The Capacity Construct Public Policy Senior Task Force took its next step on Nov. 21, discussing the results of its recent vote on a solution package. This closes out the work of the task force.
The package from Monitoring Analytics, PJM’s independent market monitor, was the only package that received simple majority support. It will move to the Dec. 7 Markets & Reliability Committee for a first read, with a vote scheduled for the Dec. 21 MRC.
The IMM’s proposal is an extension of the existing Minimum Offer Price Rule that would apply to all existing and new resources, regardless of technology type, that receive revenue outside of market revenue.
None of the other packages, including the PJM package, which advocated a two-step pricing proposal, received more than 26.1 percent of the vote. PJM received 26.1 percent support, while the other six proposals each received 16 percent or less support.
In the non-binding poll question, 64 percent were in favor of retaining the status quo, while 36 percent were in favor of making a change.
Stakeholders discussed how the voting results might be interpreted. Some stakeholders said they thought the vote indicated support for markets, as stakeholders clearly preferred not to take a two-stage approach.
Stu Bresler, senior vice president – Operations and Markets, said while the results could be interpreted in various ways, PJM and its board have indicated that out-of-market subsidies are a threat to wholesale markets’ ability to perform their function.
“We have a strong desire to protect the market from outside influences,” he said. PJM does recognize – without judgment – that states have the ability to take certain actions. The question is what impact those actions would have on the wholesale market or whether those actions could be accommodated while protecting market outcomes.
The IMM proposal, which is largely based on the Minimum Offer Price Rule, was revised to include carve-outs for public power organizations and some state renewable portfolio standard programs.
Unknown at this time is what effect the anticipated ruling from the Federal Energy Regulatory Commission on the Department of Energy’s Notice of Proposed Rulemaking might have. The FERC is expected to issue its ruling on Dec. 11, between the first read and vote at the Dec. 21 MRC.