Clean energy groups outline principles for PJM capacity market reform
The new “shared principles” document shows how a diverse coalition of PJM stakeholders that benefit from state energy policies would like to see new capacity market rules develop in the mid-Atlantic power market.
The document was signed by nuclear generators Exelon and Talen Energy, along with the American Wind Energy Association, Sierra Club, Natural Resources Defense Council and consumer advocates from Illinois and the District of Columbia, among others. Its existence was first reported by RTO Insider.
The document centers on their preferred design for a resource-specific Fixed Resource Requirement (FRR-RS) — a market construction recommended by FERC in June when it threw out PJM’s capacity market rules.
FERC’s concern was based on complaints from fossil fuel generators, who said subsidized renewables and nuclear plants were depressing capacity market prices. To fix that, FERC said the FRR-RS could allow those resources to opt out of the capacity market altogether, along with a commensurate amount of load.
FERC’s order left many of the details of a FRR-RS up to PJM and its market participants, and clean energy groups expressed concern that it could curtail wind and solar growth if the grid operator makes it difficult for state-sponsored resources to opt out of the capacity market.
The new principles document aims to prevent that situation by urging FERC to require the new market construction to allow utilities to “buy capacity from all state-incentivized resources and receive full capacity credit for doing so.”