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HAPPENING NOW: #RFFlive’s “Making Sense of @FERC’s #MOPR Order.” Watch the livestream on our event webpage: buff.ly/2NjS9g3

#EnergyTwitter #FutureOfPower

@FERC 2/ RFF’s Kathryne Cleary is giving a brief primer on @FERC’s #MOPR order. Some context: @pjminterconnect’s capacity market, which we’re here to discuss today, is intended to promote investment and ensure adequate supply is available to meet demand.

@FERC @pjminterconnect 3/ Cleary: PJM has had an existing #MOPR in place since 2006, which was originally intended for new #NatGas plants to prevent them from bidding into the market at low prices. This MOPR order expands upon that to include state-subsidized resources.

@FERC @pjminterconnect 4/ Cleary: “Something like a new offshore wind plant will now be required to bid into the capacity market at or above $4k per MW-day, which is nearly 20-30x higher than the clearing price in the last auction.”

5/ Cleary: “It’s very likely that many of these resources—when subject to these price floors—will not clear the market, with the exception of perhaps #solar PV and the new combined cycle or combustion turbines, which are #NatGas plants.

6/ Don’t forget to check out Kathryne Cleary’s new @resourcesmag blog post on what the #MOPR means for #CleanEnergy in @PJMinterconnect! resourcesmag.org/common-resourc…

@ResourcesMag @pjminterconnect 7/ RFF #FutureOfPower Director @klpalmer7 is moderating today’s event. She says the MOPR order is both “controversial and complex.”

8/ @klpalmer7: The MOPR order is "controversial because deviates in important ways from PJM’s proposal; it highlights differences across the states in #energy policies ...

9/ ... and it brings to the floor clashes between federal regulatory efforts to promote competitive markets and state efforts to promote #CleanEnergy and #decarbonization, and to transform a sector that's characterized by large interstate markets.

10/ @klpalmer7: “It’s complex in part because of the wide array of state subsidies that could trigger the #MOPR and the many exemptions that could apply.”

@Klpalmer7 11/ @pjminterconnect’s Craig Glazer: “To me, it’s pretty clear that most #renewables, and even #nuclear, really depend mostly on the #energy market ... and, frankly, renewables do very well in the energy market because of the single clearing price feature."

12/ Glazer: "I don’t think it’s the death knell of renewables or nuclear ... State subsidies, to be honest, are a problem. I think of this as an interstate commerce issue. The challenge is [that] it’s one big grid, so one state's policy effectively gets exported to other states.”

13/ Calpine’s Sarah Novosel: “We were concerned about subsidies and the impact that subsidies were having on the capacity market … Competitive generators like Calpine rely exclusively on the competitive market for our revenue, and so we need a level playing field.”

14/ Novosel: “When you have certain suppliers participating in the market, subsidized, that skews the market results because … they’re able to bid lower … they’re not exclusively dependent on the competitive market for their revenue.”

15/ @analysisgroup's Susan Tierney on @FERC's premise for it's MOPR order: "If action were not taken by FERC to address this issue of subsidies, then capacity markets would collapse." She counters, "I think actually that's the result that's going to happen from this [order]."

@analysisgroup @FERC 16/ Tierney says she thinks some states and public power entities may decide "that this is not the way they want to go," and that "there will need to be pathways to figure out how [they] can exit the capacity market."

@analysisgroup @FERC 17/ Grid Strategies's @RobGramlichDC: “Sue’s been warning FERC about this for years … they either didn’t listen or they don’t care that this is ending markets as we know them. The fact is states and utilities can and likely will pull out of these markets in response.”

@analysisgroup @FERC @RobGramlichDC 18/ @RobGramlichDC says he's had detailed talks w/ state legislators about how it could be done. "It's happening, folks." Also coins the term "FRRexit."

@analysisgroup @FERC @RobGramlichDC 19/ @RobGramlichDC gives context for the origins of MOPR as a way to mitigate market failure due to monopoly power/buyer-side market power. Notes that there's a "notable absence" in FERC's order of any finding or evidence of monopoly power.

20/ @RobGramlichDC: "It’s not just a change in magnitude, but it’s a change in a kind. In other words, it’s a whole different reason for this policy, and there’s no explanation or basis for that."

@RobGramlichDC 21/ Glazer on states pursuing FRR: "It certainly would be more costly and potentially more inefficient, but we’re certainly not barring the door if states choose to do that."

@RobGramlichDC 22/ Novosel: "Hopefully the states will take a step back and give some thought to FRR. It is complex; it is inefficient. The states are looking at possibly having much higher capacity prices if they were to FRR … They really deny themselves the benefit of the capacity market.”

@RobGramlichDC 23/ Novosel: "Calpine has long been a supporter of #CarbonPricing ... States should be able to address carbon #emissions. They should be able to lower carbon emissions, but they should do it in a market-friendly way so we can maintain the benefits of the capacity markets."

@RobGramlichDC 24/ That's a wrap! A huge thank you to our panelists for such a lively discussion on this complex topic, and to those of you who attended in person or online!

#RFFlive #EnergyTwitter #MOPR