this time we'll have a coalition for competitive electricity  good morning morning thank you and may please the court if this is acceptable to the court i propose to do is take two minutes at the outset and summarize the key points on the core preemption issue then i propose to turn to the cause of action issue the armstrong question and then come back for a more detailed discussion of the merits so on the merits for features taken together make clear that the new york sec program is wholesale rate making indistinguishable from the maryland program preempted in hughes by the supreme court first the only nuclear plants are eligible for the subsidy are ones that cannot operate profitably under the fur kes under the the rates that first has deemed to be just and reasonable samus hughes second new york guarantees that the favored plants will receive not only the just reasonable auction rates but the sec subsidy on top of those rates for every unit of electricity they sell it wholesale samus hughes third the subsidy is tethered to the movement of the wholesale estimate at their rates into the future but i'm not sure it's contingent or made on is a measure of contingent on the nuclear plants participation that's that's the fourth point your honor that it's while it is true that it's a nominal matter as a formal matter new york and not expressly condition the receipt of the subsidy on participation in the whole cell auction markets they didn't need to because all of the all of the output of these plants is necessarily sold into the wholesale markets and so to be a fact question of that and that that some of that some of their power is so to a local electric companies retailers so and bypasses the the the the the auction first we have this this is before the court on a motion to dismiss and we've made allegations in the complaint that all of the electricity that these plants generate a solace all sell we think that we can prove it it is true it may be that is but suppose they could also sell it some other way but they but i didn't but i think that if in fact they this output is all sold at wholesale and the vast majority through the auctions maybe some through contracts but those are wholesale sales too and they get the subsidy for those two that's not bypassing the wholesale market that's in the wholesale market and they get in if it in the whatever percentage right they may do a thing but that doesn't mean they're tethered to it i mean there are people who buy the same brand of beer for twenty years but they're not tethered to it they can buy another brand of beer i put here as a practical matter all they can do is sell it wholesale so new york knows that that is where this electricity is going so new york knows that for every for every unit sold these plants are going to get the zech subsidy over and above the wholesale auction rate that's and i do think that that's quite that's the way the supreme court has indicated that this preemption analysis needs to go and i would point the court in particular to the wost case which says preemption depends on what state law actually does not how the state describes it and what it actually does here is is exactly what hughes said that a state cannot do exactly what you said it's preempted which is that it disregards the interstate production or generation and whether they sell it or not or who they sell it to is irrelevant to that program you're saying in the practical reality that's what happens because nuclear generators must sell their  into the hotel market but that doesn't mean that the law requires it and that's the only thing that hugh seems to prohibit no i disagree with that your honor that i think that if in terms of what hughes prohibits the only thing in his prohibits what he was prohibits is is is ensuring that wholesale providers obtain a receive a rate that is distinct from different from in disregard of the wholesale rate that the for auction process has set and that is what happens here these plants is again we've alleges in the school in the complaint and we will be able to establish that they sell all of their output at wholesale so they don't do that regardless of the program though because of the nature of nuclear generation iraq have to keep producing so they have to sell their out it into the market in various markets so but they're not required i guess that's why as a paper tional still most that's what i'm pushing back your honor they sell it all into wholesale all of it but i think that's a factual issue that seems to be in dispute there was one suggestion that lie paula jones or invest in one of these zeke generator plants right and therefore they buy it directly from them so i think that's going back to judge shakeups point is that there may be a factual issue has been writ has been as it's been raised that in fact they don't sell all of their output on the market well we're here on a motion to dismiss right and which are factual occasions need to be accepted as true we alleged that they sell all of their output wholesale even if this the sump there is something to this light but the point i would suggest your honor that that is really the flea on the tail of the dog it would be such a small amount that it really does not call into question the legitimacy of this program for preemption purposes and i bet i do but i think it's a little bit hard to we've actually had factual investigation to know what the to know exactly how to deal with that like a question but what i do think  clear is that when we are here on a motion to dismiss and when it's clear we think that it at and under any understanding the vast