Grid Strategies published a report saying that MOPR could cost customers in the PJM Interconnection from $1 billion to $2.6 billion annually, according to an updated analysis from consulting firm Grid Strategies. The estimate cuts in half the group’s cost analysis from August, which found the Minimum Offer Price Rule (MOPR) could cost up to $5.7 billion per year. But while it’s widely been accepted by stakeholders that costs are not anticipated to rise in the next capacity auction, Grid Strategies’ “conservative” estimate finds that over the long term, the “MOPR will result in billions or tens of billions of dollars in excess costs to electricity consumers across PJM,” the report reads. The analysis comes in the midst of efforts by PJM and generators like Calpine to negotiate with stakeholders concerned by the MOPR’s potential impacts to state resource goals, particularly for offshore wind. (via Utility Dive).
Some PJM states have been exploring the potential of leaving its capacity market because of the Minimum Offer Price Rule, approved by federal regulators in December. Proponents say the rule is intended to mitigate the market distorting impacts of state subsidies for nuclear and renewable energy, but some states see it as an affront to their clean energy policies.
Exiting the PJM Interconnection’s capacity market and applying a Fixed Resource Requirement (FRR) could cost New Jersey between $32 million and $386.4 million more than the 2021/2022 capacity auction, according to a report released Wednesday by PJM’s independent market monitor (IMM). (via Utility Dive)
So needless to say there are conflicting reports about the economic implications of the MOPR, but most in the industry tend to agree that FERC should stay out of state’s business. We will have a blog post on this soon and recommend following Utility Dive for more coverage on MOPR.