NGSA, API file brief in challenge of Illinois zero emissions decision

Sept. 11, 2017
The Natural Gas Supply Association and American Petroleum Institute filed an amicus brief in the Electric Power Supply Association's and three other plaintiff's appeal to the US Seventh Circuit Appeals Court to overturn a lower court's ruling supporting Illinois's Zero Emissions Credit (ZEC) program.

The Natural Gas Supply Association and American Petroleum Institute filed an amicus brief in the Electric Power Supply Association's and three other plaintiff's appeal to the US Seventh Circuit Appeals Court to overturn a lower court's ruling supporting Illinois's Zero Emissions Credit (ZEC) program.

That program unlawfully discriminates against natural gas and undermines competitive wholesale power markets, NGSA and API argued in their Sept. 5 joint filing.

"If allowed to stand, the [US District Court for Northern Illinois Eastern Division's] decision would allow Illinois and other states to enact laws that change the wholesale rates received by electric generation suppliers participating in organized wholesale electricity markets," the trade associations said in their brief.

This would favor uncompetitive in-state nuclear generators with subsidies, while discriminatorily depressing the prices received by other suppliers, with the express intention of protecting in-state industry and favoring one fuel source over another, they said.

"Many other large power-consuming states are pursuing or considering similar programs, including Connecticut, New Jersey, New York, Ohio, and Pennsylvania," the brief said.

"The district court's decision would throw open the door to an ever-growing patchwork of discriminatory intervention in wholesale [power] markets," it warned. "This is in contravention of recent US Supreme Court precedent and would have serious adverse consequences for fair competition and the efficient functioning of the nation's energy markets."

Illinois's ZEC program infringes on the US Federal Energy Regulatory Commission's exclusive authority to set wholesale power rates and disregards decades of FERC efforts to foster market-based competition for the benefit of customers, NGSA Pres. Dena E. Wiggins said.

"The ZEC's program would change power generators' wholesale electricity rates, subsidize uncompetitive state nuclear generators, and depress the prices received by other generators in order to favor one fuel source over another," Wiggins said. "This is not only discriminatory, it would have serious adverse consequences for the efficient and unbiased functioning of the nation's energy markets."