Comments on the PJM Capacity Market: The Reliability Pricing Model

The Institute for Policy Integrity critiques proposed PJM capacity market reforms, specifically the expansion of the Minimum Offer Price Rule (MOPR), arguing that penalizing resources receiving state payments for avoided emissions would reduce market efficiency and potentially increase costs for consumers.

• The Institute for Policy Integrity argues that expanding the Minimum Offer Price Rule (MOPR) to include 'externality payments'—payments for the economic value of avoided air pollution emissions—would be neither just nor reasonable, as it would decrease rather than increase market efficiency.
• The document suggests that allowing clean energy generators to sell capacity to customers outside the market could mitigate distortions, but only if the mechanism is designed to reduce the total capacity procured through the market and aligns incentives for both capacity and load.
• The Institute for Policy Integrity contends that applying the MOPR selectively to resources receiving state-directed compensation for environmental value would be discriminatory, while applying it broadly to all resources receiving any out-of-market revenue could result in capacity overbuilding and increased market power issues.

APA

Institute for Policy Integrity (2018). Comments on the PJM Capacity Market: The Reliability Pricing Model. https://policyintegrity.org/projects/update/comments-on-the-pjm-capacity-market-the-reliability-pricing-model

Chicago

Institute for Policy Integrity. Comments on the PJM Capacity Market: The Reliability Pricing Model. 2018. https://policyintegrity.org/projects/update/comments-on-the-pjm-capacity-market-the-reliability-pricing-model.

Wikipedia

{{cite press release |author=Institute for Policy Integrity |title=Comments on the PJM Capacity Market: The Reliability Pricing Model |date=6 November 2018 |url=https://policyintegrity.org/projects/update/comments-on-the-pjm-capacity-market-the-reliability-pricing-model |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforpolicyintegrity2018comments, author = {{Institute for Policy Integrity}}, title = {{Comments on the PJM Capacity Market: The Reliability Pricing Model}}, publisher = {Institute for Policy Integrity}, year = {2018}, month = nov, url = {https://policyintegrity.org/projects/update/comments-on-the-pjm-capacity-market-the-reliability-pricing-model}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }