Why Court Victories for New York, Illinois Nuclear Subsidies Are a Big Win for Renewables

By Julia Pyper, GreenTech Media.

A federal judge in New York ruled last week that the Empire State’s plan to subsidize nuclear power plants “is constitutional” and “of legitimate state concern.”

It’s a significant win for the nation’s largest nuclear fleet owner Exelon, which has been struggling to keep its money-losing power plants operational amid weak electricity demand and low energy prices. But the ramifications of last Tuesday’s decision go well beyond the legality of New York’s nuclear program.

The ruling marks the third time in less than a month that a federal court has affirmed states’ authority to favor certain clean energy resources in their supply mix -- which could influence how states across the nation set renewable energy targets and credit programs in the years to come.

The New York case was brought by a coalition of competitive power producers that predominantly generate power from coal and gas, including Dynegy and NRG Energy. Plaintiffs argued that subsidies for the state’s nuclear power plants violate federal market rules and put out-of-state generators at a disadvantage.

District Judge Valerie Caproni dismissed all challenges, however. She ruled that New York’s zero-emissions credit (ZEC) program does not intrude on the Federal Energy Regulatory Commission's jurisdiction over wholesale electricity markets and that it is constitutional for states to take action on climate change.