Description: Challenge to component of New York Clean Energy Standard that provided payments to certain nuclear facilities providing "zero-emission" power.
Coalition for Competitive Electricity v. Zibelman
Filing Date Type File Action Taken Summary 07/25/2017 Memorandum Opinion and Order Download Memorandum opinion and order issued dismissing action. New York Federal Court Upheld “Zero Emission Credits” for Nuclear Plants. The federal district court for the Southern District of New York upheld a “zero emission credit” (ZEC) program intended to subsidize old nuclear power plants in upstate New York. The ZEC program is one component of the Clean Energy Standard adopted by the New York Public Service Commission. Plaintiffs challenging the New York program were electric generators and trade groups of electric generators. They unsuccessfully argued that the ZEC program was unconstitutional because it was preempted and violated the dormant Commerce Clause. The court held that it did not have equity jurisdiction over the plaintiffs’ claims that the Federal Power Act (FPA)—which grants FERC exclusive jurisdiction over the interstate wholesale electricity market—preempted the ZEC program. The court concluded that Congress intended to foreclose a private right of action, citing both FPA’s provisions for a detailed remedial scheme before FERC and—more definitively, in the court's view—the Public Utility Regulatory Policies Act’s addition to the FPA of a private cause of action for a narrow scope of challenges to state action. The court did not find that the relief sought by the plaintiffs would require the court to apply “judicially unadministratable” standards, but the court indicated that such a finding was not necessary to bar jurisdiction. The court also held that the FPA preemption claim would, in any event, fail on the merits. The court—looking to the Supreme Court’s 2016 opinion in Hughes v. Talen Energy Marketing, LLC—said the ZEC program did not impermissibly “tether” ZEC payments to participation in the wholesale capacity auctions and did not directly affect wholesale rates. The ZEC programs therefore avoided field preemption. The court also found that the plaintiffs did not state a plausible claim for conflict preemption because the ZEC program did not run afoul of FERC’s goal of efficient energy markets. The court ruled that the plaintiffs did not have a cause of action to bring their dormant Commerce Clause claim because their alleged injuries did not fall within the zone of interests protected by the dormant Commerce Clause—i.e., the economic interests of out-of-state entities. The court also held that the plaintiffs failed to state a dormant Commerce Clause claim because New York State acted as a market participant when it created ZECs. 07/10/2017 Brief Download Supplemental brief submitted by defendants regarding Second Circuit's decision in Allco Finance Limited v. Klee. 07/10/2017 Memorandum Download Memorandum submitted by plaintiffs regarding Second Circuit's decision in Allco Finance Limited v. Klee. 03/24/2017 Amicus Brief Download Amicus brief filed by former FERC chairman and former New York Public Service Commission chairman in support of plaintiffs. 01/27/2017 Reply Download Reply filed in support of intervenors' motion to dismiss. The beneficiaries of the ZECs program—owners of nuclear facilities—submitted a reply brief reiterating that the plaintiffs’ preemption and dormant Commerce Clause claims should fail. 01/27/2017 Reply Download Reply filed in support of defendants' motion to dismiss. Briefing Completed on New York’s Motion to Dismiss Challenge to Its Zero Emissions Credits for Nuclear Power Plants. The parties to a challenge to New York’s plan to give certain nuclear power plants “zero-emission credits” (ZECs) completed their briefing on the motion to dismiss the challenge. The ZECs program, approved by the New York State Public Service Commission (PSC) in 2016, is intended to serve as “bridge to a 50-percent-renewable energy supply” by 2030. The PSC defendants argued that their action was not preempted because it fell within the field of regulation reserved to the states in the Federal Power Act. They also reasserted that the plaintiffs had no private cause of action for their preemption claim and had failed to state a dormant Commerce Clause Claim. 01/06/2017 Memorandum Download Memorandum filed by plaintiffs in opposition to motion to dismiss. The ZECs program’s challengers—owners of fossil fuel-fired power plants—argued that the federal district court for the Southern District of New York had equity jurisdiction over their claim that the Federal Power Act preempted the New York Public Service Commission's action. The plaintiffs also asserted that their complaint stated claims that the ZECs program was both field preempted and conflict preempted. The plaintiffs also argued that they had stated a claim of violation of the dormant Commerce Clause. 12/21/2016 Amicus Brief Download Amicus brief filed by Environmental Defense Fund in support of motion to dismiss. 12/09/2016 Amicus Brief Download Amicus brief submitted by Natural Resources Defense Council in support of motion to dismiss. 12/09/2016 Motion to Dismiss Download Motion to dismiss filed. New York Public Service Commission Asked Federal Court to Dismiss Challenge to Subsidies to Nuclear Generation in State’s Clean Energy Standard. The New York Public Service Commission (PSC) moved to dismiss an action challenging the portion of its Clean Energy Standard (CES) that would compensate certain nuclear power facilities at risk of retiring for the “zero-emission generation” they provide. The PSC argued a preemption cause of action was not available to the plaintiffs under the Federal Power Act and that the preemption claims failed as a matter of law because the CES was a “a straightforward exercise of state authority to regulate generation facilities and their environmental impacts.” The PSC said that the dormant Commerce Clause claim also failed as a matter of law because plaintiffs had not shown discrimination against interstate commerce. The owners of the nuclear facilities that would receive payments under the CES plan moved to intervene and moved to dismiss, largely echoing the PSC’s arguments. The environmental organizations Environmental Defense Fund and Natural Resources Defense Council each filed an amicus brief in support of the PSC’s motion to dismiss. 12/09/2016 Motion to Dismiss Download Motion to dismiss filed by intervenors. The owners of the nuclear facilities that would receive payments under the CES plan moved to intervene and moved to dismiss, largely echoing the PSC’s arguments. 10/19/2016 Complaint Download Complaint filed. Power Plant Owners Challenged New York “Zero Emission Credits” for Nuclear Plants. Owners of fossil fuel-fired power plants that supply electricity to New York and two trade associations filed an action in the federal district court for the Southern District of New York challenging the New York Public Service Commission’s (PSC’s) plan to provide “Zero Emissions Credits” to four nuclear power plants. The Zero Emission Credit (ZEC) program was established as part of the PSC’s proceeding to establish a Clean Energy Standard to achieve the statewide goal of obtaining 50% of New York’s electricity from renewable sources by 2030. The plaintiffs alleged that the ZEC program, though “[o]stensibly” intended to avoid the loss of carbon-free nuclear generation before new renewable power sources could be developed, would in fact “simply serve to keep the uneconomic capacity and energy from [the four nuclear plants] in the … wholesale markets, notwithstanding the fact that wholesale market price signals are indicating that these units should be retired.” The plaintiffs alleged that the ZEC program was field preempted because the Federal Energy Regulatory Commission has exclusive jurisdiction over wholesale electricity sales. The plaintiffs also contended that the ZEC program was barred by conflict preemption and invalid under the dormant Commerce Clause.