Dive Brief:

• The Federal Energy Regulatory Commission on Thursday rejected a complaint by Cricket Valley Energy Center and Empire Generating, power plant owners in New York that sought to expand previously existing buyer-side market power mitigation rules, also known as minimum offer price rules, or MOPR.

• In its 4-1 decision, FERC pointed to reasoning in its May order that approved a plan by the New York Independent System Operator to exempt clean energy resources from buyer-side mitigation. “The commission rejected the premise underlying the complaint: that buyer-side market power mitigation must address price impacts triggered by state-preferred resources,” FERC said.

• FERC’s latest decision “should be the final nail in the MOPR’s coffin,” Sarah Ladin, senior attorney at the Institute for Policy Integrity at NYU School of Law, said in a statement Friday. “By rejecting the request to expand NYISO’s previous rule to the rest of the state, the commission closes a chapter on overly expansive rules that undermine state authority and harm wholesale market competition."

Dive Insight:

With FERC’s support, NYISO, ISO New England and the PJM Interconnection in recent years adopted rules that limited how low resources that were subsidized by states, such as wind, solar and energy storage facilities, could bid in capacity auctions.

Supporters of MOPR and buyer-side mitigation rules argued those resources artificially suppressed capacity prices. States and other opponents of the buyer-side mitigation rules said they interfered with state policy and would drive up costs.

In an October 2020 complaint, Cricket Valley and Empire Generating argued NYISO buyer-side mitigation rules should apply to the entire state. They argued state-supported resources were undercutting capacity prices, which hurt their finances.

FERC Chairman Richard Glick has opposed strict MOPRs, which were done away with in the Northeast and PJM markets in decisions made after Cricket Valley and Empire Generating filed their complaint.

“Chairman Glick began his term with a clear message that market power mitigation rules that undermine state clean energy and decarbonization policies are not just and reasonable,” Landin said.

FERC Commissioner James Danly dissented from the decision, saying state-sponsored resources were undermining capacity auctions in New York.

“A market rate design cannot be competitive, let alone just and reasonable, when it permits states to freely manipulate prices,” Danly said. “By their very design, state subsidies give certain resources a competitive advantage over other resources.  Any generator that is not receiving a subsidy will be forced into premature retirement or potentially into expensive, out-of-market reliability contracts to keep the lights on.”