Coalition for Competitive Electricity v. Zibelman

The Federal Power Act (FPA) granted dual authority to both the Federal Energy Regulatory Commission (FERC) and states to regulate electricity. Under the FPA, FERC had jurisdiction over all sales of electricity at wholesale, and states had jurisdiction over any other sale of electricity. States also had jurisdiction over electricity generation. In 2016, the New York Public Service Commission (NY commission) (defendant) issued an order regarding clean-energy standards aimed at reducing greenhouse-gas emissions. The order created the zero-emissions-credit program. The purpose of this program was to prevent the retirement of nuclear power plants until increased implementation of renewable energy sources could replace them. The program created a subsidy for power generators, like nuclear-power plants, that did not emit carbon dioxide. Such generators earned one zero-emissions credit for each megawatt-hour of electricity that they produced. The price was based on the social cost of carbon (i.e., damage attributed to carbon emissions). Utilities were required to purchase zero-emissions credits based on the total electricity load served by each utility. The Coalition for Competitive Electricity (the coalition) (plaintiff) challenged the zero-emissions-credit program as preempted by the FPA. The coalition argued that the program unconstitutionally infringed on FERC’s authority to regulate wholesale electricity markets and its objective to promote market efficiency. The district court held that the zero-emissions-credit program was not preempted by FERC’s authority under the FPA. The coalition appealed.