By Rory D. Sweeney

A coalition consisting of environmental advocates, zero-emissions generators and Illinois’ consumer advocate has developed a set of principles they say will “protect the cost-effective achievement of state policy goals to the extent possible” under FERC’s ordered redesign of PJM’s capacity market.

While the document doesn’t address applicability of PJM’s minimum offer price rule (MOPR), which sets floors for subsidized units’ capacity offers consistently above clearing prices, it does argue any unit subject to the MOPR should be eligible for the resource-specific fixed resource requirement (FRR-RS) FERC suggested in its order.

The principles also call for the FRR-RS to indicate as clearly and as early as possible whether state programs would be subject to the MOPR, along with providing a transition period so states can enact any laws they deem necessary. However, the document reiterated demands the FRR-RS also preserve states’ abilities to achieve clean energy policy goals.

The Natural Resources Defense Council’s Miles Farmer said that “part of it is to push PJM in this direction as well,” pointing out PJM’s proposal has progressively moved toward the principles, and “to make sure that FERC follows through on FRR-RS.”

The signatories “were all talking to each other around these PJM meetings, and we realized it makes sense to develop these shared principles,” he said, though he declined to offer specifics about who approached whom first.

Several stakeholder groups have proposed market redesigns, which stakeholders have been examining as part of special sessions of the Markets and Reliability Committee on the issue. (See PJM Unveils Capacity Proposal.) While the coalition is not advocating for any specific proposal along with the principles, many of the signatories support a proposal being represented at the meetings by consultants Rob Gramlich of Grid Strategies and James Wilson of Wilson Energy Economics.

An Exelon representative confirmed the proposal is endorsed by “a large coalition of odd bedfellows,” including the NRDC, Citizens Utility Board of Illinois, Sierra Club, Office of People’s Counsel for the District of Columbia, American Council on Renewable Energy, Exelon, Mid-Atlantic Renewable Energy Coalition, Talen Energy and Public Service Enterprise Group. All but PSEG are signatories of the principles document, which also includes the American Wind Energy Association.

Farmer said the principles have just been published and are expected to gather wider support as they become better known, adding no conclusions should be drawn from anyone who hasn’t signed on yet.

The proponents are all interested in PJM giving states capacity credit for units they subsidize to achieve state policy goals, such as procuring renewable and zero-emissions resources, and declare as a principle the credits should be applicable on a one-for-one basis.

For a unit to be eligible for FRR-RS election, it would need to be removed from the auction with a corresponding amount of load. The principle calls for making election at least four months prior to a Base Residual Auction and would need to be confirmed by a load-serving entity or state power authority at least 30 days before the auction.

Owners could also elect portions of units to be FRR-RS, and there would be no minimum length of time the unit would need to remain elected. Those units would continue to be Capacity Performance resources subject to PJM’s performance requirements and financial consequences.

“I take FERC at its word that it’s going to implement FRR-RS, but it still needs to do so in a way that’s workable so all the FRR-RS capacity is actually credited because setting this all up is not trivial and needs to be done with care,” Farmer said.