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E&E News: Md. Weighs Exiting U.S. Grid Market Over FERC Order

Posted by Arianna Skibell on Apr 24, 2020

E&E News covered Maryland Public Service Commissioner Jason Stanek's comments on considering exiting Md. from PJM Interconnection's capacity market in response to FERC's MOPR order, quoting AEE's Jeff Dennis. Read excerpts below and the entire E&E News piece here (sub. req.).  

Maryland's top utility regulator said his state is considering exiting PJM Interconnection's capacity market — the nation's largest — in response to a Federal Energy Regulatory Commission order last year changing the grid operator's pricing mechanisms. "It's hard to say whether [exiting is] a net benefit," Jason Stanek, chairman of the Maryland Public Service Commission, said Wednesday on a webinar hosted by the National Conference of State Legislatures. "It is not an easy calculus to make, and we're in the midst of that right now..."

Maryland joins several states with progressive clean energy targets, including Illinois and New Jersey, to have mulled an exit from PJM, though Stanek said talks have just begun. At issue is FERC's 2019 decision to expand the "minimum offer price rule," or MOPR, in the regional capacity market, which raises floor prices for state-subsidized generation. The order has caused concern that renewable and nuclear resources would now be prevented from competing with fossil fuel power plants in PJM's wholesale market, which spans 13 Midwest and Mid-Atlantic states and the District of Columbia. Critics warn that could hamstring state decarbonization goals.

Maryland Gov. Larry Hogan (R) last year signed into law a plan to achieve 50% renewable energy by 2030. And the state is one in a growing list to adopt a renewable portfolio standard, which requires a certain percentage of a state's electricity to come from renewable generation. Roughly half of the growth in U.S. renewable energy generation since 2000 can be attributed to state-level requirements, according to a 2018 report by the Lawrence Berkeley National Laboratory. FERC is already facing legal challenges over the MOPR. Illinois, the American Public Power Association and environmental groups like the Natural Resources Defense Council have filed petitions for review in the U.S. Court of Appeals for the District of Columbia Circuit...

Jeff Dennis, managing director and general counsel for Advanced Energy Economy, said if the MOPR compels state-supported resources out of the capacity market, those resources won't be counted toward the region's needs. "Even if they are built, their capacity is effectively ignored," he said on the webinar. "The capacity market will procure other resources in their place, most likely natural gas plants or existing coal resources subject to low or no floor prices." He said that according to Democratic FERC Commissioner Richard Glick, this could increase capacity payments by $2.4 billion per year. The consulting group Grid Strategies LLC put that number around $1.6 billion a year...

Read the entire EnergyWire piece here (sub. req.).  

Topics: AEE In The News