The MOPR Saga and the Politics of Manipulation in U.S. Electricity Markets

Recent sociological literature treats market manipulation as a product of the interaction of innovative trading practices with activities of market policing. Its definition is not independent of the construction of devices to detect it, and regulatory means for sanctioning and correcting it. This paper builds on that work by analyzing the political process through which those devices, and market manipulation itself, are defined. It examines a protracted struggle to define a particular form of manipulation in wholesale electricity markets in the U.S. From 2006 to 2021, the definition of “buyer-side market power” and the preferred mechanism for detecting and mitigating this particular form of market manipulation, the Minimum Offer Pricing Rule (MOPR). Analyzing filings and orders in regulatory proceedings before the Federal Energy Regulatory Commission, internal documents tracing deliberations within PJM, the largest wholesale electricity market in the U.S., supplemented by interviews with regulators, stakeholders, and economic experts. This contention takes the form of a “valorization struggle,” in which actors with different relative endowments of the many types of properties wield what influence they have to shape the market rules in a way that will convert those holdings into sources of revenues and competitive advantages relative to other market participants. The successive redefinitions of this type of market manipulation, as coded in the instruments used to detect and mitigate it, track the evolving power relations within the field. The paper considers the ways that, in this case, the politics of market manipulation mediate the politics of climate.