On Monday, the Illinois Attorney General (AG), New York Department of Public Service (DPS), and Exelon filed briefs in opposition to Supreme Court review of lower court decisions about the states’ zero emission credit (ZEC) programs. Respondents emphasized that all four lower courts, the states, and FERC agree that ZECs are not preempted by the Federal Power Act (FPA). Moreover, they argue that the appeals courts’ decisions are, in Exelon’s words, “rife with vehicle problems,” and the Court would have to grapple with complex procedural issues before it reaches the merits of the FPA claims. Petitioners also highlight an ongoing proceeding before FERC and urge the Court to allow the expert agency to find a solution to any alleged market distortion that is tailored to the complexities of wholesale power markets.

The three briefs respond to petitions filed in early January by the Electric Power Supply Association (EPSA) and two of its member companies. EPSA’s petition asserts that lower court decisions rejecting its FPA preemption arguments mark a “sharp departure from settled law” and threaten to “reorder the allocation of regulatory authority between the federal government and states.” Respondents portray the lower court ZEC decisions as consistent with decades of precedent that recognize state authority over energy production as distinct from FERC authority over wholesale sales. The AG contends that EPSA’s aim is to “expand FPA preemption to cover every state program that provides additional revenues to power generators,” a result that it claims the Court rejected just three years ago in Hughes.

Respondents highlight three procedural issues unexamined by the appeals courts that the Court would need to address before it could reach the merits of EPSA’s preemption claims. First, the Illinois district court held that EPSA lacked standing to support an element of its preemption argument. Second, both the Illinois and New York district courts held that the FPA does not provide a private cause of action to enjoin implementation of an allegedly preempted state law. Third, EPSA’s question presented assumes that the ZEC-receiving nuclear generators will sell “their entire output at [FERC-regulated] auctions,” an assumption their complaint did not allege and they cannot prove. As Exelon explains, the “Court would first need to determine that the lower courts misapplied the well-settled pleading standard of Ashcroft v. Iqbal” before reaching the merits. Respondents urge the Court not to take the case and address these procedural issues without the benefit of analysis by a circuit court.

The Supreme Court grants approximately 1% of petitions.

The AG’s brief is available on the Illinois page, and the DPS’s brief is available on the New York page. Exelon’s corresponding brief is available on each page.