New York State Public Service Commission v. Federal Energy Regulatory Commission

The D.C. Circuit Court of Appeals rejected the New York State Public Service Commission’s (NYPSC’s) challenge to FERC’s acceptance of the New York grid operator’s use of an amortization period for a hypothetical new gas-fired “peaking plant” that was based on the New York State Climate Leadership and Community Protection Act (CLCPA) target of zero-emission electricity by 2040. When the grid operator submitted its proposed rates for 2021 to 2025 to FERC, it proposed to use a 17-year amortization period based on the CLCPA target instead of the 20-year period it used in previous filings. The D.C. Circuit concluded that FERC (which previously rejected the grid operator’s use of the shorter amortization period) had this time appropriately concluded that the shorter amortization period was within the zone of reasonableness, given the CLCPA’s provisions. The D.C. Circuit also rejected the NYPSC’s argument that FERC did not justify the increased costs to consumers that would result from the use of the shorter amortization period. Judge Childs dissented, writing that the CLCPA itself did not require fossil fuel-fired power plants to shut down by 2040—it only required the NYPSC to promulgate requirements to reach the zero-emissions target by 2040.