As of October 9, 2024, the Organization of PJM States Inc. (OPSI), which represents state utility regulators, is backing a complaint at the Federal Energy Regulatory Commission (FERC) over reliability must-run (RMR) power plants. [1] OPSI informed federal regulators that the PJM Interconnection’s failure to include power plants with RMR contracts in its capacity auctions could result in higher costs in PJM’s upcoming capacity auction by roughly $14.5 billion. In July 2024, the capacity auction totaled $14.7 billion, which was to be paid by power consumers in the Mid-Atlantic and Midwest. The omission of Talen Energy’s RMR resources in Maryland accounted for $4.3 billion in capacity costs, according to market monitor Monitoring Analytics.
When a power plant owner wants to retire a unit, PJM investigates how it would affect the grid; if PJM finds that it would cause reliability issues, they can enter into an RMR contract with the owner to keep it operating. OPSI supports a complaint at FERC that suggests that this practice of PJM should be banned. OPSI believes that FERC should find that PJM’s capacity market rules are unreasonable because they create price signals that are inconsistent with market fundamentals.