FERC Takes Baby Steps on Carbon Pricing while Tripling Down on Anti-Renewable Market Rules Amid Legal Challenge

15 Oct 2020

The Federal Energy Regulatory Commission (FERC) released a proposed policy statement on carbon pricing that, if formally adopted, would convey the Commission's sense that RTO-level carbon pricing based on state policy decisions may be acceptable. This is a constructive signal but has no immediate applicability since it was not adopted as official policy. Unfortunately, however, FERC acted with more force with regard to a compliance filing from wholesale power market operator PJM Interconnection on FERC's Minimum Offer Price Rule (MOPR) order, which imposes new costs on ratepayers to subsidize fossil generation at the expense of more cost-effective renewable power. 

Following is a statement from American Council on Renewable Energy (ACORE) President and CEO Gregory Wetstone:

While we are grateful for the signal that FERC may eventually look positively on carbon pricing in the nation’s electricity markets, the Commission’s binding actions on its Minimum Offer Price Rule (MOPR) reflect a continued commitment to effectively subsidize fossil generation in the nation’s largest electricity market, the PJM Interconnection, imposing massive unnecessary costs on millions of ratepayers and overtly discriminating against renewable power generators. While we’ll need to see future orders on compliance to determine the precise severity of this action, renewable energy investment decisions in the Mid-Atlantic region are already impacted by the MOPR, and preferential treatment for fossil fuel generators will only grow in subsequent auctions as costs for renewable power continue to decline. These policies take us in the wrong direction from where we need to be to address our climate imperatives and grow the renewable energy economy, and are being challenged in court by ACORE and allied groups.

ACORE | http://www.acore.org