PJM Answers MOPR Complaint

On April 11, PJM submitted an answer to the Federal Energy Regulatory Commission in response to a complaint regarding the Minimum Offer Price Rule. The Minimum Offer Price Rule established the minimum price certain new generation capacity resources could bid into PJM’s capacity market auctions for the three-year forward period.

On March 21, a group of generation owners within the region PJM serves filed a complaint to expand the rule to apply to sell offers from existing generation capacity resources when they receive subsidies under state programs that could lead to uncompetitive offers in PJM’s capacity market.

The complaint seeks to modify the PJM tariff to apply the new MOPR in time for PJM’s upcoming capacity market auction, which begins on May 11.

PJM asked the FERC to reject the complaint because it would require new MOPR rules to be in place for the auction.  PJM said, however, that there may be a gap in the current MOPR. The gap could result in unjust and unreasonable rates when existing generation capacity are able to offer capacity that is subsidized under state programs in an uncompetitive manner.

PJM’s filing asks the FERC to order a comprehensive stakeholder process to review any new MOPR provisions and file any new rules with FERC in time for the May 2017 auction.

PJM asserted it is not necessary for a remedy for the May 2016 auction. If the FERC disagrees, however, PJM has asked that the remedy be narrowly drawn and offer workable alternative approaches.