PPL EnergyPlus, LLC v. Solomon

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Dissatisfied with the stock and reliability of power-generating facilities in New Jersey, the state adopted the Long Term Capacity Pilot Program Act (LCAPP), instructing New Jersey’s Board of Public Utilities to promote construction of new power-generating facilities in the state. Rather than pay for the construction of these plants directly, the Board of Public Utilities crafted a set of contracts, called Standard Offer Capacity Agreements, which assured new electric energy generators 15years of revenue from local utilities and, ultimately, New Jersey ratepayers. LCAPP guaranteed revenue to new generators by fixing the rates those generators would receive for supplying electrical capacity, that is, the ability to make energy when called upon. The district court found LCAPP invalid. The Third Circuit affirmed. With the Federal Power Act, Congress placed “the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce” under federal control, 16 U.S.C. 824(a). When New Jersey arranged for LCAPP generators to receive preferential capacity rates, the state entered into a field of regulation beyond its authority. Federal law preempts, and invalidates, LCAPP and the related Standard Offer Capacity Agreements.View "PPL EnergyPlus, LLC v. Solomon" on Justia Law