Village of Old Mill Creek v. Star

The State of Illinois passed the Future Energy Jobs Act and implemented a program for zero emission credits (ZECs) to subsidize nuclear-power generation after Exelon Corporation announced it would shut down two of its nuclear-generation facilities due to operating losses. The purposes of the ZEC program were to protect the environment and save energy jobs at nuclear facilities. Qualifying energy-generating facilities earned ZECs by producing electricity from resources with zero emissions. Electric utilities were required to enter contracts to purchase ZECs. ZECs were conferred on zero-emission generation facilities equal to 16 percent of the electricity delivered to retail customers during a calendar year. The utilities providing retail electricity were required to purchase all ZECs conferred on zero-emission facilities each year. The price for ZECs was initially set equal to the social cost of carbon, but it was permitted to be adjusted to ensure electricity remained affordable to retail customers. When sold, ZECs provided payments to certain nuclear plants for each megawatt hour of electricity produced. This allowed nuclear plants to bid into the wholesale-market auctions at lower prices than they would have otherwise bid without the payments from ZECs. Two separate suits were field to challenge the Future Energy Jobs Act’s ZEC program. A group of delivery-services customers of the Commonwealth Edison Company in Illinois comprising the Village of Old Mill Creek; Ferrite International Company; Got It Maid, Incorporated; Nafisca Zotos; Robert Dillon; Richard Owens; and Robin Hawkins (plaintiffs) brought the first suit. An industry association for competitive power producers, Electric Power Supply, and several independent power producers, Calpine Corporation; Dynegy Incorporated; Eastern Generation, LLC; and NRG Energy, Incorporated (plaintiffs) brought the second suit. The State of Illinois (defendant) and Exelon (defendant) filed motions to dismiss the complaints.