majority of this power gets sold directly into the wholesale system selling it through contracts why shouldn't we read hughes to have what granted would be a very formal require a very formal element there's no requirement and you're not alleging that there's a requirement even if economically and practically speaking every every u of electricity must go into the wholesale auction why it why should we why should we really not to impose a formal requirement otherwise it seems like any subsidy would be pre empt so i don't i think the reason not to your honor is because a disregards that i think the thrust of hughes itself there's that one sentence that my friends on the other side point to i assume you're on is referring to but the beginning of that paragraph says we hold that this new york that the american progress preempted because it's providing a rate that's in disregard of the furka proved auction rate and remember the operative statutory provision here is one that says that that says that it's not that covers not just the rates that the wholesale supplier charges but it's all charges that the wholesale supplier receives and it's not just for the sale but it's in connection with the sale that's the governing statutory tax it's clearly broader and i do think that the the key operative whole language in hughes's is really a page so earlier where in this is that page twelve ninety seven of one thirty six supreme court i think i quoted it earlier but it said that the problems that maryland guarantees a certain rate for sales into the auction regardless of the clearing price and that is what is happening here it's also the case that in hughes and in another case that the supreme court decided the same term eps the court said that the test is that there's no room under this regulatory scheme either for state laws that directly regulate wholesale rates or state actions that indirectly have the same effect indirectly have the same effect on the court said th quota that language in husic quoted it in conjunction really with the point i've i've just the point of the court too and that i do think is consistent with what the supreme court has said in the wost case the national me case and others about the way preemption analysis goes you look at what the law actually gods also makes plain that there's a very substantial role for the states and that and that they they they can provide subsidies to favored producers for any any reason that that's remotely rational and why and a subsidy has the same effect so if you get a subsidy that's based upon the amount of electricity you sell then that's boosting the price the supreme court i think gave specific direction on that point as well your honor where it said states may not seek to achieve ends however illegitimate through regulatory means that intrude on  interstate wholesale rates and i certainly agree with your honor and i think the supreme court make clear that there are things the states can do and they may have economic effects on the auction process and what and on the price that people get their electricity prices and their i mean you you make out you know a compelling that argument that what you're complaining about affects the wholesale price but subsidies are allowed and  seems to me that affects the wholesale price as well i think can seem to be tolerated i think it depends your honor that's certain certain things clearly the state can do they can have a cap and trade system fact new york is participating in a regional cap and trade system now that doesn't interfere with the auction mechanism in the way that this does your can impose a carbon tax maybe have an incidental effect doesn't interfere new york could build its own plants if it thinks that there's a not enough zero emission credit for it allows that would have an indirect effect doesn't interfere new york could give a tax rebate again in direct effect doesn't interfere all kinds of things a state can do but what the state can't do is adopt a means as a supreme court said in hughes that interferes with the auction with the price setting mechanism for whole self sales and that it and i don't think there's any doubt here because and if i could go back to your question just once in about the limit i think the i've tried him in the four points i laid out the opening to suggest that there's the limiting principle that the court can adopt to avoid the risk that your honest question implies you're only eligible for this if you cannot make a profit based on the wholesale rates if you look at page eight to fifty five of the appendix you'll see right there in black and white in the p s c order you're only eligible if you can't make a profit based on the capacity energy and ancillary markets well those are the three wholesale markets ok so that's two eligibility tells you what this is about then as i said you get this subsidy for every unit you sell over and above the the just and reasonable rate that for has that that the fork auctions give you and then so that's a limiting principle too you get you know you get it for everything you sell third you have the tether that the the the subsidy price moves in conjunction with the movement of the wholesale auction forecasts so that whether the market is also markets actually going up or going down what these three plants are going to receive is the compensation level that new york wants them to receive for  h output unit of output they sell that is accurate except for the word actually because it's estimated it's not the actual right but it's true your honor but the estimates are based on futures forecasts which are are you