FERC open to revisiting MOPR, as grid operators, utilities mull future of wholesale markets
Federal regulators, grid operators, state regulators and other stakeholders yesterday indicated they were willing to revisit rules that effectively raised the price for state-subsidized resources, such as renewables and nuclear, within eastern regional transmission organizations (RTOs), but consensus on what a successor model might look like is not yet obvious.
During the Federal Energy Regulatory Commission’s first meeting in a series of technical conferences on the future of resource adequacy in eastern organized power markets, commissioners also seemed open to revisiting the minimum offer price rule (MOPR). The policy was seen in many states as an attempt by the federal government to control their resource decisions.
“Although I voted for our MOPR orders, and believe those determinations were supported by the record, I’m not wedded to the policy calls of the past,” said Commissioner Neil Chatterjee, who was chairman when the MOPR order was implemented in PJM Interconnection. “And I’m open to better accommodating state policies, so long as we’re still able to meet our statutory mandate.”
FERC Chair Richard Glick said he ultimately hoped stakeholders would come up with a solution on their own, but added he believes the commission should step in if they are unable to, and create a more durable construct.
Though the initial panel focused on the MOPR expansion across the RTOs broadly, much of the day was focused on the policy in the 13-state PJM Interconnection.
The MOPR orders were ultimately an attempt to offset state subsidies and “level the playing field” for unsubsidized resources, such as gas plants. Some stakeholders reiterated their concerns that reliability could be at risk if not enough “traditional” fossil-fueled generation is able to bid into the markets. And PJM’s independent market monitor repeated his testimony that renewable energy would not suffer under such a rule, because wind and solar resources are some of the cheapest on the market.
But stakeholders seemed to agree that current market constructs need to better accommodate state resource goals, rather than hinder them, in order to maintain a sustainable wholesale market construct.
If PJM stakeholders don’t act, ‘we need to do it for them’
Glick, who voted against the MOPR order and has been consistently critical of it, reiterated his views that the rule is an “unsustainable” market solution. He also cited the urgency of states potentially exiting the markets, and said he hopes the states and other stakeholders ultimately bring their own proposal to the commission. However, if stakeholders fail to find a clear consensus, he said, the commission has the authority to step in and take action.