Tenth Circuit Rejects Commerce Clause Challenge to Colorado’s RPS

Posted on July 16, 2015 by Jeff Thaler

On Monday July 13, 2015, the 10th Circuit Court of Appeals held that Colorado’s mandate that the state’s biggest utilities get 30 percent of their power supplies from renewable resources is legal, rejecting a dormant commerce clause challenge. In the case of Energy and Environment Legal Institute v. Joshua Epel et al, decision, Judge Gorsuch began the unanimous decision in an unusually clear, direct and non-traditional style; the opening paragraph says it all: 

Can Colorado’s renewable energy mandate survive an encounter with the most dormant doctrine in dormant commerce clause jurisprudence? State law requires electricity generators to ensure that 20% of the electricity they sell to Colorado consumers comes from renewable sources. Under the law, too, this number will rise over time. It may be that Colorado’s scheme will require Coloradans to pay more for electricity, but that’s a cost they are apparently happy to bear for the ballot initiative proposing the renewable energy mandate passed with overwhelming support. So what does this policy choice by Coloradans affecting Colorado energy consumption preferences and Colorado consumer prices have to do with the United States Constitution and its provisions regarding interstate commerce? The Energy and Environment Legal Institute points out that Colorado consumers receive their electricity from an interconnected grid serving eleven states and portions of Canada and Mexico. Because electricity can go anywhere on the grid and come from anywhere on the grid, and because Colorado is a net importer of electricity, Colorado’s renewable energy mandate effectively means some out-of-state coal producers, like an EELI member, will lose business with out-of-state utilities who feed their power onto the grid. And this harm to out-of-state coal producers, EELI says, amounts to a violation of one of the three branches of dormant commerce clause jurisprudence.

In the end, the district court disagreed with EELI’s assessment and so must we.