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

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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 By John Gustafson University of Maryland Francis King Carey School of Law Ineffective Attempts at Multinational Treaties of the United Stateshave 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
  • Executive of the United States Judicial Legislative State Legislature (California) Congressional of the United StatesFalse 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
  • State Renewable Portfolio Standards of the United States ISOs—Result of FERC Order 888, 1996 of the United States w of the United Stateshich implies The Dormant Commerce Clause of the United States Regional Transmission Operator (RTO) of the United States 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 Challenges—Recent & Significant of the United States
  • E&E Legal v. Epel(Colorado)
  • North Dakota v. Heydinger(Minnesota)
  • Rocky Mountain Farmers v. Corey (California)
  • Energy & of the United StatesEnv'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 ISOs—Result of FERC Order 888, 1996 of the United States North Dakota v. of the United StatesHeydingerWL 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 Rocky Mountain Farmers v. of the United StatesCorey730 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 Final Thoughts of the United States
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