Photo Credit: Jay Heike at: https://images.unsplash.com/photo-1564957341074-6520b6b483b
PJM Interconnection LLC (“PJM”) held a series of workshops in February and March 2021 to discuss possible enhancements to the PJM capacity market, including eliminating or reforming the current Minimum Offer Price Rule (“MOPR”). PJM believes that MOPR reform needs to come first, before it can move onto considering other capacity market issues. For MOPR reforms, PJM put forth four possible options, while noting that it is open to considering other proposals during the stakeholder process. The first option is a transitional approach that maintains the current MOPR while attempting to accommodate state policy resources by reducing the clearing price to ensure total cost does not increase. The second option is intent-based and would only apply MOPR when certain ex-ante screens are triggered. The third option would create an explicit buyer side market power screen based on the contractual obligation of a supply resource and the impact to clearing price. The fourth option would revert back to the pre-December 2019 version of the MOPR and potentially include portions of prior iterations. In the final workshop, PJM also discussed the possibility of conducting an alternative stakeholder process for MOPR reform, in order to implement the reforms in time for the December 2021 Base Residual Auction.
PJM’s presentation from the first workshop is available here.
Details from the second workshop, including stakeholder presentations, are available here.
Details from the third workshop, including stakeholder presentations, are available here.
PJM’s presentation from the fourth workshop is available here.