Wednesday, April 20, 2016

High court rules against Md. gas-for-electric subsidy

"The Supreme Court on Tuesday ruled that Maryland overstepped its authority when it implemented a program to subsidize construction of natural-gas-fired power plants," Timothy Cama reports for The Hill. "The court unanimously ruled that by requiring companies building such subsidized plants to set rates for certain electricity sales, Maryland improperly interfered in markets that are the sole responsibility of the Federal Energy Regulatory Commission."

Allison Clements, director of the Natural Resources Defense Council’s Sustainable FERC Project, told Cama, “The Supreme Court’s decision is good news for clean energy because it rejected Maryland’s program on extremely narrow grounds. The decision leaves states free to encourage clean energy through a wide variety of means, including by requiring long-term power purchase agreements.”

The ruling is seen as "a setback for Maryland and other states that want to ensure a reliable supply of electricity for customers at reasonable rates," reports The Associated Press. "The case involves a 2012 decision by state regulators to order construction of a $775 million natural gas power plant in Charles County. Officials offered the winning bidder—Silver Spring-based Competitive Power Ventures—a financial incentive by requiring utilities to buy electricity from the plant for 20 years at a fixed price. Lower courts sided with rival power suppliers who said the incentive interfered with pricing in wholesale markets, which are subject to federal regulation."

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