Goblets of fire: Potential constitutional impediments to the regulation of global warming

Ecology Law Quarterly

Volumn 35, Issue 4, 2008, Pages 835-910

  Ferrey, Steven ^a  

^a UNIVERSITY OF SUFFOLK   (United Kingdom)

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[No Author keywords available]

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EID: 64949108015     PISSN: 00461121     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (527)

1. 2 emissions. Energy Info. Admin., Dep't of Energy, International Energy Outlook 2008: Highlights (June 2008), http://www.eia.doe. gov/oiaf/ieo/highlights.html.
2. Seventy percent of power generation in the United States is from the combustion of fossil fuels. ENERGY INFO. ADMIN, GREENHOUSE GASES, supra note l, at 2 fig.4.
3. Steven Ferrey, Power Future, 15 DUKEENVTL. L.&POL'YF.261 (2006).
4. See Bill McKibben, How Close to Catastrophe?, N.Y. REV. BOOKS, Nov. 16, 2006, at 23, 23 (book review) (citing climatologist Jim Hansen, The Threat to the Planet, N.Y. REV., July 13, 2006, to the effect that we have only until 2015 to reverse carbon emissions or face radically changing the planet).
5. Water vapor in the atmosphere is created by the transpiration of cooler air passing over warmer water bodies. National Oceanic & Atmospheric Administration, Greenhouse Gases Frequently Asked Questions (Dec. 1, 2005), http://lwf.ncdc.noaa.gov/oa/climate/gases.htrnlftwv.
6. Carbon dioxide and methane originate from non-biological sources, the respiration of animals, and organic waste. CO2 is also formed as a by-product of combustion, which accounts for about two- thirds of GHGs. Id.
7. X into the atmosphere per year. These levels are rising at a rate of about 4% per year. WORKING GROUP 1, INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, U.N. ENV'T PROGRAMME, CLIMATE CHANGE 2001: THE SCIENTIFIC BASIS §4.2 (2001), available at http://www.ipcc.ch/ipccreports/tar/wgl/ index.htm.
8. Feeling the Heat-The Greenhouse Effect nd the Carbon Cycle, http://unfccc.int/essential-background/feeling-the-heat/items/2903.php (last visited Nov. 30, 2008).
9. URANIUM INSTITUTE, RESPONDING TO GLOBAL CLIMATE CHANGE: THE POTENTIAL CONTRIBUTION OF NUCLEAR POWER, http://www.world-nuclear.org/info/clitnate.html (last visited Nov. 30, 2008).
10. U.S. ENVT'L PROT. AGENCY, INVENTORY OF U.S. EMISSION OF GREENHOUSE GASES AND SINKS: 1990-2005: DRAFT FOR PUBLIC REVIEW, ES-14 (2007), available at http://www.epa.gov/ climatechange/emissions/ downloads07/07CR.pdf.
11. WORKING GROUP 1, INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, U.N. ENVT. PROGRAMME, SUMMARY FOR POLICY MAKERS (2007), available at http://www.ipcc.ch/pdf/assessment- report/ar4/wgl /ar4-wg 1 -spm.pdf.
12. Id.
13. Id.
14. While this phrase accurately assesses the current state of our country's climate change situation, and is a memorable phrase from the Ron Howard-directed movie, Apollo I3, it is historically inaccurate. This Tom Hanks tag line was never actually uttered during the actual Apollo 13 moon orbit mission. See NASA, Detailed Chronology of Events Surrounding the Apollo 13 Accident (Jan. 24, 2006), http://history.nasa.gov/Timeline/apollol3chron.html.
15. See Massachusetts v. EPA, 127 S. Ct. 1438, 1461 (2007). "EPA has not identified any congressional action that conflicts in any way with the regulation of greenhouse gases from new motor vehicles." Id.
16. See Reg'l Greenhouse Gas Initiative, Participating States, http://www.rggi.org/states (last visited Nov. 30, 2008).
17. CAL. HEALTH & SAFETY CODE §§ 38500-38599 (West 2007), available at http://www.leginfo.ca. gov/pub/05-06/bill/asm/ab-0001-0050/ab-32-bill-20060927-chaptered.pdf.
18. The Western Climate Initiative is a group of six western states and two Canadian provinces that plan to release a carbon restriction program late in 2008 that will cut GHG emissions 15% below 2005 levels. See Ethan Howland, Power Lines, Renewables, Climate Change Are at Top of New Mexico Agenda in 2008, ELECTRIC UTIL. WEEK, Jan. 14, 2008, at 26; Lisa Weinzimer, California Regulators Call for 'First-Seller' Variation of Cap-and-Trade GHG Approach, ELECTRIC UTIL. WEEK, Feb. 18, 2008, at 17.
19. See generally, Midwestern Governor's Ass'n, Midwestern Greenhouse Gas Accord, 2007 (Nov. 15, 2007), available at http://www. midwesternaccord.org/midwesterngreenhousegas reductionaccord.pdf; Mike Granstaff, EcoAgri.biz, Cap and Trade-A Primer (Jan. 21, 2008), http://www.ecoagri.biz/0801cap.aspx. These states include Iowa, Illinois, Kansas, Michigan, Minnesota and Wisconsin, and the Canadian province of Manitoba. Dean Scott, Midwestern States to Draw up Model Rule by end of 2008 to Implement Cap and Trade, 39 Env't Rep. (BNA) 343 (Feb. 22, 2008). Each state's governor and the Premier of Manitoba, Canada executed a regional greenhouse gas emission reduction strategy. Id. Indiana, Ohio and South Dakota have opted out of the Midwestern Greenhouse Gas Reduction Accord and are now observers. Id. This accord will not set a specific target but will attempt to cut emissions by 2020.
20. See MIDWESTERN GREENHOUSE GAS REDUCTION ACCORD, PRELIMINARY R ECOMMENDATIONS OF THE ADVISORY GROUP: 11/1/08 DRAFT 2 (2008), http://www.midwesternaccord.org/News%20Page/ Accord%20Draft%20Recs%2011%201%2008.doc. This region depends heavily on coal-fired electric generation. A model rule is expected by the end of 2008, and the industries affected are expected to be broader than under the RGGI. Scott, supra;
21. see also Nora Macaluso, Midwest States to Commence Work on Details of Regional Climate Strategy, 38 Env't Rep. (BNA) 2556 (Nov. 30, 2007).
22. See Energy Policy Act of 1992, 42 U.S.C. § 13385 (2006);
23. see also Press Release, Office of Public Affairs, U.S. Dep't of Energy, DOE Strengthens Public Registry to Track Greenhouse Gas Emissions (Apr. 17, 2006), available at http://www.pi.energy.gov/enhancingGHGregistry/ documents/ 1605BAprill72006.pdf (outlining recent changes to voluntary U.S. program).
24. U.S. CONST, art. I, § 8, cl. 3 ("The Congress shall have the Power ... To regulate Commerce with foreign Nations, and among the several States ⋯ .").
25. See RGGI EMISSIONS LEAKAGE MULTI- STATE STAFF WORKING GROUP, REG'L GREENHOUSE GAS INITIATIVE (RGGI), POTENTIAL EMISSIONS LEAKAGE AND THE REGIONAL GREENHOUSE GAS INITIATIVE: EVALUATING MARKET DYNAMICS, MONITORING OPTIONS, AND POSSIBLE MITIGATION MECHANISMS (2007), available at http://www.rggi.org/docs/il-report-final-3-14-07.pdf [hereinafter RGGI WORKING GROUP],
26. See l STEVEN FERREY, THE LAW OF INDEPENDENT POWER, §2:1 (2007) [hereinafter FERREY, LAW OF INDEPENDENT POWER]; Steven Ferrey, Inverting Choice of Law in the Wired Universe: Thermodynamics, Mass and Energy, 45 WM. & MARY L. REV. 1839, 1914 (2004) [hereinafter Ferrey, Inverting Choice].
27. RGGI WORKING GROUP, supra note 22, at ES-1. RGGI States such as New Jersey, New York, and Maryland are bordered by states that are not signatories to RGGI and do historically produce a large of volume of electricity from coal-fueled power plants. Id. Similarly, California imports power from eleven states, including a large amount of coal-fired power.
28. See CALIFORNIA ENERGY COMMISSION, 2006 NET SYSTEM POWER REPORT, available at http://www.energy.ca.gov/2007publications/CEC-300-2007-007/CEC-300-2007-007.PDF (showing California imports approximately 10% of its total electricity from out of state coal plants).
29. To date, six states-Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont-have decided to auction their allowances. Green Business, RGGI States Announce First Emissions Auction, http://www.green-business.ca/RGGI- States-announce-first-emissions-auction.html (last visited Nov. 26, 2008);
30. see also PRE-PROPOSAL OF VERMONT'S RULE To IMPLEMENT THE REGIONAL GREENHOUSE GAS INITIATIVE (Vt. Dep't of Envtl. Conservation, Draft 2007), available at http://www.anr.state.vt.us/air/docs/ VTPreProposal%20Draft%20Rule%20to%20Implement%20RGGI.p df; N.Y. COMP. CODES R. & REGS. tit. 6 § 242 (2008); Maine Act to Establish the Regional Greenhouse Gas Initiative, ch. 317 (June 18, 2007), available at http://janus.state.me.us/legis/LawMakerWeb/ externalsiteframe.asp?ID=280024997&LD=1851&Type=l&SessionID=7.
