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Legal Obstacles to Subnational Energy Initiatives: The Case of the United States

Legal Obstacles to Subnational Energy Initiatives: The Case of the United States. By John Gustafson. University of Maryland Francis King Carey School of Law. Ineffective Attempts at Multinational Treaties have led to an increase in negotiation through:. Supra-National Agreements (EU)

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Legal Obstacles to Subnational Energy Initiatives: The Case of the United States

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  1. Legal Obstacles to Subnational Energy Initiatives: The Case of the United States

    By John Gustafson University of Maryland Francis King Carey School of Law
  2. Ineffective Attempts at Multinational Treatieshave led to an increase in negotiation through: Supra-National Agreements (EU) Bilateral negotiations (US and China) Unilateral efforts Subnational efforts: Cities (World Mayor’s Council on Climate Change) Regions (collaborative efforts between cities and/or states/provinces, e.g. RGGI) State Initiatives
  3. Executive Judicial Legislative State Legislature (California)
  4. Congressional False Starts & Limited Agency Action Only Congress has the “power of the purse”; agencies have no direct method of incentivizing renewable energy development— Congress—hyper-partisan stagnation Waxman-Markey Bill (cap & trade) failed in the Senate in 2010 Wind Production Tax Credit (PTC) inconsistent EPA—indirectly incentivizes renewables by regulating fossil fuel industry E.g., new EPA carbon regulation promulgated June 2, 2014 (Clean Power Plan) FERC—indirectly promotes renewable energy growth with authority to set wholesale market energy rates and to approve transmission cost allocation schemes Section 216 of Energy Policy Act of 2005  FERC Order 1000, 2011
  5. State Renewable Portfolio Standards
  6. ISOs—Result of FERC Order 888, 1996
  7. which implies
  8. The Dormant Commerce Clause
  9. Regional Transmission Operator (RTO) ISO New England, Inc. (ISO-NE) Maine RPS (ME ST T. 35-A §3210): Does not require generators outside of New England to sell energy into New England to receive incentives Massachusetts RPS (225MASS. CODE REGS. 14.05(5)) : Requires out-of-region generators to prove they are selling electricity in region in order to be eligible for incentives Maine Treats in-region and out-of-region generators the same, thus, not discriminatory But Does not capture benefits of diversified energy portfolio for the regional electricity pool Better captures benefits of diversified energy portfolio for the regional electricity pool But Treats in-region and out-of-region generators differently; thus, discriminatory Massachusetts
  10. Challenges—Recent & Significant E&E Legal v. Epel(Colorado) North Dakota v. Heydinger(Minnesota) Rocky Mountain Farmers v. Corey (California)
  11. Energy & Env't Legal Inst. v. Epel 2014 WL 1874977 (D. Colo. May 9, 2014) Colorado Does not distribute electricity through a Regional Transmission Operator Plan creates higher demand for renewable energy and less demand for fossil fuel energy Makes fossil fuels in-state and out-of-state more expensive Question: is reducing profits for out-of-state actors who deal with in-state actors the same as controlling them? "The Renewables Quota does not make it more difficult for electricity to flow between states that are connected via the same grid." STATUS: UPHELD
  12. ISOs—Result of FERC Order 888, 1996
  13. North Dakota v. HeydingerWL 1612331 (D. Minn. Apr. 18, 2014) Minnesota RPS:“No person shall…(2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions…” Minnesota’s intention— applies to Minnesota utilities only applies only to Power Purchase Agreements Judge’s reading— applies to any private party applies to actual energy, not just contracts for energy STATUS: STRUCK DOWN
  14. Rocky Mountain Farmers v. Corey730 F.3d 1070 (9th Cir. 2013) California Assembly Bill 32 – comprehensive, multi-faceted climate change plan Low Carbon Fuel Standard—uses a lifecycle analysis Uses location—discriminates against distant ethanol producers in accounting for the transportation of the fuel “The Fuel Standard considers location, but only to the extent that location affects the actual GHG emissions attributable to a default pathway.” STATUS: UPHELD

  15. Final Thoughts

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