Members of the Ohio legislature are challenging PJM’s proposed replacement for the extended minimum offer price rule (MOPR-Ex), asking FERC to reject the RTO’s July filing.

In comments sent last week to the commission, Ohio Senate President Matt Huffman (R) and Sen. Rob McColley (R), majority whip and chairman of the Energy and Public Utilities Committee, requested that the PJM proposal endorsed at a special Members Committee meeting on June 30 and approved by the Board of Managers on July 7 be rejected (ER21-2582). (See PJM Board Approves MOPR Rollback.)

The senators said that PJM’s MOPR-Ex filing would “severely undermine Ohio’s efforts to promote robust and fairly administered competitive electricity markets in our state.”

“PJM’s new construct would freely allow states outside of Ohio to effectively export their policies to our state,” the senators said. “FERC must stand up to this overreach and discriminatory construct by rejecting the filing.”

PJM said its MOPR proposal would “maximiz[e] transparency and market confidence” through identification of buyer-side market power (BSMP). Market participants would be asked to sign attestations declaring they are not exercising market power or receiving state funds tied to clearing in the capacity auction. PJM and the Independent Market Monitor would conduct “fact-specific, case-by-case reviews” if market power is suspected. Referrals of BSMP would then be made to the commission for a final determination.

The comments from the Ohio legislators come on the heels of more than two dozen comments that came into the commission late last month as PJM stakeholders issued a mix of support and opposition to the RTO’s filing. (See Mixed Stakeholder Reception to PJM MOPR Replacement.)

PJM adopted the extended MOPR in response to FERC’s 2-1 ruling in December 2019 saying MOPR should apply to all new state-subsidized resources to combat price suppression in the capacity market. Then-Chair Neil Chatterjee and fellow Republican Bernard McNamee formed the majority, with Democrat Richard Glick angrily dissenting, calling it an attack on state decarbonization efforts. Glick asked PJM to undo the rule after he was named chairman by President Biden in January.

Disparate State RPS Policies

While several states in PJM’s 13-state footprint have enacted increasingly ambitious renewable energy targets in recent years, Ohio’s Republican-controlled government has not joined the trend.

In 2019, Gov. Mike DeWine (R) signed House Bill 6, which reduced the state’s renewable portfolio standard from 12.5% by 2027 to 8.5% by 2026, after which the RPS would be eliminated. Last month, DeWine signed a bill giving county governments the power to review and reject utility-scale wind and solar projects before developers can apply to the state Power Siting Board. (See Ohio Governor Signs Bill to Block Renewables.)

Huffman and McColley said PJM’s MOPR filing “represents a significant step backward for an RTO that has traditionally been a champion of just and reasonable competitive markets.” They said utilities in Ohio originally joined PJM expecting to participate in a regional market “in which reliability would be ensured by competitive resources vying to serve load at the lost cost.”

“Ohio desires a market based on competition, not subsidies, and FERC has a duty to protect that market from the disruptive actions of a one state that impact the outcomes for other states,” the senators said in their letter.

Senate Resolution

Huffman and McColley said the Ohio Senate will “shortly” consider a concurrent resolution by Ohio Sen. Mark Romanchuk (R) to “urge the preservation of the minimum offer price rule for the PJM capacity market.” The resolution calls on PJM and FERC to “evaluate whether state-subsidized generation resources have a material impact on price formation in PJM’s capacity market.”

Citing “billions of dollars of investment in new generation resources in Ohio since deregulation began in 1999,” the resolution said the state has rejected subsidizing generation resources “in favor of encouraging competition.”

“The elimination of the minimum offer price rule would increase the risk of a critical reliability problem within the PJM states and would force Ohioans to bear costs associated with other states’ generation resource preferences,” the resolution said.

Huffman and McColley said the full Ohio Senate will be “shortly” considering the resolution. Besides the resolution, the senators said the general assembly also intends to hold its own hearings on the MOPR and to “explore how to maintain Ohio’s commitment to competitive markets in the face of a PJM filing that is clearly antithetical to that cause.”