April 19, 2016 / 2:35 PM / 3 years ago

U.S. top court rules against Maryland over power plant subsidies

WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday ruled against Maryland in its bid to revive a program to subsidize natural gas-fired electricity plant construction to serve the power needs of its residents in a case weighing state versus federal authority.

Writing on behalf of the court in the 8-0 ruling, liberal Justice Ruth Bader Ginsburg said the Maryland program infringed upon the U.S. Federal Energy Regulatory Commission’s (FERC) authority to regulate interstate wholesale electricity rates.

The case focused on whether Maryland’s actions to encourage power generation through subsidies and incentives ran afoul of the federal government’s energy regulatory authority. The ruling is likely to resolve a separate case concerning a similar program in New Jersey that also was pending before the high court.

Ginsburg said that “states may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC’s authority over interstate wholesale rates, as Maryland has done here.”

The Maryland and New Jersey programs were challenged by power company PPL Corp and other generators. The states were backed by companies that wanted to build new plants, including CPV Holdings.

The New Jersey program was enacted through a law in 2011. The Maryland Public Service Commission adopted its own version a year later.

In separate 2014 decisions, appeals courts ruled against both states’ programs, saying they infringed upon federal authority to regulate wholesale electricity markets.

New Jersey and Maryland appealed those rulings to the Supreme Court.

In a different case, the court in January ruled again in favor of FERC’s authority. The agency was defending a regulation aimed at encouraging efficiency in the electricity market by having electrical grid operators pay users to reduce consumption at peak times.

Reporting by Lawrence Hurley; Editing by Will Dunham

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