Electrical Contractor

NEWS IN THE WORLD OF POWER AND INTEGRATED BUILDING SYSTEMS

16 ELECTRICALCONTRACTOR | JUN.16 | WWW.ECMAG.COM

INDUSTRYWATCH

I S T O C K

SCOTUS Rules on Power-Generation Incentives

> IN A UNANIMOUS DECISION, the U.S. Supreme Court ruled 8–0 that a controversial Maryland program designed to incentivize new in-state power generation should be thrown out because it intrudes on federal authorities’ jurisdiction over wholesale energy markets.

Hughes v. Talen Energy Marketing hinged on a Maryland program that guaranteed income for new in-state power generation to ensure that it cleared wholesale market auctions. Some utilities and the Obama administration argued that the program artificially suppressed power prices, infringing on the Federal Energy Regulatory Commission’s (FERC) exclusive authority over interstate wholesale markets.

The justices left the door open for other state generation
incentives but said states may not “intrude on FERC’s authority
over interstate wholesale rates, as Maryland has done here.”
A coalition of states and industry interests spurred the high
court to take the case last year, arguing that allowing a lower
court decision that threw out the program to stand would
endanger dozens of state laws under which private parties are
investing billions in needed generation plants, including clean-
coal facilities and wind farms.

State officials argued that the program was simply aimed at ensuring a natural gas plant being constructed in Maryland would later clear PJM Interconnection (a regional transmission organization) market auctions, something they said was essential to ensure reliability and reasonable power prices for consumers.

Utilities, PJM and FERC argued that the state incentives
were in direct conflict with PJM’s Minimum Offer Price Rule,
The court attempted to draw a line between the Maryland
program and other state generation incentive programs.

Justice Ruth Bader Ginsburg wrote that not all state generation incentives would infringe on FERC’s wholesale market jurisdiction but that the Maryland program went too far.

“Maryland’s program is rejected only because it disregards an interstate wholesale rate required by FERC,” Ginsburg writes. “Neither Maryland nor other states are foreclosed from encouraging production of new or clean generation through measures that do not condition payment of funds on capacity clearing the auction.”

Many observers noted the narrow nature of the ruling.

“The Court issued a narrow ruling in this matter,” said Travis Kavulla, president of the National Association of Regulatory Utility Commissioners, in a press release. “Indeed, following the Supreme Court’s logic, it seems possible that the State of Maryland could have accomplished substantially the same result of obtaining new generating capacity in the state, just so long as it did not condition the generator’s compensation on the wholesale market’s clearing price for capacity.

“This narrow ruling inevitably will result in further litigation of these issues by leaving many open questions. Someday soon, consumers, utilities, power generators, and regulators alike will need greater certainty about what is and is not permissible on the part of federal and state regulators. But today is not that day,” he said.

—WILLIAM ATKINSON

New York Renewable Transmission Is out of Sight

> MUCH OF WHAT we think we know about renewable technology comes from visual association. However, much of renewable energy is invisible.

One such project is a proposed cable to bring electricity generated from renewable sources to New York City. The high-voltage direct current (HVDC) electric transmission line will be installed underground and underwater.

In April, Empire State Connector Corp. (ESC) filed an application with the Federal Energy Regulatory Commission (FERC) for the 260-mile,

The route will “unlock” upstate renewable and zero-emission generators, helping New York State achieve its goal of 50 percent renewable generation by 2030, said John Douglas, ESC CEO.

According to the application, the line will originate at a converter station near Utica, N. Y., and it will terminate at a converter station in New York City. The stations will be connected by two solid-state HVDC cables.

The project will be built under a project labor agreement (PLA), using New York State construction workers and labor unions affiliated with the New York State Building Trades. ESC estimates the project will create more than 500 construction jobs and 1,200 indirect jobs during the three-to-four-year construction period. The target in-service date is 2021.