Hughes v. Talen Energy Marketing, LLC

The United States Supreme Court ruled that a Maryland program that subsidized new electricity generation in the state was preempted because it disregarded an interstate wholesale rate required by the Federal Energy Regulatory Commission. The Court said that Maryland impermissibly guaranteed a new generator a price for interstate sales of capacity other than the clearing price determined through the capacity auction operated by the entity that oversees the regional electricity grid. The Court noted, however, that states were not foreclosed from adopting programs to encourage development of clean energy generation “[s]o long as a State does not condition payment of funds on capacity clearing the auction.”