Authority to regulate the U.S. electricity system is split between the Federal government and the States. Traditionally, States have exclusive jurisdiction over retail sales, generation siting, and fuel choices (i.e., whether to authorize regulated utilities to burn coal or harness the wind). Federal regulators, meanwhile, have authority over interstate transmission and wholesale sales.
Over the past two decades, many States have required or encouraged utilities to increasingly rely on interstate markets for procuring energy, and Congress and Federal regulators have enabled this transition. This shift to markets has opened a new front in the long-standing tension between State and Federal authority. A host of legal challenges filed since 2010 argue that in this new regulatory environment State power to require or encourage renewable energy is limited by Federal authority over interstate markets.
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StatePowerProject.org provides summaries of litigation and filed legal briefs and judicial or administrative decisions in those cases. The site also presents background about key concepts at issue, including relevant Constitutional provisions and electricity policies. The site’s policy resources section applies constitutional doctrines to state energy policies and suggests how states can work within constitutional constraints to achieve policy goals. In addition, Policymaker Summaries explore the latest academic literature about energy policy, states, and the U.S. Constitution.
Twenty-eight States have Renewable Portfolio Standards, which typically require utilities to generate or purchase a certain percentage of their electricity from renewable sources. Challenges to these types of State renewable energy and carbon policies argue that these laws are barred or limited by the dormant Commerce Clause, a Constitutional doctrine that prohibits States from passing laws that discriminate against out-of-state businesses or unduly burden interstate commerce. The lawsuits posit that requiring renewable energy to be generated within a State or transmitted to customers in the State, or providing incentives to do so, is unconstitutional because it inhibits out-of-state generators from competing on a level playing field. States have defended their policies, arguing that these laws regulate their own utilities, rather than interstate markets, do not burden Federally regulated markets, or are exempt from Commerce Clause scrutiny.
Lawsuits, in Federal or State courts or before administrative agencies, challenge other State renewable energy laws or approvals of specific renewable projects. Some of these lawsuits make similar challenges using the dormant Commerce Clause. A second line of attack is that States’ energy policies impermissibly intrude on exclusive Federal authority over wholesale electricity markets. Under the Constitution’s Supremacy Clause, Federal law can preempt State action.
Only one proceeding (currently on appeal) have resulted in a court or administrative agency striking down a renewable energy law. In addition, the 8th Circuit affirmed a lower court decision that struck down a law aimed at reducing greenhouse gas emissions from Minnesota’s electricity consumption. And in 2016 the Supreme Court held that Maryland’s incentive program for new gas-fired generation was preempted by the Federal Power Act. Meanwhile, the Second and Seventh Circuits upheld Illinois and New York policies that reward nuclear plants for their carbon-free energy. In doing so, both courts read the Supreme Court’s decision narrowly, freeing states to enact policies that reward favored resources despite effects on federally regulated wholesale markets. Decisions in these and other cases summarized on this site will influence lower courts and administrative agencies deciding cases about the Constitutional limits of State authority to deploy renewable energy.
StatePowerProject.org is created and maintained by the Harvard Electricity Law Initiative.