Energy industry coalition sues NY PSC over nuclear subsidies

Oct 19 (Reuters) - An energy industry coalition including competitive non-nuclear electricity producers sued on Wednesday to oppose a plan to subsidize nuclear power plants in New York State.

The lawsuit in federal court said the New York Public Service Commission’s (PSC) plan to raise electric rates across the state by requiring consumers to pay for zero emission credits (ZECs), infringes illegally into federal regulators’ territory.

The coalition said in a statement that the litigation was “solely to save several New York nuclear plants that, allegedly, can no longer compete successfully in the federally-regulated wholesale electric power market.”

The subsidies were part of an effort to keep the nuclear reactors, which produce almost no emissions, operating at a time of low prices for power and natural gas, an alternative generator fuel.

“The frivolous lawsuit is right out of fossil fuel industry’s play book to deny and thwart actions to combat climate change,” New York PSC Chairwoman Audrey Zibelman said in a statement.

She noted that the U.S. Supreme Court has repeatedly upheld the rights of states to protect their environment for the welfare of citizens.

The owners of the state’s nuclear reactors include units of Exelon Corp and Entergy Corp.

Exelon in August agreed to buy Entergy’s FitzPatrick reactor in New York, which Entergy said it would retire in 2017, after the state adopted the Clean Energy Standard to help the state’s nuclear reactors.

Officials at Exelon were not immediately available for comment.

Coalition members opposed to the nuclear subsidies include units of Dynegy Inc and NRG Energy Inc. (Reporting by Harshith Aranya in Bengaluru and Scott DiSavino in New York; editing by Grant McCool)