Supreme Court To Determine Ability For States To Enter Into Contracts For Capacity in RPM
October 20,2015
The U.S. Supreme Court will hear an appeal of a lower court ruling that struck down the Maryland PSC's action directing utilities to enter CfDs to support construction of a new power plant, contingent on the plant bidding into and clearing the RPM capacity auction
In the Maryland case, the court will hear at oral arguments the following questions:
1. Where, as a result of a state-directed procurement, the contract price to build and operate a power plant is the developer's bid price, and may result in payments beyond what the developer earns selling the plant's capacity in the FERC-supervised auction, is the program "field preempted" as a State's attempt to set interstate wholesale rates?
2. Is a state-directed contract to support construction of a power plant "conflict preempted" because its long-term pricing structure provides incentives different from the incentives provided by prices generated in the FERC-supervised yearly capacity auction?