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Supreme Court takes on another high-stakes FERC case

The Supreme Court today agreed to tackle its second major case of this term surrounding state and federal turf lines in electricity markets.

In a customary short order issued this morning, the court announced it would hear arguments in two linked cases involving a Maryland program providing incentives for new power generation. A lower court threw out the state program after judges found the incentives infringed on the Federal Energy Regulatory Commission's jurisdiction.

That program had been challenged by existing plants that would compete with the new plants in the regional wholesale electricity market operated by PJM Interconnection LLC. Power generators opposed to the state program and the Obama administration had urged the high court not to hear the appeal.

The high court is currently grappling with a separate case surrounding whether a FERC program inappropriately impeded on states' jurisdiction over retail electricity markets. An opinion in that case is pending after the justices heard oral arguments last week (Greenwire, Oct. 14).

The newly granted case is tied to the pending case "in that the problems both FERC and Maryland are trying to address in each situation represent the importance of the concurrent jurisdiction and cooperative federalism that the Federal Power Act envisions," said Natural Resources Defense Council attorney Allison Clements, although she noted there are "important distinctions" differentiating the cases.

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The linked Maryland cases the court today agreed to hear later this term are W. Kevin Hughes v. PPL EnergyPlus LLC and CPV Maryland v. PPL EnergyPlus. Hughes is the chairman of the Maryland Public Service Commission.

The high court has not yet declared whether it will weigh in on two separate but related cases that involve a similar program in New Jersey.

Both states developed programs that sought to encourage energy generation by setting up programs where new plants were ensured fixed contract rates and stable revenues from retail electricity purchasers. And both states' programs were struck down by federal appeals courts, where judges found that the incentives infringed on FERC's jurisdiction over wholesale rates for electricity and transmission that crosses state lines.

Maryland, New Jersey and Commercial Power Ventures of Maryland had asked the high court to reinstate those programs. State officials argued that the lower courts had inappropriately hampered their ability to ensure adequate and affordable electricity generation and failed to preserve states' authority over electricity generation within their borders.

Last month, U.S. Solicitor General Donald Verrilli said both the Maryland and New Jersey programs were unlawful and urged the court to leave in place the rulings that struck them down. Despite states' contentions that the lower courts' decisions will stifle clean energy generation, he said, "both courts went out of their way to emphasize that their pre-emption decisions were limited to the specific circumstances of the New Jersey and Maryland programs" (Greenwire, Sept. 18).

Clements of NRDC said today, "The Supreme Court's consideration of this case is consistent with the recognition that states must be able to pursue their own energy policy agendas -- specifically clean energy agendas -- in a manner that complements FERC's authority."

The court's decision to hear the Maryland case is "good news," said National Association of Regulatory Utility Commissioners general counsel Brad Ramsay. NARUC filed an amicus brief urging the Supreme Court to reverse the lower court's ruling. "If nothing else -- it means petitioners get one more shot in the 'batter's box' to make our case. Plus, the most logical implication of the grant is that at least four justices don't like some aspect of the decision below," Ramsay added.

It takes the votes of four Supreme Court justices to grant review of a case.

Calif. clean water case

In a separate denial issued today, the Supreme Court refused to hear an appeal in the case Conway v. State Water Resources Control Board.

In that case, the owners of private property on McGrath Lake in Ventura County, Calif., challenged how regulators had established the "total maximum daily load" of pollutants allowed in the lake.

A California appeals court found that regulators' establishment of pollutant limits was in line with the Clean Water Act, and the California Supreme Court declined to review the case.

Click here to read the property owners' petition to the Supreme Court.

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