Parties Request Rehearing of PJM’s Focused MOPR Policy

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On November 29, 2021, FERC issued a notice stating that the requests for rehearing on PJM Interconnection, L.L.C.’s Focused Minimum Offer Price Rule (“Focused MOPR”) policy, which went into effect by operation of law on September 29, 2021 (see October 29, 2021 edition of the WER) were deemed denied by operation of law. FERC’s notice triggers a 60-day clock under the Federal Power Act for parties to petition for appellate review. The November 29 notice followed rehearing requests filed by parties including the Pennsylvania Public Utility Commission, Public Utilities Commission of Ohio, Electric Power Supply Association, Old Dominion Electric Cooperative, Vistra Corporation, and the New Jersey Board of Public Utilities. In addition to the rehearing requests, the PJM Power Providers Group has already appealed the Focused MOPR to the United States Court of Appeals for the Third Circuit, and submitted comments responding to Chairman Glick’s and Commissioner Clements’ joint statement in support of the Focused MOPR.

Parties seeking review of FERC’s September 29, 2021 notice (collectively, “Rehearing Requestors”) focused both on the substantive aspects of PJM’s Focused MOPR policy, as well as the procedural aspects associated with the policy going into effect by operation of law. Substantively, the rehearing requests addressed, among other issues, whether the Focused MOPR is adequate to prevent the exercise of buyer-side market power, and whether FERC adequately explained its departure from prior precedent imposing the “Expanded MOPR.”

For example, some Rehearing Requestors argued that the Focused MOPR is unjust and unreasonable, in part because the attestation process does not afford PJM a meaningful ability to review offers to ensure they are competitive. Others argued that the Focused MOPR contains loopholes that make it unclear whether the buyer-side market power mitigation framework will be applied to any offers at all, opening the door to systematic market distortions eroding confidence in PJM’s capacity market. Rehearing Requestors also stated that acceptance of the Focused MOPR would result in an unexplained departure and repudiation of prior FERC orders approving the Expanded MOPR framework. They also argued that FERC failed to balance consumer and investor interests, and failed to meaningfully respond to the objections regarding the Focused MOPR’s ability to address buyer-side market power.

By contrast, other Rehearing Requestors argued that FERC erred by not accepting the MOPR outright, and stated that both consumers and PJM market participants would be better served by putting their efforts into positive market reform rather than seeking to endlessly re-litigate the MOPR.

Procedurally, the Rehearing Requestors raised concerns with what they characterized as the Commissioners’ failure to issue timely statements explaining their positions. For example, some Rehearing Requestors—though taking opposite positions on the substantive issues—argued that the weeks-long delay in issuing statements deprived the parties of their due process rights by making it impossible to engage with the Commissioners’ reasoning prior to the deadline to submit rehearing requests. Old Dominion Electric Cooperative also took issue with FERC’s failure to issue an order accepting or denying PJM’s Focused MOPR proposal, pointing out that, as a result of FERC’s inaction, FERC did not rule on its proposed revisions to the Focused MOPR tariff language that would clarify the MOPR’s application to electric cooperatives, even when PJM agreed that FERC should accept the proposed clarifications.

As reported in the October 29, 2021 edition of the WER, the PJM Power Providers Group has appealed the Focused MOPR to the U.S. Court of Appeals for the Third Circuit. PJM Power Providers Group also submitted a response to Chairman Glick’s and Commissioner Clements’ joint statement in support of PJM’s Focused MOPR, arguing, among other issues, that the joint statement mischaracterized Commissioner Christie’s position on the issues and that it ignored economic evidence that the PJM Power Providers group submitted into the record.

The requests for rehearing and FERC’s November 29 notice are available in the FERC docket here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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