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1 1 (February 18, 2020)

handle is hein.crs/govcagf0001 and id is 1 raw text is: Researh Sevice FERC Directs PJM to Expand Minimum Offer Price Rule February 18, 2020 On December 18, 2019, the Federal Energy Regulatory Commission (FERC) issued an order directing the PJM regional transmission organization (RTO) to expand its Minimum Offer Price Rule (MOPR) as a move to address subsidies to electric power generation resources by states, with certain exemptions. FERC stated that it acted to protect the competitive capacity market administered by PJM by requiring PJM to expand its MOPR to apply to any new or existing power generation resource that receives, or is entitled to receive, a state subsidy, unless a FERC-determined exemption applies. FERC initiated a hearing under Section 206 of the Federal Power Act (FPA) to make its determination that PJM's Open Access to Transmission Tariff was unjust and unreasonable, since it did not account for the effect of these subsidies. Background RTOs and independent system operators (ISOs) manage the electric transmission systems and the competitive wholesale electric energy markets, under FERC's oversight. RTOs essentially operate as a broker between generation companies that bid to sell power into the wholesale markets, and distribution companies that submit bids to buy power from the markets. To ensure the reliability and timeliness of these transactions, RTOs generally run several markets (including a capacity market) to ensure that enough generation is available to reliably meet peak power demands. Therefore, the dispatch of power plants essentially involves two stages, encompassing the planned commitment of generation to meet projected RTO system demand, and the dispatch of additional or alternative capacity in real time. In recent years, several states have criticized various aspects of the performance of the competitive markets, especially in areas with transmission congestion (i.e., load pockets) where high prices for electricity persist. Several proposals, in New Jersey and Maryland in particular, to subsidize generation in these load pockets and opposition to these proposals from energy marketers eventually led to the 2016 Supreme Court decision in Hughes v. Talen Energy Marketing. The Supreme Court decision held that Maryland's program to encourage development of in-state generation was preempted by FERC's exclusive jurisdiction over interstate wholesale electricity rates under 16 U.S.C. § 824. Congressional Research Service https://crsreports.congress.gov IN11223 CRS NStGHT Prepaimed for Mernbei-s and Committees 4 o. C- --q .. . . . . . . . ...----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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