know it's an effort to approximate as clo shore but you if you invest in forecasts you can lose your shirt yes but that doesn't mean that doesn't change the fact that even if they don't get to the nickel the amount that new york wants them to get they're going to get within a range of what new york wants to get them to get and that range is going to be substantially above what the wholesale auction rates are and that's the problem whether it's down to the nickel or not it's still in disregard of the rates that the auction set and that's the problem that hughes identified for preemption purposes and so you know you've got that and then you've got the fourth consideration which is that we're talking about here nuclear plants that always operate at full capacity can't store their power it all goes into the wholesale grid the new york iso grid and so when you have those four conditions present it seems to me you really got something that is in practice indistinguishable from the maryland program invalidated a huge problem in practice the the point is whether or not the law itself requires any of these things and i think this goes back to the question of if the law doesn't require it that it may have this practical effect isn't not something that ought to be preempted well i guess i would push back on that because if that's the if that's the case your honor then hughes was a ticket good for one right only that it was that that you know maryland did this thing and and it did have this express condition states can now figure out clever ways to deliver exactly the same subsidies in exactly the same per megawatt hour form tethered in exactly the same way to price movements only for plants that can't operate under the under the profitably under the rates that first think should govern  if they but if they just leave out an express condition but insure in other ways at that subsidy going to flow for all of that for all of the energy sold in the fuel cell market they can do it i really don't think that that is a fair reading of hughes now i understand that there is a question of limits here in an interrupt or isn't it true that the only way that the program effects the wholesale rate the actual health of ray is because as you allege it allows for the dumping of cheap energy into the grid thereby in theory lowering what the market clearing price will ultimately be because it's too much cheap energy isn't that really the only way it impacts the wholesale market rate if it harms us that way that's how hard that's how it inflicts the hundreds of millions of dollars of harm on us it affects the the wholesale rate that exelon receives they receive that's the key statutory language what does the supplier receive and not just for but in connection with  participating the markets pay someone to produce right or they may not sell any wholesale i mean they may not participate on the wholesale market but still get the z credit right except that that's that can't happen in the real world your honor there  they all of what they sell goes in the wholesale market there's no other option than to do that that's and that's what we've alleged in our complaint we're ready to prove it it's true and be in new york knew that when it adopted this regulation and so this regulation functions in a manner that's just identical to the way that the maryland program function and that was its point its point is to funnel a permit to want our subsidy to exelon for every unit that they sell into the whole sell market that that's what this does and i do think that with respect to with respect to what he was all about yes hughes recognizes the need for limits but but boy if this is not preempted under hughes please the court scott's trials for the commission good morning the federal power act treats energy generation and its subsequent sale as distinct activities and divides regulatory control between the states who have control over generation and the federal government who has control over wholesale sales the statute doesn't not say that state authority evaporates if the generation is sold at wholesale new york is using its authority over generation to address a traditional area of state concern environmental protection and is using a core police power to do it regulation of local utilities because the point of new york's program is to preserve the environmental benefits of carbon free energy production the payments are based on production not on sales just like the regional energy credit programs which our friends on the other side think are just fine any distinction between production and sale in this particular context of nuclear power there may be iran or what in the in the plaintiff's complaint they talk about the nuclear plant selling at wholesale either directly or indirectly that's in paragraph sixty four if their complaint directly into the auction or indirectly would be selling this courtly allco case has found that bilateral sales which are subject to regulation are outside the fuse and don't fall into the use test so there is a difference yes but if that is so then it's not selling in direct li into the auction it's not selling into the or correct it's selling it's selling on the market and there's nothing that prevents the nuclear plants from selling their power bilaterally in fact that was what the nuclear plants were doing several year into it for several decades during the time the markets were in place c have found that states may create energy attribute payment streams that are production based and are separate and apart from the revenues that you receive for the salient argy what are friends on