Hughes v. PPL EnergyPlus, LLC

Whether Maryland violated the Supremacy Clause of the United States Constitution with their subsidy structure for energy production?

Firms that produce energy are subject to extensive regulation through the Federal Power Act (FPA) and Federal Energy Regulatory Commission (FERC). The FERC generated a requirement (“the minimum offer price rule, or MOPR”) to adjust the clearing prices while exempting the some “state-supported generators.” Appellees are power plants in competition with the Commercial Power Ventures of Maryland who claim that the Generation Order and the CfDs are unconstitutional under the Supremacy Clause of the U.S. Constitution. The District Court held and the Appellate Court agreed that the Maryland subsidies are preempted by the U.S. Constitution.

Petitioners argue on appeal that the decision will alter the FPA by conflicting with history of rates and will be in direct conflict with the D.C. Circuit. Further, altering the regulatory nature of the Maryland subsidy system will destroy state laws and private investments in the energy market. Finally, the petitioners argue that altering the Maryland subsidy system will alter future energy planning. Adhering to the decision will upset long term investments, state-supervised planning and hurt the state’s authority in the energy field.