Last Friday, two sets of plaintiffs each filed a motion for a preliminary injunction in order to halt implementation of Illinois’ Zero Emission Credit (ZEC) program, which is scheduled to go into effect on June 1. Opponents of New York’s ZEC program (mostly the same generating companies) never requested such relief. The Illinois lawsuit was filed several months after the New York case, and the state and defendant-intervenor Exelon have yet to file motions to dismiss. The motions for a preliminary injunction, supported by an economic consultant’s 45-page analysis and affidavits from executives at NRG and Dynegy, appear designed to keep the state on defense in this case.
To obtain a preliminary injunction, plaintiffs must demonstrate that they are likely to win the case on the merits; that they will suffer irreparable harm absent an injunction; and that the balance of equities supports granting the injunction. On the first issue, plaintiffs’ legal claims are nearly identical to those of the New York plaintiffs. In short, they allege that ZEC payments for each megawatt-hour of nuclear energy generated by state-selected plants are preempted by the Federal Power Act because they impermissibly intrude on FERC’s authority over wholesale rates and distort the regional auction markets for energy and capacity. They further argue that ZECs, which are likely to be awarded to two Illinois plants, discriminate against out-of-state competition in violation of the dormant Commerce Clause.
With regard to the irreparable harm prong of the injunction test, the plaintiff generators focus on alleged distortions to PJM and MISO markets that they claim will affect capital investments and reduce market revenues, which could lead to premature retirement of generators. The second group of plaintiffs, who are a few Illinois businesses and residents and one local government, assert that absent an injunction they will be forced to pay higher electricity bills.
On the balance of equities, the plaintiff generators argue that the ZEC program stands as an obstacle to the goals of Illinois public utilities law, which values competition and low prices. Moreover, the program runs counter to the Federal Power Act’s public interest standard by “interfering with the market-based mechanisms for pricing and allocating wholesale power that FERC promotes.”
Both motions and the economic consultant’s report are available on the Illinois page