FERC has it wrong on the facts, and the law. State policy preferences for clean energy are market corrections, not market distortions. Fossil fuels long have enjoyed market advantages. Coal and gas have received a free ride for climate pollution, generous federal tax benefits, and a government-aided network of pipelines and ports — just to name a few. Moreover, in much of the country, fossil fuel power plants are insulated from competitive pressures because they are owned by vertically integrated, monopoly utilities.
As for the law, the Federal Power Act explicitly gives broad latitude to states to choose the type of power they want to offer to their citizens. FERC’s PJM order threatens to undercut states’ energy rights by singling out, and penalizing, states’ clean energy preferences.