…Have You Heard of MOPR?…
The minimum offer price rule (MOPR) is symbolic of a struggle that’s going on behind the scenes where Regional Transmission Organizations (RTOs) are surreptitiously forcing the use of wind and solar onto the grid.
It’s hidden from the public because it’s part of a complex system involving regulators and RTO organizations, where a multitude of complex rules are established behind the scenes. While the legal rulings are posted for all to read, which technically makes them transparent, they are, to the average person, like reading Sanskrit.
MOPR is one of these rules.
The Federal Energy Regulatory Commission (FERC) recently issued a new ruling about MOPR, in response to questions raised by PJM, an RTO.
MOPR relates to capacity auctions where RTOs attempt to ensure the availability of electricity in future years, across the region for which an RTO is responsible. The bidders supposedly guarantee that new capacity will be available for supplying electricity during the contracted period.
(Wind, which can’t supply electricity when the wind doesn’t blow, and solar, which can’t supply electricity at night or on cloudy days, are assumed to be able to guarantee they can generate electricity at any time in the future covered by the capacity auction.)
The MOPR issue relates to whether suppliers that receive subsidies, such as wind and solar installations, could participate in the bidding for future capacity.
There is the danger that suppliers that receive subsidies could enter very low bids in comparison with bidders who are not subsidized.
RTOs only cover about two-thirds of the country, as shown by this map, with FERC being the regulatory authority that pulls everything together.
As described in an earlier article, The Market for Electricity is Rigged, the day ahead and realtime auctions conducted by RTOs are rigged to ensure that wind and solar always win the bid if wind and/or solar is available.
The capacity auctions would also be rigged in favor of subsidized suppliers, such as wind and solar, if it weren’t for the FERC, MOPR ruling.
As a result, organizations, such as the Sierra Club and Natural Resources Defense Council, are campaigning to revise the ruling.
It should be noted that there are additional complex manipulations in the capacity market to make it appear as though wind and solar can be counted on to guarantee the availability of electricity even though both sources are unreliable. As a result, wind and solar are assumed to be ready and able to provide electricity to the grid even though they may not be able to do so.
One-third of the country continues to rely on regulatory commissions, as opposed to RTOs, to establish fair pricing and ensure reliability within their territories, and don’t use rigged auctions for this purpose.
Few people are aware of what’s going on behind the curtains which is why you are not alone if you never heard of MOPR.
The system for ensuring reliable and low-cost electricity is being manipulated, at least in those states covered by RTOs, by people with a political agenda that may not be in the best interests of all Americans.
It’s clear that RTOs are manipulating the system, with the end result that the cost of electricity will be higher while reliability is lowered.
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Thanks for highlighting the rigged system!
Donn, indeed, trying to understrand the RTOs is like reading Sanskrit or maybe Hungarian. And then, once you read one piece, you have to ask yourself about the missing pieces…like…why is there a MOPR for capacity auctions but not for the energy auctions? It takes years to get even a slight grasp on this stuff. Thanks for your post.
Thanks. You are 100% correct. It’s far too complicated, far more than it needs to be.
It’s typical bureaucratic tactics to obfuscate and confuse.