Yesterday, April 20, 2016, the Supreme Court issued its opinion in Hughes v. Talen Energy Marketing, LLC.* The Court unanimously found that Maryland’s program was not permissible under the Federal Power Act (FPA). Justice Ginsburg, writing for the Court, affirmed the lower court decision and held that Maryland’s program “contravenes the FPA’s division of authority between state and federal regulators.” The opinion, however, concludes by noting the narrowness of the holding:
We . . . need not and do not address the permissibility of various other measures States might employ to encourage development of new or clean generation, including tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector. Nothing in this opinion should be read to foreclose Maryland and other States from encouraging production of new or clean generation through measures “untethered to a generator’s wholesale market participation.” . . . So long as a State does not condition payment of funds on capacity clearing the auction, the State’s program would not suffer from the fatal defect that renders Maryland’s program unacceptable.
(internal citation omitted). Justice Sotomayor concurred to note that the question of pre-emption in the context of the federal-state relationship envisioned by statutes such as the FPA is “particularly delicate.” Justice Thomas concurred in part and in the judgment, noting that the finding that Maryland’s program “invades [FERC’s] exclusive jurisdiction” is sufficient and that the Court need not apply an implied pre-emption analysis.
*Spiegel & McDiarmid LLP represented petitioners, the Maryland Public Service Commission.
