Late last year, regulators at the Federal Energy Regulatory Commission (FERC) issued a long-anticipated ruling to prevent subsidized power generation from distorting the wholesale market for electricity. In the PJM marketplace that serves Ohio customers, the ruling means the owners of Ohio’s two nuclear power plants will encounter difficulty in selling their electric capacity into the wholesale market.
See FERC’s press release on the ruling, which will likely be challenged in court.
OMA energy experts are still reviewing the complex FERC action, but our initial read suggests the minimum offer price rule (MOPR) is a giant stick against state subsidies. The ruling appears to force generators to decide whether to take a state subsidy or freely participate in the wholesale market.
Ironically, Ohio’s recently enacted House Bill 6 — which requires businesses and residential customers to subsidize nuclear generation, as well as select coal and renewable generation assets — will now deprive the nukes, OVEC, and the solar projects from competitive revenue in the wholesale market. This will make the subsidized resources either unviable or will shift more costs to ratepayers — depending on how the federal rule plays out.
Regardless, it appears that major customer impacts are in store. Plan to join the OMA Energy Committee meeting on March 12, after the dust has settled, to learn what this means for your business. 1/9/2020