Court rules New Jersey law to get new power plants built is unconstitutional
Originally published October 21, 2013
A federal court has ruled unconstitutional an effort by New Jersey to promote development of new power plants. Echoing a recent ruling on a similar program in Maryland, the U.S. District Court for New Jersey held that the New Jersey Long-Term Capacity Pilot Project Act violates the Supremacy Clause of the U.S. Constitution. The state law championed by Gov. Chris Christie "is therefore null and void," Judge Peter Sheridan ruled in PPL EnergyPlus v. Robert Hanna.
The state law required the state’s investor-owned utilities to enter into contracts with companies that won a competitive solicitation process to build new power plants in New Jersey. Judge Sheridan held that the state-ordered contracts "occupy the same field of regulation as the [Federal Energy Regulatory] Commission and intrude upon the commission’s authority to set wholesale energy prices through its preferred [PJM capacity market] auction process."
The court said the state could have promoted construction of new power plants through other means. "While New Jersey retained the authority to take a wide range of actions to ensure reliable electric service for its citizens and encourage the construction of new electric generation facilities, it chose to advance those goals through a mechanism that intrudes upon the authority of the commission and violates federal law," the court said.
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