Renewable Portfolio Standards and the Dormant Commerce Clause: The Case for In-Region Location Requirements

Abstract

Electricity generation facilities are the single largest source of greenhouse gas emissions in the United States. Although renewable generation facilities offer a cleaner alternative to traditional, carbon-intensive methods of electricity generation, output from renewable facilities is less reliable and more costly relative to facilities that burn fossil fuels. Therefore, in an unfettered marketplace, investment in renewable energy facilities would be slow if not stagnant. In response to concerns regarding anthropogenic climate change and fuel diversity, an increasing number of state governments have implemented statutory and regulatory regimes to incentivize the construction of renewable generation facilities within state or regional borders. These programs run the risk of violating the dormant Commerce Clause because they provide for differential treatment of electricity based, at least in part, upon the commodity’s geographic origin. This Note argues that state programs that condition benefits upon the in-region location of a renewable generation facility or physical delivery of electricity from a facility in a neighboring region can survive scrutiny under the dormant Commerce Clause.