The Federal Energy Regulatory Commission (FERC) ordered PJM Interconnection, LLC’s (PJM) on July 25 to suspend its 2019 Base Residual Auction (BRA), which provides for capacity payments to electric generators. FERC found that delaying the auction until FERC establishes a replacement rate would provide greater certainty to the market than conducting the auction under the existing rules.

This is the second time that the 2019 BRA, which provides for capacity payments for 2022–2023, has been delayed. PJM originally planned to run the auction in May, but delayed it based on a prior FERC order. FERC’s July 25 order delays the 2019 BRA until FERC establishes a replacement rate.

Read FERC’s order.

The Ohio House of Representatives approved HB 6 on July 23, providing up to $150 million in financial support for the two operating nuclear plants in the state. A version of the House bill was passed by the Ohio Senate last week, and Governor Mike DeWine signed the bill into law shortly after the legislation passed the House.

Read the full text of HB 6 >>

The US Supreme Court issued its decision on June 17 in the case of Virginia Uranium, Inc. v. Warren. The Court affirmed the decision of the US Court of Appeals for the Fourth Circuit, which held that the Atomic Energy Act does not preempt Virginia’s statutory prohibition on uranium mining. This decision is important to the nuclear industry because it considers the extent to which state and local governments may insert themselves into the field of radiological safety by enacting “bottleneck” laws purporting to regulate antecedent activities.

The New Jersey Board of Public Utilities (BPU) approved applications submitted by PSEG Nuclear LLC seeking subsidies of up to $300 million annually, in the form of zero emission credits (ZECs), for PSEG’s Hope Creek and Salem 1 and 2 nuclear generating stations on April 18. The PSEG applications were filed on December 19, 2018, after New Jersey enacted legislation on May 23, 2018, establishing a ZEC program for the state (the ZEC Act).

The NRC, with the approval of the US attorney general, recently published a second revision to its guidelines on the use of weapons by licensee security personnel whose official duties include the protection of designated facilities, certain radioactive material or other licensee property, and licensee material or property that is being transported to or from a licensee facility. The changes were made to ensure consistency with existing FBI procedures on appeals of background check delays or denials. The updated guidelines were published in the Federal Register on March 8, 2019, and took effect the same day.

The US Court of Appeals for the Second Circuit on September 27 affirmed a decision of the US District Court for the Southern District of New York dismissing a complaint seeking to invalidate New York’s Zero Emissions Credit (ZEC) program. This decision comes on the heels of a Seventh Circuit decision affirming the validity of a similar ZEC program in Illinois. In its opinion, the Second Circuit noted that its conclusions accorded with the Seventh Circuit’s decision, which we wrote about in an earlier post.

The US Court of Appeals for the Seventh Circuit on September 13 affirmed a decision of the US District Court for the Northern District of Illinois that dismissed two complaints seeking to invalidate the Illinois Zero Emission Credits (ZEC) program.

The Illinois ZEC program was created in 2016 as part of the Future Energy Jobs Act. A ZEC is a credit that represents the environmental attribute of one megawatt hour of energy produced from an eligible zero-emission facility as defined by the statute. The Illinois Power Agency confers ZECs to eligible facilities generating zero-emission power and requires utilities to purchase those ZECs. The act set an initial price for ZECs based on a calculated “social cost” of carbon, but the price can adjust downward based on an index of wholesale power prices. While the eligible zero-emission generators will still participate in wholesale electricity markets, ZECs provide additional out-of-market payments to compensate the generators for their zero-emission power.

The US Court of Appeals for the Eleventh Circuit on July 11 affirmed the decision of the US District Court for the Southern District of Florida that dismissed a putative class action complaint seeking class certification for more than 1 million customers, injunctive relief, and disgorgement of rates collected under Florida’s Nuclear Cost Recovery System (NCRS).

The NCRS is a regulation promulgated by Florida’s Public Service Commission (PSC) after the passage of Florida’s 2006 Renewable Energy Technologies and Energy Efficiency Act (the Act). The NCRS allows a utility, subject to PSC approval, to preemptively charge its customers through an electricity rate increase for “costs incurred in the siting, design, licensing, and construction” of a nuclear project through its completion. The utility retains the funds collected under the NCRS even if the project is never completed. Here, plaintiffs sought to recover monies collected by two utilities under the NCRS for nuclear projects.

The US Department of Justice (DOJ) and the Federal Energy Regulatory Commission (FERC) filed a joint brief on May 29 in the US Court of Appeals for the Seventh Circuit, stating that Illinois’ zero emission credit (ZEC) program for eligible nuclear plants in Illinois is not preempted by the Federal Power Act (FPA). Because the panel in a substantially similar case pending in the Second Circuit has indicated that it would review the government’s filing in the Seventh Circuit case, the views of FERC and DOJ could be critical as this issue plays out in the federal court system.

The Illinois legislature passed a law in 2016 requiring utilities to purchase ZECs at administratively set prices from nuclear plants in the state. Generators that compete with the ZEC-receiving nuclear plants challenged the law, arguing that the ZEC program is preempted by the FPA. The district court upheld the program, and the generators appealed the decision to the Seventh Circuit. FERC did not take a position in the trial court but has now done so after the Seventh Circuit invited the US government to file a brief.