Commerce Clause and First Amendment Challenge to Law Regulating Energy Marketers
Retail Energy Advancement League v. Brown
Recent Developments: Complaint filed in October 2024
Case Documents

Case Summary
A trade group of energy marketers and one of its member companies filed a lawsuit in federal district court alleging that a new Maryland law violates the First Amendment and the dormant Commerce Clause. The law regulates non-utility energy marketers that sell electricity to Maryland consumers, including the prices they charge and the claims they make about their “green” electricity products. The marketers allege that by establishing standards for green power that include geographic limits on renewable products, Maryland is restricting the marketers’ speech and discriminating against interstate commerce.

In 1999, the Maryland Legislature first allowed non-utility companies to sell electricity to consumers. These energy marketers generally purchase electricity from the interstate wholesale market and resell that power to their customers. A marketer’s customers pay the marketer for the energy they consume and also pay their local utility a state-set price for delivering that energy. In general, Maryland has not regulated the prices charged by energy marketers. Energy marketers compete for customers based on price, contract terms, and other product features.

“Green power” is a common product offered by energy marketers. To certify their energy as “green,” “clean,” or “renewable,” energy marketers purchase sufficient renewable energy credits (RECs) to cover the electricity they sell to Maryland consumers. A REC represents the environmental attributes of a megawatt of energy, including that it was generated from an emission-free renewable resource. Under long-standing Federal Trade Commission (FTC) guidelines and common industry practice, a company or individual that purchases RECs may claim that it is consuming renewable electricity. Renewable facilities, such as wind or solar farms, generate one REC with each megawatt-hour of electricity they produce and sell their RECs to utilities, marketers, and other companies making clean energy claims.

In May 2024, Maryland enacted the law at issue (SB1) that imposes price caps on products sold by energy marketers to residential consumers, updates the state’s green power standards, and imposes other obligations on energy marketers. The industry lobbied against the law. Although its lawsuit targets the green energy standards, the energy marketers argue that the “green power provisions are central to the Act’s overall scheme,” and seek to enjoin enforcement of the entire law.

The law’s green power provisions supplement the state’s renewable portfolio standard (RPS). Maryland’s RPS requires energy marketers and other energy providers to procure RECs that cover 38 percent of energy sold to consumers in 2025. By 2030, marketers and other providers must cover 50 percent of energy sales with RECs. RECs must be sourced from generators in the 13-state PJM region or from generators adjacent to PJM.

The new green power provisions increase these requirements for marketers’ clean energy products. Under current rules, marketers must back 38 percent of their sales with RPS-compliant RECs in 2025 and may use RECs sourced from any renewable generator in the country to cover their remaining clean-energy product sales. Under the new law, 51 percent of clean-energy product sales must be backed by RECs that comply with the RPS. In addition, the new law requires marketers to disclose the sources of their RECs and include language specified in the law about RECs in materials provided to customers.

In their complaint, the energy marketers allege that the new law prohibits them from “truthfully and accurately describing their existing products as green power” and instead demands that they “adopt Maryland’s preferred understanding” of green power and “make controversial and inaccurate disclosures about the nature of their product offerings.” For instance, the law instructs marketers to tell their customers that RECs “represent . . . a social good” and to explain how green power will benefit the environment. The marketers claim that such “compelled disclosures would require [them] to alter their current speech about their products and speak in ways with which they disagree.”

The marketers allege that these rules amount to a “content-based” and “viewpoint-based” restrictions on speech that violate the U.S. Constitution’s First Amendment and Article 40 of the Maryland Constitution’s Declaration of Rights. The marketers claim that there is “no compelling or substantial state interest” in restricting marketers’ speech, as they are already describing their green power products “accurately, truthfully, and consistently with” the FTC’s guidelines and other states’ laws.

Finally, the marketers also claim that increasing the percentage of RECs that must meet the RPS’s locational requirements from 38 to 51 percent “discriminates against and burdens out-of-region generation sources by reducing demand for their RECs compared to in-region generation sources.” They assert that the new law “substantially burdens” their ability “to obtain their RECs from the current generation sources outside the Maryland region from which they currently obtain their RECs.” Such out-of-region RECs, they claim, “provide the same benefits with respect to climate-change mitigation” as in-region RECs.

Filed Briefs
Complaint (Oct. 2, 2024)
Maryland’s Opposition to a Preliminary Injunction (Oct. 29, 2024)
Marketers’ Response in Support of a Preliminary Injunction (Nov. 12, 2024)

4th Circuit — Appeal of the District Court’s Denial of a Preliminary Injunction
Marketers’ Opening Brief (Mar. 3, 2025)
7 States Amicus Brief in Support of Marketers (Mar. 10, 2025)
Maryland’s Response (Apr. 15, 2025)
Marketers’ Reply (May 6, 2025)