Orrick's Adam Wenner and Cory Lankford published an article in Pratt's Energy Law Report on a recent SCOTUS opinion that invalidated a Maryland program designed to incentivize construction of a new natural gas plant.
The authors explained that "the underlying dispute relates to the wholesale capacity auctions conducted by PJM, the regional transmission operator that administers wholesale energy markets in many Mid-Atlantic states, including Maryland. PJM uses an auction to set market prices for the purchase and sale of capacity from generation resources three years in advance of delivery of capacity from those resources. Opponents of the Maryland program argued that PJM's FERC-approved capacity market is designed to ensure that sufficient generation resources are available to satisfy wholesale load requirements. They also argued that the PJM capacity market sends price signals that reward existing capacity resources that clear in the PJM auctions and incentivize the construction of new generation that can serve markets where capacity prices are high."
Read the article in its entirety here.
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