A re-defined capacity product, revised parameters for generator performance, and a new role for demand response.
PJM would minimize risk, but so did regulation.
If PJM markets should lose demand response as a capacity resource.
How recent events could prove a harbinger of winters to come.
New England’s proposed capacity market reform would force generators to ‘Be There or Else.’
A pragmatic new approach to assuring reliability.
The latest dispute over PJM’s bidding rules has raised the level of uncertainty in organized electricity markets. Efforts at reform have created a market structure so jumbled that it can’t produce just and reasonable rates -- or assure adequate supply resources. It’s time for FERC to consider alternative approaches to market design.
Does the lack of long-term pricing undermine the financing of new power plants?
The PJM Interconnect’s Reliability Pricing Model generally has succeeded in attracting and retaining low-cost generation and demand resources to maintain resource adequacy. But sluggish demand and low prices have weakened the market for long-term capacity contracts. Suppliers aren’t willing to lock in current low prices, and buyers don’t want to pay more for future certainty. Is the market dysfunctional, as some state lawmakers suggest, or does the lack of long-term contracts indicate a rational balance of supply and demand?
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.
FERC seems to say that states remain free to interfere with RTO markets.
Citing what it called “mounting evidence of risk” that PJM’s RPM capacity market could indeed “be gamed,” the Federal Energy Regulatory Commission (FERC) last week OK’d most of the tariff amendments PJM had proposed to correct ﬂaws in its Minimum Offer Price Rule (MOPR), which allows the grid operator to mitigate or predatory, below-cost bids by suppliers who would sell generating capacity into the region.
New England grapples with excess capacity and rock-bottom prices.
“Corrosive.” “Seriously flawed.” On the “brink of market failure.”That’s what critics say about New England’s forward capacity market (FCM), whereby ISO New England conducts auctions to solicit offers from project developers to make electric capacity available three years into the future to meet anticipated regional demand.