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Today’s edition of Utility Dive discusses our pending appeal in the Illinois Zero Emission Credit Case. You may read the article here.

It’s been a busy day for the Establishment Clause of the First Amendment. The U.S. Supreme Court’s jurisprudence on separating church and state is long and, in many cases, self-contradictory and even incoherent. But despite all that fog, there are a few solid ideas that emerge.

The Washington Post reports that the U.S. Supreme Court has agreed to hear the case of a Colorado baker who refused to bake a wedding cake for a same-sex couple’s wedding reception, claiming that to do so violated his constitutional right to religious liberty. Masterpiece v. Colorado Civil Rights Commission. The actual decision is probably a year away, but it will be interesting to hear what Gorsuch has to say.

As some ancient sage said, predictions are always dangerous, especially when they involve the future. But here goes. My prediction is that the case will go against the baker.

Were I to walk into a kosher deli and order a cheeseburger, the deli owner would almost certainly not serve me because they serve only food that complies with their religious rules.

But there’s a world of difference between not serving someone because the dish they’re asking for is against your religious principles (and therefore not even on the menu), and not serving someone a dish that is on the menu because that person’s existence or nature is against your religious principles. To call that an exercise of your own “religious liberty” is Orwellian. If that’s religious liberty, then it’s a very short step for a restaurant run by neo-Nazi skinheads (assuming one existed, and, if it did, it could stay in business for more than a week) could refuse to serve anyone who doesn’t meet their definition of Aryan.

Today as well, in the Trinity Lutheran case, the U.S. Supreme Court ruled that taxpayer-funded grants for playgrounds available to nonprofits under a state program could not be denied to a school run by a church. Though the commentariat sees this as shattering the separation between church and state, I don’t. In 1971, the Court decided Lemon v. Kurtzman, which set forth a 3-point test for such statutes: there must a secular purpose behind the statute; the statute’s primary effect must be one that neither promotes nor inhibits religion; and the statute must not foster “excessive government entanglement with religion.” Trinity Lutheran involved public funds used to re-pave playgrounds with rubberized material that’s easier on the knees than asphalt or cement. Before someone sounds alarm bells about Trinity Lutheran, they should first explain why it does not fit fairly within the Lemon v Kurtzman criteria.

 

 

One might be forgiven for mistaking the Federal Energy Regulatory Commission for an Agatha Christie mystery play in which the characters disappear one-by-one. With the earlier departures of three of its five commissioners, including former Chair Norman Bay, FERC is currently down to two: Acting Chair Cheryl LaFleur and Commissioner Colette Honorable. FERC has not had a quorum since those departures became effective. Honorable’s term ends in June, and she has said that she’ll step down then. LaFleur will be the sole commissioner at that point.

The Trump administration has named three replacements so far, but as of this date none of them have been confirmed by the U.S. Senate. Given the Senate’s work schedule (raising campaign funds is more important than all that boring Article I stuff), it’s not likely that the three nominees will be confirmed by June. So FERC could be hobbled for a while yet.

Exelon CEO Chris Crane

Exelon CEO Chris Crane

Chicago, IL February 14, 2017:  Chicago energy attorneys, Patrick N. Giordano and Paul G. Neilan, announced they filed a lawsuit in the U.S. District Court Northern District of Illinois today against Anthony Star in his Official Capacity as Director of the Illinois Power Agency.  Village of Old Mill Creek, et al. v. Anthony Star was filed on Tuesday, February 14, 2017 at the U.S. District Court Northern District of Illinois.

Attorneys Giordano and Neilan represent Plaintiffs that are governmental, residential, commercial, and industrial electricity consumers located throughout the State of Illinois. Plaintiffs claim that P.A. 99-0906, executed by Governor Rauner on December 7, 2016, violates the U.S. Constitution’s Supremacy Clause, Commerce Clause, and 14th Amendment Equal Protection Clause. The underlying basis for the constitutional claims is that the prices charged by electricity generating plants are subject to federal rather than state regulation. A similar case has already been filed in federal court in New York challenging that state’s subsidy of Exelon nuclear plants by the law firm Boies, Schiller & Flexner, LLP, which is headed by preeminent attorney David Boies.