31. U.S. CONST, art. VI, § 2 ("This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the authority of the United States, shall be the supreme Law of the land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.").
32. Lisa Wood, RGGI Effect Goes Beyond Mandates, Brings Wave of Changes to New England Energy Policy, ELECTRIC UTIL. WEEK, Sept. 1, 2008 at 1.
33. See infra Part II.A.
34. See infra Part III.A.
35. See infra Part III.B-C.
36. 16 U.S.C. § 824 (a), (d) (2006); Fed. Power Comm'n v. (1964).
37. U.S. CONST, art. I, § 10, cl. 3 ("No state shall, without of tonnage, keep troops, or ships of war in time of peace, enter another state, or with a foreign power, or engage in war, unless danger as will not admit of delay.").
38. See infra Part IV.
39. McKibben, supra note 4, at 23 (quoting Jim Hansen, The Threat to the Planet, N.Y. REV. BOOKS, July 13,2006).
40. See infra Part V.
41. See U.N. Framework Convention on Climate Change, Joint Science Academies' Statement: Global Response to Climate Change, June 7, 2005, available at http://royalsociety.org/ displaypagedoc.asp?id=20742 (stating that "there is now strong evidence that significant global warming is occurring" and "it is vital that all nations identify cost-effective steps that they can take now, to contribute to substantial and long-term reduction in net global greenhouse gas emissions").
42. William Robert Johnston, Global Warming (May 31, 2004), http://www.johnstonsarchive.net/ environment/wrjp365g.html.
43. Conference of the Parties to the Framework Convention on Climate Change: Kyoto Protocol, 137 l.L.M. 22(1998).
44. See Kyoto Protocol, http://unfccc.int/kyotojDrotocol/items/2830. php (last visited Nov. 30, 2008).
45. See Margaret Kriz, Warm-up Drills, 37 NAT'L J. 906, 906 (2005).
46. A great concern about carbon trading among stakeholders are the requirements of "additionality." U.S. Government Accountability Office, "Carbon Offsets: The U.S. Voluntary Market is Growing, but Quality Assurances Poses Challenges for Market Participants," GAO-08-1048, August 2008, at 25. "Additionality" is the requirement in most carbon control statutes or regulations that only "additional" or non-business-as-usual carbon-reduction projects legally qualify to create carbon "offsets;" "offsets" create tradable credits for compliance with these carbon policies.
47. See REG'L GREENHOUSE GAS INITIATIVE, MODEL RULE (Jan. 5, 2007), available at http://www.rggi.org/ docs/model-rule-corrected-l-5-07.pdf
48. There are some voluntary programs. With the passage of the Energy Policy Act of 1992, Congress authorized a voluntary program to encourage the public to report achievements in reducing GHG emissions. Pub. L. No. 102-486, 106 Stat. 2776 (1992). Beginning in October of 1994, the U.S. Department of Energy issued guidelines on the voluntary reporting of emissions reductions and carbon sequestration. U.S.DEP'T OF ENERGY, VOLUNTARY REPORTING OF GREENHOUSE GASES UNDER SECTION 1605(b) OF THE ENERGY POLICY ACT OF 1992: GENERAL GUIDELINES (1994), available at http://www.eia.doe.gov/oiaf/1605/1605b.html. This program, though, only offers an opportunity to report annual GHG emissions and record projects that reduce emissions or increase carbon sequestration, but does not provide a mechanism or monetary incentives to reduce carbon emissions. Id. The Chicago Climate Exchange (CCX) was among the first to create a voluntary, legally binding multi-sector reduction and trade program that provides true monetary incentives. Chicago Climate Exch., History (2007), http://www.chicagoclimatex.com/content. jsf?id=l. CCX is currently the single voluntary emissions trading system for all six GHGs and has almost 300 members from various sectors worldwide. Id. Another voluntary program is the Western Climate Initiative (WCI).
49. See Cathy Cash, Western Region Plan to Reduce GHG Emissions has Energy Suppliers Waiting for Specifics, ELECTRIC UTIL. WEEK, Aug. 27, 2007, at 1. In a regional effort to address climate change, the governors of Oregon, Washington, California, Arizona, New Mexico, and Utah, as well as the premiers of British Columbia and Manitoba signed an agreement establishing the Western Climate Initiative. Id. The original agreement was signed in February 2007 by Governors of Arizona, California, New Mexico, Oregon, and Washington. Id. In May 2007, the state of Utah and the Canadian provinces of British Columbia and Manitoba joined WCI. Energy Information Administration, State Regulations on Airborne Emissions: Update Through 2007, http://www.eia.doe.gov/oiaf/aeo/otheranalysis/aeo- 2008analysispapers/sraemissions.html (last visited Nov. 30, 2008). The states of Kansas, Colorado, Wyoming and Nevada, the Canadian provinces of Ontario, Quebec and Saskatchewan and one Mexican state, Sonora, will participate in WCI as observers. Id.
50. CAL. ENERGY COMM'N, INVENTORY OF CALIFORNIAN GREENHOUSE GAS EMISSIONS AND SINKS III 20 (2006), available at www.energy.ca.gov/ 2006publications/CEC-600-2006-013/CEC-600- 2006-013-SF.pdf.
51. See id.
52. See Sheila M. Olmstead & Robert N. Stavins, A Meaningful Second Commitment Period for the Kyoto Protocol, ECONOMISTS' VOICE, May 2007, at 3, available at http://www.bepress.com/ev/ vol4/iss3/artl/.
53. 2 emissions by 10% from 1997-1999. 310 MASS. CODE REGS. 7.29 (2008).
54. See REG'L GREENHOUSE GAS INITIATIVE, GOALS, PROPOSED TASKS, SHORT-TERM ACTION ITEMS (2003), available at http://www.rggi.org/docs/actionplanfinal.pdf.
55. Id. at 1.
56. Id. In Massachusetts' RGGI rules, for example, any bidder may bid for up to one-quarter of all available allowances at an auction.
57. 2 ALLOWANCE AUCTION 2 ON DECEMBER 17,2008 § 7.2.3 (2007), available at http://www.rggi.org/docs/Auction-Notice-Oct-13-2008. pdf. This will invite market makers and speculators to bid for allowances, with the hope to create a profit through a secondary market after winning allowances. See infra notes 88-92, 96.
58. REG'L GREENHOUSE GAS INITIATIVE, MEMORANDUM OF UNDERSTANDING (2005), available at hrrp://www.rggi.org/docs/mou-fmal-12-20-05.pdf [hereinafter RGGI MOU].
59. Massachusetts and Rhode Island were originally given the status of observing states. Press Release, State of Mass., Gov. Patrick Signs Regional Pact to Reduce Greenhouse Gas Emissions (Jan. 18, 2007), available at http://www.mass.gov/?pageID=pressreleases&agId=Agov3&prModName= gov3pressrelease&prFile=reduce-greenhouse-gases011807.xml; Press Release, State of R.I., Lt. Gov. Roberts Calls for R.I. to Join Regional Greenhouse Gas Initiative (January 23, 2007), available at http://www.ri.gov/press/view.php?id=3423. In January 2007, both agreed to formally join RGGI as signatory states. Id. Maryland, a predominantly coal-powered electricity generating state in contrast to the other RGGI states, also subsequently joined RGGI in 2006. Press Release, State of Md., Gov. Martin O'Malley Signs Greenhouse Gas Agreement, Climate Change Executive Order (April 20, 2007), available at http://www.gov.state.md.us/pressreleases/070420. html.
60. RGGI MOU, supra note 50, at 2.
61. Edna Sussman, New York Addresses Climate Change with the First Mandatory U.S. Greenhouse Gas Program, N.Y. ST. B. J., May 2006, at 43, 44.
62. Heddy Bolster, Note, The Commerce Clause Meets Environmental Protection: The Compensatory Tax Doctrine as a Defense of Potential Regional Carbon Dioxide Regulation, 47 B.C. L. REV. 737, 744 (2006) (citing RGGI MOU, supra note 50, at 2).
63. Robert Stavins, Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System, at 2, 3 (Kennedy School of Government Faculty Research Working Paper, Paper No. RWP07-
64. 2007), available at http.V/ksgnotes 1. harvard.edu/Research/ wpaper.nsf/rwp/RWP07-053/SFile/ rw-07-053-stavins.pdf.
65. 2 emissions cap will be equal to 121 million short tons. RGGI MOU, supra note 50, at 2.
66. Id. at 3.
67. Press Release, Reg'l Greenhouse Gas Initiative, States Reach Agreement on Proposed Rules for the Nation's First Cap-and-Trade Program to Address Climate Change, 1, 2 (Aug. 15, 2006), available at http://www.rggi.org/docs/ model-rule-release-8-l-5-06.pdf.
68. See RGGI MOU, supra note 50, at 2-3.
69. 2 emissions budget.
