NRG Seeks Elimination of SWMAAC Requirement in Maryland Capacity RFP

NRG Energy has asked the Maryland PSC to remove the geographic limitation in the PSC's current RFP for 1,500 MW of new gas-fired capacity.

As first reported in Matters (9/30), the RFP requires the generation to be located in the SWMAAC region.

NRG said that the geographic limitation increases the risk of judicial Constitutional challenges to the RFP on Commerce Clause grounds.

"The Commission is no doubt aware that on February 9, 2011, a number of parties, including Calpine, PPL EnergyPlus, Exelon, GenOn and PSEG Power, filed suit in federal court challenging the New Jersey Long-Term Capacity Agreement Pilot Program legislation on similar grounds."

NRG argued that projects outside the SWMAAC region contribute to reliability needs of the SWMAAC load centers.

NRG also said that eliminating the geographic limitation would provide more competitive responses to the RFP.

NRG further expressed concerns with the compressed RFP timeline, and with the contract for differences used in the RFP.

Finally, NRG countered recent arguments from the Pepco utilities that utility-owned generation would be more beneficial than long-term contracts for merchant capacity.

For the record, NRG, "supports Maryland's decision to release an RFP that allows the State to take advantage of existing market conditions while mitigating longer term reliability concerns."