New York's zero emissions credit (ZEC) program discriminates against gas-fired generators and would undermine competitive markets and raise rates if implemented, according to the Natural Gas Supply Association (NGSA) and American Petroleum Institute (API).
The ZEC program "unlawfully requires New York ratepayers to subsidize a handful of privately-held nuclear generating units, undermining competition in wholesale markets and discriminating against natural gas-fired generators" supplied by NGSA and API members, the two organizations said in a joint amicus brief filed in the United States Court of Appeals For the Second Circuit [Case 17-264]. "Any environmental benefits of the program are incidental and seemingly unrelated to its true purpose."
NGSA and API asked the court to reverse a decision of the United States District Court for the Southern District of New York against the Coalition for Competitive Electricity, Dynegy Inc., Eastern Generation LLC, Electric Power Supply Association, NRG Energy Inc., Roseton Generating LLC and Selkirk Cogen Partners LP [No. 16-cv-8164].
NGSA has said the New York Public Service Commission should reject the ZEC concept because it artificially props up uneconomic power generation facilities, ultimately resulting in higher consumer energy costs.
"The ZEC program infringes on FERC's exclusive authority to set rates for wholesale electricity markets and disregards decades of FERC efforts to foster fuel-neutral, market-based competition for the benefit of customers," said NGSA CEO Dena Wiggins.
The brief mirrors another filed last month in a federal appeals court in Chicago, in which NGSA and API argued that an Illinois ZEC program unlawfully discriminates against natural gas and undermines competitive wholesale power markets.
Illinois is the only state to have enacted a ZEC program, though Connecticut, New Jersey, Ohio and Pennsylvania are considering similar programs, NGSA and API said.