NO QUICK FIX: Why ‘Fixed Resource Requirement’ is Not the Best Way for States to Protect their Energy Choices

Posted by Reports on Sep 2, 2020 3:18:00 PM

Publish Date: September 2, 2020

In Sept. 2020, AEE released this background paper describing the Fixed Resource Requirement (FRR) option in regional energy capacity markets that some states are exploring in response to an order by the Federal Energy Regulatory Commission (FERC) they see as undermining their policy commitments to clean energy.

In December 2019, FERC issued a controversial decision, called the Minimum Offer Price Rule, directing the nation’s largest regional grid operator, PJM Interconnection, to apply an administratively set minimum price to any new (and some existing) resources eligible to receive financial support from state programs that participate in PJM’s annual capacity auction. That requirement could potentially keep new renewable energy, energy efficiency, energy storage, and demand resources from clearing the auction for capacity payments, making these resources more expensive.

This report details potential risks and costs of FRR as a solution to the MOPR impacts, and argues that states may be better off prioritizing other options which could bring them closer to achieving their clean energy goals. 

Please fill out the form to download the report.

Topics: Federal Policy, Wholesale Markets