Electric Power Supply Association v. Star

On April 24, 2017, the federal district court for the Northern District of Illinois invited the Federal Energy Regulatory Commission (FERC) to submit an amicus brief stating “its views, if any, on the intersection of Illinois’s Zero Emission Credit [(ZEC)] program and the Federal Power Act and/or FERC’s jurisdiction over wholesale electricity sales.” The court sought FERC’s views in the context of two lawsuits challenging the ZEC program in which the plaintiffs claimed that the program was preempted and violated the Commerce Clause. On April 26, 2017, FERC submitted a letter to the court indicating that it would not submit a brief. FERC noted that a complaint related to the ZEC program and filed by one of the plaintiffs in the lawsuits was currently pending before FERC. FERC also noted that it was operating without a quorum and would not be able to act on the pending complaint until the quorum was restored, after which it would be able to address the complaint and potentially provide a more definitive statement on its views.

Other parties sought to intervene or to file amicus briefs in the lawsuits, including both of the regional transmission operators that oversee the electric grid in Illinois. Midcontinent Independent System Operator, Inc. (MISO)—which oversees the electric grid in 15 states (including in southern Illinois) and the Canadian province of Manitoba—submitted an amicus brief arguing that the case should be dismissed because a decision by the court could prematurely limit ongoing efforts before FERC involving MISO stakeholders to resolve questions related to issues before the court.

PJM Interconnection, L.L.C. (PJM)—the grid operator for 13 states (including northern Illinois) and the District of Columbia—filed an amicus brief opposing the motion to dismiss, arguing that the ZEC program would substantially harm the wholesale energy markets PJM operated.

A group of four non-profit groups that included Environmental Defense Fund sought leave to file an amicus brief urging dismissal of the lawsuit, arguing that the ZEC program operated within the “collaborative federalism” framework and was within Illinois’s authority to craft energy policy to address environmental and public health concerns.

The Independent Market Monitor for PJM earlier moved to intervene as a plaintiff “to promote and protect the competitive wholesale electric power markets and to avoid the burden that would be imposed on its resources in efforts to avert failure of the market if Defendants prevail.”

A trade association representing independent power producers and four power producers filed a lawsuit in Illinois federal court challenging an Illinois law that created a Zero Emissions Credit (ZECs) program allegedly to “prop up … two uneconomic nuclear power plants” in the state. The law, known as the Future Energy Jobs Act (FEJA), provides that certain zero-carbon resources (which the complaint says are limited to the two failing nuclear plants) will receive ZEC payments in an amount tied to the social cost of carbon and wholesale energy prices. The plaintiffs claimed that FEJA intruded on the Federal Energy Regulatory Commission’s exclusive authority to regulate the sale of electric energy at wholesale in interstate commerce under the Federal Power Act. The plaintiffs contended that FEJA therefore was preempted on both field preemption and conflict preemption grounds. The plaintiffs also asserted that the ZEC program was invalid under the dormant Commerce Clause. They stated that “[a]though the reduction of carbon emissions is important, this can be achieved much more effectively by means that would neither discriminate against interstate or international commerce nor frustrate the progress competitive markets have been delivering in the form of environmental benefits.”