Dive Brief:

PJM Interconnection on Wednesday issued a compliance filing with the Federal Energy Regulatory Commission that largely satisfied some of the biggest critics of the regulatory body's controversial Minimum Offer Price Rule (MOPR) order .

FERC's December order attempted to effectively raise the floor prices for state subsidized resources bidding into the wholesale market, eliciting concerns that the new rules could effectively nullify state policies attempting to increase deployment of new zero-emissions resources.

But Wednesday's filing quelled some of the concerns initially raised by the renewables industry, allowing projects to advocate for lower MOPR floor prices on a case-by-case basis and lowering the overall adjusted floor prices for clean energy technologies to clear future bid auctions.

Dive Insight:

PJM's 536-page filing was a "phenomenal" attempt to assuage stakeholder concerns, Managing Director and General Counsel at Advanced Energy Economy Jeff Dennis told Utility Dive, despite flaws he and other clean energy stakeholders still see at the root of the FERC order.

"The FERC order issued in December significantly expanded the application of the MOPR used in PJM's capacity market," the grid operator said in a statement. Since then, "PJM has heard from every stakeholder sector, conducting nine formal stakeholder meetings."

PJM originally submitted the MOPR for FERC approval to address new natural gas resources coming into the market, where they expected the most market interference to come from. But FERC ended up applying the rule much more broadly, in a move that attempted to "level the playing field" across all resource types bidding into the capacity market.

Renewable resources like wind and solar "ought to be able to compete without subsidies," FERC Chair Neil Chatterjee said at the time. The rule also drew support from coal advocates who called the order a "timely first step in addressing the loss of the nation's baseload generating capacity."

But several stakeholders, including the grid operator itself, expressed concerns over FERC's response and its potential impacts on the market.

"MOPR, like the rest of the capacity market, is designed around the economics of natural gas, and therefore doesn't create a level playing field for renewables," said Dennis.

PJM raised similar concerns in its comments filed with FERC in January, and in its Wednesday filing seemed to largely act to the extent that it could to not disadvantage wind and solar in its market, clean energy industry groups said.

Under PJM's compliance proposal, unit-specific reviews will allow energy projects to justify a lower clearing price based on more specific attributes of the project, a move groups praised.

"Though SEIA objects to the underlying policies presented in the current MOPR construct, PJM took a positive step in proposing how to comply with FERC's December order," Katherine Gensler, vice president of regulatory affairs for the Solar Energy Industries Association, said in a statement. "This process provides renewable generators a better opportunity to compete on a level playing field with other capacity providers and to help meet states' clean energy goals."

PJM's Wednesday filing also lowers default floor prices for wind and solar, or the FERC-mandated price PJM had to calculate for all energy technologies.

"PJM's proposal provides the flexibility necessary for renewable resources to demonstrate that they are among the lowest cost and most reliable sources of capacity available today," Amy Farrell, senior vice president of government and public affairs at the American Wind Energy Association, said in a statement. "We appreciate PJM's efforts to develop sensible responses to the unsustainable policies that FERC mandated for the region's competitive market."

The grid operator also proposed to conduct its next capacity auction within six and a half month's of the commission's approval, if it secures that approval.

PJM's forward capacity auction has been delayed since May 2019, drawing increased frustrations from generators across the region. To make up for missed auctions, the grid operator proposed conducting auctions every six months instead of annually for the next three auctions.

Additionally, PJM asked for a 35 day comment period "given the size of the filing, the importance of the issues and the current circumstances."