Jenner & Block won three important litigation victories in 11 days for firm client Exelon.
Two cases, one in the Northern District of Illinois and the other in the Southern District of New York, concern Zero Emissions Credit programs adopted by Illinois and New York to compensate nuclear power plants for the environmental benefits of producing electricity without emitting greenhouse gases. Challengers – consisting of fossil fuel generators in both cases and retail electric customers in Illinois – argued that the programs were preempted by the Federal Power Act because they affected wholesale power prices and interfered with wholesale power auctions regulated by the Federal Energy Regulatory Commission and that they violated the Dormant Commerce Clause because they favored in-state plants at the expense of out-of-state competitors. The cases have broad significance for states’ ability to promote environmentally friendly power plants – including not only nuclear plants, but also wind and solar – consistent with the division of federal/state authority under the Federal Power Act.
The firm won on motions to dismiss in both cases (on July 14 in Illinois and on July 25 in New York). The courts ruled in Exelon’s favor on every issue presented – standing, whether there is a preemption cause of action, and the merits of the preemption and Commerce Clause claims. The programs will facilitate the continued operation of three nuclear plants in New York, and later this fall, the Illinois Commerce Commission and Illinois Power Agency will select the nuclear plants that will participate in the Illinois program. The team on these matters was led by Partner Matthew E. Price, assisted by Partners David W. DeBruin, Ishan K. Bhabha, Elizabeth A. Edmondson and Gabriel A. Fuentes; Associates William K. Dreher, Zachary C. Schauf and Corinne M. Smith; Paralegal Cheryl L. Olson; and Project Assistant Kafayat O. Adeaga.
Mr. DeBruin led the team that won the third case, a challenge to Exelon’s multi-billion dollar merger with PHI Holdings, which, among other things, owns Pepco, the utility serving Washington, DC and the Maryland suburbs. The merger, which was rejected twice by the DC Public Service Commission before it was finally approved, involved a complex negotiation and approval process not only in DC, but also in Maryland, New Jersey and Delaware. It was challenged in the DC Court of Appeals by the District of Columbia, the Office of People’s Counsel and other groups. On July 20, the court affirmed the merger approval. Assisting Mr. DeBruin were Mr. Schauf, Mr. Price and Ms. Olson.