The PJM Power Providers Group (P3)[1], a non-profit organization focused on promoting well-designed competitive markets, filed an emergency challenge on October 5, 2021, to a recent overhaul of the minimum offer price rule (MOPR) adopted by PJM Interconnection LLC, the Grid operator for 13 states and the District of Columbia.[2] P3 is a coalition of independent power producers that operate across the Mid-Atlantic and Midwest. Some members mostly own coal- or gas-fired power plants, while others also manage renewable energy projects.
In December 2019, the Federal Regulatory Commission (FERC), under then-Chairman Neil Chatterjee, issued the MOPR expansion rule, which raised the bid price for all state-subsidized resources, such as renewables and nuclear.[3] In response to concerns from states and Biden-appointed Chairman Richard Glick, PJM filed a plan with FERC in July 2021 to remove the application of the MOPR from state-subsidized resources and effectively make it easier for these resources to compete in capacity auctions.[4] However, P3 claims that FERC’s notice on September 29, 2021[5], allowing the revised MOPR to go into effect violates the Federal Power Act (FPA)[6] and the Administrative Procedure Act (APA)[7].
In its rehearing request, P3 argued that the notice conflicts with “the remedial rate fixed by the Commission under FPA section 206 in its recent expanded MOPR Orders,” which established protections against market power and discrimination. The notice also does not satisfy the provisions of the APA because it is arbitrary and capricious. The coalition also argued that the revised MOPR is in itself unlawful because it goes against more than a decade of Commission decisions that asserted that "uneconomic entry" of state-subsidized resources in regional power markets weakens market confidence and harms consumers. P3 said FERC should grant P3's request for rehearing, reject PJM's proposal, and direct PJM to develop a new policy to address state-subsidized resources.
[1] Members include: Advanced Power, Caithness Energy, L.L.C., Calpine Corporation, Cogentrix, Competitive Power Ventures, Eastern Generation, LLC, J-POWER USA Development Co., Ltd, LS Power Development LLC, NRG Energy
Talen Energy, Tenaska, Inc., and Vistra Energy
[2] https://www.p3powergroup.com/siteFiles/News/6CD08DA3CE06DFBADBA97398F79C0D2B.pdf
[3] https://www.powermag.com/the-significance-of-fercs-recent-pjm-mopr-order-explained/
[4] https://www.jdsupra.com/legalnews/pjm-s-focused-minimum-offer-price-rule-3396405/
[5] https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20210929-3009&optimized=false
[6] The Federal Power Act created the Federal Power Commission (FPC) (now the Federal Energy Regulatory Commission) as the regulatory body of transmission and wholesale sale of electricity and natural gas.
[7] The Administrative Procedure Act governs the way in which administrative agencies of the federal government may propose and establish regulations. Under the APA, administrative agencies must abide by certain regulations when rulemaking.