the other side are doing is they're saying there are two revenue streams but they're only for one product but that's wrong that's a fallacy what's actually going on is dura two revenue streams being received for two separate products there's a revenue stream for the energy attribute and there's a separate rendered energy stream for the wholesale sales the power conflating but they conflate them and say oh look at that it's all for wholesale energy that's not the case that's a fallacy and it's the same way the rec program works and first has said has disclaimed jurisdiction over renewable energy credit yes it's a fallacy but does these environmental attribute programs they are separate when they are sold in unbundled way which means in a separate transaction which is exactly how these are sold regardless of the market reality that nuclear generators have to put their energy into the grid regardless of that reality that that's how these programs that if you have a generator you have a wreck generator those generators will sell into the wholesale market as well but if the trend if the energy attribute is separate and is based on production for kids this claim jurisdiction over those arrangements touched and that's in the ws p p case also look at the emirates fuel case that we're further is looking at the question it's plainly a wholesale transaction they're looking at the question of a sale by qualifying facility under the purpose statute at wholesale and are trying to address the question gee what about the rx do they convey as well first says no those are not payments for energy or capacity they're state created payments for something else energy environmental attributes environmental attributes and environmental benefits to the state but the social cost of carbon is computed on the basis is it not of the of costs worldwide that is the not we is is new york state privilege to basically have a foreign policy to say here are these worldwide costs and we're going to adjust we we're going to basically supplement let's face it supplement the wholesale price in order to to achieve environmental effects not only outside new york state but outside the continent well remember on the question of the subsidy subsidies are there to unsent behavior that the market does not incenting market behavior that the state believes is appropriate here to address environmental protection that's why we subsidy program so that one of our friends first comment was a comment that you only get the subsidy if you can't make if you can't if the other revenues you're receiving are inadequate but that's just how a subsidy works in the rec programs it's a generic determination the states want more renewable energy the markets aren't providing sufficient incentives to do that so we create a subsidy program to do are not in the market meaning the wholesale rate set by firms it could be that yes it could mean that it could mean any market wherever they're not going to that's the one we're talking about today that's the one we're talking about today absolutely and by the way back to another point that our friends made as well about the effect of the subsidy on wholesale prices remember that really there are two things going on here there's the state program and there's the participation of these nuclear units in the wholesale market and for controls the participation of the units in the market so the the price lowering effect that he's talking about is a consequence of the first regulatory s so really this is this concern that they're raising really is a concern about how first runs their markets and really belongs at the f d r see if it belongs anywhere and as we noted in our brief at footnote thirty six of our brief these plaintiffs have gone to first they did they've asked for to weigh in on it the order death and say when they want to hear from for do we have any idea when that's going to be i'm not in the seventh circuit case and nor obviously am i here in behalf of the united states i have no idea i have no idea when that very specific it was a one ride ticket i believe and it's very clear from the court's holding really do you see a supreme court holding that says not only that it's a very limited but also there's a fatal defect and the defect is conditioning a subsidy on participation in a wholesale market this doesn't do that the states regulation and with the production what happens after that is not addressed in the c s order because it wasn't the point the point was to have the clean energy production might also know we mentioned in our papers the north west central case a supreme court case from a couple of years ago that deals with kansas is regulation of the natural gas market there kansas was regulating gas production something that was plainly on the state side of the line but everyone knew it would have an impact on interstate wholesale sales purchases and the the court said that did not make it preempted that as long as the state was operating on its side of the line for a bona fide state purpose and was pursuing it in a means that was legitimately got i don't have to be honest runner i don't have that number but what i do know what the reason i said is this does this factor show up on the bill for the right pay it will show i believe it will show up on the bill but remember this is a retail product and we haven't started yet though it started over it started roughly a year ago so it's going to show up but it started a year ago with who has it does not show up on the bill if if you're telling me that because you're paying those bills you know i i i don't pay my bills  customers retail