Troutman Sanders LLP: FERC Continues to Address RTO Capacity Market Issues

Troutman Sanders LLP: FERC Continues to Address RTO Capacity Market Issues

On Thursday July 28, 2011, the Federal Energy Regulatory Commission ("FERC" or the "Commission") held a technical conference to discuss issues surrounding the applicability of PJM Interconnection LLC's Minimum Offer Price Rule ("MOPR") to "self-supplying" resources. 

At the technical conference, Commission staff posed questions on the following issues:

  • How resources which self supply were be compensated before the Commission's order on April 12, 2011 in ER11-2875 and EL11-20-001;
  • How the Commission's April 12 Order could impact long-term resource planning;
  • Does the same incentive to exercise buyer market power exist for small load serving entities as it does with large load serving entities;
  • Would the market power concern about using self-supply be alleviated if the self-supplied resources are acquired through a procurement process that does not discriminate between new and existing resources? If yes, what factors should be analyzed to determine whether a procurement process is non-discriminatory;
  • Why the Fixed Resource Requirement Alternative is or is not a viable alternative for self-suppliers; and
  • What alternative are there to the FRR option which would allow self-supply while  still deterring buyer market power?  

Post technical conference comments are due to be filed on August 18, 2011.

Panelists at the Conference included Patrick McCullar on behalf of the American Public Power Association; Gregory J. Morgan, representing Dominion Resources Services, Inc.; Douglas R. M. Nazarian, Chairman, Maryland Public Service Commission; Dr. Joseph E. Bowring, Monitoring Analytics, L.L.C.; David L. Mohre, National Rural Electric Cooperative Association; Lee A. Solomon, President, New Jersey Board of Public Utilities; Andrew Ott, PJM Interconnection, L.L.C.; Mark Scott, representing PJM Load Group; Dr. Roy Shanker, PJM Power Providers Group; Dr. William Hogan, Professor, Harvard University, representing PSEG Companies.

Additionally, on July 20, 2011, the Midwest Independent Transmission System Operator, Inc. ("MISO") filed revisions to its Open Access Transmission, Energy and Operating Reserve Markets Tariff to implement a capacity market in the Midwest in Docket No. ER11-4081.  MISO also requested the Commission extend the Comment date to September 15, 2011.

A copy of the MISO filing is available here

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