The Federal Energy Regulatory Commission (FERC) issued two orders denying rehearing and offering some clarity on the PJM Interconnection, LLC (PJM) Minimum Offer Price Rule (MOPR), a construct that potentially prevents new capacity-market sellers from depressing prices by offering at reduced prices to clear a capacity auction. The April Orders relate to FERC’s June 2018 order, which found that out-of-market payments support the operation of certain generation resources ranging from small solar and wind facilities to large nuclear plants and threaten the competitiveness of PJM’s capacity market. See GT Alert, “FERC Orders Sweeping, Expedited Changes to PJM Capacity Market, Rehearing Requests Filed.” The June 2018 Order determined that PJM’s open-access transmission tariff is unjust and unreasonable because the MOPR failed to address the price-distorting impact posed by out-of-market support.
