Putting the Dormant Commerce Clause Back to Sleep: Adapting the Doctrine to Support State Renewable Portfolio Standards

By Lee, Daniel K.; Duane, Timothy P. | Environmental Law, Spring 2013 | Go to article overview

Putting the Dormant Commerce Clause Back to Sleep: Adapting the Doctrine to Support State Renewable Portfolio Standards


Lee, Daniel K., Duane, Timothy P., Environmental Law


I.  INTRODUCTION II. THE DORMANT COMMERCE CLAUSE      A. Discrimination Against Out-of-State Commerce         1. Facial Discrimination         2. Discriminatory Effect         3. Discriminatory Effects of Subsidies and Taxes         4. Discriminatory Purpose         5. Defeating Discrimination Through Virtual Representation      B. Strict Scrutiny and Deferential Pike Balancing      C. The Extraterritoriality Principle: Regulation of Out-of-State         Commerce.      D. The Market-Participant Exception and Discrimination Favoring         State-Owned Entities III. LITIGATING THE CONSTITUTIONALITY OF STATE RPSS      A. In-State Carve-Outs and the Massachusetts RPS:         TransCanada v. Bowles      B. Prohibiting Nonrenewable Energy: The Minnesota RPS and North         Dakota v. Swanson      C. REC Bundling Requirements and the Missouri RES      D. Conclusion  IV. A BROAD AND ROBUST ATTACK ON THE COLORADO RES      A. Facial Discrimination and Discriminatory Effect         1. Distributed Generation Requirements         2. In-State Multipliers      B. Discriminatory Purpose      C. Extraterritoriality      D. Burdens on Interstate Commerce      E. The Market-Participant Exception and Virtual Representation      F. Standing, ATI's Membership, and Incentives Not to Settle   V. CHALLENGING CALIFORNIA'S RPS AND AB 32 IMPLEMENTATION      A. Cowlitz County's Claim Before the California Public Utilities         Commission      B. There Is No Discriminatory Purpose Evident in the California         RPS      C. Rocky Mountain Farmers: Challenging the Low Carbon Fuel         Standard         1. The LCFS and the District Court's Reasoning         2. The Court Misapplied the Extraterritoriality Principle            and Failed to Recognize Congress's Intent Under the Clean            Air Act Exemption         3. Implications for State RPSs            a. Extraterritoriality Concerns            b. Regulation of the Channels of Interstate Commerce            c. Differential Treatment of Substances of Identical               Composition      D. The Ninth Circuit's Rationale in Pacific Merchant Supersedes         Rocky Mountain Fanners         1. The Ninth Circuit's Reasoning in Pacific Merchant         2. How the Result in Pacific Merchant Undermines the Court's            Reasoning in Rocky Mountain Farmers         3. Other Potential Implications o/Pacific Merchant on RPSs  VI. IMPLICATIONS AND PRESCRIPTION      A. Apply Intermediate Scrutiny as the Standard of Review for         State RPSs.      B. Expanding the Market-Participant Exception      C. A Broken Federalism and Regulatory Voids      D. Conclusion 

I. INTRODUCTION

There is widespread agreement on the value of renewable energy development: renewable energy reduces greenhouse gas emissions, decreases the country's reliance on fossil fuel reserves, (1) and combats our dependence on the energy resources of hostile nations. (2) Despite the importance of renewable energy development, however, the federal government has not mandated this development. (3) Although the federal government has taken some steps to encourage renewable energy developers, including loan programs and expedited permit review for renewable energy projects, (4) the task has largely fallen on state governments to ensure that renewable energy development actually takes place. (5) Thus, the states have served as "laboratories" for testing various policy mechanisms in pursuit of protecting the environment. (6) Perhaps the most popular of these policy mechanisms is the renewable portfolio standard (RPS), (7) which requires that a certain fraction of total installed capacity or total generation come from renewable technologies. (8) Indeed, thirty states and the District of Columbia had adopted an RPS by 2012. (9)

Although RPSs have become a popular policy tool to encourage renewable energy development, many have questioned the validity of state renewable energy mandates under the dormant Commerce Clause. …

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