Industry: Trump’s FERC ‘padding fossil fuel profits’ with rule change

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Arial shot of District of Columbia, part of the PJM electricity market. Source: Flickr, La Citta Vita

US renewable energy associations have filed a request to the federal energy watchdog for the rehearing of an order mandating a PJM capacity market pricing system overhaul that they say will pad profits for fossil fuel generators at the expense of consumers and clean energy development.

The Federal Energy Regulatory Commission (FERC) issued an order on 19 December requiring that PJM, the nation’s largest electric grid operator that covers 13 states and the District of Columbia, expand the scope of its minimum offer price rule (MOPR) in order to blunt the impact of state-subsidised resources on the market.

It was the long-awaited follow-up to a June 2018 order by the FERC which declared the PJM’s existing tariff system “unjust and unreasonable” due to price distortions caused by state subsidies.

The decision issued last month by the Commission mandates that almost all state-subsidized power resources hit a PJM-determined price floor currently only applied to natural gas generators in order to participate in forward-looking capacity auctions.

The Solar Energies Industries Association (SEIA), the American Council on Renewable Energy,  the American Wind Energy Association and the Advanced Energy Economy slammed the decision, which they say will block new clean energy resources from participating in wholesale markets and hike prices for consumers.

The row is the latest in a slew of policy rows raging between the solar industry and the federal administration, joining the ranks of SEIA-fronted campaigns to overturn federally-mandated trade tariffs on imported solar cells and modules and to prevent the depreciation of the federal solar investment tax credit.

SEIA, ACORE: Justification of order is “cavalier and factually inaccurate”

In the joint filing, the industry groups contended that the decision oversteps federal jurisdiction and will undermine state clean energy programs. They also decried a lack of due process and justification for the decision.

“The Commission offers a cavalier and factually inaccurate justification for the Order,” the filing reads, noting that industry requests for a rehearing after the original 2018 decision were ignored.

“The Order, with little explanation, drastically and arbitrarily expanded the application of the MOPR to the point where it ‘could potentially apply to any conceivable state effort to shape the generation mix,” it added.

Under the new rules, PJM must expand the scope of MOPR to all new and existing resources that receive or are eligible to receive state subsidies, with a few exceptions. Existing self-supply, demand response, storage and energy efficiency resources were declared exempt from the updated MOPR, as were existing renewables already participating in a renewable portfolio standard programme.

The FERC gave PJM 90 days to comply with its December order.

Read the request for rehearing here.

Read the December 2019 order here.

Read the June 2018 order here.

Read Next

September 22, 2021
More than 190 US solar companies have warned that proposed duties on imports of modules and cells from three Southeast Asian countries represent an “immediate and serious threat” to America’s solar sector.
September 14, 2021
The Senate of Illinois has passed legislation that will commit the US state to reaching 50% renewables by 2040 and 100% carbon-free electricity by 2045.
September 14, 2021
The US solar industry is set to continue breaking annual installation records in the coming years despite supply chain constraints that have led to higher prices as well as disruptions caused by the government’s withhold release order (WRO), according to new research.
PV Tech Premium
September 13, 2021
Following the release of the US Department’s Solar Futures Study, Liam Stoker assesses the downstream and upstream trends that must be realised for US solar to fulfil its potential.
September 9, 2021
A letter co-signed by more than 750 US organisations has called on US Congress to push through policies to significantly ramp up renewables deployment in the country.
PV Tech Premium
September 3, 2021
For years California, Texas and Florida have dominated the US solar market, but backed by the investment tax credit, strong state-specific renewables standards and falling costs, new states are coming to the fore. Molly Lempriere takes a look at what is driving them, and the hurdles they face if they are to challenge the ‘Big Three’.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021