Update – April 15, 2019 – Supreme Court Rejects Requests to Review Zero Emission Credit Cases

This morning, the Supreme Court denied petitions filed by the Electric Power Supply Association (EPSA) seeking review of two federal appeals court decisions that upheld New York and Illinois Zero Emission Credit (ZEC) programs. Although the Second and Seventh Circuit decisions at issue are about specific state policies supporting nuclear plants, the petitions had broader implications. EPSA asked the Court to expand preemption under the Federal Power Act, a move that might have threatened state renewable energy programs and could have jumpstarted a wave of litigation. Today’s denials affirm that states have broad legal authority to enact programs that pay clean energy generators for their production of zero-emission energy.

Meanwhile, New Jersey regulators are expected to announce in the coming days whether they will award payments tied to nuclear energy production, and legislatures in Pennsylvania and Ohio are debating their own nuclear support policies. Courts reviewing any new state programs will not be bound by the Second and Seventh Circuit’s conclusions, and nuclear subsidy opponents might therefore choose to file additional lawsuits should these programs progress. A draft Ohio bill, if finalized, would be a particularly attractive target for litigation. Legislators proposed to explicitly tie state payments to each nuclear generator’s wholesale market participation. That condition appears to violate the Supreme Court’s narrow holding in Hughes, and would unnecessarily put the state’s program in legal jeopardy.

The court’s order noting that it denied the petitions is available on the Court’s website (see page 3).