The U.S. Supreme Court will not consider two appeals court decisions that upheld state programs in Illinois and New York that provide support for nuclear power plants.
The Electric Power Supply Association had asked the Supreme Court to grant EPSA’s petitions to review the appeals court cases, which were issued in 2018.
New York
The U.S. Court of Appeals for the Second Circuit on Sept. 27, 2018 issued a decision that upheld a New York state program that provides support for certain nuclear power plants in the state.
At issue is a New York State Zero Emission Credit (ZEC) program, which was challenged by a number of merchant generators and EPSA.
The New York ZEC program provides for qualifying nuclear plants to receive credits. The credits are based on the social cost of carbon calculated by a federal inter-agency task force. Initially set at $17.48 per megawatt-hour, the ZEC level can be adjusted downward based on forecasted wholesale market prices.
The ZEC program was adopted by the New York PSC in August 2016 as part of a larger energy reform plan in the state to cut greenhouse gas emissions by 40 percent by 2030.
The program subsidizes qualifying nuclear power plants by creating ZECs. The PSC has determined that three nuclear power plants (FitzPatrick, Ginna, and Nine Mile Point) qualify for the ZEC program.
Illinois
The New York appeals court decision followed closely on the heels of a similar ruling in Illinois. The U.S. Court of Appeals for the Seventh Circuit on Sept. 13, 2018 ruled that an Illinois ZEC program providing support for nuclear plants in Illinois was not preempted by the Federal Power Act.
In December 2016, then-Illinois Gov. Bruce Rauner signed a broad energy bill into law to help ensure that Exelon's financially troubled Clinton and Quad Cities nuclear power plants in Illinois, remain in operation for another 10 years.
The law provides about $235 million a year through a 10-year contract to the two nuclear power plants. The 1,065-MW Clinton and 1,871-MW Quad Cities plants faced looming shutdowns prior to the law.
Two sets of plaintiffs filed suit in federal district court in Illinois to challenge the statute. In one case, the plaintiffs are delivery services customers of Commonwealth Edison Company, a subsidiary of Exelon. The second lawsuit was brought by the Electric Power Supply Association, a national industry association for competitive electric power producers, and several independent power producers: Calpine Corporation, Dynegy Inc., Eastern Generation, LLC and NRG Energy, Inc. The request for Supreme Court review of the Seventh Circuit decision was brought by this second set of plaintiffs.
Other states look to support nuclear generation
Meanwhile, other states are taking steps to support nuclear generation.
The New Jersey Board of Public Utilities in late 2018 approved a ZEC program and application process for nuclear power plants.
The creation of the ZEC program is a requirement of legislation signed by New Jersey Gov. Phil Murphy in May. Murphy signed a bill (S-2313) that created a ZEC program to support nuclear generation in the state -- the 2,468-MW Salem plant and the 1,240-MW Hope Creek facility.
Legislation has been introduced in both the Pennsylvania General Assembly and Senate that would incorporate nuclear power into a new tier in the state’s Alternative Energy Portfolio Standard (AEPS).
In Ohio, A House of Representatives subcommittee in the state was scheduled to consider a clean energy bill on April 17 “designed to save the state’s two nuclear power plants from retirement and encourage the building of new renewable facilities,” Reuters reported on April 17.