built this will show up as a charge yesterday and will it help if you know it i'm assuming it does as the program started a year ago and what is it marked as i mean this is my look this is my question is this is in effect is a is is a hidden tax on the rate payers to pay for an environmental measure that the state deems worthwhile but if your goal is to get to fifty percent that that burden on the rate payers going to become enormous and if it's a hidden tax and by the way a highly regressive tax then it seems to me there are you know there  program and they're both designed to to draw that extra money out of rate payers to pass it along to to favored producers people whose whose produce produce energy in a way that that that that is favorable to the economy i'm just maybe it's irrelevant but i'm kind of wondering whether whether that the rate payer has any knowledge of this because if you get to fifty percent it's going to be quite and it's going to be quite a  series of subsidies the state had a very extensive proceeding before adopting the wreck of the sec program and i'm confident that the repair advocates were there and very much aware of what was going on keep in mind that the record program which you mentioned your honor is actually not being challenged the plaintiffs are friends on the other side have no issue with it if i may and your tweets but it seems to me the solution would be a local political one which is that the rate payers will actually complain to their low politicians but it's not necessarily or first issue because it has to do with your honor may please the court matthew price on behalf of interviewer apple e's i'd like if i may just to spend one minute providing a context for hughes and then make three specific points about why the court should reject plaintiff's attempt to extend hughes to this context so  states have been subsidizing power plants to promote environmental goals taxing them regulating them to promote environmental goals for decades and the federal power act allows that under the state's ability to regulate generation facilities cite a number of cases in our brief pages five year seven the supreme court make clear that nothing in its opinion was intended to foreclose these types of subsidy programs and the plaintiffs themselves concede that states can do carbon taxes and emissions caps and trades and presumably direct fics subsidies as well and the four features that mr of really identified three of them are true of any subsidy program states don't subsidize two plants that don't need subsidies the whole point of a subsidy is to provide extra money to a plant that  needs it and he says that new york here in teas that they receive not only auction sales but also zack's well that's true of any subsidy any subsidy is an extra revenue stream and he also talks about how all these plants necessarily sell their output wholesale there's a dispute on that which i'll get to but assuming he's correct about that again that would be true of any subsidy in new york the only distinguishing feature that makes this different is the pricing mechanism and i think his case boils down to the notion that hew should be extended from a situation where there is an express requirement that you sell it wholesale in order to get the money to one where there is a pricing mechanism that's use and i want to provide three reasons why the court should reject that extension of hughes now the first is briley has argued that our position is is formalistic their position is also formalistic and i think that's critical for the court to understand under their theory there should be no problem with a fixed subsidy amount like the program actually is for the first two years it's fixed at the social cost of carbon but if new york had provided a fixed subsidy amount for the entire twelve year period from a functional standpoint it would be worse from his perspective his competitors would be getting more money his or his the wholesale you can see that and that any subsidy is based on the insufficiency of the normal stream of income to sustain the enterprise or to provide a profit that seems to me you're conceding that what you have here is the retail supplier paying money to a producer to top off what the producer gets under the pricing mechanism that is for and what am i missing i mean if you simplify this there are so many complexities here but basically it's what it is the retail companies have to pay more money to the producer isn't that what a consequences of different methods of producing electricity and for new york it matters whether electricity is being produced by a coal or an or natural gas plant or instead by a nuclear plant or renewable plant and what the state is paying for it's paying for the environmental benefits that that method of production provides new york the other plants don't provide and and renewables have been getting those subsidies for many years nuclear plants jewishly haven't because the state didn't see a need to bother but that's no longer true and now the state wants to provide nuclear plants with recognition of the environmental value that those plants provide to new york state not quiet as i read it they're planning to provide the nuclear plants with what they need to stay alive until they can get rid of your clients altogether and substitute wind and solar and kitchen grease whatever it is well i think you're right that the new york sees this is a transitional mechanism that's right that's correct but but the order if you read it is complete with  the findings by the commission about how if these plants were to retire now you would take a