Among other things, P.A. 99-0906 is designed to subsidize Exelon Corp.’s Quad Cities and Clinton nuclear plants. This subsidy will be charged to all Illinois electricity consumers beginning June 1, 2017 regardless of what company supplies the consumer’s electricity. The lawsuit specifically asks that the U.S. District Court grant a permanent injunction blocking the charges from going into effect as scheduled on June 1, 2017. According to Mr. Giordano: “These additional charges will reverse twenty years of deregulation in Illinois which have given us perhaps the one advantage we have over neighboring states: relatively low electricity charges due to an effectively functioning competitive market.” Mr. Giordano also said: “We’re challenging the nuclear bailout provision of the legislation because the prices charged by electricity generators have already been established by the competitive wholesale electricity market subject to federal jurisdiction and cannot be increased by the State of Illinois.”

The estimated impact to all Illinois consumers will be about $3.3 billion over the ten years of the nuclear bailout. Mr. Neilan points out that: “This nuclear bailout is one of four rate increases to Illinois consumers this year, including increased delivery charges, increased renewable energy subsidies, increased energy efficiency subsidies, and these nuclear energy subsidies.” When the nuclear subsidies go into effect on June 1, 2017, Illinois residents and businesses can expect to see an average 3% increase in their electricity bills due to the nuclear subsidies alone.”

Giordano & Associates, Ltd. is Chicago’s first law firm devoted to energy issues. We provide clients with experienced counsel on regulatory, litigation, transactional, and legislative matters in the areas of electricity and natural gas. Pat Giordano can be reached at pgiordano@dereglaw.com.

The Law Offices of Paul G. Neilan, P.C. represents commercial, industrial and governmental energy users in disputes against public utilities, as well as in litigation and transactional matters with non-utility competitive energy suppliers.

FACT SHEET

  1. Village of Old Mill Creek, et al. v. Anthony Star was filed in the United States District Court for the Northern District of Illinois on February 14, 2007.
  2. The Plaintiffs are: Village of Old Mill Creek, Ferrite International Company, Got it Maid, Inc., Nafisca Zotos, Robert Dillon,Richard Owens, and Robin Hawkins, both individually and d/b/a Robin’s Nest.
  3. The Defendant is Anthony Star in his official capacity as Director of the Illinois Power Agency.
  4. This case arises from unlawful Illinois legislation that invades the exclusive jurisdiction of the Federal Energy Regulatory Commission (“FERC”) over “the sale of electric energy at wholesale in interstate commerce” pursuant to the Federal Power Act. 16 U.S.C. 824(b)(1).
  5. The unlawful legislation is contained in subsection (d-5) Zero Emission Standard of Illinois Public Act 99-0906 (“P.A. 99-0906”), which was enacted on December 7, 2016 and is available at http://www.ilga.gov/legislation/99/HB/09900HB65761v.htm.
  6. Subsection (d-5) Zero Emission Standard of P.A. 99-0906 requires the Illinois Power Agency to procure contracts for Illinois utilities Commonwealth Edison Company, which serves northern Illinois, and Ameren Illinois Company, which services central and southern Illinois, for purchases of Zero Emission Credits (“ZECs”) from nuclear-fueled generating plants.
  7. The ZEC payments will be passed through by the utilities to all Illinois consumers through automatic adjustment tariffs.
  8. A. 99-0906 is designed to provide additional revenues to the Illinois-based Quad Cities and Clinton nuclear plants.
  9. Exelon Corp. owns both the utility ComEd and Exelon Generation, which owns the Quad Cities and Clinton nuclear plants that will sell the ZECs to the utilities.
  10. Although P.A. 99-0906 has many other provisions, this case concerns only subsection (d – 5) Zero emission standard.
  11. Plaintiffs are not challenging any other provisions of P.A. 99-0906. Section 97 of P.A. 99-0906 provides that the provisions of the Act are severable under Section 1.31 of the Illinois Statute on Statutes. 5 ILCS 70/1.31.
  12. In New York, ZEC payments to Exelon nuclear plants in that state are being challenged on the same grounds set forth by Plaintiffs in Illinois. Coalition for Competitive Electricity, et al. v. Audrey Zibelman, et al. was filed in the U.S. District Court Southern District of New York on October 19, 2016.
  13. A typical residential customer using 1 mWh (1,000 kWh) per month would pay an additional $2.64 per month beginning June 1, 2017 based on the initial ZEC price established in P.A. 99-0906.
  14. A manufacturing company using 10,000 mWh per month would pay an additional $26,400 per month beginning June 1, 2017 based on the initial ZEC price established in P.A. 99-0906.
Clinton Nuke Plant