70. See E-mail from Denise Sheehan, Commissioner, N.Y. State Dep't of Envtl. Conservation, to RGGI Agency Heads et al. (August 11, 2006) (on file with author).
71. Id.
72. See Harvard Electric Policy Group, Rapporteur's Summary at the Harvard Electric Policy Group 49th Plenary Session 34 (Dec. 6-7, 2007), available at http://www.hks.harvard.edu/hepg/ RapporteurReport 12-07.pdf.
73. Cathy Cash, Banks, Investment Firms, Find Positions for Gigantic Carbon Market, ELECTRIC UTIL. WEEK, June 30, 2008, at 2.
74. See Harvard Electric Policy Group, supra note 62, at 39.
75. See id. at 46 (indicating that prices as high as fifty dollars per ton are necessary to motivate consumer behavior changes).
76. N.Y. COMP. CODES R. & REGS. tit. 6 § 242-1.2(11) (2008). The sixth offset category, projects to reduce fugitive methane emissions from natural gas transmission and distribution, was removed from the RGGI MOU by an amendment dated August 8,2006.
77. N.Y. COMP. CODES R. & REGS. tit. 6 § 242-1.2(b)(33) (2008).
78. REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-5.3(aH« (2007), available at http://www.rggi.org/docs/model-rule-corrected-l-5-07.pdf.
79. Full Committee Oversight Hearing: To Receive Testimony on Energy and Related Economic Effects of Global Climate Change Legislation (SD-366) Before the S. Comm. on Energy and Natural Resources, 110th Cong. 10 (2008) (Statement of Peter Orszag, Director, Congressional Budget Office).
80. One power producer, National Grid, has advocated auctioning 100% of the allowances and then having the state use the money to supplement consumer rates. Letter from Joseph M. Kwasnik, Vice President-Environmental, National Grid, to Franz Litz, Policy Change Coordinator, N.Y. State Dep't of Envtl. Conservation (May 22, 2006), available at http://www.rggi.org/docs/ national-gird-whitepaper.pdf. These generators propose that the costs spent on allowances by the utilities will be passed along to the consumer, resulting in higher retail prices for consumers. Id.
81. 2 allowances and this does not include any auction to preexisting sources, which are freely allocated to electric power generators).
82. See Harvard Electric Policy Group, supra note 62, at 36.
83. Orszag, supra note 69, at 9.
84. European Climate Change Programme, National Allocation Plans: First Phase (2005-2007) (Oct. 14,2008), http://ec.europa.eu/environment/climat/emission/ emissionjlans.htm.
85. Twenty-seven EU members constitute the core of the 30 European Annex 1 Kyoto countries. Directive 2003/87/EC of the European Parliament and of the Council, 2003 O.J. (L 275) 32, available at http://eur-lex.europa.eu/ LexUriServ/LexUriServ.do?uri=OJ:L:2003:275:0032:0046:EN:PDF (amending Council Directive 96/61/EC (the "EU Directive")). Phase II of the EU ETS second phase corresponds to the Kyoto 2008-2012 initial phase. See id. The EU system caps emissions of about 4000 companies at 11,500 installations. Id. This covers larger steel, combustion facilities, oil refineries, pulp and paper mills, cement, ceramics, and glass facilities. Id. Aviation was not included. See id. Trading is allowed. Id,;
86. see also Press Release, EU Emissions Trading System, Questions and Answers on the Commission's Proposal to Revise the EU Emissions Trading System, § 19 (January 23, 2008), available at http://europa.eu/rapid/ pressReleasesAction.do?reference=MEMO/08/35 & format=HTML&aged= 0&language=EN&guiLanguage=en.
87. See Harvard Electric Policy Group, supra note 62, at 37. This EU system attempts to accomplish an 8% CO2 reduction from 1990 levels. Id.
88. Comm'n of the European Communities, Proposal for a Directive of the European Parliament and of the Council Amending Directive 2003/87/EC so as to Improve and Extend the Greenhouse Gas Emission Allowance Trading System of the Community 15 (2008), available at http://www.europeanenergyforum.eu/ archives/european-union/eu-general-topic-file/eu-environment/ third-energy-package-climate-action-and-renewable-energy/amending-directive- 2003-87-ec-so-as-to- improve-and-extend-the-greenhouse-gas-emission-allowance- trading-system-of-the-community.
89. See Harvard Electric Policy Group, supra note 62, at 38.
90. See id. at 38.
91. There is an ongoing debate about whether out-of-state or other producers can purchase allowances from a particular state, which effectively could shift the carbon emission rights away from local generation, and the state would have to import more out-of-state power. Gerald B. Silverman, Northeast States Move Toward Final Design for Auction of Carbon Emissions Allowances, 39 Env't Rep. (BNA) 114 (Jan. 18, 2008). NGO groups have argued for completely fluid open salable markets, with no preference for local generation. Id
92. Christine Cordner & Alexander Duncan, Eyeing Carbon Bill, House Panel Considers Interaction of Federal, State Greenhouse Roles, ELECTRIC UTIL. WEEK, March 3, 2008, at 4 (quoting STAFF OF H. COMM. ON ENERGY AND COMMERCE, 110TH CONG., CLIMATE CHANGE LEGISLATION DESIGN WHITE PAPER: APPROPRIATE ROLES FOR DIFFERENT LEVELS OF GOVERNMENT (2008), available at http://energycommerce.house.gov/Climate-Change/ white%20paper%20st-lcl%20roles% 20final%202-22.pdfj.
93. 2. Large states such as California and New York have geographic state ISOs, while all six New England states combine in ISO-NE, and PJM controls the operation of power plants owned by others in thirteen states including Pennsylvania, New Jersey, and Maryland. FERC encourages and approves ISO procedures as a way to more efficiently control power plant operations.
94. See ME. REV. STAT. ANN. tit. 38, § 580 (2007), available at http://janus.state.me.us/legis/ LawMakerWeb/summary.asp?ID=280024997. Maine's Regional Greenhouse Gas Initiative Act of 2007 (LD 1851) was passed by the Maine Legislature and enacted June 18, 2007.
95. See 310 MASS. CODE REGS. §§ 7.00 Appendix B, 7.29 (2007).
96. See VT. ANN. tit. 30, § 255 (2007). Vermont receives the majority of its power from Vermont Yankee nuclear power plant and Hydro-Quebec, two power producers with very low carbon output. Cent. Ver. Pub. Serv., Energy Sources (2001), http://www.cvps.com/ProgramsServices/ EnergySources.shtml. Since Vermont will still have a significant amount of allowances allotted to it, the state could end up selling the allowances to out-of-state power producers.
97. See N.Y. COMP. CODES R. & REGS. tit. 6 § 242 (2008).
98. Id. § 242-5.3(a)(3).
99. Governor Deval Patrick has indicated that Massachusetts will auction all of its emission allowances and use the approximately $25-125 million generated annually to fund various energy efficiency-related programs.
100. See Martha Kessler, State Energy Secretary Drafts Regulations for Cap- and-Trade Program under RGGI, 38 Env'tRep. (BNA) 1787 (Aug. 17, 2007).
101. ME. REV. STAT. ANN. tit. 38, § 580 (2007).
102. 2 emissions at 188 million regional tons by 2009. Id.
103. 2 allowances in the state will be auctioned and the proceeds from the sale will be allocated to one or more trustees acting on behalf of consumers. Id. The account will be managed by trustees, appointed by the Public Service Board, to provide the maximum long-term benefit to Vermont electric consumers. Id. Auction goals and procedures are also loosely outlined in New York's draft rule.
104. 2 emissions allowances for public benefit to produce funds for carbon reduction and energy conservation. ME. REV. STAT. ANN. tit. 38, § 580-B(7) (2007).
105. Cathy Cash & Paul Whitehead, All-Auction Allowances Get Promoted on Capitol Hill, as Europe Heads that Way, ELECTRIC UTIL. WEEK, Jan. 28, 2008, at 1.
106. See, e.g., N.Y. COMP. CODES R. & REGS. tit. 6, § 242-5.3(a) (2008). The proceeds from this auction will then be used for "energy efficiency and clean energy technology" as well as "promoting or rewarding investments in energy efficiency, renewable or non-carbon-emitting energy technologies, and/or innovative carbon emissions abatement technologies with significant carbon reduction potential." Id. The rule specifies that the 100% allowance auction is to be used for these purposes. Id. An account will be managed by either the New York Department of Environmental Conservation (NYSDEC) or an agent assigned by the NYSDEC.
107. As of early 2008, some RGGI allowance options and rights had been already traded among companies in the $5-$10 per ton price range.
108. See Gerald B. Silverman, Two Options Exchanged for Allowances in Anticipation of Growing American Market, 39 Env't Rep. (BNA) 343 (Feb. 22, 2008).
109. REG'L GREENHOUSE GAS INITIATIVE, DESIGN ELEMENTS FOR REGIONAL ALLOWANCE AUCTIONS UNDER THE REGIONAL GREENHOUSE GAS INITIATIVE, March 17, 2008 at 1, 1-2; Gerald B. Silverman, Regional Initiative Sets Terms, Dates for First Carbon Emissions Auctions, 39 Env't Rep. (BNA) 549 (Mar. 21, 2008). The first auction was planned for September 2008, and the second for December 2008. Id.
