MSOC (Market Seller Offer Cap) is a price ceiling applied to certain capacity sell offers. MSOC is based on Net Avoidable Cost Rate (ACR) formula defined by PJM.
ESAI Power’s recent Capacity Watch includes our forecast for the PJM BRA 2023/24. Our PJM analysis this quarter includes ESAI’s forecast for the PJM BRA 2023/24 and reflects upon MOPR, MSOC, ELCC and VRR Curves.
Ethan Howland reports in Utility Dive that the Federal Energy Regulatory Commission on Wednesday ordered the PJM Interconnection to revise its reserve market rules, which will delay the grid operator’s upcoming capacity auction. This was a reverse of an earlier decision. In a 3-1 vote, FERC reaffirmed its previous decision to direct PJM to consolidate tier one and tier two reserve products, but said it had erred by approving changes to the grid operator’s operating reserve demand curves (ORDC), which help set the price for reserves. Our Scott Niemann, Director and Principal of ESAI Power said, “This rule change seems like a small detail, but the ripple impacts may be more significant and touch a lot of aspects of the PJM market.”
In ESAI’s latest Capacity Watch report, we analyze the three major rule changes that will impact pricing in the upcoming PJM Base Residual Auction (2023/24 BRA) and the subsequent influence on clearing prices out to 2030. These rule changes include FERC’s revised approval of ELCC, a default MSOC based upon Net ACR, and FERC’s failure to reach a majority decision on PJM’s proposed MOPR revisions.
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ESAI Power is a market research and consulting firm that delivers focused analysis of the US wholesale power markets: PJM, NYISO, ISO-NE and MISO. Since 2003, ESAI has been providing market-focused research product content and custom consulting services for US power market participants including private equity and infrastructure investors, lenders, independent power producers (IPPs), developers, utilities & retail electricity suppliers, regulators & RTOs, and traders.