By Suzanne Herel
Eleven generating companies, including Calpine, Dynegy and NRG, have asked FERC to expand PJM’s minimum offer price rule in time for May’s 2019/20 Base Residual Auction, as the Public Utilities Commission of Ohio is poised to rule on power purchase agreements for FirstEnergy and American Electric Power.
“Complainants respectfully request that the commission expand the MOPR to prevent the artificial suppression of prices in the Reliability Pricing Model (RPM) market by below-cost offers for existing resources whose continued operation is being subsidized by state-approved out-of-market payments,” the companies said (EL16-49).
The companies also voiced support for related complaints asking FERC to void the waivers it granted AEP and FirstEnergy regarding affiliate power sales to ensure commission review of the proposed eight-year agreements, which are supported by PUCO staff. The Ohio commission is expected to rule on the requests in the coming weeks. (See PJM Joins EPSA’s Call for FERC Review of Ohio PPAs.)
Similarly, the complainants have asked that FERC address the waiver issue in time for the May BRA.
Currently, the MOPR applies only to certain new resources.
Recently, the generators argue, “a new threat has emerged in the form of subsidies to existing resources that create incentives for noncompetitive offers and that may prevent the exit of uneconomic resources.”
The proposals from AEP and FE would have “just that effect with respect to over 6 GW of capacity in PJM,” they said.
The companies said they recognized that PJM stakeholders have not had a chance to discuss changes to the MOPR and that Tariff revisions addressing the upcoming BRA might not be an appropriate permanent remedy. Therefore, they are requesting narrowly tailored revisions and a directive to PJM to develop a long-term solution by Nov. 1.
Regardless of whether the PPAs are approved, PJM should initiate a stakeholder process to expand the MOPR, the generators said.
The companies invoked testimony to PUCO by Independent Market Monitor Joe Bowring saying the PPA proposals “highlight the fact that the MOPR needs to be expanded to address all cases where subsidies create an incentive to offer capacity into the PJM capacity market at less than an unsubsidized, competitive offer. This would include offers from all new and existing units that receive subsidies.”
Other parties to the filing are Eastern Generation, Homer City Generation, Carroll County Energy, C.P. Crane, the Essential Power PJM Companies, GDF SUEZ Energy Marketing, Oregon Clean Energy and Panda Power Generation Infrastructure Fund.