Stakeholders Across the Spectrum Ask FERC to Reconsider Its PJM Capacity Market Ruling
Clean energy advocates, power plant owners and states fear FERC overstepped its bounds in demanding a remake of country’s biggest capacity market.
Power plant operators, environmental and consumer groups, and states covered by PJM Interconnection are asking the Federal Energy Regulatory Commission to reconsider what may be the biggest change to U.S. energy markets in decades.
They argue that FERC stepped outside its legal authority with its June order demanding that grid operator PJM remake its capacity market, and should throw out its current plan and start over as a result.
In a 3-2 ruling that came as a shock to many in the industry, FERC rejected PJM’s current capacity market as “unjust and unreasonable.” Regulators ordered PJM to come back with a new market construct that would have significant effects on state-subsidized generation resources, such as nuclear power plants with zero emissions credits (ZECs) or wind and solar projects backed by a state renewable portfolio standard (RPS).
Last week’s deadline for filing requests for a rehearing of the order drew a broad range of complaints and critiques from a broad swath of stakeholders in the process, as noted by Ari Peskoe, director of the Electricity Law Initiative at Harvard University.
Many focused on the unprecedented interference into state energy policies that the order represents — the same issue that led FERC Commissioners Cheryl LaFleur and Richard Glick to vote against the order.
Regulators for the states of Illinois and New Jersey, which are proposing ZECs to support nuclear power, expressed their concerns that FERC’s order would pre-empt those policies. Such a move “crosses the clear jurisdictional boundary between the states” and FERC, according to the Illinois Commerce Commission.
Clean Energy Advocates — a group including Earthjustice, Natural Resources Defense Council, Sierra Club, Sustainable FERC Project, and Environmental Defense Fund — agreed with state regulators in its filing. The group noted that the order appears to draw an “arbitrary” line around ZEC and RPS programs, while ignoring the multitude of other state and federal policies affecting the market price of grid resources.