On the price floor

Source: By KELSEY TAMBORRINO, Politico • Posted: Wednesday, January 22, 2020

Grid operator PJM called on FERC to rewrite portions of its December order barring clean and nuclear energy from PJM’s long-term power auctions, Pro’s Gavin Bade reports. Ahead of FERC’s decision to impose a strict price floor, nuclear-heavy states warned they could remove their entire power sectors from that market if FERC did not allow individual plants to opt out. FERC did not provide that option for individual plants, and now PJM is worried states may exit by using an existing authority called the “Fixed Resource Requirement alternative.”

“If significant additional portions of PJM’s load were to utilize the FRR alternative, some of the efficiencies of a regional capacity market may be lost,” the grid operator wrote. “PJM is concerned that the December 19 Order’s pursuit of economic efficiency may in fact unintentionally cause economic inefficiencies over the long term.”

Multiple states, utilities and clean energy groups also filed rehearing requests — many of which want FERC to rethink its price floor completely and are likely to file legal challenges at the D.C. Circuit Court if it does not reverse course. FERC has 30 days to respond but can give itself additional time if needed.