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by Jeff St. John
January 08, 2020

Last month, the two-Republican majority on the Federal Energy Regulatory Commission ordered mid-Atlantic grid operator PJM to rework its $10 billion-a-year capacity market. While the details are complex, the simple effect will be to force almost all resources receiving any form of state subsidy to bid at an administratively set minimum price — a move that will force new wind and solar out of the market entirely and leaves the fate of other clean resources like demand response and efficiency up in the air.

FERC’s order ends an 18-month period of delay and uncertainty for the nation’s biggest capacity market, but it opens an even more contentious battle over its future. That’s because FERC’s decision could drive many of the states served by PJM to consider more radical alternatives — including removing themselves from the market entirely.