110. RGGI MOU, supra note 50, at 4.
111. 6) capture and recycling; (3) afforestation (transition of land from a non-forested to forested state); (4) end-use efficiency for natural gas, propane and heating oil; (5) methane capture from farming operations; and (6) projects to reduce fugitive methane emissions from natural gas transmission and distribution. Id.
112. There is significant variation in what is an eligible renewable energy technology in each of the states: while certain wind and solar technologies seem to qualify everywhere, the eligibility of various biomass, landfill gas, hydroelectric and other facilities varies significantly.
113. See Steven Ferrey, Sustainable Energy, Environmental Policy, and States' Rights: Discerning the Energy Future Through the Eye of the Dormant Commerce Clause, 12 N.Y.U. ENVTL. L.J. 507, 646 tbl. 3 (2004); K.S. COREY & B.J. SWEZEY, NATIONAL RENEWABLE ENERGY LABORATORY, RENEWABLE PORTFOLIO STANDARDS IN THE STATES: BALANCING GOALS AND IMPLEMENTATION STANDARDS (2007).
114. For a detailed discussion of these programs, see Ferrey, supra note 98, at 529-532.
115. See also Steven Ferrey, Renewable Orphans: Adopting Legal Renewable Standards at the State Level, ELECTRICITY J., Mar. 2006, at 52.
116. See Rules Regulations & Policies, Database of State Incentives for Renewables & Efficiency (2007), http://www.dsireusa.org/summarytables/ regl.cfm?&CurrentPageID=7&EE=l&RE=l; Ferrey, supra note 98, at 523.
117. For a discussion of net metering and its legal and policy implications, see Steven Ferrey, Nothing But Net, DUKE ENVTL. L. & POL'Y. F., Fall 2003, at 1, 1 (2003);
118. see also Steven Ferrey, Net Zero: Distributed Generation andFERC's MidAmerican Decision, ELECTRICITY J., Oct. 2004, at 33, 34.
119. REG'L GREENHOUSE GAS INITIATIVE MODEL RULE, § XX-10.3(d)(2) (2007), available at http://www.rggi.org/docs/model-rule-corrected-l-5-07.pdf.
120. Id. § 10.3(d)(3). These measures are quite restrictive considering that renewable energy credits in many states are expected to trade at higher rates than RGGI offsets or credits. Therefore, the RGGI scheme stands conspicuously apart from other carbon schemes and even from the renewable energy incentive programs that the RGGI states may have otherwise adopted and implemented.
121. Id. § 10.3(d)(4).
122. Id. § 10.5(c)(4)(iii).
123. Id. § 10.5(c)(6)(i).
124. Id. § 10.3(d)(l).
125. REG'L GREENHOUSE GAS INITIATIVE, MEMORANDUM OF UNDERSTANDING IN BRIEF (2005), available at http://www.rggi.org/docs/mou-brief-12-20-05.pdf.
126. Id.
127. RGGI MOU, supra note 50, at 5.
128. Pew Ctr. on Global Climate Change, Q&A: Regional Greenhouse Gas Initiative, http://www.pewclimate.org/rggi/qanda (last visited Nov. 30,2008).
129. Id.
130. See supra note 74.
131. See Harvard Electric Policy Group, supra note 62, at 40-41.
132. REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-lO.3(e)(2) (2007), available at http://www.rggi.org/docs/model rule-corrected 1-5 07.pdf.
133. Id §XX-6.5(d)(l).
134. Doug Obey, Early Emission-Reduction Credits in RGGI Prompt Controversy, CARBON CONTROL NEWS, June 11,2008.
135. Id.
136. Id.
137. Id.
138. Id.
139. See REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-5.3 (2007), available at http://www.rggi.org/docs/mode1 rule corrected 15 07 .pdf.
140. C.F.R. § 73.71(a)-(f) (1991).
141. See REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-10.3(d) (2007), available at http://www.rggi.org/docs/model-rule-corrected-l-5-07.pdf.
142. See id. §§ XX-10, XX-10.7.
143. NEW HAMPSHIRE DEP'T OF ENVTL. SCI., REGIONAL GREENHOUSE GAS INITIATIVE FREQUENTLY ASKED QUESTIONS ON THE ECONOMIC ANALYSIS (2008), available at http://des.nh.gov/organization/divisions/air/tsb/tps/climate/rggi/documents/ economic-faqs.pdf ("Historically, cap-and-trade programs, such as federal trading program for sulfur dioxide emissions under acid rain legislation, have allocated allowances directly to regulated emissions sources based on historic operation, a practice commonly referred to as 'grandfathering.'").
144. 2 EMISSION ALLOWANCES UNDER THE REGIONAL GREENHOUSE GAS INITIATIVE 8 (2007), available at http://www.rggi.org/docs/ rggi-auction-final.pdf.
145. REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-10.3(f) (2007). available at http:// www.rggi.org/docs/model-rule-corrected-l-5-07.pdf.
146. Id. § XX-10.3(d).
147. Electricity on the Political Stage in Calif., ELECTRICITY DAILY, Sept. 26, 2003, at 1, 1.
148. Steven Ferrey, Soft Paths, Hard Choices: Environmental Lessons in the Aftermath of California's Electric Deregulation Debacle, 23 VA. ENVTL. L.J. 251, 255 (2004).
149. See Seth Hilton, The Impact of California's Global Warming Legislation on the Electric Utility Industry, ELECTRICITY J., Nov. 2006, at 10, 11. During this period, California increased its generation supply by only 23% since the 2001 crisis. Id.
150. See Energy Info. Admin., Dep't of Energy, Annual Energy Review Table 8.2(a) Electricity Net Generation: Total 1949-2007 (2007), available at http://www.eia.doe.gov/aer/pdf/pages/sec88.pdf.
151. California Global Warming Solutions Act of 2006, CAL. HEALTH & SAFETY CODE §§ 38500- 38599 (West 2007). The California Assembly passed Assembly Bill 32, signed into law by Governor Schwarzenegger on September 27, 2006. Press Release, Governor Arnold Schwarzenegger, Gov. Schwarzenegger Signs Landmark Legislation to Reduce Greenhouse Gas Emissions (Sept. 27, 2006), available at http://gov.ca.gov/index.php7/press-release/4111/. The bill sets a firm limit on GHG emissions in California by requiring the Air Resources Board to determine California's GHG emission level in 1990 and then issue regulations causing GHG emissions to be reduced to that level by 2020. California Global Warming Solutions Act of 2006 § 1, CAL. HEALTH & SAFETY CODE § 38550 (West 2007). A.B. 32 also requires comprehensive GHG reporting by major sources of GHG emissions. Id. § 38530 Market-based compliance mechanisms are also discussed in the legislation, but left to the discretion of the Air Resources Board. See Id. §§ 38561(a)-0), 38570. While A.B. 32 regulates all significant sources of GHGs
152. The California Assembly passed Assembly Bill 32, signed in to law by Governor Schwarzenegger on September 27, 2006. Press Release, Governor Arnold Schwarzenegger, Gov. Schwarzenegger Signs Landmark Legislation to Reduce Greenhouse Gas Emissions (Sept. 27, 2006), available at http://gov.ca.gov/index.php7/press-release/4111/.
153. CAL. ENERGY COMM'N, HISTORY OF CALIFORNIA'S INVOLVEMENT IN AIR POLLUTION AND GLOBAL CLIMATE CHANGE (2008), http://www.climatechange.ca.gov/background/history.html.
154. CAL. AIR RES. BD., AB 32 FACT SHEET-CALIFORNIA GLOBAL WARMING SOLUTIONS ACT OF 2006 (Sept. 25, 2006), available at http://www.arb.ca.gov/cc/factsheets/ab32factsheet.pdf.
155. See Press Release, Cal. Envtl. Prot. Agency, Expert Advisors Release Final Cap-and-Trade Report: Recommendations Intended to Complement California's Ongoing Efforts to Reduce Emissions (June 29, 2007). MAC is comprised of national and international experts in environmental policy, regulatory affairs, economics, and energy technologies.
156. MKT. ADVISORY COMM., CAL. AIR RES. BD., RECOMMENDATIONS FOR DESIGNING A GREENHOUSE GAS CAP-AND- TRADE SYSTEM FOR CALIFORNIA (2007), available at http:// www.climatechange.ca.gov/events/2007-06-12 mac meeting/2007-0601 MAC DRAFT REPORT.PDF.
157. Id.
158. Id.
159. Id.
160. CAL. ENERGY COMM'N, supra note 137.
161. Id.
162. Id.
163. Id.
164. Id.
165. See id.
166. Id.
167. See Harvard Electric Policy Group, supra note 62, at 39.
168. See Weinzimer, supra note 18.
169. Ferrey, supra note 131, at 297.
170. See Weinzimer, supra note 18.
171. See Harvard Electric Policy Group, supra note 62, at 39.
172. California is home to the largest municipal utility in the nation, the Los Angeles Department of Water and Power (LADWP), serving a multi-million person consumer base. L.A. Dep't of Water and Power, Our Service and History, http://www.ladwp.com/ladwp/cms/ladwpOOO5O8.jsp (last visited Nov. 30, 2008). LADWP is among the most dependent California LSEs on both power imports from out of state, and coal-fired high-GHG power. See Hilton, supra note 133, at 13.
