LOCATION/TYPE

NEWS HOME

[ exact phrase in "" • results by date ]

[ Google-powered • results by relevance ]


Archive
RSS

Add NWW headlines to your site (click here)

Get weekly updates

WHAT TO DO
when your community is targeted

RSS

RSS feeds and more

Keep Wind Watch online and independent!

Donate via Paypal

Donate via Stripe

Selected Documents

All Documents

Research Links

Alerts

Press Releases

FAQs

Campaign Material

Photos & Graphics

Videos

Allied Groups

Wind Watch is a registered educational charity, founded in 2005.

News Watch Home

FERC denies rehearings on PJM capacity orders, in a blow to states’ renewables plans 

Credit:  Jeff St. John | Greentech Media | April 16, 2020 | www.greentechmedia.com ~~

The Federal Energy Regulatory Commission on Thursday rejected requests to reconsider its controversial orders that will upend the $10-billion-per-year capacity market of mid-Atlantic grid operator PJM by forcing state-subsidized renewable energy resources to bid at higher prices that could render them uncompetitive.

In Thursday’s vote, FERC’s Republican majority rejected rehearing requests from states that say their clean energy goals will be undermined if renewables are forced to bid at higher, administratively set prices.

But for clean energy groups, there could be a silver lining. In denying the rehearing requests, FERC has now opened the door to legal challenges to its initial 2018 order that threw out PJM’s existing capacity market rules as “unjust and unreasonable,” as well as its December 2019 order that forces PJM to apply a minimum offer price rule (MOPR) to state-subsidized resources across its 11-state territory.

Under the Federal Power Act, legal challenges to FERC decisions can’t proceed until rehearing requests have been affirmed or denied.

“We’re certainly totally opposed to these orders and will continue fighting them wherever they can,” Casey Roberts, senior attorney for the Sierra Club, said in a Thursday interview. While the Sierra Club hasn’t yet filed a petition for review asking a federal court to take up its legal arguments against FERC’s orders, “I think it’s almost certain” that the group will do so, she added.

Legal challenges can be expected against FERC for failing to consider the increase in capacity costs that could be passed on to the 65 million or so electricity customers served by utilities in PJM territory, Robert said, as lower-cost, state-subsidized resources are excluded and higher-cost power plants continue to win capacity contracts.

States have also argued that FERC has overstepped its authority to regulate the interstate transmission of energy by directing its MOPR order only at state-subsidized resources as a market-distorting influence, while failing to address federal subsidies or private-party transactions that could also cause market imbalances, Roberts said. “It’s really targeting state policy in ways that overstep what FERC’s jurisdiction allows it to do.”

Clean-energy groups including the American Wind Energy Association, the American Council on Renewable Energy, and Advanced Energy Economy are reviewing their options for making legal challenges, according to spokespeople contacted Thursday.

These groups, along with the Solar Energy Industries Association, wrote in a joint statement on Thursday that they “strongly oppose instituting the MOPR because it unjustifiably interferes with state decisions to bring low-cost and reliable clean energy to their communities.”

“FERC is financially penalizing American consumers for the clean energy they want and deserve to bail out increasingly uneconomic fossil fuel generators,” American Council on Renewable Energy CEO Gregory Wetstone wrote. “As a result, we will be exploring our options to ensure that state policies are respected and renewable deployment moves forward.”

A push to bring back the country’s biggest capacity auction

In the meantime, clean-energy groups and fossil fuel power plant owners alike are pushing FERC to approve PJM’s compliance filing from last month, despite their opposition to the underlying FERC orders that set it in place, so that PJM can resume its capacity market auctions. Those auctions have been on ice since the last one was held in 2018.

Last month’s compliance filing from PJM set floor prices for most state-backed solar power, onshore and offshore wind and energy storage that are likely to be too high to compete against natural gas, nuclear or coal-fired power plants. But it also sets relatively low minimum prices for existing nuclear power plants and includes proposed rules that could lower the minimum bidding price of some solar and onshore wind resources to a level that could be competitive.

“While we remain opposed to the MOPR, we are hopeful that FERC will approve the pending PJM MOPR compliance filing, which better recognizes the important value that renewable energy can provide in a competitive capacity market,” Amy Farrell, senior vice president of government and public affairs for the American Wind Energy Association, says in a statement released Thursday.

Gas generators support FERC’s ruling, but like solar and wind operators, they want to see PJM’s capacity auctions resume as quickly as possible. While the negative effects of FERC’s order on state-backed renewables are expected to increase into the latter part of this decade, natural-gas power plants are far more reliant on capacity revenue in the short term.

In a statement, Todd Snitchler, CEO of the Electric Power Supply Association, which represents companies operating natural-gas power plants, pushed FERC to “act quickly and ensure an expeditious timeline” for allowing PJM’s capacity auctions to restart.

Snitchler noted that FERC’s actions have led several states with aggressive clean energy goals, including Illinois and New Jersey, to consider actions that could pull them out of PJM’s capacity market altogether. “Our energy future hangs in the balance as some states consider drastic, destructive options such as abandoning regional markets,” Snitchler wrote.

Chairman Chatterjee defends MOPR order

FERC Chairman Neil Chatterjee said on a conference call that Thursday’s decisions will clear the way for FERC to consider that compliance filing, even as it awaits a new compliance filing from PJM that’s due in the next 45 days. He also clarified that FERC’s MOPR order does not apply to voluntary renewable energy credits or to trading in the footprint of the Regional Greenhouse Gas Initiative, because these transactions are not a type of “payment or concession” directly from states.

Chatterjee denied accusations from MOPR opponents that it the action will drastically drive up capacity costs. As evidence, he pointed to a March analysis from PJM’s independent market monitor that found the changes ordered by FERC are “not expected to have an impact on the clearing prices and auction revenues” for PJM’s next capacity auction.

Opponents to FERC’s order have pointed out, however, that this analysis fails to consider the likelihood that the costs to consumers are expected to rise dramatically in the years ahead as more and more state-subsidized renewables are subjected to the MOPR and denied access to PJM’s capacity market. Because existing renewables are exempted from FERC’s MOPR, their presence in auctions in the short term won’t be suppressed.

“FERC completely failed to consider the impact on consumers from these orders,” Sierra Club’s Roberts said.

Richard Glick, FERC’s sole Democratic member and the only “no” vote against FERC’s December 2019 decision, disagreed with Thursday’s move to deny rehearing requests, calling it an attack on states’ authority to determine their own clean energy futures. Glick has cited independent analyses indicating the order could increase consumer costs by billions of dollars per year.

On Thursday’s conference call, Chatterjee pushed back on the premise that FERC’s order would lead to large cost increases in the long term. “I believe that markets drive competition and innovation,” he said. “I’m also a big believer in the business case for renewables. I believe the costs of clean energy have come down now [to a degree] that they can compete without subsidies.”

Chatterjee downplayed concerns that Illinois, New Jersey, Maryland and other states that have made initial moves to find alternatives to participating in PJM’s capacity market will follow through. “Organized competitive markets bring significant benefits to consumers. I think state leaders will be significantly pressed to ignore that.”

Source:  Jeff St. John | Greentech Media | April 16, 2020 | www.greentechmedia.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

Wind Watch relies entirely
on User Funding
   Donate via Paypal
(via Paypal)
Donate via Stripe
(via Stripe)

Share:

e-mail X FB LI TG TG Share


News Watch Home

Get the Facts
CONTACT DONATE PRIVACY ABOUT SEARCH
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.

 Follow:

Wind Watch on X Wind Watch on Facebook

Wind Watch on Linked In Wind Watch on Mastodon