PJM market monitor opposes Illinois nuclear subsidies

Dive Brief:

  • Monitoring Analytics, the independent market monitor for the PJM Interconnection, has filed in federal court in opposition to the zero emission credit (ZEC) the Illinois legislature passed late last year to support two Exelon Nuclear plants.

  • The market monitor, in a filing with US District Court for the Northern District of Illinois, has intervened in the case brought by a group of merchant generators against the Illinois Power Agency and the Illinois Commerce Commission.

  • Monitoring Analytics argues that the ZEC subsidies “unlawfully intruded” on the Federal Energy Regulatory Commission’s exclusive authority over wholesale interstate electricity sales under the Federal Power Act.

Dive Insight:

The passage of the Future Energy Jobs Act late last year provides $235 million in annual ZEC payments to Exelon’s Quad Cities and Clinton nuclear plants and has encouraged other states to follow suit. Connecticut earlier this month introduced similar legislation that would create a solicitation aimed at providing a power purchase agreement for Dominion Energy’s Millstone nuclear plant.

FirstEnergy is pushing similar legislation in Ohio, and analysts say Pennsylvania and New Jersey are eyeing similar measures.

But merchant generators are strongly opposing what they see as out-of-market payments that have the potential to skew competition in wholesale power markets. New York is in the midst of a battle over ZECs designed to shore up some of the state’s ailing nuclear plants.

In the Illinois case, Monitoring Analytics is arguing that the state’s ZEC “threatens the foundations of the PJM market and interferes with the federal regulatory scheme.” Monitoring Analytics also argues that its interest in the case is unique because it is not seeking to protect its financial interests but is serving the public interest by promoting and protecting “robust and competitive markets.”

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Filed Under: Generation Transmission & Distribution Regulation & Policy
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