Lawsuits against Illinois legislation dismissed

19 July 2017

A federal judge has dismissed two lawsuits seeking an invalidation of the State of Illinois' zero emission credit (ZEC) program. Introduced last year as part of the states' Future Energy Jobs bill, the program provides financial support to Exelon's Quad Cities and Clinton nuclear power plants.

Senate Bill 2814, the Future Energy Jobs bill, was passed by the state legislature on 1 December, the final day of both houses' 2016 veto sessions. Illinois governor Bruce Rauner signed the bill into law six days later. The bill will see Illinois expand clean energy production while protecting jobs and maintaining competitive electricity rates, with caps and protections to limit the impact on consumers and businesses. It recognises the contribution of nuclear power generation to the state's zero-carbon emission generation and ensures that the Clinton and Quad Cities nuclear power plants can remain open. Without the legislation, both plants had faced closure.

Two lawsuits were filed with the US District Court for the Northern District of Illinois to challenge the zero emission credit program. The first case was brought by consumer plaintiffs including Village of Old Mill Creek, Ferrite International Company, Got It Maid Inc, Nafisca Zotos, Robert Dillon, Richard Owens, and Robin Hawkins. They are all delivery services customers of Commonwealth Edison in Illinois. The second case was filed by the Electric Power Supply Association (EPSA) and independent power producers Calpine Corporation, Dynegy Inc, Eastern Generation LLC and NRG Energy Inc.

Both the consumer plaintiffs and the generator plaintiffs brought claims against Illinois Power Agency director Anthony Star and the commissioners of the Illinois Commerce Commission seeking to invalidate the Future Energy Jobs bill. They claimed that the legislature's asserted goal for the statute, "environmental protection", was "a mere pretext for a bailout" for Exelon's Clinton and Quad Cities plants.

The plaintiffs alleged the ZEC undermined wholesale power markets that are the exclusive jurisdiction of the federal government. The generator plaintiffs claimed they will incur millions of dollars in damages because they will lose power auctions they otherwise would have won, and will receive less revenue from auctions they do win. Meanwhile, the consumer plaintiffs said they will face higher utility bills as Commonwealth Edison and Amaren Illinois increase retail charges.

The defendants and Exelon each filed motions to dismiss the complaints.

In his ruling on 14 July, Judge Manish Shah said, "The ZEC program falls within Illinois' reserved authority over generation facilities. Illinois has sufficiently separated ZECs from wholesale transactions such that the Federal Power Act does not pre-empt the state program."

Shah concluded, "Defendants' and Exelon's motions to dismiss are granted. The plaintiffs' claims are dismissed in part for lack of subject-matter jurisdiction and in part for failure to state a claim. The plaintiffs' motions for a preliminary injunction are denied. The Clerk shall enter final judgement and terminate these cases."

On 17 July, the generator plaintiffs - EPSA, Dynegy, Eastern Generation, NRG Energy and Calpine - filed an appeal against the ruling with the 7th US Circuit Court of Appeals in Chicago.

Researched and written
by World Nuclear News