173. CAL. PUB. UTILS. CODE § 8341(d)(l) (West 2007). This legislation targets only electric generation. Sections 8340 and 8341 govern all new long-term energy commitments and establish a "greenhouse gas emissions performance standard." Id. §§ 8340-8341. This is specific to the electric power role in meeting A.B. 32 goals. The GHG emissions standard creates a specific level of permissible emissions and prohibits new construction, new long-term power contracts, and any major plant investment that will not meet the performance standard. See id. This prohibits load serving entities from entering long-term power contracts with out-of-state producers who do not meet California's stringent new emissions standard. California's Public Utilities Commission (PUC) has set the GHG emissions performance standard at the equivalent of the emissions from a combined-cycle natural gas plant. See id.
174. 2MWh. See Hilton, supra note 133, at 14.
175. CAL. PUB. UTILS. CODE § 8340(a) (West 2007).
176. Order Instituting Rulemaking to Implement the Commission's Procurement Incentive Framework and to Examine the Integration of Greenhouse Gas Emissions Standards into Procurement Policies, R.06-04-009, D.07-09-017, 2007 Cal. P.U.C. LEXIS 330 (Cal. Pub. Utils. Comm'n Sept. 6, 2007). Three-quarters of California's power imports come from the Southwest, and involves much coal-fired power, as opposed to the other quarter that is imported through the Northwest. AL ALVARADO & KAREN GRIFFIN, CAL. ENERGY COMM'N., REVISED METHODOLOGY TO ESTIMATE THE GENERATION RESOURCE MIX OF CALIFORNIA ELECTRICITY IMPORTS: UPDATE TO THE MAY 2006 STAFF PAPER 1,1,3 (2007).
177. See Hilton, supra note 133, at 13. The three major investor-owned utilities import 3-15% of their total supply in the form of out-of-state coal-fired power. Id. The Los Angeles DPW imports half of its power from these sources. Id.
178. Weinzimer, supra note 18.
179. California GHG Law Sparks Debate on Other Air Pollutants, CARBON CONTROL NEWS, April 14, 2008.
180. Id. (citing unnamed industry spokespeople).
181. 2 Allowances in Calif., Generators Deny Windfall is Possible, ELECTRIC UTIL. WEEK, April 28, 2008, at 13. Load served and historical emissions both would be factors in determining the amount of allowances given. Id.
182. Id. This is being endorsed by some Southern California lawmakers. Id.
183. Id.
184. CAL. HEALTH & SAFETY CODE § 38530(b)(2) (West 2007). "This requirement applies to all retail sellers of electricity, including load-serving entities as defined in subdivision (j) of Section 380 of the Public Utilities Code and local publicly owned electric utilities as defined in Section 9604 of the Public Utilities Code." Id.
185. See Hilton, supra note 133, at 16.
186. The RGGI system governs only the original power producers, whereas the California bill governs any load serving entity, defined as "every electrical corporation, electric service provider, or community choice aggregator serving end-use customers in the state." CAL. PUB. UTILS. Code § 8340(h) (West 2007).
187. See Reg'l Greenhouse Gas Initiative, About RGGI, http://www.rggi.org/about (last visited Nov. 30,2008).
188. Cal. Air Res. Bd., Climate Change, http://www.arb.ca.gov/cc/cc.htm (last visited Nov. 30, 2008).
189. Reg'l Greenhouse Gas Initiative, Fact Sheet, http://www.rggi.org/docs/ RGGI-Executive-Summary.pdf (last visited Nov. 30, 2008).
190. Claire Carothers, United We Stand: The Interstate Compact as a Tool for Effecting Climate Change, 41 GA. L. REV. 229, 236 (2006) (arguing that "[a] regional plan or compact regulating emission controls would likely be found as encroaching upon areas typically delegated to the federal government, as well as potentially increasing the powers of the participating states").
191. Bolster, supra note 54, at 737.
192. RGGI MOU, supra note 50, at 9-10.
193. CAP AND TRADE SUBGROUP, CAL. CLIMATE ACTION TEAM, CAP AND TRADE PROGRAM DESIGN OPTIONS (2006), available at http://www.climatechange.ca.gov/climateactionteam/reports/ 2006report/2006-03-27-CAP-AND-TRADE.PDF.
194. RICHARD COWART, REGULATORY ASSISTANCE PROJECT, ADDRESSING LEAKAGE IN A CAP-AND-TRADE SYSTEM 1 (2006), available at http://www.raponline.org/Pubs/RC-Leakage-4-06.pdf.
195. N.Y. STATE DEP'T OF ENVTL. CONSERVATION, FINAL GENERIC ENVIRONMENTAL IMPACT STATEMENT 107 (2008), available at http://www.dec.ny.gov/docs/air-pdf/rggigeis.pdf.
196. See Regional Greenhouse Gas Initiative Stakeholder Meeting, Stakeholder Comments 17-18 (Mar. 12, 2007), available at http://www.mass.gov/ dep/air/climate/rggisum2.doc; Morgan Hansen, Emissions Trading: EU ETS, US Voluntary Market & Carbon Credit Projects as Offsets 21 (Apr. 2008) (unpublished Master's thesis, Duke University), available at http://dukespace.lib.duke.edu/dspace/bitstream/10161/549/1/MP-mbh15-a-200804. pdf.
197. 2 regulation. Id.
198. See id. at 45.
199. N.Y. INDEPENDENT SYSTEMS OPERATOR, 2008 RELIABILITY NEEDS ASSESSMENT SUPPORTING DOCUMENTS, AND LIST OF APPENDICES FOR THE 2008 COMPREHENSIVE RELIABILITY PLANNING PROCESS (2007), available at http://www.nyiso.com/public/webdocs/services/planning/reliability-assessments/ 2008-RNA-Supporting-FINAL-REPORT-12-12.pdf.
200. Id. at 1-26.
201. Id.;
202. see also Younger Aff. ¶¶ 28-29,47, 61 (2007) (on file with author).
203. See 42 U.S.C. § 7413(c) (2006) (authorizing criminal or civil penalties for violation of Clean Air Act).
204. COWART, supra note 178, at 3.
205. RGGI WORKING GROUP, supra note 22, at ES-1.
206. See CAL. ENERGY COMM'N, supra note 24, at 4 tbl.2 (showing California imports approximately 10% of its total electricity from out of state coal plants).
207. For more information on these projects, compiled by the Edison Electric Institute, see http://www.eei.org/industry-issues/energy-inrrastructure/ transmission/Trans-Project-A-D.pdfat4.
208. See REG'L GREENHOUSE GAS INITIATIVE, supra note 47.
209. Id.
210. Mary Powers, PSEG 'Leakage' Plan Would Cost New Jersey Ratepayers $50 Million Annually, Group Says, ELECTRIC UTIL. WEEK, July 14, 2008, at 8.
211. Id.
212. See id.
213. Lyn Corum, Los Angeles DPW Hires Goldman Sachs, JP Morgan, to Evaluate Divesture of Assets, ELECTRIC UTIL. WEEK, at 1.
214. Powers, supra note 193.
215. Id.
216. See Bolster, supra note 54, at 745 ("The resulting increase in cheaper, imported electricity will undermine the goal of the program because imported emissions will not count towards the region's emission limits even though they are directly associated with the region's electricity consumption.").
217. See infra Part III.B.
218. RGGI MOU, supra note 50, at 10.
219. Id. at 9.
220. The RGGI Emissions Leakage Staff Working Group issued a preliminary report on March 14, 2007 entitled POTENTIAL EMISSIONS LEAKAGE AND THE REGIONAL GREENHOUSE GAS INITIATIVE (RGGI): EVALUATING MARKET DYNAMICS, MONITORING OPTIONS, AND POSSIBLE MITIGATION MECHANISMS, supra note 22. This report lists options for addressing leakage, but does not assess the potential effectiveness of these options or analyze the potential impacts on energy prices, allowance prices, electric system reliability, or the economies of RGGI states as instructed in the MOV. Likewise, the New York RGGI Proposal is being proposed prior to design and development of the auction platform and structure. See infra Part V.
221. See RGGI WORKING GROUP, supra note 22.
222. Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440, 443 (1960).
223. Ark. Elec. Coop. Corp. v. Ark. Pub. Serv. Comm'n, 461 U.S. 375, 377 (1983) (citing Munn v. Illinois, 94 U.S. 113(1977)).
224. Id.
225. Fed. Energy Reg. Comm'n v. Mississippi, 456 U.S. 742, 757 (1982).
226. See Title II of the Public Utility Act of 1935, 74 Pub. L. 333, 49 Stat. 803, 838-863 (1935) (amending the Federal Power Act).
