According to a May 2020 report released by consulting firm Grid Strategies, the Federal Energy Regulatory Commission’s (FERC) 2019 Minimum Offer Price Rule (MOPR) decision could cost customers in the PJM Interconnection from $1 billion to $2.6 billion annually.[1] The new estimate updates a previous cost analysis done by the group in August 2019 which found the MOPR could cost up to $5.7 billion per year.[2] The newest analysis finds the rule could cost consumers nearly $24 billion over the next nine years if FERC adopts minimum bid levels closer to PJM’s initial proposal rather then its most recent finding. Under that scenario, it is likely that subsidized nuclear units in Illinois, New Jersey, and Ohio will not be able to clear the capacity market. Under another scenario that assumes FERC adopts more recent PJM minimum bid levels, Grid Strategies still estimates that the rule will cost customers $10 billion over the same period. In this scenario, it is still possible that some units would not clear under PJM’s newest bid numbers.

Grid Strategies’ analysis comes in the midst of efforts by PJM to negotiate with stakeholders concerned by the MOPR’s potential impacts on state resource goals. Maryland and New Jersey have stated that they are looking at pursuing a Fixed Resource Requirement alternative which would allow parts or all of their state to secure capacity outside the wholesale market.[3]

[1] https://gridprogress.files.wordpress.com/2020/05/a-moving-target-paper.pdf

[2] https://gridprogress.files.wordpress.com/2019/08/consumer-impacts-of-ferc-interference-with-state-policies-an-analysis-of-the-pjm-region.pdf

[3] https://www.bpu.state.nj.us/bpu/pdf/boardorders/2020/20200325/3-27-20-2H.pdf