PJM States Propose Four Core Principles For PJM Markets, Resource Adequacy

The Organization of PJM States, Inc. (OPSI) wrote to PJM's board of managers with a recommendation for "four core principles" concerning resource adequacy and the PJM markets

"While OPSI understands the need for PJM to move forward with base residual auctions, we also look forward to an urgent and constructive dialog with PJM about immediate concerns as well as 'what’s next' for resource adequacy across the PJM footprint," OPSI said in the letter

OPSI recommended, "four core principles to guide discussion about the evolution of market design in the PJM region," including:

1. "State procurements or competitive solicitations, policy choices, emissions levels, or clean energy requirements must be respected and accommodated, rather than over-ridden or made infeasible by PJM market rules."

2. "States should have the option of specifying the clean energy, emission levels, or other content of their own resource mix, in whole or in part, which the PJM market would then account for or procure on a competitive, least-cost basis, consistent with reliability."

3. "Because states retain primary authority for resource adequacy under the Federal Power Act, any re-imagined resource adequacy solution must continue to allow states the option of meeting resource adequacy through a mechanism independently, similar to the current Fixed Resource Requirement."

4. "Effective and appropriate market power mitigation is imperative for a properly functioning market design, and for PJM-administered markets generally."

"These principles are critical to the long-term success of the PJM market and should form the cornerstones of a concentrated effort to recast the future of resource adequacy in PJM," OPSI said

States in support of the OPSI letter include: Delaware PSC; PSC of District of Columbia; Indiana URC; Kentucky PSC; Maryland PSC; Michigan PSC; New Jersey BPU; North Carolina UC; PUC of Ohio; Pennsylvania PUC; Tennessee PUC; Virginia SCC; and PSC of West Virginia. The Illinois Commerce Commission voted 'nay' on the matter