227. U.S. CONST, art. I, § 8, cl. 3.
228. Or. Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93, 98 (1995); accord H.P.. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 534-38 (1949); Cooley v. Bd. of Wardens, 53 U.S. (12 How.) 299 (1851).
229. See Maine v. Taylor, 477 U.S. 131, 137-38 (1986) (maintaining that the Commerce Clause limits, but does not forbid, state commercial legislation).
230. E.g., Reading R.R. Co. v. Pennsylvania, 82 U.S. (15 Wall.) 232, 279-80 (1872); Brown v. Maryland, 25 U.S. (12 Wheat.) 419, 448-49 (1827);
231. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 208 (1824).
232. New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273 (1988) (citing Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 270-273 (1984); H.P. Hood & Sons, 336 U.S. 525, 532-533 (1949).
233. Or. Waste Sys., 511 U.S. at 98 (citing Wyoming v. Oklahoma, 502 U.S. 437 (1992); Welton v. Missouri, 91 U.S. 275 (1876)).
234. See Hughes v. Oklahoma, 441 U.S. 322, 325-26 (1979) (noting that the Commerce Clause is intended to prevent "economic Balkanization" among the states, and recognizing that the Dormant Commerce Clause limits state regulation as much as federal regulation of commerce).
235. H. Jefferson Powell, The Oldest Question of Constitutional Law, 79 VA. L. REV. 633, 635 (1993).
236. STEVEN FERREY, ENVIRONMENTAL LAW: EXAMPLES & EXPLANATIONS 148-49 (4th ed. 2007).
237. Id.
238. The issue of bans or discouragement of interstate waste transport has been before the Supreme Court many times since 1978. See id. at 148-157.
239. C. & A. Carbone v. Town of Clarkstown, 511 U.S. 383, 402 (1994) (citing Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992); Maine v. Taylor, 477 U.S. 131, 138 (1986)).
240. Id. at 392 (citing Maine v. Taylor, 477 U.S. at 138).
241. See H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949); City of Philadelphia v. New Jersey, 437 U.S. 617 (1978) (finding a ban on interstate waste disposal in private facility impermissible);
242. West v. Kan. Natural Gas Co., 221 U.S. 229 (1911) (holding that an attempt by a state to prohibit export of natural gas discriminated against interstate commerce on such basis).
243. Or. Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93, 99 (1995).
244. See Hughes v. Oklahoma, 441 U.S. 322 (1979); City of Philadelphia, 437 U.S. 617; Dean Milk Co. v. City of Madison, 340 U.S. 349 (1951) (holding that the city must use a less discriminatory means of regulating the quality of milk sold and choose a nondiscriminatory method to effectuate such purpose).
245. See Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456 (1981) (holding that a Minnesota statute banning plastic milk containers as environmentally unacceptable served a legitimate purpose and was sustained, notwithstanding the fact that it promoted local industry at the expense of out-of-state industry).
246. Cf. Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (holding that the state may not restrict fruit packaging because the restriction was clearly imposed to protect local industry and burdened interstate commerce).
247. Or. Waste Sys., 511 U.S. at 99 (quoting Pike, 397 U.S. at 142 (1970)).
248. Clover Leaf Creamery, 449 U.S. at 473.
249. See, e.g., id.
250. See Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333 (1977).
251. City of Philadelphia v. New Jersey, 437 U.S. 617 (1978); W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994).
252. See Hughes v. Oklahoma, 441 U.S. 322 (1979) (invalidating a statute that placed no limit on the number of minnows that could be taken by licensed minnow dealers but forbade any person from leaving the state with more than three dozen minnows). In this case, the Supreme Court refined the City of Philadelphia v. New Jersey, 437 U.S. 617 (1978), per se test to accommodate potentially offensive laws that may not discriminate in construction, but have the practical effect of burdening out-of-state competitors. The Supreme Court articulated three inquiries: (1) whether the challenged statute regulates evenhandedly with only "incidental" effect on interstate commerce, or discriminates against interstate commerce either on its face or in practical effect, (2) whether the statute serves a legitimate local purpose; and, if so, (3) whether alternative means could also promote this local purpose without discriminating against interstate commerce. Id. at 336. This last inquiry is similar to the one articulated in Dean Milk Co. v. City of Madison, 340 U.S. 349 (1951), where the Court established the rule that even when a regulation is not facially discriminatory, it may not be constitutional if the practical effect of its application is discriminatory.
253. As to the doctrine of ripeness and exhaustion of administrative remedies regarding challenge of administrative regulations, see FERREY, supra note 218, at 57-60.
254. See Miller v. Ariz. Corp. Comm'n, No. CV-08-1096SA (Ariz, filed June 27, 2008), complaint available at http://www.goldwaterinstitute.org/ Common/Img/Miller%20v%20Arizona%20Corporation %20Commission.pdf (challenging a 2006 agency action where there was no specific RPS legislation in the state, but where rules for RPS had been approved by the Arizona Attorney General in 2007).
255. 512 U.S. 186(1994).
256. Id. at 199. The pricing order's "avowed purpose" was to enable Massachusetts dairy farmers to compete with lower cost out-of-state farmers. Id. at 194. The Massachusetts scheme was comprised of two parts. First, the state issued a regulatory pricing order requiring every milk dealer selling in Massachusetts, regardless of loci, to make a monthly "premium payment" into the "Massachusetts Dairy Equalization Fund." Id. at 190. The amount of such payments was determined by the amount of the individual dealer's "Class I" milk sales in Massachusetts. In other words, the extraction was a direct function of the quantity sold. See id. at 190-91 (articulating a formula for calculating payments). Second, the fund's proceeds were distributed monthly to Massachusetts milk producers. Id. at 191. Each Massachusetts producer received a share from the total fund equal to his or her proportionate share of the state's total production of raw milk. Id. Out-of-state milk dealers were regulatorily ineligible to receive funds. See id. at 190 n.4 (applying the order to only dealers within the Commonwealth). This disbursement operated as a state subsidy of in-state dairy farmers, the initial link in the milk production process, by a tax imposed on all wholesalers participating in the state market a subsequent link in the chain of commerce affecting this good. See id. at 194-96 (explaining how the tax impermissibly discriminated against out of state milk). By the time Massachusetts declared a "state of emergency" in early 1992, the number of dairy farms in the state had declined from approximately 850 in 1978 to approximately 380 in late 1991. See Ferrey, supra note 98, at 591 n.483 (noting the decline in the number of Massachusetts dairy farms).
257. Healy, 512 U.S. at 199. The state had argued that each component of the program was valid and therefore the sum of the parts must also be valid.
258. Id. at 201. The Healy Court observed that its "Commerce Clause jurisprudence is not so rigid as to be controlled by the form by which a State erects barriers to commerce. ⋯ [O]ur cases have eschewed formalism for a sensitive, case-by-case analysis of purposes and effects." Id.
259. Id. at 199.
260. Id. at 198.
261. Okla. Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. 175 (1995) (citing McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33 (1940) (upholding tax on coal shipped into the taxing state)), superseded by statute, ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (1995).
262. Id. at 188 (citing Goldberg v. Sweet, 488 U.S. 252 (1989)).
263. Id.
264. W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 198 (1994).
265. Id. at 199-200.
266. Id.
267. Id. at 202.
268. Id. (citing Brown v. Maryland, 25 U.S. 419, (12 Wheat.) 419, 444, 448 (1827)).
269. Id. at 207 n.20 (quoting Brief for Respondent at 40).
270. See, e.g., City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).
271. W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994).
272. Cf. City of Philadelphia, 437 U.S. at 625-27. In that case, although the statute was "cloaked in the fashionable garb of environmental protection," there had been no showing "that the very movement of waste into or through New Jersey endangers health." Id. at 626, 629.
273. Healy, 512 U.S. at 207 n.20 (quoting City of Philadelphia, 437 U.S. at 626-27) ("[W]hatever New Jersey's ultimate purpose, it may not be accomplished by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently.").
274. Id.
275. Id. at 194.
276. Id. The concurring opinion of Justice Scalia, joined by Justice Thomas, found the majority's opinion too extensive. Id. at 207 (Scalia, J., concurring). Justice Scalia distinguishes the Healy scenario of a non-discriminatory tax upon industry, the revenue from which is placed in a segregated fund and is disbursed as subsidies to in-state members of the industry, from a non-discriminatory tax on industry coupled with a subsidy for the in-state members of the industry funded directly from the state general revenues. Id. at 210-11 (Scalia, J. concurring) ("There are at least four possible devices that would enable a State to produce the economic effect that Massachusetts has produced here: (1) a discriminatory tax upon the industry, imposing a higher liability on out-of-state members than on their in-state competitors;
277. (2) a tax upon the industry that is nondiscriminatory in its assessment, but that has an 'exemption' or 'credit' for in-state members;
278. (3) a nondiscriminatory tax upon the industry, the revenues from which are placed into a segregated fund, which fund is disbursed as 'rebates' or 'subsidies' to instate members of the industry (the situation at issue in this case);
279. and (4) with or without nondiscriminatory taxation of the industry, a subsidy for the in-state members of the industry, funded from the State's general revenues ⋯. The issue before us in the present case is whether the third of these methodologies must fall. Although the question is close, I conclude it would not be a principled point at which to disembark from the negative-Commerce-Clause train. The only difference between methodology (2) (discriminatory 'exemption' from nondiscriminatory tax) and methodology (3) (discriminatory refund of nondiscriminatory tax) is that the money is taken and returned rather than simply left with the favored in-state taxpayer in the first place. The difference between (3) and (4), on the other hand, is the difference between assisting in-state industry through discriminatory taxation and assisting in-state industry by other means. I would therefore allow a State to subsidize its domestic industry so long as it does so from nondiscriminatory taxes that go into the State's general revenue fund.").
