Spanberger Calls for Delay to Rule that Could Stifle Renewable Energy Growth, Increase Energy Prices for Virginia Consumers

A December 2019 FERC Decision Could Dramatically Increase Energy Rates & Threaten Clean Energy Innovation

WASHINGTON, D.C. — U.S. Representative Abigail Spanberger joined a bicameral effort to prevent increased energy rates for Central Virginia consumers and limit constraints on growth within Virginia’s clean energy market.

In December 2019, FERC directed PJM Interconnection to create an artificial price floor for clean energy sources like wind, solar, and nuclear. PJM provides electricity to 65 million customers across the Northeast, Mid-Atlantic, and Midwest—including in Central Virginia.

In a letter sent to PJM President and CEO Manu Asthana, Spanberger and 20 of her colleagues called on Asthana to delay PJM’s annual capacity auctions, so that states can take steps to mitigate the expansion of the Federal Energy Regulatory Commission (FERC)’s Minimum Offer Price Rule (MOPR). This delay would give states additional time to analyze how FERC’s decision will impact consumers.

In part, the letter reads: “According to FERC Commissioner Richard Glick, who opposes the MOPR, this rule will push clean energy generation out of the PJM capacity market and artificially restrict energy supply. The result will be increased costs in the market by at least $2.4 billion annually. Our concern is that these costs will be borne by the most vulnerable among us.”

The bicameral letter is led by U.S. Senator Tammy Duckworth (D-IL) and U.S. Representative Cheri Bustos (D-IL-17).

Click here to read the full letter. The full text is also below:

Dear Mr. Asthana:

We urge you to delay PJM’s annual capacity auctions to 2021. Like you, we are extremely concerned by the Federal Energy Regulatory Commission (FERC)’s unprecedented expansion of the Minimum Offer Price Rule (MOPR) and how this rash decision will impact PJM’s Capacity Market. Specifically, we believe this decision will have crippling impacts on your consumers and our constituents, including dramatic increases in rates and threatening a burgeoning clean energy market. Giving states in your network a year to understand how this decision will impact them will help mitigate any disruption to the capacity market. It will also give FERC time to respond to your recent request that they reconsider parts of their decision.

Under your leadership PJM has provided reliable, affordable and increasingly clean energy to approximately 65 million customers in thirteen states and the District of Columbia. These states are leading the Nation in climate action. For example, of the thirteen states in PJM’s market, nine remain committed to the goals of the Pairs Climate Accord. All of them have a renewable energy mandate which PJM has helped cultivate by providing flexibility.

Clean energy is not only good for the environment, it’s good for low-income households. According to a report published in 2016, low-income families spend approximately 7.2 percent of their income on energy bills. That is more than double what higher-income families spend, which is approximately 2.3 percent. According to FERC Commissioner Richard Glick, who opposes the MOPR, this rule will push clean energy generation out of the PJM capacity market and artificially restrict energy supply. The result will be increased costs in the market by at least $2.4 billion annually. Our concern is that these costs will be borne by the most vulnerable among us.

FERC’s expansion of MOPR would undermine clean energy and will come at a high price for consumers. By delaying your capacity auction by a year, you will help states pursue policies that can mitigate the impacts of FERC’s decision. We urge you to take this crucial step.

Thank you in advance for your consideration of our request.

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