When Colorado enacted a referendum petition strengthening its renewable portfolio standard, the Energy and Environment Legal Institute sued, arguing that the RPS violates the dormant commerce clause, because it harms out-of-state coal producers. The 10th Circuit Court of Appeals, in an opinion by Neil Gorsuch (son of the EPA former administrator), disagreed. Pretty much telegraphing the outcome in the first sentence, Judge Gorsuch framed the question as follows:
Can Colorado’s renewable energy mandate survive an encounter with the most dormant doctrine in dormant commerce clause jurisprudence?
The answer, of course, was no.
The opinion includes a readable and reasonably concise explication of the dormant commerce clause. Judge Gorsuch cogently summarizes the doctrine’s limitations. As to why it failed here, the essence is that:
To be sure, fossil fuel producers like EELI’s member will be hurt. But as far as we know, all fossil fuel producers in the area served by the grid will be hurt equally and all renewable energy producers in the area will be helped equally. If there’s any disproportionate adverse effect felt by out-of-state producers or any disproportionate advantage enjoyed by in-state producers, it hasn’t been explained to this court. And it’s far from clear how the mandate might hurt out-of-state consumers either.
The decision may be fairly obvious, but that doesn’t mean it is unimportant. If the Colorado RPS had been struck down, most, if not all, other state RPSs would have been in serious jeopardy. However, it looks as though we can let sleeping clauses lie.