280. See C. & A. Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 394 (1994) (stating in dicta that the town could subsidize its solid waste processing facility through general taxes or municipal bonds); New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 278 (1988) ("Direct subsidization of domestic industry does not ordinarily run afoul of the Commerce Clause); S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 99 (1984) ("[T]he State could support its [timber] industry ⋯ by direct subsidy.").
281. Healy, 512 U.S. at 188, 191 n.5.
282. On average, about 50% of power ultimately sold proceeds through an interstate wholesale transaction prior to its retail sale. As recently as 1983, about 31.8% of all power arrived via a wholesale transaction. By the 1990s, this number had increased to 37%. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, §§ 8:3-8:4, tbl.8.5.
283. Healy, 512 U.S. at 195.
284. See id. at 195.
285. In Bacchus Imports. Ltd. v. Dias, 468 U.S. 263, 265 (1984), only a limited number of Hawaiian liquor producers were benefitted by the tax credit. The fact that other Hawaiian liquor dealers would be bearing the same discriminatory burden as out-of-state competitors did not protect the tax credit from constitutional attack. Id.
286. For example, some states regulate the certification and provision of legal and other services within a state, and may not afford equal status to professionals certified in or originating in a different state. See generally Ferrey, Inverting Choice, supra note 23, at 1865-1889.
287. For a discussion of the "goods" versus services distinction for electricity, see Ferrey, Inverting Choice, supra note 23; STEVEN FERREY, THE NEW RULES: A GUIDE TO ELECTRIC MARKET REGULATION ch.12 (2000). See generally Steven Ferrey, Defining Power: Electrons and the Law, 32 ENVTL. L. REP. NEWS & ANALYSIS 10038 (2000).
288. In several cases, FERC applied the U.C.C. rule or an equivalent, thus reinforcing its determination that electricity is a "good" for the purposes of law. See Commonwealth Elec. Co., 46 F.E.R.C. ¶ 61,253, ¶ 61,759 n.15 (1989); Village of Jackson Center, 91 F.E.R.C. ¶ 63,013, ¶ 65,123-124 (2000); Cent. 111. Pub. Serv. Co., 20 F.E.R.C. ¶ 61,043, ¶ 61,089 (1982); Golden Spread Elec. Coop., 40 F.E.R.C. ¶ 61,348, ¶ 62,047 (1987).
289. See Ferrey, Inverting Choice, supra note 23, at 1865-1888.
290. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 10:79.
291. See Ferrey, Inverting Choice, supra note 23, at 1865-1889.
292. S. Cal. Edison Co., 70 F.E.R.C. ¶ 61,215, ¶ 61,676 (1995).
293. FERC held that "regardless of whether the State regulatory authority determines avoided cost administratively, through competitive solicitation (bidding), or some combination thereof, it must in its process reflect prices available from all sources able to sell to the utility whose avoided cost is being determined. If the state is determining avoided cost by relying on a combination of benchmark and bidding procedures, as here, this means that the bidding cannot be limited to certain sellers (QFs); rather, it must be all-source bidding." Id. ¶ 61,677.
294. 455 U.S. 331(1982).
295. Id. at 336.
296. Id. at 339-40.
297. Power flows pursuant to Kirchoff's Law, at nearly the speed of light. See generally KirchofFs Laws (Aug. 10, 2004), http://cnx.org/content/ m0015/latest/. We have constructed a series of legal fictions that, for contractual, tort, and other commercial purposes, make assumptions about how electricity is transacted commercially. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 10.79; Ferrey, Inverting Choice, supra note 23, at 1843, 1908-14.
298. Compare City of Philadelphia v. New Jersey, 437 U.S. 617 (1978), Fort Gratiot Sanitary Landfill, Inc. v. Mich. Dep't of Natural Res., 504 U.S. 353 (1992), Or. Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93 (1995), and Chem. Waste Mgmt., Inc. v. Hunt, 504 U.S. 334 (1992) (keeping articles of commerce out of the region), with C. & A. Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994), and U. & I. Sanitation v. City of Columbus, 205 F.3d 1063 (8th Cir. 2000) (keeping articles of commerce in the region).
299. See discussion infra Part III.A regarding articulated objectives of certain states in RGGI regulation.
300. See, e.g., Pac. Gas & Elec. Co. v. State Energy Res. & Dev. Comm'n, 461 U.S. 190 (1983) (deferring to California's stated purpose of economic planning where a regulation appeared to have been enacted to block nuclear power based on health and safety impacts, which are exclusively within federal jurisdiction).
301. W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186 passim (1994). The purpose of the scheme "is to save an industry from collapse." Id. at 204 (quoting Brief for Respondent at 16).
302. Id. at 204 n.20 (quoting Brief for Respondent at 40).
303. Id.
304. City of Philadelphia v. New Jersey, 437 U.S. 617, 626-27 (1978);
305. see also C. & A. Carbone, Inc., v. Town of Clarkstown, 511 U.S. 383, 393 (1994) (holding that the town cannot "justify the flow-control ordinance as a way to steer solid waste away from out-of-town disposal sites that it might deem harmful to the environment. To do so would extend the town's police power beyond its jurisdictional bounds").
306. Healy, 512 U.S. at207 n.20.
307. Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 270 (1984); Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471 n.15 (1981).
308. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 10:87.
309. See F.E.R.C. Docket No. RM99-2-000, 89 F.E.R.C. ¶ 61,285 (1999).
310. In many states, utilities are compelled to provide a Standard Offer regulated electric supply for those customers who do not choose a competitive supplier, and a default service supply for those who lose or leave an alternative generation provider. Standard Offer service is scheduled to be no longer available after a multi-year transition period. See, e.g., the Massachusetts D.T.E. Order in Docket 96-100.
311. For a discussion of the California energy market debacle, see Steven Ferrey, The Eagles of Deregulation: The Role of the Courts in a Restructured Environment, 32 ENVTL. L. 297 (2002); Ferrey, supra note 131.
312. See ISAAC MOORE & JOHN H. ANDERSON, PAC. GAS & ELEC. CO., INTRODUCTION TO THE NEW CALIFORNIA POWER MARKET (1997); CAL. PUB. UTIL. CODE §§ 367(e)(2), 365(a) (West 2008). The scheduling coordinator provides a forum for market clearing sales. The Power Exchange is a special scheduling coordinator operating pursuant to orders approved by FERC, and under regulations promulgated by the California Public Utilities Commission and approved by FERC, that determines a minimum price per kilowatt hour (kWh), the market clearing price, for each hour of the day based on participants' initial bids.
313. Demand denominates the maximum quantity of energy delivered to a customer. A customer or retailer places demand bids into a scheduling coordinator indicating the quantity of energy that a participant wishes to buy during a particular time for a particular price. See 3 STEVEN FERREY, THE LAW OF INDEPENDENT POWER app. B (2008).
314. See Cal. Pub. Utils. Code § 335. The ISO is a state-created non-profit corporation that manages the utility-owned transmission grid. Creating ISOs gives operating control of the transmission system to an independent organization of the generating facilities using the network. The operating responsibilities of an ISO would include having final authority over the dispatch of generation, ensuring open access to the transmission grid, administering nondiscriminatory service tariffs subject to FERC jurisdiction, and maintaining compliance with reliability standards. F.E.R.C. Order 889, 18 C.F.R. Part 37 (1996); F.E.R.C. Docket No. RM96-11-000 (1996) (amending 18 C.F.R. Part 35). In most situations, utilities will retain ownership of existing transmission facilities while relinquishing operational power to the ISO.
315. See CAL. PUB. UTIL. CODE §§ 345-50.
316. See infra Part III.B for a detailed treatment of federal authority over wholesale power flows.
317. See infra Part III.B.
318. See Bolster, supra note 54, at 748 ("The LSE regulation imposes burdens on electricity crossing state lines only. Therefore it burdens out-of-state generators wishing to sell into the RGGI region, but does not itself impose the same burdens on in-state generators.").
319. 429 U.S. 318 (1977). The transfer tax applied to all sales and transfers, except those sales completed in New York. The exemption was designed to encourage sellers to work through New York brokers. See id. at 327-28 (describing purpose of transfer tax). The Court determined that the exemption would induce sellers to trade through New York brokers in order to reduce tax liability. Id. at 330-31. This incentive offended the Commerce Clause by "foreclosing] tax-neutral decisions." Id. at 331.
