FERC Orders Gric to Restrict State-Backed Renewables in Its Market

“The sole Democratic commissioner says Republican majority plan will “nullify” state clean energy policies and predicts legal challenges.”

“After more than a year of delay, the two-Republican majority at the Federal Energy Regulatory Commission has told mid-Atlantic grid operator PJM how it must revamp its $10-billion-per-year capacity market. And at first glance, it could be even more harmful to state-subsidized renewable energy than previously imagined.

Thursday’s order would force almost all future state-subsidized resources in PJM's 11-state territory to use a “minimum offer price rule,” or MOPR, that would limit how low they can bid. Because almost all state subsidies and incentives are for zero-marginal-cost clean energy, this would create an artificial floor that masks their true cost-effectiveness — and essentially forces them out of the market — compared to existing coal, nuclear and gas-fired generation, critics say.

And unlike FERC’s June 2018 order that found PJM's capacity market in need of reform, Thursday’s order has removed some of the few openings for state-subsidized resources to continue to earn money for their capacity value, according to Commissioner Richard Glick, the sole Democrat at FERC.”

Jeff St. John reports for Greentech Media December 19, 2019.