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The following is a contributed article by Steven Schleimer, senior vice president of government and regulatory affairs at Calpine Corporation.
In his dissent to a Nov. 19, 2020, Federal Energy Regulatory Commission Order on Rehearing related to ISO New England's Competitive Auctions with Sponsored Policy Resources (CASPR) construct (Docket ER18-619-001), Chairman Richard Glick questions the need for a Minimum Offer Price Rule (MOPR) and whether the concept of "investor confidence" should be a "lodestar" that matters in FERC's decision-making. Regardless of how the debate on any particular market mechanism plays out, it is of course true that investors countenance investments based on the expectation that they can recover their capital (including an adequate return). The key market design question is whether investors or ratepayers should bear the risk that the investment choices were sound.