The operator of the bulk power grid across parts of the Mid-Atlantic and Midwest is proposing to revamp controversial market rules — a change that could empower states to reshape energy policies to address climate goals.
The updated rules by PJM Interconnection LLC were approved by the grid operator’s board yesterday and are expected to be filed with federal regulators by mid-month.
In the latest twist of a long, divisive battle over rules that govern the grid operator’s $4 billion capacity market, the proposal would effectively rein in use of the minimum offer price rule (MOPR), an artificially set price floor for electricity resources competing in PJM’s periodic auctions. The MOPR was expanded last year with approval by the Federal Energy Regulatory Commission under a Republican majority, drawing backlash from clean energy advocates who said the move would stifle renewables. A few states discussed exiting the capacity auction amid concerns that it would make it harder for them to reach their low-carbon goals (Energywire, June 1, 2020).
Changes to the MOPR in effect now were spurred by a 2019 FERC order that directed PJM to apply the price floor to renewable energy projects and nuclear plants supported by state subsidies. Previously, the price floor had been applied only to new natural gas units.
Democratic FERC Chairman Richard Glick was also a critic and suggested the commission would take action to reform the rule if PJM didn’t (Energywire, March 24).