Crony Capitalist N.Y. Utility Subsidy Boondoggle Now Facing Federal Lawsuit
So there’s grave new trouble for New York Governor Andrew Cuomo’s crony-capitalist, climate alarmist utility subsidy boondoggle: a federal lawsuit.
Since its introduction in August, CFIF has been exposing Cuomo’s “Clean Energy Standard” (CES), a scheme approved by the state of New York’s Public Service Commission made up entirely of his own appointees. In a nutshell, the CES creates an artificial mandate that 50% of all the state’s energy be generated by carbon-neutral plants just 13 years from now. At a minimum, the CES will cost $1 billion in its first two years alone, and an estimated $8 billion over its 13-year existence. And it illustrates the sort of crony capitalism that is all too common at the federal, state and local levels because the plan’s subsidies will be steered toward a single company named Exelon that owns financially struggling upstate nuclear plants. We have nothing against Exelon in particular, but everything about this scheme smells fishy. At the end of the day, moreover, the cost of all of this will fall upon New York residents and businesses.
Additionally, the CES program is so manifestly flawed that opposition is bipartisan. New York environmental groups also attack what they describe as Governor Cuomo’s “$8 billion bailout of three upstate nuclear power plants.”
And now there’s even more grave trouble for CES.
In U.S. District Court, a lawsuit filed this week by the prominent law firm Boies Schiller seeks injunction against the scheme, alleging violation of the Interstate Commerce Clause and federal preemption under the Supremacy Clause of the U.S. Constitution, among other counts:
Several power plant owners sued New York state energy regulators Wednesday over the state’s approval of billions of dollars in subsidies for aging nuclear plants. The suit filed in Manhattan federal court argues the bailout represents an illegal interference with the federal government’s role in regulating electric rates, and will unfairly burden the ratepayers who will pay for the subsidies, which could cost nearly $8 billion over 12 years. ’This is a bad deal for New Yorkers, who will see their electric bills go up across the state,’ said Jonathan Schiller, whose firm Boies, Schiller & Flexner is representing the plaintiffs… ’This subsidy will cost New Yorkers as much as $7.6 billion in payments to a single company. This is illegal.’”
We’ll be monitoring and updating this lawsuit as events develop, but it presents another mortal threat to the CES plan.
And justifiably so. Although we continue to support nuclear power as an energy source that should be exploited by the U.S. on the basis of both efficiency and national security, Governor Cuomo’s crony capitalist boondoggle is simply an unacceptable way to do it. It’s not by accident that opposition is bipartisan, and now under judicial threat as well.