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NGSA, API Say Illinois Program Discriminates Against NatGas, Hurts Power Markets

Two trade associations have filed a joint amicus brief in a federal appeals court in Chicago, arguing that the Illinois Zero Emissions Credit (ZEC) program unlawfully discriminates against natural gas and undermines competitive wholesale power markets.

On Tuesday, the Natural Gas Supply Association (NGSA) and the American Petroleum Institute (API) urged the U.S. Court of Appeals for the Seventh Circuit to reverse a lower court ruling to dismiss a legal challenge to block Illinois from implementing the ZEC program.

Specifically, the U.S. District Court for the Northern District of Illinois, Eastern Division, dismissed a lawsuit filed by the Electric Power Supply Association, Dynegy Inc., NRG Energy Inc. and Calpine Corp.

The plaintiffs argued that the ZEC program infringes on the Federal Energy Regulatory Commission’s exclusive authority to regulate wholesale power markets.

"If allowed to stand, the district court's decision would allow Illinois and other states to enact laws that change the wholesale rates received by electric generation suppliers participating in organized wholesale electricity markets, favoring uncompetitive in-state nuclear generators with subsidies, while discriminatorily depressing the prices received by other suppliers, with the express intention of protecting in-state industry and favoring one fuel source over another," NGSA and API said in their joint filing.

The associations said Connecticut, New Jersey, New York, Ohio, and Pennsylvania were considering enacting programs similar to ZEC. "The district court's decision would throw open the door to an ever-growing patchwork of discriminatory intervention in wholesale markets."

NGSA CEO Dena Wiggins said the ZEC program "is not only discriminatory, it would have serious adverse consequences for the efficient and unbiased functioning of the nation's energy markets."

Illinois Gov. Bruce Rauner signed the Future Energy Jobs Act (FEJA) into law last December. FEJA authorized the Illinois Power Agency to award ZECs to electric utilities.

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