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Coalition for Competitive Electricity v. Zibelman

ELR Citation: 47 ELR 20092
Nos. 16-CV-8164, (S.D.N.Y., 07/25/2017) (Caproni, J.)

A district court held that New York's Zero-Emission Credit (ZEC) program is not preempted by federal law. In an effort to curb the effects of global warming, New York issued a Clean Energy Standard (CES) Order that created two programs, one being ZEC. A ZEC is a “credit for the zero-emissions attributes of one megawatt-hour of electricity production by” an eligible nuclear facility. Pursuant to the CES Order, the nuclear generators sell their ZECs to the State Energy Research and Development Agency (NYSERDA) at a price administratively determined by the Public Service Commission (PSC). Plaintiff energy companies alleged that all electricity produced by these nuclear generators must be sold in the New York Independent System Operator energy auctions because they have no alternative way to sell their output. Plaintiffs also claimed that the ZEC program was preempted under the Federal Power Act and that it violates the dormant Commerce Clause. Defendants argued that there is no private right of action for plaintiffs’ preemption claims and that, even if there were, plaintiffs’ claims would fail as a matter of law. The court held that the ZEC auctions did not "directly affect the [wholesale] rate" of energy, and that any “indirect or tangential impacts on wholesale electricity rates” fall outside of federal jurisdiction. The court further held that the plaintiffs failed to allege a plausible Dormant Commerce Clause claim. The case was dismissed.