NEWS IN THE WORLD OF POWER AND INTEGRATED BUILDING SYSTEMS
16 ELECTRICALCONTRACTOR | JUN.16 | WWW.ECMAG.COM
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,”
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.
For more on HVDC, see “Power to the
People,” on page 46.