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FERC must let states choose own energy mix: coalition

The Governors' Wind & Solar Energy Coalition on Wednesday urged the US Federal Energy Regulatory Commission to abandon its plan to revamp the capacity market in PJM Interconnection to address the effects of state-subsidized energy resources, saying FERC is overstepping its authority.

"If the commission preempts or restricts the states' ability to regulate environmental effects from energy power production, it would constitute a dangerous shift in the balance between state and federal authority," said the coalition, which includes governors from 19 states.

FERC ORDER

At issue is a June 29 FERC order rejecting two proposals that PJM filed to redesign its capacity market to address the impacts of state policies that subsidize renewable and nuclear power. Instead, FERC offered its own solution and launched a proceeding (EL18-178) to flesh out the details of that plan.

FERC's proposal would require PJM to modify its minimum offer price rule so it applies to new and existing resources that receive out-of-market payments, regardless of resource type. FERC said PJM should also allow resources receiving out-of-market support to opt out of the PJM capacity market, along with a matching amount of load, for a period of time.

STATE POLICY

But the Governors' Wind & Solar Energy Coalition said FERC went too far. Congress did not give the commission the power to meddle in state's ability to choose their power mix and regulate the environmental impacts of power production, the letter said.

"The commission's requirement of minimum bids will lead to unjust and unreasonable rates, and the commission should abandon this intrusion into state prerogatives," the letter said.

FERC should instead focus on reliability and efficient power markets, the governors said. "The commission must discover ways to regulate markets in ways that complement state policy preferences and objectives rather than overriding or negating them," the letter said.

The coalition also sent the letter to the leaders of the House and Senate energy committees, as well as the Department of Energy and the White House. -- Kate Winston, kate.winston@spglobal.com

-- Edited by Rocco Canonica, newsdesk@spglobal.com