Back at #NARUCWinter2020 for the big panel of the day:
MD PSC Chair Stanek moderates a panel featuring PJM and market participants to discuss FERC's decision to institute a price floor (Minimum Offer Price Rule, or MOPR) for state subsidized nukes and renewables.
MD PSC Chair Stanek moderates a panel featuring PJM and market participants to discuss FERC's decision to institute a price floor (Minimum Offer Price Rule, or MOPR) for state subsidized nukes and renewables.
NRG's Kavulla, a former MT regulator and NARUC prez, handed out these anti-FRR flyers before the panel. The Fixed Resource Requirement is a mechanism states could use to pull out of the capacity market, and NRG says it would be a "major reversal" for competitive markets.
Kavulla says MOPR is "much ado about nothing" for renweables, bc wind and solar are getting cheaper and may still clear. If there was a MOPR in ERCOT, he says (and knows there cannot be), renewables would still clear.
This is the standard line from PJM and gas-heavy generators about the MOPR order, by the way. Nukes and renews may still clear, MOPR doesn't really "block" them from the market.
PJM's Haque says the FERC order "is an acknowledgment that energy policy in our footprint is happening in the states and we need to get behind that, we cannot simply ignore that trend."
PJM, remember, asked for major changes to FERC's MOPR order in its rehearing request
PJM, remember, asked for major changes to FERC's MOPR order in its rehearing request
"In the long term, we don’t believe [the FERC order] is a durable solution," Haque says when asked about the rehearing request.
Analyst Christi Tezak says this order was a departure from FERC's usual practice of balancing market operations and state resource preferences.
"There is no blending — it’s a decision that market comes first," she says.
"There is no blending — it’s a decision that market comes first," she says.
Haque says PJM will not run the delayed capacity auction until December of this year, and that's if "everything goes perfectly at FERC."
They need a compliance order from FERC first, he notes, and six months to react.
They need a compliance order from FERC first, he notes, and six months to react.
Stanek brings up a recent ICF study that estimated PJM capacity prices would actually FALL if NJ, MD, IL and VA take the FRR option and pull out of capacity market.
If they stayed in, ICF predicted higher prices across RTO. From the study:
If they stayed in, ICF predicted higher prices across RTO. From the study:
Tezak says there's real risk that states could leave the capacity market, or (less likely) PJM altogether.
Haque calls that "unnecessarily inflammatory," saying the capacity market is only a small part of the PJM value prop for states.
Haque calls that "unnecessarily inflammatory," saying the capacity market is only a small part of the PJM value prop for states.
Kavulla says NRG would support a regional market for clean energy procurement, similar to a proposal from the Maryland PSC, and a carbon price would be even better.
Gas generators have been moving that way lately, but there aren't any RTO proposals ready for FERC on either
Gas generators have been moving that way lately, but there aren't any RTO proposals ready for FERC on either
Analyst Christi Tezak throws in some carbon pricing skepticism, saying it's a good idea in theory, but she's not going to hold her breath "for 14 cats to get into the same bag."
Tezak says the core problem is the capacity market is "mathematically perfect and politically problematic, and it always has been."
"You can make the argument that an FRR may be more expensive than running the market under MOPRex but the arguments we’re having are political"
"You can make the argument that an FRR may be more expensive than running the market under MOPRex but the arguments we’re having are political"
MD Com. O'Donnell: How do you think this order is durable? How will it survive court challenges or a new FERC majority?
PJM: We don't think it's durable
NRG: "There's got to be a better way"
Exelon: "We think it’s wrongheaded but we don't see it changing."
PJM: We don't think it's durable
NRG: "There's got to be a better way"
Exelon: "We think it’s wrongheaded but we don't see it changing."
ALSO -- EEI just filed their comments on the MOPR order.
Per usual, Ari has your rundown:
Per usual, Ari has your rundown:
