By: Paul Rice, Assistant Vice President

This article is the first entry of a three-part series

Key Points:

• Customers want and ultimately will have choice
• Customers are moving from passive recipients of utility services to an active participant in the market
• Understanding the customer, and ultimately maintaining a relationship with that customer, is paramount to the utility establishing itself as a preferred partner
• Getting on the right path means a shift from a “rate base” perspective to a tailored and personalized approach

By: Emma Nicholson, Senior Project Manager

In December 2019, the Federal Energy Regulatory Commission (“FERC” or “the Commission”) issued an order (“December 2019 Order”) directing the PJM Interconnection, LLC (“PJM”) to significantly expand its application of the Minimum Offer Price Rule (“MOPR”) in the PJM capacity market. The MOPR was initially created to address buyer-side market power by creating an administratively determined offer floor for certain resources in the capacity market. Over time, its purpose was expanded to address the market impacts of state support for capacity resources, such as Zero Emissions Credits for nuclear units and Renewable Energy Credits (“RECS”) for renewable facilities. FERC defined these and other out-of-market payments as a “State Subsidy.” The MOPR is designed to remove the impacts of State Subsidies from capacity resource supply offers. Since it is a price floor, applying the MOPR is expected to raise the supply offers of certain capacity resources that receive a State Subsidy and risk their ability to clear in the capacity auction.