Coalition for Competitive Electricity, Dynergy Inc., Eastern Generation, LLC, Electric Power Supply Association, NRG Energy, Inc., Roseton Generating LLC, Selkirk Cogen Partners, L.P., PlaintiffsAppellantsv.Audrey Zibelman, in her official capacity as Chair of the New York Public Service Commission, Patricia L. Acampora, in her official capacity as Commissioner of the New York Public Service Commission, Gregg C. Sayre, in his official capacity as Chair of The New York Public Service Commission Diane X. Burman, in her official capacity as Commissioner of The New York Public Service Commission, DefendantsAppelleesExelon Corp., R.E. Ginna Nuclear Power Plant LLC, Constellation Energy Nuclear Group, LLC, Nine Mile Point Nuclear Station LLC, IntervenorDefendantsAppellees
Before: Jacobs, Livingston, C.JJ, Chen, D.J.1Plaintiffs, a group of electrical generators and trade groups of electrical generators, appeal from a judgment of the United States District Court for the Southern District of New York (Caproni, J.) granting Defendants’ Rule 12(b)(6) motions to dismiss. Plaintiffs challenge the constitutionality of New York’s Zero Emissions Credit (“ZEC”) program, which subsidizes qualifying nuclear power plants with “ZECs”: statecreated and stateissued credits certifying the zero-emission attributes of electricity produced by a participating nuclear plant. Plaintiffs argue that the program is preempted under the Federal Power Act (“FPA”) and that it violates the dormant Commerce Clause. We conclude as follows: (1) the ZEC program is not field preempted because Plaintiffs have failed to identify an impermissible “tether” under Hughes v. Talen Energy Marketing, LLC, 136 S. Ct. 1288, 1293 (2016), between the ZEC program and wholesale market participation; (2) the ZEC program is not conflict preempted because Plaintiffs have failed to identify any clear damage to federal goals; and (3) Plaintiffs lack Article III standing to raise a dormant Commerce Clause claim. Affirmed.Dennis Jacobs, C.J.Plaintiffs, a group of electrical generators and trade groups of electrical generators, appeal from a judgment of the United States District Court for the Southern District of New York (Caproni, J.) granting Defendants’ Rule 12(b)(6) motions to dismiss. In August 2016, the New York Public Service Commission (“PSC”) adopted the Zero Emissions Credit (“ZEC”) program as part of a larger energy reform plan to reduce greenhousegas emissions by 40 percent by 2030. The program subsidizes qualifying nuclear power plants by creating “ZECs”: statecreated and stateissued credits certifying the zeroemission attributes of electricity produced by a participating nuclear plant. The PSC has determined that three nuclear power plants (FitzPatrick, Ginna, and Nine Mile Point) qualify for the ZEC program; other facilities, including facilities located outside New York, may be selected in the future.Plaintiffs allege that the ZEC program influences the prices that result from the wholesale auction system established by the Federal Energy Regulatory Commission (“FERC”) and distorts the market mechanism for determining which energy generators should close. Plaintiffs challenge the program’s constitutionality on two grounds: that the program is preempted under the Federal Power Act (“FPA”) and that it violates the dormant Commerce Clause. Defendants, who are members of the PSC, and Intervenors, who are the nuclear generators (and their owners, including Exelon Corporation) receiving ZECs, moved to dismiss on the grounds that Plaintiffs lack a private cause of action to pursue their preemption claims because the FPA implicitly forecloses equity jurisdiction, and that (in any event) Plaintiffs’ claims fail as a matter of law.We conclude that the ZEC program is not field preempted, because Plaintiffs have failed to identify an impermissible “tether” under Hughes v. Talen Energy Marketing, LLC, 136 S. Ct. 1288, 1293 (2016) between the ZEC program and wholesale market participation; that the ZEC program is not conflict preempted, because Plaintiffs have failed to identify any clear damage to federal goals; and that Plaintiffs lack Article III standing as to the dormant Commerce Clause claim. These conclusions are consistent with the recent Seventh Circuit decision in Elec. Power Supply Assn v. Star, No. 172433, 2018 WL 4356683, at *1 (7th Cir. Sept. 13, 2018).The judgment of the district court is affirmed.IAThe FPA establishes a collaborative scheme between the states and federal government to regulate electricity generation. States have exclusive jurisdiction over “facilities used for the generation of electric energy,” including production and retail sales. 16 U.S.C. §824(b)(1). FERC regulates electricity sales at wholesale, ensuring “rates and charges made, demanded, or received…for or in connection with” such sales are “just and reasonable.” Id. §824d(a).FERC has determined that just and reasonable rates for wholesale electricity should be set by competitive auctions. The New York Independent System Operator (“NYISO”) manages two types of wholesale auctions under FERCapproved rules and procedures: energy and capacity. In energy auctions, generators bid the lowest price they will accept to sell a given quantity of electrical output; in capacity auctions, generators bid (and NYISO purchases) options to call upon the generator to produce a specified quantity of electricity in the future. Both types of auction employ “stacking” of bids from lowest to highest price until demand is satisfied. App’x 50, 54 (Compl.
