Capacity Market

News & Analysis as of

PJM Alternative to Expanding MOPR Leaves Questions Unanswered

On August 18, 2016, PJM Interconnection, L.L.C. (“PJM”) presented aproposal to its stakeholders outlining a possible mechanism for mitigating the potential impact on capacity prices in the PJM market of generation units...more

UK Electricity Market Reform: How far have we come?

In this note (part 3 of a series) we reflect on the Government’s continuing implementation of Electricity Market Reform (EMR), highlight key developments in 2015 and Q1 and Q2 2016, and outline EMR milestones we expect to...more

Brexit: Energy market and energy policy issues

Many EU and UK energy policies are closely aligned. In many respects, the UK has taken the lead in shaping EU energy policy, with its focus on open and transparent markets, energy security, low carbon energy sources, energy...more

Energy Brexit: initial thoughts

In the energy sector, as elsewhere, it is far too early to give any definitive view on the effects of the UK electorate’s vote to leave the EU, or to offer a comprehensive analysis of the merits of the options now facing the...more

Recent Complaints Highlight Continued Friction between State Policy Goals and Federally Regulated Wholesale Power Markets

On June 24, 2016, two complaints were filed with the Federal Energy Regulatory Commission (“Commission or FERC”) that highlight the continued tension between state policy initiatives and the mandatory centralized capacity...more

Supreme Court Continues to Stake Out FERC Jurisdiction, Invalidates State Gas-Fired Power Plant Incentive Program

In an opinion unanimous in judgment (albeit with two concurring opinions), the U.S. Supreme Court recently reiterated the reach of the Federal Energy Regulatory Commission’s (FERC) jurisdiction over interstate wholesale...more

The Court has spoken: State programs to incentivize the construction or continued operation of electric generators must be crafted...

Energy regulators throughout the United States are looking for ways to encourage production of clean electricity, including from renewable sources. States, public utility commissions, power producers, power distributors and...more

U.S. Supreme Court Invalidates Maryland Program that Supplements FERC-Approved Capacity Payments

In a unanimous opinion issued on April 19, the U.S. Supreme Court invalidated a Maryland program designed to incentivize construction of a new natural gas plant. The Court concluded that the program infringed upon the...more

Renewable Energy In Russia: Recent Developments

Russia recently introduced procedures for the transfer of a power generating company’s rights and obligations under long-term capacity agreements for future projects that use capacity payments to secure a return on...more

European Commission’s First State Aid Sector Inquiry Identifies Preliminary Concerns with Capacity Mechanisms

The European Commission's Interim Report is critical of price-based mechanisms and calls for harmonized methods to determine generation adequacy levels and reliability standards. The European Commission (Commission)...more

"CFTC Proposes Exclusion of Certain Electric Power and Natural Gas Contracts From 'Swap' Definition"

On April 4, 2016, the Commodity Futures Trading Commission (CFTC) proposed guidance that would exclude certain capacity contracts in electric power markets (capacity contracts) and natural gas peaking supply contracts from...more

CFTC Proposes Guidance Clarifying that Certain Electric Capacity and Natural Gas Peaking Contracts are not “Swaps”

The CFTC has proposed guidance that certain capacity contracts in electric power markets and certain natural gas peaking supply contracts should not be considered “swaps” under the Commodity Exchange Act. The guidance does...more

FERC Expands Role of Demand Response Resources in Approving PJM’s New Capacity Market Framework

In a move likely to create more opportunities for demand response resources, FERC has conditionally approved substantial modifications to PJM’s capacity market framework, known as the Reliability Pricing Model (“RPM”). Many...more

FERC Issues Order Accepting PJM Capacity Performance Proposal

FERC approves PJM’s significant capacity market changes in an effort to ensure reliability in the region. On June 9, 2015, the Federal Energy Regulatory Commission (FERC or the Commission) issued an order (the CP...more

PJM Proposes Capacity Performance Rules That Will Present New Opportunities and Risks for Clean Energy Resources

In response to poor performance by many generation resources in the PJM region during the 2104 “Polar Vortex” and concerns over the increasing reliance on natural gas-fired generation resources in the PJM region, PJM filed...more

UK Electricity Market Reform

On 16 October 2014, the first CfD allocation round commences, with the first CfDs being signed as early as January 2015, subject to any mid-allocation round appeals. The attached “Contracts for Difference – On the Launchpad”,...more

Clear Rift Highlighted by Commissioners’ Lack of Action on New England’s Most Recent Forward Capacity Auction Results

On September 16, 2014, the Federal Energy Regulatory Commission’s four Commissioners issued statements explaining a 2-2 deadlock between Chairman LaFleur and Commissioner Moeller on the one hand and Commissioner Clark and new...more

New generation in 2014 mostly gas, solar, wind

Most new power plants placed in service in the first half of 2014 are powered by natural gas, with new solar and wind capacity coming in second and third, respectively, according to the U.S. Energy Information Administration....more

Third Circuit Affirms District Court Decision Invalidating New Jersey’s Long-Term Capacity Pilot Program

On September 11, 2014, a three-judge panel of the U.S. Court of Appeals for the Third Circuit unanimously affirmed an October 2013 decision of the U.S. District Court for the District of New Jersey that New Jersey’s Long-Term...more

The Fourth Circuit Affirms District Court Decision Finding Maryland’s Contract for Differences Unconstitutional

As we reported (see link below), in October 2013, the United States District Court for the District of Maryland declared unconstitutional an order of the Maryland Public Service Commission (PSC) directing the state’s...more

Renewable Energy Update -- May 2014

Renewable Energy Focus - Another solar record set, renewables power nearly quarter of California: KCET - May 20 -- Yet another milestone in California's quest to go solar: the state's industrial-sized solar power...more

FERC Approves PJM’s Proposed Changes to Market Rules Governing the Participation of Demand Response Products in the Capacity...

On January 30, 2014, the Federal Energy Regulatory Commission (FERC) issued an order approving rule changes proposed by PJM Interconnection, L.L.C. (PJM) to the clearing of its capacity market, referred to as the Reliability...more

NYISO’s Proposal to Constrain Market Power in New Capacity Zones Approved by FERC

On June 6, 2013, the Federal Energy Regulatory Commission (“FERC”) issued an Order conditionally accepting the New York Independent System Operator, Inc.’s (“NYISO”) proposal to implement buyer-side and supplier-side market...more

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