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The Federal Energy Regulatory Commission and Department of Justice support Illinois nuclear subsidies

FERC, DOJ support Illinois nuclear subsidies in court filing  UTILITY DIVE,31 May 18  

Dive Brief:

  • The Federal Energy Regulatory Commission and Department of Justice filed a joint legal brief in support of Illinois nuclear subsidies on Tuesday.
  • Lawyers for the two agencies wrote the zero emission credits (ZECs) for Illinois nuclear plants do not interfere with FERC’s authority to regulate wholesale power markets, as generators claimed. If the subsidies disrupt market operations, “the solution lies with the Commission, not the courts,” the agencies wrote.
  • The legal opinion will likely also apply to a pending court challenge against New York nuclear subsidies, as well as a New Jersey subsidy program enacted last week. The FERC opinion could also make a Supreme Court case over the subsidies less likely, analysts say.

Dive Insight:

The Tuesday amicus brief from FERC and DOJ is a blow for opponents of nuclear subsidies, who hoped the courts would throw out the recent state programs designed to keep uneconomic plants from retiring.

In their brief, filed with the U.S. Court of Appeals for the Seventh Circuit, FERC and DOJ write the Illinois program does not suffer from the “fatal defect” that doomed other state subsidy programs in the courts.

In 2016, the Supreme Court ruled that a Maryland policy to support gas generation interfered with FERC’s authority because it made receipt of a subsidy contingent on wholesale market participation, which FERC regulates.

………Evaluating methods to integrate state energy policies into wholesale markets has been a focus at FERC in recent years — and also a point of contention. In March, the commission approved an ISO-New England plan to change its capacity market auctions to handle subsidized resources, but the 3-2 vote exposed divides between regulators on how to handle future cases.

Those issues are likely to come to a head next month, when FERC is scheduled to rule on two market reform options submitted by the PJM Interconnection — both of which could diminish the market impact of nuclear and renewable energy subsidies.

In the meantime, analysts say the FERC-DOJ brief makes it more likely the nuclear subsidies will be upheld by the courts — not just the Seventh Circuit, but also the U.S. Court of Appeals for the Second Circuit, which is hearing a similar challenge against the New York program……..


June 1, 2018 - Posted by | Legal, USA

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