PJM Interconnection, which covers parts of the Mid-Atlantic and Midwest, received the directive from the US Federal Energy Regulatory Commission (FERC).
FERC said the move would protect alleviate price distortions in the 鈥渃ompetitive capacity market鈥 and address state-subsidised electric generation resources鈥.
Capacity markets ensure there is adequate electricity to meet peak demand and operating reserve requirements.
鈥淎n important aspect of competitive markets is that they provide a level playing field for all resources, and this order ensures just that within the PJM footprint,鈥 said FERC chairman Neil Chatterjee.
In the US, states typically have 鈥榬enewable portfolio standards鈥 to ensure that a certain proportion of electricity is clean.
The move was blasted by the Union of Concerned Scientists (UCS), which said it could mean $2-8 billion a year in extra costs for customers.
The decision will 鈥渢ilt the market away from low-carbon sources to favor fossil fuel providers and effectively nullify state actions to decarbonise electricity,鈥 it said.
Mike Jacobs, a senior energy analyst at UCS, said: 鈥淏y agreeing to this proposal, FERC is not indifferent to state policies that address carbon emissions鈥攖hey are actively attacking them.鈥
The decision 鈥渢hreatens states鈥 rights and hinders their ability to bring more clean energy to their communities,鈥 added Amy Farrell, senior vice president of government and public affairs, at the American Wind Energy Association trade body.
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