FERC on Thursday accepted Kestrel Acquisition’s updated market power analysis as partially compliant with the commission’s standards for market-based rate authority (MBRA), and directed the PJM generation owner to submit a further compliance filing within 30 days (ER18-1106-002).

In doing so, FERC rejected a protest by PJM’s Independent Market Monitor, which said that “current PJM market rules for market power mitigation are insufficient to support [market-based rate] authorizations.”

The commission said the Monitor failed “to submit any specific evidence … demonstrating that Kestrel Acquisition has market power.” Rather, the Monitor’s protest was directed at PJM’s rules and not Kestrel’s analysis itself.

“In granting market-based rate authority, the commission does not certify markets as competitive; it determines whether individual sellers have market power,” FERC said. “Here, IMM makes no attempt to show that PJM’s monitoring and existing market power mitigation provisions would fail to mitigate any market power possessed by Kestrel Acquisition.”

The Monitor argued that Kestrel’s MBRA should be conditioned on offering into the energy and capacity markets at cost-based offers. But FERC said that “many of the allegations in IMM’s protest apply to all sellers in PJM, including those that are not part of the protested proceedings. Such sellers have not been given adequate notice and opportunity to comment on IMM’s proposal.”

FERC noted that the Monitor’s criticism of PJM’s capacity market echo those made in a separate complaint, in which the commission approved its proposal to conduct a unit-specific review of all offers in the capacity market. It is also conducting a review the RTO’s rules on parameter-limited offers. “We believe that proceeding, which will provide all sellers in PJM the opportunity to intervene and participate, is the appropriate forum to consider changes to the relevant PJM mitigation rules,” it said.

Kestrel owns the 810-MW Hunterstown Generating Station combined cycle gas-fired power plant located in Gettysburg, Pa.

Commissioner James Danly concurred in a separate statement to highlight that the Monitor’s “concerns in this case would properly be rejected even if the commission had not recently ordered PJM to adopt” the Monitor’s unit-specific proposal.

“I opposed unit-specific review of all offers because doing so likely will result in over-mitigation,” Danly said. “Unit-specific review is not required to adequately mitigate market power concerns, and today’s order in no way indicates otherwise.”