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Tonko, Lance lead push for federal regulators to let states determine clean energy resource policies

Bipartisan group of 24 Members of Congress urges FERC to reject PJM’s “MOPR-Ex” proposal

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Washington, June 5, 2018 | comments
"“This proposal… will limit the ability of states to advance public policies that address their unique goals and generation needs, requiring affected generators to offer into the capacity market at a higher price. Consequently… consumers’ bills could increase. Consumers could also lose the benefits of the clean generation that the MOPR-Ex could force out of the market" - Rep. Paul Tonko
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WASHINGTONRepresentatives Paul Tonko (D-NY) and Leonard Lance (R-NJ) led a bipartisan group of 24 Members of Congress calling on the Federal Energy Regulatory Commission (FERC) to reject a proposal by regional grid operator PJM Interconnection to prevent states from supporting clean energy resources. The letter reads in part:

“This proposal… will limit the ability of states to advance public policies that address their unique goals and generation needs, requiring affected generators to offer into the capacity market at a higher price. Consequently… consumers’ bills could increase. Consumers could also lose the benefits of the clean generation that the MOPR-Ex could force out of the market at a time when ratepayers in PJM are enjoying low prices and high reserve margins.

“We believe that the expanded use of MOPRs will ultimately have the effect of making it more difficult for states to promote generating resources that provide positive economic and environmental attributes… We strongly urge you to allow states to continue to pursue these policies and reject proposals that would undermine states’ individual abilities to cultivate their own energy goals and programs.”

Last month, PJM submitted two proposals to FERC to reform its capacity market design, including a modified Minimum Offer Price Rule (MOPR) referred to as “MOPR-Ex” that seeks to dampen the effects of certain state policies that provide out-of-market subsidies for energy resources. This would make it likely that state-supported resources, including renewables supported by state Renewable Portfolio Standard programs and nuclear plants supported by state Zero Emissions Credit programs, will not clear the capacity market auction.

Possible outcomes of the MOPR-Ex proposal include higher energy prices for customers within PJM, disadvantages for clean energy resources, and an infringement on states’ rights to make their own decisions about their energy generation mix.

The Sustainable FERC Project has a useful summary of the MOPR-Ex proposal, as does policy news site Vox.com. The Institute for Policy Integrity has released a report outlining concerns with the proposal’s design.

 

Full letter

Federal Energy Regulatory Commission (FERC)
888 First Street, NE
Washington, DC 20426

Dear Chairman McIntyre, Commissioner LaFleur, Commissioner Chatterjee, Commissioner Powelson, and Commissioner Glick:

We respectfully request the Commission to support collaboration between grid operators and individual state governments—whom each have unique energy needs—and dismiss any proposal that would curtail the ability of states to develop their own policies and programs.

As you know, on April 9, 2018, PJM filed with FERC two competing proposals designed to address potential market distortions when out-of-market actions influence the clearing of the capacity markets. One of these two proposals would apply a Minimum Offer Price Rule (MOPR) to address the impacts of state policies on wholesale capacity markets in PJM. This proposal, known as “MOPR-Ex”, will limit the ability of states to advance public policies that address their unique goals and generation needs, requiring affected generators to offer into the capacity market at a higher price. Consequently, PJM capacity market prices and consumers’ bills could increase. Consumers could also lose the benefits of the clean generation that the MOPR-Ex could force out of the market at a time when ratepayers in PJM are enjoying low prices and high reserve margins.

We believe that the expanded use of MOPRs will ultimately have the effect of making it more difficult for states to promote generating resources that provide positive economic and environmental attributes.

Rather than focus on mitigating the effects of state policies, FERC should encourage grid operators to work with states in a way that respects states’ role. State energy policies have been implemented to address existing market failures, and states have taken the lead in developing policies that will support safe, reliable, and clean energy resources. We strongly urge you to allow states to continue to pursue these policies and reject proposals that would undermine states’ individual abilities to cultivate their own energy goals and programs.

 

Sincerely,

Members of Congress

Paul Tonko

Leonard Lance

Frank A. LoBiondo

Bobby L. Rush

Jerry McNerney

Daniel W. Lipinski

Brian K. Fitzpatrick

Adam Kinzinger

Lloyd Smucker

John Katko

Robert A. Brady

Mike Quigley

Donald Norcross

Anthony G. Brown

Cheri Bustos

Mike Doyle

Brendan F. Boyle

C. A. Dutch Ruppersberger

Matt Cartwright

Bill Foster

Raja Krishnamoorthi

Thomas MacArthur

Conor Lamb

Dwight Evans

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