David Mohre

Capacity Roulette

Out of market means out of luck—even for self-supply.

When the U.S. Federal Energy Regulatory Commission issued its so-called ”MOPR“ decision in April 2011, approving a minimum offer price rule (or bid floor) for PJM RPM capacity market — and then on the very next day did much the same for New England’s FCM capacity market — FERC did more than just prop up prices. Instead, it created a nightmare scenario for utilities that still own their own generation. These utilities, who choose to “self-supply” with their own plants, rather than buy capacity from either the RPM or FCM, adequacy rules, could now be forced to pay twice for capacity — if their own plants are deemed inefficient or uneconomic.

Too Much Reliability

NERC confronts a case backlog now numbering in the thousands.

The case backlog of unprocessed electric reliability violations is growing out of control, threatening to “swamp” the industry — a sign, perhaps, that when Congress and FERC modernized the electric reliability regime to serve a more market-based industry structure, and for the first time gave enforcement authority to North American Reliability Corp. (NERC) as the nation’s official electric reliability czar, no one gave much thought, apparently, as to whether NERC’s very idea of what constitutes reliability might have needed modernizing as well.