Energy

Opponents Of Nuclear Energy Subsidies Take Their Case To The US Supreme Court

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The fate of the U.S. nuclear industry could rest in the hands of the Supreme Court, should the justices decide to hear a petition by opponents of zero-emission credit programs.

Power producers filed a petition to the Supreme Court on Monday to challenge two circuit court rulings upholding zero-emission credit programs, also known as ZECs. Led by the Electric Power Supply Association, the petitioners seek to strike down ZEC programs in Illinois and New York, arguing that they pre-empt the authority of the Federal Energy Regulatory Commission. The ramifications of a Supreme Court decision could affect how subsidies are doled out to the U.S. nuclear fleet.

The U.S. nuclear industry has struggled recently in an increasingly unfriendly power market. Natural gas, flourishing under the fracking boom, and renewable energy, backed by government subsidies and mandates, have rendered many nuclear power plants cost-ineffective. Since 2013, six different nuclear plants have closed down, and another nine plants are expected to retire by 2025.

However, nuclear plant closures come at an economic and environmental cost. Unlike fossil fuels, nuclear can generate energy without producing carbon emissions; nuclear plants currently provide about 60 percent of the country’s zero-carbon electricity. And unlike wind and solar, nuclear power can produce massive amounts of energy at a steady rate.

State governments have recognized the vital role nuclear plays in the country’s energy market, and have begun to take action.

Both Illinois and New York, for example, have established similar ZEC programs to support at-risk nuclear plants in their states. The subsidy programs require fossil fuel generators to purchase zero-emission credits from nuclear plants that are connected to the regional grid. Price caps are set in place to protect consumers.

Both programs, however, were challenged in court.

The Electric Power Supply Association, representing a group of generation facilities and consumers, argued that Illinois’ ZEC program violates the Federal Energy Regulatory Commission’s (FERC) sole authority over interstate power markets and the wholesale sale of electricity. The plaintiffs referred to the Federal Power Act, which gives the FERC exclusive jurisdiction regarding the interstate sale of electricity at wholesale.

However, the Seventh Circuit Court of Appeals in September ruled against the Electric Power Supply Association. In addition, the FERC submitted a brief, arguing itself that the Illinois ZEC program was not pre-empted by the Federal Power Act. Less than a month later, the Second Circuit Court of Appeals reached a very similar decision, preserving New York’s ZEC program.

Opponents of the programs are now hoping the Supreme Court will hear their challenge. Justices on the nation’s highest court will review the case before they decide whether or not to accept it.

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