Standing in the Shade of the Dormant Commerce Clause – Constitutionality of State Renewable Portfolio Standards after Epel

In the face of rapid global anthropogenic climate change, many U.S. states have sought to implement energy and environmental policies to diversify their electricity markets, reduce dependence on fossil fuels, reduce greenhouse gas emissions, and promote local economies. One such policy tool used by many states is the renewable portfolio standard. Renewable portfolio standards (“RPS”) mandate that a certain percentage of retail electricity sold in a state come from renewable energy sources. RPSs are attractive to states as they can serve as technology and market neutral policies that encourage innovation and renewable energy production in competitive, deregulated electricity markets. However, in the absence of U.S. federal law allowing states to design and implement these programs, state environmental laws are at risk of being voided as unconstitutional under the U.S. Constitution’s dormant commerce clause. The dormant commerce clause prohibits states from interfering or burdening interstate commerce to the benefit of in-state commerce. For electricity, almost every state in the United States is connected to regional electricity grids and markets. As a result, state-based renewable energy mandate could place an unconstitutional burden on out-of-state electricity producers. In 2015, in the case of Energy and Environment Legal Institute v. Epel, the Tenth Circuit Court of Appeals ruled that a state RPS was constitutional under the dormant commerce clause. This note reviews the court’s decision in Epel within the context of states’ efforts to reduce greenhouse gas emission through RPSs, and discuss implications and future potential problems that remain.