On December 11, 2015, FERC issued an order accepting PJM's
proposed tariff and operating agreement revisions that would (1)
double PJM's energy market offer cap from $1,000/MWh to
$2,000/MWh for cost-justified offers, (2) cap market-based offers
at $2,000/MWh only when the corresponding cost-based offer is above
$1,000/MWh, and (3) allow market sellers of generation resources
with demonstrated costs above $2,000/MWh to recover those costs
through make-whole payments. Although PJM's proposal was made
in advance of potential natural gas price spikes in the
2015–2016 winter, PJM's proposal would apply
year-round.
As FERC explained in its order, in January 2014, cold weather
caused natural gas prices to spike, driving the costs of producing
electricity from certain gas-fired generators to exceed PJM's
$1,000/MWh offer cap for market-based and cost-based sell offers.
Because of the offer cap, certain resources were not permitted to
include their marginal production costs
