By William Opalka

The New York environmental group Hudson River Sloop Clearwater sued New York regulators on Wednesday over their subsidies for upstate nuclear power plants.

Clearwater wants the court to vacate the “Tier 3” requirement included in the state’s Clean Energy Standard, which would pay zero-emission credits to three generators that that could have closed as early as next year. Critics say the program could cost ratepayers $7.6 billion over 12 years.

The suit, filed in state Supreme Court in Albany, alleges the program was illegally enacted and fails the New York Public Service Commission’s mandate to provide just and reasonable rates.

This is the second legal challenge to the ZEC program. In October, fossil fuel generators and a trade association filed suit in federal court attacking the program on the grounds that the state was interfering in FERC-regulated wholesale markets. (See Federal Suit Challenges NY Nuclear Subsidies.)

ZECs “would bring about one of the largest transfers of wealth from the ratepaying public to a single corporate entity in New York state history,” Clearwater’s suit says.

The PSC last month approved Exelon’s purchase of the James A. FitzPatrick nuclear plant from Entergy, making it the sole owner of the three nuclear power plants on Lake Ontario, all of which are eligible for ZEC payments. Exelon also is the beneficiary of a bill approved by Illinois legislators Thursday to provide similar credits to keep its Clinton and Quad Cities nuclear plants operating for another decade. (See related story, Illinois Lawmakers Clear Nuke Subsidy.)

Clearwater says the PSC rushed the subsidy through the regulatory process in 14 days after a staff report first publicly broached the subsidy. The ZEC price will be determined by the federal “social cost of carbon.”

“Tier 3 contains many deficiencies, including implementing a program beyond the legal authority of the PSC, numerous assumptions and statements not supported by any technical basis, errors of fact and legal procedural defects preventing public comment and review in violation of multiple sections of the State Administrative Procedures Act,” the suit alleges.

A PSC spokesman defended the program. “Clearwater’s opposition to nuclear energy is based on ideology, not reality, and ignores the many benefits these upstate nuclear plants provide. Our zero-emission credit plan is a cheaper, sensible way to have the existing carbon-free nuke fleet serve as a bridge to renewables as opposed to importing fracked gas and using dirty oil,” spokesman Jon Sorensen said in a statement.

“Opposing this subsidy will demonstrate to the country that nuclear power is not where our dollars need to be spent. Many of these nuclear plants are aging, leaky and dangerous,” Manna Jo Greene, Clearwater’s environmental action director, said in a statement. “Clearwater strongly supports N.Y. state’s goal of 50% renewable energy generation by 2030 but opposes the nuclear subsidy. Moving toward a fully renewable energy economy as rapidly as possible is the direction that New York should model for the nation.”