Now, the final piece of the puzzle. A decade ago, worries were raised about utility holding companies, which are both sellers and buyers of capacity, selling artificially cheap capacity into markets in order to drive down prices, from which they would then benefit. To remedy this potential use of buyer-side (monopsony) power, FERC added a tool to its kit: the Minimum Offer Price Rule (MOPR), which forces resources owned by the holding companies in question to meet at least a certain minimum bid price in capacity markets.

It was meant to be a surgical tool, used in clear cases of buyer-side market manipulation, almost entirely limited to natural gas plants. In 2011, FERC specifically said that renewable resources are not good examples of buyer-side attempts to suppress prices.

This is a good thing for everyone except the owners of those plants. But those gencos, and the utility holding companies that own them, have lots of influence over RTOs and ISOs. And they have been complaining to market administrators that they are being beat in capacity auctions because clean energy has an unfair advantage. Both renewables and nuclear power are subsidized in various ways by state energy policies that, for instance, require utilities to procure a certain amount of their power from renewables. Those policies suppress prices, they argue, and thus subsidized renewables and nuclear ought to be subject to the MOPR.

Some RTOs and ISOs have found this argument convincing and have appealed to FERC to be allowed to apply the MOPR to clean energy resources supported by state policies. Last year, when ISO New England made the request, FERC granted it, and endorsed the broader use of MOPRs: “Absent a showing that a different method would appropriately address particular state policies, we intend to use the MOPR to address the impacts of state policies on the wholesale capacity markets.” (Note here: FERC’s explicit intent is to “address particular state policies.”)