POWER and RTO Insider Quote Jennifer Mersing on Possible Outcome of Case Challenging State Nuclear Plant Subsidies

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Energy attorney Jennifer Mersing was quoted in POWER magazine in an article titled “DOJ, FERC Back Illinois in Nuclear Subsidy Fight,” published May 31, 2018, and in RTO Insider in an article titled “Analyst: FERC Asserts Role in Handling Nuke Subsidies,” published June 3, 2018. The articles discuss an ongoing case stemming from an Illinois law that requires utilities to buy zero-emissions credits (ZECs) in order subsidize nuclear plants in the state (including two nuclear facilities owned by Exelon).

The case, brought against the state of Illinois by several independent power producers, argued that the Federal Power Act preempts Illinois’ ZEC program, which grants the Federal Energy Regulatory Commission (FERC) jurisdiction to regulate the wholesale sales of electric energy. At the request of the court, the U.S. Department of Justice and FERC recently filed a joint brief with the U.S. 7th Circuit Court of Appeals urging the court to reject the preemption argument, which Mersing believes has the deeper meaning to FERC of: Leave this to us.

“FERC made clear that ‘we have jurisdiction under the Federal Power Act to deal with what we view as states subsidizing these generation facilities,’ ” Mersing said. “I think FERC was saying essentially, ‘We are handling this. … Let us be the forum where this gets worked out.’ They didn’t tip their hand about how they would rule … but I think that FERC is trying to keep within its court how it’s going to deal with states subsidizing certain nuclear facilities.”

Mersing said that the position expressed by the government in the brief “definitely increases the chances that the 7th Circuit—and probably the 2nd Circuit, in a similar case going on regarding the New York nuclear subsidy case—is probably going to uphold the district court decisions dismissing the claims.”

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