Trump Aims for New York in Latest Salvo Against Clean Energy

(Bloomberg) -- Federal regulators are set to make a decision on New York’s power market that could disrupt the state’s plans to reach its climate goals.

The U.S. Federal Energy Regulatory Commission has scheduled a meeting for Thursday to rule on a case filed by some generators who said the state’s policies were unfair because only clean-power producers received subsidies.

In December, FERC changed rules in another market -- PJM Interconnection LLC, which stretches from Washington, D.C. to Chicago -- in a way that props up fossil-fuel generators. Given that action, speculation is now rising that New York’s efforts to support wind farms, solar panels and nuclear plants could be hobbled.

“It would not surprise me if the commission does the same thing that they did to PJM,” said Paul Patterson, an analyst at Glenrock Associates LLC in New York. “Why not go after New York, too.”

If that does happen, it would prove yet another win for U.S. President Donald Trump and his pro-fossil-fuel campaign. PJM -- which operates America’s biggest power market -- wants to overturn parts of FERC’s December decision that critics say will make clean energy more expensive and increase costs for consumers.

Most of Trump’s efforts to revive the slumping coal industry have been thwarted by declining costs for renewable energy and state-level energy policies that increasingly favor carbon-free sources.

But decisions that govern how electricity is bought and sold in wholesale markets are made at the federal level, giving Trump’s Republican majority at FERC levers to tip the scales toward fossil fuels. Chairman Neil Chatterjee, in what he described as an effort to level the playing field, is changing the way power plant owners are paid for some services.

The PJM decision became a rallying cry for state’s rights and a threat to the wholesale market model, with Illinois, Maryland and New Jersey warning they may abandon the market that supplies power for 65 million people. Each of those states subsidize nuclear operations and want to increase renewable energy sources.

New York Governor Andrew Cuomo has set a goal of eliminating carbon emissions from power plants by 2040.

Mary O’Driscoll, a FERC spokeswoman, declined to comment on how the commission may rule on the case. A spokesman for the New York Independent System Operator also declined to comment.

--With assistance from Natalia Kniazhevich.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net

To contact the editor responsible for this story: Joe Ryan at jryan173@bloomberg.net

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