FERC Order Could Exclude Some Clean Energy from PJM Market

The Federal Energy Regulatory Commission issued an order yesterday directing the PJM Interconnection to impose a minimum price on resource offers into its capacity auction for resources that receive state policy support. While there are limited exemptions, this rule would likely exclude some renewable and nuclear generation as well as new demand response, energy efficiency, and storage resources from participating in PJM’s capacity auctions. Likely results include higher consumer electricity costs and more capacity overprocurement in PJM, said Jennifer Chen, senior counsel for federal energy policy at Duke University’s Nicholas Institute for Environmental Policy Solutions.

Chen wrote extensively in 2018 about the issue and its potential impacts on energy consumers and clean energy production.

Related content and analysis:

• Policy Brief: Issues on the Horizon at the Federal Energy Regulatory Commission – November 2018
• Policy Brief: Improving Market Design to Align with Public Policy – August 2018
• Understanding FERC’s Order Rejecting PJM’s Capacity Market Proposals and the Proposed Replacement Framework – July 18, 2018