Appeals Court Upholds New York Clean Energy Plan

(New York – September 27, 2018) The U.S. Court of Appeals for the Second Circuit today upheld a New York state clean energy policy, reaffirming states’ right to create policies to protect their people and their environments from unhealthy pollution.

“For the third time in a row, our Circuit Courts have said that states have the fundamental authority to create strong clean energy and environmental policies,” said EDF Senior Attorney Michael Panfil. “This is a clear sign that states have the right to address the threats posed by climate change and air pollution in the ways that are best for them.”

EDF and NRDC filed an amicus, or “friend of the court,” brief supporting New York’s right to establish its own clean energy policies.

New York state created zero-emission credits (ZEC’s) for qualifying nuclear power plants with the aim, as stated by the court, “to prevent nuclear generators that do not emit carbon dioxide from retiring until renewable sources of energy can pick up the slack.” The ZEC program ties the credit to the social cost of carbon, structured to reduce unhealthy, climate-changing pollution through a larger energy reform plan to reduce greenhouse-gas emissions by 40 percent by 2030.

Opponents challenged the policy, saying it violated the Supremacy and Commerce Clauses of the Constitution because it usurped the authority of the Federal Energy Regulatory Commission (FERC).

A lower court ruled in favor of New York. Today the Second Circuit upheld that decision, saying:

“In this Circuit, there is a ‘strong presumption against finding that the [State’s] powers’ are preempted by the [Federal Powers Act], legislation that was ‘drawn with meticulous regard for the continued exercise of state power.’ That presumption may be overcome only if displacing state authority was Congress’ ‘clear and manifest purpose.’”  (Decision, page 12)

The decision later states:

“The ZEC program does not cause clear damage to federal goals, and Plaintiffs have failed to state a plausible claim for conflict preemption.” (Decision, page 22)

Earlier this month, the Seventh Circuit Court upheld a clean energy policy in Illinois that was challenged on similar grounds. The Seventh Circuit also found that state policies to create more clean energy and reduce pollution do not violate the Supremacy or Commerce Clause of the Constitution or infringe of the rights of FERC. EDF filed an amicus brief in that case.

Also earlier this month, the Ninth Circuit Court of Appeals ruled in favor of a clean fuels policy in Oregon. The Ninth Circuit also found that Oregon’s policy did not violation the Commerce Clause. EDF was a party to that case.