Remember back in late 2010 and 2011, when the latest Texas resource adequacy (or revenue adequacy as the process started) debate started, and generators, in their drive for a capacity market, claimed that energy market price caps in excess of the then-current $3,000/MWh would be bad for the market and unworkable?

Higher price caps would be politically unsustainable they said, pointing to the Northeast, where a capacity market was the "solution" to the "politically expedient" $1,000/MWh price caps.

And even if Texas's free-market politicians had a stronger stomach for high wholesale prices, price caps in excess of $3,000/MWh were poor policy, we were told by the generators, because it placed far too great an outage risk on generators, and created illiquid markets.

Well, not surprisingly, generators really didn't mean any of it.

Because now they want Texas-style price caps in the Northeast RTOs on top of the existing (actually, "reformed," meaning higher-priced) capacity markets.

Such is evident from comments filed at FERC this week concerning "reforms" needed in the "organized markets" in light of the polar vortex.

Most notably, Exelon is recommending elimination of the price cap entirely (though it would be satisfied with a higher cap, though it listed no specific value).

From Exelon's comments at FERC:

"The market offer caps were originally introduced as an emergency measure to prevent sellers from exercising market power. Today, market power screens and market manipulation mitigating tools deter sellers from exercising market power. Thus, it is no longer necessary to cap prices artificially, particularly given last winter’s demonstrations that costs can exceed the offer cap during shortage periods." [emphasis added]

"Increasing the offer cap, or removing it altogether and allowing prices to increase will better support investments in firm fuel and winter hardening," Exelon said [emphasis added].

Compare this to Exelon's February 2012 comments to the Public Utility Commission of Texas:

"Exelon does not believe an increase in the SWOC is advisable because it would subject both consumers and suppliers to greater price risk and likely would not be conducive to development of new generation capacity in the ERCOT market. The higher the offer cap, the greater the risk to small retailers who may purchase some of their supply in the real time market and the greater the burden on consumers who would face spiking power bills"

"[A] higher ceiling price does not necessarily benefit suppliers either. A generator subject to an unexpected derate or unit trip during times of scarcity could be forced to buy substitute power to cover its obligations at prices many times higher than its contract revenues. These risks discourage investment, rather than create a more conducive environment for investment," Exelon said in 2012.

Which do you believe?

Exelon is by far not the only generator seeking higher price caps (or no caps) at FERC. EPSA, the "merchant" generator trade association, suggested "remov[ing]" the current caps as well.