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U.S. Supreme Court Will Review Maryland Power Plant Subsidy Decision

The U.S. Supreme Court said Monday it will review an appeals court ruling on a Maryland program requiring utilities to enter into long-term power supply contracts with a developer chosen by the state's Public Service Commission (PSC) to build a natural gas-fired plant.

Lower court rulings on a similar program in New Jersey were also petitioned but were not acted on by the Supreme Court. That program's fate is now apparently tied to the Court's decision in the Maryland case.

In both states, the programs were challenged by PPL Corp. and other power companies who said they infringed on Federal Energy Regulatory Commission jurisdiction (see Daily GPIOct. 3, 2013).

The Maryland program, based on an April 2012 PSC order requiring public utilities in the state to enter into long-term contracts with Competitive Power Ventures, was overturned by a U.S. District Court judge in 2013. Within days, another judge struck down the New Jersey Board of Public Utilities' plan to have ratepayers subsidize the cost to build new natural gas-fired power plants in that state (see Daily GPINov. 22, 2013).

Appeals courts ruled against the programs in separate decisions last year.

The Supreme Court said it would hear a total of one hour of oral argument concerning two consolidated cases, W. Kevin Hughes, Chairman, Maryland Public Service Commission et al, v. PPL Energy Plus LLC [No. 14-614], and Douglas R. M. Nazarian et al v. PPL Energy Plus LLC [No. 14A282]. A ruling in the case isn't expected from the Supreme Court until mid-2016. Hughes is the current chairman of the PSC; Nazarian was chairman when the PSC adopted the disputed program.

Last week, the high court heard oral arguments in another case testing jurisdiction of FERC and states, this time in electricity markets. That case, Federal Energy Regulatory Commission v. Electric Power Supply Association [No. 14-840] and EnerNOC Inc. et al v. Electric Power Supply Association [No. 14-841], reverses the tables, with petitioners arguing that a FERC program infringed on states' jurisdiction over retail electricity markets.

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