FERC Denies Request to Reconsider Controversial Order

The Federal Energy Regulatory Commission (FERC) has denied requests to reconsider its December order that many believe to be a huge blow to the future of clean energy in the region.

In December of last year the Commission ordered PJM Interconnection to begin using the minimum offer price rule (MOPR) for its capacity market. This requires that energy sources that receive state subsidies be offered at a higher price in the market. The policy primarily targets clean energy resources as they receive state subsidies through renewable portfolio standards (RPS) and renewable energy credits (REC). Existing sources may be exempt, but new resources will have to use significantly higher prices. Maryland’s Public Service Commission issued a statement signaling their disappointment in the Commission’s decision because of its potentially harmful effects on new offshore wind projects and other renewable sources soon to come online. New Jersey has even threatened to leave PJM.

The Commission’s order forced PJM to issue a compliance filing where they make an effort to ease fears from the clean energy sector. However, many groups maintain opposition to the initial FERC order and have since asked the Commission to reconsider. On Thursday FERC denied these requests, saying that the move would clear the way to approve the compliance filing.

The Federal Power Act only allows lawsuits to proceed once reconsideration requests are approved or denied, paving the way for interested groups to take legal action. Major organizations in the clean energy sector issued a joint press release in response to FERC’s reconsideration request denial.

Comments from the press release by Gregory Wetstone, President and CEO, American Council on Renewable Energy:

FERC is financially penalizing American consumers for the clean energy they want and deserve to bail out increasingly uneconomic fossil fuel generators. As a result, we will be exploring our options to ensure that state policies are respected and renewable deployment moves forward.

A representative from the Sierra Club believes legal challenges are likely for several reasons including the increased costs predicted as a result of the order. Several sources estimate it will cost over $5 billion to implent. From coverage in Greentech Media:

Legal challenges can be expected against FERC for failing to consider the increase in capacity costs that could be passed on to the 65 million or so electricity customers served by utilities in PJM territory…

Previous Conduit Street coverage:

Maryland Public Service Commission Disappointed With Federal Energy Order

New Jersey Could Exit PJM’s Capacity Market