FERC Ruling May Undermine State Renewable Energy Mandates

Energy Innovation and NRDC both argue that the recent FERC ruling on New England ISO’s plans to reform capacity markets could undermine state policies on renewable energy.

According to Energy Innovation, this will increase the cost of renewable energy, while preventing the retirement of plants that would otherwise retire. “Customers will have to pay twice for the same energy: once for the subsidized clean energy resources and again for the retirement of other resources,” notes Robbie Orvis, the director of energy policy design at Energy Innovation.

This is unlikely to affect the adoption of net metered-solar in New England, which makes up the large majority of the region’s solar market. However, Orvis notes that the rule is likely to exacerbate an oversupply problem on the regional grid.

“If renewable resources do not pair with a generator willing to retire, those resources would still be built anyway under the state RPS and uneconomic fossil fuel will be kept online,” explains Orvis. “The result would be more overcapacity and higher costs for customers, not the other way around.”

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