Ohio Commission Continues to Be Concerned with RPM Capacity Market

In adopting an order on the FirstEnergy Ohio utilities' electric security plan, in which capacity prices in the constrained ATSI zone became an issue of contention, the Public Utilities Commission of Ohio said that it would continue to review the utilities' participation in future PJM Base Residual Auctions.

"[T]he Commission notes that additional steps may be taken to mitigate the impact of the transmission constraint in the ATSI zone for future base residual auctions."

"Specifically, the Companies should take steps to amend their energy efficiency programs to ensure that customers, knowingly and as a condition of participation in the programs, tender ownership of the energy efficiency resources to the Companies. Further, the Companies should continue to take the necessary steps to verify the energy savings to qualify for participation in the base residual auctions, and the Companies should bid qualifying energy resources into the auction. The record demonstrates that there has been tremendous growth in the use of energy efficiency resources in the capacity auctions, and the Companies are well positioned to substantially increase the amount of energy efficiency resources they can bid into the auction, which will assist in mitigating the impact of the transmission constraint in the ATSI zone," PUCO said.

"Further, the Commission will continue to review the Companies' participation in future base residual auctions until such time as the transmission constraint in the ATSI zone is resolved," PUCO added.

Additionally, PUCO encouraged the utilities to utilize the approved distribution capital recovery rider to select, with Staff consultation, "[distribution] projects, among others, which will mitigate effects of the transmission constraint in the ATSI zone of PJM."

"There is an ample record in this proceeding that the transmission constraint has resulted in a higher charge for capacity in the ATSI zone than PJM as a whole. Moreover, the record demonstrates that there are projects which can be undertaken by the Companies to mitigate, at the distribution level, the transmission constraint, in order to reduce capacity charges resulting from future base residual auctions," PUCO said.