giant step backwards in terms of new york's emissions profile and what new york is concerned with is not having a massive backsliding in its emissions up put and that's its interest in preserving these plants until twenty thirty new york's even it so it's very valuable goals that's not really what's at stake in the hughes analysis is that it doesn't really matter why new york is is doing it matters housing markets doing i agree with that your honor and what hughes focused on is whether new york is or whether the state is conditioning payment on a wholesale sell and that's conduct condition is what made the payment in hughes a payment for wholesale electricity because it was only made if you actually completed the whole sale still and if you look at page twelve ninety seven  as well as a footnote nine it makes that very clear that's why the supreme court thought this the subsidy in that case crossed the line into your ad with your adversaries portrayal of this is there's no need as a matter of physics or economic reality to have an express condition with regard to the new york program because the the energy is going to go into the grid there's no other place after it to go so new york doesn't have to have the express condition that maryland had  operation it's exactly the same sort of program well your honor that that argument gets to the second point i wanted to make which is the accusation that our position is formalistic and i think admittedly there may be a formalism in distinguishing between production and wholesale sale in some circumstances but it's a formalism that congress understood what an act of the federal power act and that it embraced when it decided it knew and we discussed this in the legislative history of the legislative history of this in pages twenty six and twenty seven of our brief congress understood when it enact to the federal  that the production of electricity and its its sale at interstate wholesale sale were inextricably connected and instantaneous that the moment electricity is produced needs to be sold yet congress nonetheless decided to divide these two activities into separate sovereigns and give states the power to regulate generation facilities which they've done for many years by taxing and regulating and subsidizing generation facilities even those that sell exclusively at wholesale and ferk recognize this important distinction as well in the w s p  case their first was presented with a question of hey we have a whole bunch of renewable generators that are all selling in the wholesale market but if they're getting these rocks from states what do we do with those and said well you're you're also in the wholesale market but those racks reflect a a different product they reflect the environmental attribute and so long as they're not bundled together with the energy sale so it's all one sale we're going to treat them as outside our jurisdiction so under stood these pts these fears are intertwined but nonetheless they're distinct and congress made the decision to divide them between separate sovereigns despite the fact that maybe there's some formalistic element to that now that the third point i wanted to make is that this court has already decided this case twice the first time was in the alco case and there are the court from this generator and this court said that's not preempted and the reason it's not preempted is because the state isn't actually compelling it is not actually compelling the utility to buy the power from the generator it's expected it's intended that's the whole purpose of the program but it's not compelled and so this court said there's no preemption issue the state hasn't intruded into the wholesale demand now this court this case is easier than the case because this case doesn't even involve wholesale energy it involves the purchase of environmental attributes which as i've said for recognizes and this core in the will break her case has recognized it is as a distinct product under state jurisdiction now the second case is the rochester gas electric case in that case this court held that there is a difference between accounting for wholesale price forecasts and actually regulating wholesale prices the two are different things and in that case the new york commission said the utility is selling a bunch of electricity wholesale and getting wholesale revenues but we want to make sure that it recovers its cost and we're going to recover the difference between from retail rate payers and retail rates so the state said it's retail rates knowing anticipating a certain amount of wholesale revenue in adjusted those retail rates accordingly and this court said there's no preemption there because again recognizing revenue is different than actually regulating the wholesale rate and again this case is easier than rochester because here the price is fixed for the first two years afterwards it doesn't depend on any generators actual wholesale revenues it's set in advance peace and price forecast that first does not regulate and we cite the hunter case and that issue for does not regulate them for a different region of new york than the generators are located so this case is easier than rochester there's one more point i want to make about the fact western judgeships you asked and i believe just as well as their fact question about what life does or doesn't do there may be a factual dispute about that but it's not one that needs to be resolved in order to affirm the district court and the reason for that is requiring the state to basically engage in discovery against a third party in order to determine whether its program does