Clinton Nuclear Plant

The history of the Big Bank Bailouts of 2008-09 is now repeating itself as farce. The 2016 tsunami of crony capitalist entitlement is scheduled to hit Illinois tomorrow in Clinton, where according to news reports Gov. Rauner will sign the Exelon Dividend Protection Act. We’ll have to more to say on the legislation, but one may read the story here.

 

Today’s  Chicago Sun-Times discusses the Exelon Bail-Out Bill.

What began as a means of rewarding Exelon Corp. for generating “clean” nuclear energy and  keeping unprofitable plants in Clinton and the Quad Cities open has evolved into a far-reaching and  contentious revamp of state energy policy.

Check out the article here.

Constantinople falls to Ottoman Ruler Mehmet II, 1453

Constantinople falls to Ottoman Ruler Mehmet II, 1453

For hundreds of years alum was mined in Smyrna, in Asia Minor, which back then went by the name of Anatolia. Anatolia was the breadbasket of Constantinople, the Queen of Cities, and was under the control of the Byzantine Emperors for nearly a millennium.

Alum was an essential commodity for the makers of fabrics and tapestries in Flanders and other cloth-making centers in northwest Europe. They used it to set the colors and make sure they did not run or fade too quickly. (The saying “These colors don’t run” might have been coined back then.)

In 1453, Constantinople fell to the Ottoman Turks. Then in 1455 the Ottomans occupied Smyrna and took control of its alum mines. Needless to say, this put quite a strain on the tapestry industries, cloth makers and dyers of Western Europe, who now had to pay through the nose to obtain this irreplaceable substance.

We in the contemporary United States get rather frosted when we consider that we have to buy petroleum from some countries who absolutely hate us, and who undoubtedly use some of that money to finance overseas terrorism in the West. We may question whether we’re financing a war against ourselves.

Western Europe had a similar problem. Having to pay the Ottomans for alum was particularly galling because there was a continuing low-intensity war between Christendom in the West and the Ottoman Empire in the East. The Ottomans continually probed into the Balkans and the Mediterranean. Think of Malta around 1565 or the gates of Vienna in the 1680’s. (Vienna had (and may still have) a residential district called the Turkenschanze, or Turkish Redoubt, which was where part of the old city’s walls faced the Turkish armies. It was Sigmund Freud’s neighborhood, until he left.) So, after the fall of Constantinople, Western Europe was in effect financing the war against itself.

Then, in the 1480s alum deposits were discovered in one of the Papal States in Italy. The Pope moved quickly to establish a monopoly on the alum trade. A papal bull (which doesn’t mean what you think it means) was issued prohibiting the purchase or importation of any Turkish alum under pain of excommunication and eternal damnation. In fact, the written text of the indulgences that were being sold to finance the Vatican’s wars (mostly against other Italian city-states like Florence) and its construction of St. Peter’s was revised to carve out the purchase of Turkish alum and make it a mortal sin that could not be absolved by any indulgence. These were the same indulgences which, a few decades later, really upset an Augustinian friar named Martin Luther.

Try to imagine what it must have been like for some cardinal or canon lawyer laboring in the bowels of the Vatican to come up with the theological underpinning for making the purchase of Turkish alum (but not the Pope’s alum) an unforgivable mortal sin.

Nowadays, there are threats to slap 35% or 50% tariffs on some goods manufactured overseas. Could we try a threat of eternal damnation for buying a Ford Escort assembled in Ciudad Juarez? The more things change….