Little-Publicized Supreme Court Case Around Fossil-Fuel Subsidies Will Affect Wind and Solar

first_img FacebookTwitterLinkedInEmailPrint分享Matthew Bandyk for SNL:The U.S. Supreme Court in 2016 already issued one decision that shook the energy industry, but another, more obscure case likely to be decided in the spring could also have widespread reverberations, this time for power projects — especially renewable energy.Various interest groups have lined up on either side of Hughes v. Talen Energy, both claiming that the wrong move by the court could inadvertently frustrate developers of wind and solar installations as they work to keep growing the nation’s renewable energy supply. Wind and solar have soared from providing less than 0.5% of the total electricity generated in the U.S. in 2005 to providing more than 5% in 2015 through November, according to U.S. Energy Information Administration data.But a major developer of renewable projects says it already has been blocked from pursuing new solar projects by state policies like the one the Supreme Court must rule on in the Hughes case.The state of Maryland is asking the court to overturn a lower court’s ruling that struck down a Maryland plan to incentivize the building of a new natural gas-fired plant. Under the program, the developer that won a competitive bidding process had to agree to build a new plant and then bid all of the facility’s capacity into the PJM Interconnection LLC’s capacity market. However, the state’s local electric distribution companies had to sign contracts with the developer and pay a specific amount for that capacity over the length of the contracts regardless of the prices set by the PJM market. To that end, if the contract prices turn out to be higher than the market prices, the utilities would pay the difference to the developer, and vice versa if the market prices were higher than the contract prices.Unlike the Supreme Court’s decision earlier in 2016 concerning demand response, Hughes is a case that has largely flown under the radar, perhaps in part due to the technical complexity of the issue, which has left even Supreme Court justices scratching their heads.In Feb. 24 oral arguments, former U.S. Solicitor General Paul Clement tried to help out Justice Stephen Breyer, who freely admitted that he was confused about the complicated case. Clement was an attorney for the Talen side, arguing that Maryland’s scheme interfered with the price-setting process in competitive wholesale electricity markets and thus intruded on FERC’s jurisdiction.In trying to help Breyer understand what was so objectionable about this specific type of subsidy, Clement said the problem is that Maryland’s policy sends the message to electricity generators to stop competing “based on market forces and efficiency” and instead compete for “subsidies” and “guarantees.”Full article ($): US Supreme Court could alter path for renewables in 2016 Little-Publicized Supreme Court Case Around Fossil-Fuel Subsidies Will Affect Wind and Solarlast_img

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