Jenner & Block

Exelon Prevails in another Challenge to Zero-Emission Credit Program in New York

In the latest dispute, environmental groups tried to shut down New York’s program that compensates Exelon’s three nuclear plants in New York for producing energy without emitting carbon.  The challengers claimed that the state’s Public Service Commission (PSC) overstepped its authority under state law when it instituted the program, that the subsidies are “arbitrary and capricious,” and that the PSC improperly denied the public the required opportunity for notice and comment.

On October 8, New York Supreme Court Justice Roger D. McDonough rejected all those arguments.  In his opinion, Judge McDonough said that “the court recognizes that the reduced carbon emissions issue has been heavily debated in this matter, but must conclude that there is an adequate and rational basis in the record to support PSC’s conclusions regarding carbon emissions as well as PSC’s findings of ‘public necessity.’”

The ZEC program has now survived court challenges at the state and federal levels.  In New York last September, the Second Circuit upheld the dismissal of a preemption and Dormant Commerce Clause lawsuit by owners of fossil-fuel power plants.  Also last September, in Illinois, the Seventh Circuit affirmed a district court dismissal of a case challenging the Illinois ZEC program.

The team representing Exelon includes Partners Matthew E. Price, Elizabeth A. Edmondson, and Zachary C. Schauf.