PJM and the other U.S. independent system operators/regional transmission operators have a record of delivering enormous consumer benefits in the 20-plus years since organized wholesale markets were first introduced in the United States. But the Minimum Offer Price Rule order issued by FERC in December – requiring PJM to rewrite its capacity market rules to blunt the effects of state-level clean energy choices — puts that record at risk. When this development is considered alongside the large surpluses of generating capacity built up over the years, it becomes clear that the ISO/RTO capacity markets, which were once a useful adaptation in response to specific concerns, have overstepped their mission and outlived their usefulness.
This moment presents an opportunity to refocus resource adequacy on those for whom it is pursued: consumers, businesses and the state governments they elect. This paper does so by exploring four key questions: What constitutes “adequate”? How is the challenge of maintaining adequate resources changing? Who is responsible for securing resource adequacy in organized markets? What would “consumer-centric” resource adequacy look like?