Coalition for Competitive Electricity v. Zibelman

To fight climate change and decarbonize the electricity sector, New York State adopted a suite of clean energy standards in August 2016. Under these standards, 50 percent of the state’s electricity must come from renewable sources, such as solar and wind, by 2030. To meet its ambitious goals, New York established a program that requires the state’s electric companies to purchase zero emissions credits (ZECs) from certain nuclear power plants to account for their carbon-avoidance benefits.

But in October 2016, a group of fossil fuel power generators filed a lawsuit in federal court challenging the ZEC program as an unconstitutional exercise of state power. One of their main arguments relied on an overly rigid interpretation of the Federal Power Act—the law that governs wholesale electricity sales—which they said forbids or “preempts” New York from adopting such a program. If these fossil fuel companies were successful, it could have had far-reaching implications for clean energy policies nationwide by restricting states’ ability to enact ambitious clean energy programs.

So NRDC filed an amicus brief supporting New York State in December 2016. Our brief aimed not to support the ZEC program (which we did not support during the state administrative proceedings) but rather to defend states’ authority more broadly, and thereby to preserve a critical tool in the effort to combat climate change and hazardous air pollutants emitted by power plants. New York was acting within its traditional state authority to regulate utilities and determine the appropriate resource mix when it adopted the ZEC program, and the federal government has long acknowledged that states can exercise this authority consistent with federal law.

The district court sided with New York State and NRDC in July 2017, upholding New York’s ZEC program and dismissing the generators’ complaint. The court’s thorough decision affirmed states’ broad authority to advance their chosen energy supply mix and “do their part to reduce the emissions that contribute to global warming.” The fossil fuel power generators appealed the district court’s decision to the Second Circuit Court of Appeals but on September 27, 2018, the court again ruled in favor of New York’s authority to adopt its zero-emission credits—delivering an important victory for states that are seeking to support clean energy.