or doesn't cross the line into a forbidden federal sphere is a completely unworkable approach to preemption it is enough if the state is indifferent to where the recipients of it subsidies sell their power here the state is indifferent it doesn't care at all what like the does how it organizes its business how the new york i s o organizes the grid it simply says if you produce power we'll give you a sack because we value the environmental benefits about production thank you thank you starting with first views your honor i can't give you a time estimate for when they're going to file their brief in the seventh circuit but given the centrale of the two my friends on the other side of what they claim for thinks perhaps it would be  dent to to sue it for it actually says about this and in that regard it would be tempting to ask for to send us a you know a position statement to a brief hum can we assume that what they say in the seventh circuit will be the same as what they would have said here i would assume so your honor that's what i'm assuming is one ariel but and but specifically just to clear something up about what my friends in the other side say as for its views i think if you look at that w p decision first they say it's limited to the facts before it wasn't some grand pronouncement on the issue of it or you but second that used in india as inferring that in the w s p p decision what firk said was that some of the wrecks were subject to further action and some weren't and it depended on how close the link was to the wholesale sales so what that tells you is you've got to figure out how close the link is it doesn't answer the question it just poses it now if i could but there's no doubt that there are some subsidies that consist of basically a levy on retail distributors to be paid to producers and that affects my addition by math and arithmetic the wholesale price that it's not and that seems to be quite tolerate well but i think that you know going back to what the supreme court said and he was it all depends on the regulatory means the state chooses and some means directly interfere with for x processes and some don't and i do think it's it's critical to i'm just going to jump to a point that my friend mr price made about the congress understanding that the states have sovereignty and authority over generation and production and the federal government over wholesale sales that's precisely the argument that the state of maryland made in those words in hughes we're just trying to get more generation on line that's why we set up the program we set up that's why the supreme court in hughes said what matters is not your aim however worthy but the means you choose so that i just think that takes that off the table now i do think alcoa is important iran is raise the question  alco some critical things about that that elko provided for the possibility of bilateral wholesale contracts but the state was not prescribing the price there was no subsidy involved in in those at all at all it wasn't and in elko that it was just an opportunity for a wholesale transaction to occur under that program and then they would be at whatever price the parties agreed to the state wasn't prescribing the price well my friends are saying here is that with respect not only with respect to the auctions but with respect to whatever they sell in a contract at wholesale you get the wholesale price that you negotiate and then you get the sex subsidy on top of it and the sec subsidy is outside for extra stiction so you can submit the contract to for review as to whether the contract price is just and reasonable but you can't subject the fact that they also get the payment on top of it the first of you and that's exactly the position exxon has taken before for so the idea that alcoa answers this case is completely wrong it's it has nothing to do with it it doesn't have any of the characteristics that i described in my opening that are present here now with respect and with respect to this point about the auctions you know of course first doesn't just hasn't just chosen the auctions as some random way of see adding wholesale rights they've chosen it because they want to rely on market mechanisms to send the proper signals to the participants in the market and what happens when you when you went and then what this is what really was at the root of the problem in hughes and it's a real problem here when you guarantee wholesale producers that they're going to get a perm megawatt hour subsidy on top of the subs on top of those just and reasonable rates you're interfering in the most direct way possible with that mechanism sure iran is right that there are going to be incidental economic effects from other things of the states can do because that's in the nature of the fact that we have a dual system but when you intervene in this direct way you're doing exactly what hugh said we can do and i i think it's important for i may just take one minute to draw an analogy to a case that the supreme court decided we've cited in our briefs the national meat case preemption case about regulating slaughterhouses federal government regulate  slaughterhouses says non ambulatory animals can be slaughtered under some circumstances and slaughterhouse california comes along and it doesn't like that and it says ok we can't regulate the slaughterhouse practice because the federal government regulates that but we're going to do is an act the law in our street here that says you can't sell any meat that was the comes from a non ambulatory animal there was supreme court had no trouble unanimously preempting that even though