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Smart Energy Decisions: Understanding the MOPR: What an Obscure FERC Rule Could Mean for Renewable Energy Buyers

Posted by Caitlin Marquis on Mar 13, 2020

Smart Energy Decisions featured a guest column from AEE's Caitlin Marquis explaining the impact of FERC's Minimum Offer Price Rule (MOPR) on corporate renewable energy buyers. Read excerpts below and the entire Smart Energy Decisions piece here. 

The energy world is full of acronyms, and the hottest four-letter word of 2020 is, without contest, MOPR. MOPR stands for “Minimum Offer Price Rule,” and it has become a top concern of clean energy advocates, advanced energy developers, and states since December when the Federal Energy Regulatory Commission (FERC) issued a much-anticipated decision on the rule. Applying to PJM Interconnection, which operates the bulk power system in all or part of 13 mid-Atlantic states and the District of Columbia, the FERC order poses a threat to both state clean energy policies and voluntary purchases of renewable energy in the largest U.S. energy market, and potentially all the organized wholesale markets under FERC jurisdiction, where direct corporate purchases of renewable energy are expanding.

FERC’s December decision requires PJM to apply an administratively set minimum price to any state-sponsored resource that participates in PJM’s annual capacity auction, a tool used to lock in the resources needed to meet the region’s resource adequacy requirements three years into the future. Proponents of the MOPR argue that this price floor is necessary to counteract the market price impact of state policies such as renewable portfolio standards and zero emission standards, which provide revenue to certain resources, typically emission-free renewable and/or nuclear energy. Operators of coal- and natural gas-fired power plants charge that these state-based payments allow those resources to drive down prices in the capacity auction, to their detriment...

With the ultimate impact of FERC’s failure to provide a clear and complete exemption for voluntary renewable energy transactions uncertain, nearly 50 requests for clarification and/or rehearing were filed at FERC. Commenters including the Advanced Energy Buyers Group, Hershey’s, clean energy advocates (a joint filing by Advanced Energy Economy, the American Wind Energy Association, and others), and even PJM itself argued that voluntary transactions should be clearly exempt from MOPR. FERC is known to take months to respond to filings for rehearing, and legal challenges to the order cannot proceed until it does...

Read the entire Smart Energy Decisions piece here. 

Topics: AEE In The News