The Future Of State-Subsidized Electric Generation Resources

Compass Lexecon’s Joseph Cavicchi and Kenneth Grant recently published a commentary on Law360 addressing the potential implications FERC’s suggestion of cost-of-service remedies in response to PJM’s proposed changes to its capacity market auction tariff. PJM’s proposal comes in the wake of a growing incidence of state support for zero emission generation resources receiving out-of-market revenues. FERC’s actions are at odds with its historical skepticism over the use of such agreements and suggest a fundamental shift in Commission policy that portends an uncertain future for the continued success of competitive wholesale electricity markets.

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