"Merchant" generators' hypocrisy was on full display again yesterday in comments filed at FERC opposing PJM's proposed temporary increase in the energy offer cap to $1,800/MWh for this winter (with such pricing setting LMP), as generators claimed the $1,800 cap was "artificial."

But, we must stress, generators have no problem in adopting artificial market design elements, such as a wholly administrative demand curve in the capacity market which in no way correlates with customers' actual willingness to pay for capacity, when such artificial market design elements provide them with windfall revenue

But if "artificial" market design elements curb their ability to earn inframarginal revenues, suddenly it's a repudiation of competition.

Representative of generators' comments is this line about the $1,800 cap from the PJM Power Providers Group:

"PJM appears to pick a number out of thin air with the only justification being that the number was part of a failed stakeholder compromise that was never voted upon by the PJM stakeholders.

Generators, who revel in capacity payments from a market whose existence results solely from the fiat of government bureaucrats, complaining about a market design element being picked out of "thin air."

What more can be said?

Tags:
Capacity Market   PJM   Price Cap   Offer Cap  

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