320. Maryland v. Louisiana, 451 U.S. 725 (1981). The Louisiana Legislature enacted a tax of $0.07 per thousand cubic feet on the "first use" of any natural gas imported into Louisiana that was not previously taxed by another state or the federal government. Id. at 731-32. The statute defined "first use" as selling, transporting, processing, treating, using in manufacturing, or "other ascertainable action." Id.
321. Or. Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93, 101, 102 (1995).
322. Id. at 102-03.
323. Id. at 103 (finding unsuccessful a resort to compensatory tax doctrine to save a state-imposed waste surcharge).
324. Id.
325. Id. (brackets in original).
326. See RGGI WORKING GROUP, supra note 22, at 11-25. Proposals for tracking imported electricity have been made, focusing on the extension of current tracking systems to establish historical baselines on import which would then be used to measure any increases in demand. Id.
327. 477 U.S. 131(1986).
328. Maine, v. Taylor, 477 U.S. 131, 151-52 (1986).
329. Id. at 151.
330. See Dean Milk Co. v. City of Madison, 340 U.S. 349 (1951) (holding that a state must pursue first reasonable nondiscriminatory regulatory alternatives); Fort Gratiot Sanitary Landfill, Inc. v. Mich. Dep't of Natural Res., 504 U.S. 353 (1992)
331. Taylor, 477 U.S at 151-52.
332. Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 815 (1976) (Stevens, J., concurring).
333. 127 S. Ct. at 1790, 1798 (2007).
334. See, e.g., C. & A. Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994). The sole difference between the two cases is that in United Haulers the waste handling facility in question was publicly owned, unlike the privately owned facility in Carbone. Four of the six Supreme Court Justices who comprised the majority in the United Haulers case clearly based their decision, at least in part, on a belief that regulations that are not motivated by economic discrimination (protecting local businesses) should be viewed with favor even if they have some effect on interstate commerce. United Haulers, 127 S. Ct. at 1797-98. Two Justices (Scalia and Thomas) go further and favor scrapping the entire doctrine entirely. Id. at 1798-99 (Scalia, J., concurring in part); id. at 1799 (Thomas, J., concurring in the judgement).
335. See Letter from Seth Kaplan, Dir. of Clean Energy and Climate Change Program, Conservation Law Found., to RGGI Commissioners, RGGI Staff Working Group, & RGGI Stakeholders (May 22, 2006), http://www.rggi.org/docs/ clf.pdf (noting potential for "leakage" affecting markets outside of RGGI states).
336. See New England Power Co. v. New Hampshire, 455 U.S. 331 (1982).
337. RGGI WORKING GROUP, supra note 22, at 55-56; see Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970); City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).
338. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).
339. Lisa Weinzimer, Schwarzenegger Advisor says States, Regions will Take Lead on Climate Program, ELECTRIC UTIL. WEEK, June 16, 2008, at 7.
340. See supra notes 77, 82-85 and accompanying text (discussing RGGI program design).
341. REG'L GREENHOUSE GAS INITIATIVE, supra note 47, at 1.
342. Id.
343. For a discussion of various power auction practices and theories, see generally FERREY, LAW of INDEPENDENT POWER, supra note 23, § 9.
344. For a discussion of the operation of some of these ISO regional energy control areas, see id. § 10.87.
345. N.Y. STATE DEP'T OF ENVTL. CONSERVATION, REVISED REGULATORY IMPACT STATEMENT ON CO2 BUDGET TRADING PROGRAM: 6 NYCRR PART 242, CO2 BUDGET TRAINING PROGRAM 43 (2008), available at http://www.dec.ny. gov/docs/air-pdf/242ris.pdf.
346. ISO NEW ENGLAND, INC., ISO NEW ENGLAND MANUAL fOR MARKET OPERATIONS: MANUAL M-ll passim (2008), available at http://www.isone.org/mlesjroceds/isone-rmls/m-ll-market-operations- revision-31-10-01-08.doc (taking effect October 1,2008).
347. Id.
348. FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 9.26.
349. Id. Since the final, highest price accepted from supplier bids during each hour of the day sets the price paid to all generators from whom power is purchased, id., this highest price is passed on in all costs paid for power during that hour as the marginal cost of supply as set by the ISO, regardless of the individual costs actually incurred by each supplier of power.
350. See AES & Dynegy, Comments on New York State Department of Environmental Conservation's Proposed 6 NYCRR Part 242, CO2 Budget Trading Program, Revisions to 6 NYCRR Part 200, Dec. 24, 2007, at 101 (on file with author) (noting impacts of RGGI proposal).
351. Lis352a Wood, Connecticut's AG Challenges Governor's Push to Channel Some RGGI Money to Ratepayers, ELECTRIC UTIL. WEEK, July 21,2008, at 8.
352. CAL. PUB. UTILS. COMM'N & CAL. ENERGY COMM'N, JOINT STAFF PAPER on OPTIONS FOR ALLOCATION of GREENHOUSE GAS ALLOWANCES IN THE ELECTRICITY SECTOR, R. 06-04-009, dec. 07-OIIP-01 (2008).
353. Lisa Weinzimer, Economy-Wide Draft GHG Plan Released by California Air Resources Board, ELECTRIC UTIL. WEEK, June 30, 2008, at 15.
354. See id. (noting that the California legislature has final authority over the plan).
355. Julie A. Fitch, Dir. of Policy and Planning, Cal. Pub. Utils. Comm'n, Address at the Joint Workshop of the California Public Utilities Commission and California Energy Commission: Context, Principles, and Key Questions for Allowance Allocation in the Electricity Sector (Apr. 21-22, 2008), available at http://docs.cpuc.ca.gov/Published/Graphics/82593.PDF (Attachment 15) (allocating allowances based on traditional emissions ensures that higher CO2 emission utilities are protected, while distribution based on load of electricity supplied favors lower CO2 emission utilities with surplus tradable allowances, while high carbon utilities do not receive allowances reflecting this reality).
356. Emissions Deepen over California Emissions-Allowance Plan, CARBON CONTROL NEWS, June 9, 2008, http://www.carboncontrolnews.com.
357. Id.
358. Id.
359. Pre-Workshop Comments of Dynegy on Allocation Issues at 8, Order Instituting Rulemaking to Implement the Commission's Procurement Incentive Framework and to Examine the Integration of Greenhouse Gas Emission Standards into Procurement Policies, R.06-04-009, D.07-07-018, 2007 Cal. P.U.C. LEXIS 330 (2007), available at http://docs.cpuc.ca.gov/efile/CM/ 75023.pdf.
360. KRISTIN GRENFELL, NATURAL RES. DEF. COUNSEL, MEMORANDUM TO CALIFORNIA AIR RESOURCES BOARD STAFF RE: NRDC COMMENTS ON ALLOWANCE ALLOCATION ISSUES (2008), available at http://www.arb.ca.gov/cc/scopingplan/pgmdesign-sp/meetings/031708/NRDC-comments- from-031708-Program-Design-Technical-Stakeholder-Workgroup-Meeting.pdf.
361. See generally Carolyn Whetzel, Western States Release Draft Policies for Allocating Emissions Alowances, 39 Env't Rep. (BNA) 702 (Apr. 11, 2008); Western Climate Initiative (2008), http://westernclimateinitiative. org/.
362. States for Preemption?, CARBON CONTROL NEWS, March 26, 2008.
363. Because the value of the allowances will be included as a cost in the generators' bids to supply electricity, the price of electricity will be the same whether the allowances are given away at no cost to generators or generators must purchase allowances. An allowance giveaway, therefore, means generators are able to substantially increase their revenues (and, hence, profits) under a program like RGGI because they pass on the cost of a commodity they obtained at no charge. This has been referred to as "excess revenues", and these excess revenues occur at the expense of electricity consumers. N.Y. STATE DEP'T OF ENVTL. Conservation, NOTICE OF PRE-PROPOSAL OF NEW YORK RGGI RULE (2006), available at http://www.dec.ny.gov/regulations/26450.html.
364. Id.
365. See CAL. ENERGY COMM'N, supra note 24, at 4 tbl.2 (2006) (showing the amount of electricity imported from out of state).
366. See generally comments filed with California Air Resource Board, available at http://www.arb.ca.gov/homepage.htm.
367. N.Y. COMP. CODES R. & REGS. tit. 6 § 242 (2008).
368. 2 EMISSIONS: A LONG-RANGE VIEW, 3 fig.3a (n.d.), http://www.netl.doe.gov/publications/proceedings/01/carbon-seq/lb2.pdf (depicting CO2 emissions from electricity and heat generation sectors in Annex II countries).
369. ROBERT STAVINS, THE BROOKINGS INSTITUTE, A U.S. CAP-AND-TRADE SYSTEM TO ADDRESS GLOBAL CLIMATE CHANGE 21 (2007) available at http://www.Brookings.edu/papers/ 2007/ 10climate-stavins.aspx.;
370. Heather Timmons, Data Leaks Shake Up Carbon Trade, N.Y. TIMES, May 16, 2006, at Cl.
371. Billy Pizer, Resources for the Future, Address at the Harvard University Kennedy School Electricity Policy Group, 47th Plenary Group Symposium (June 1, 2007) (quoting statistics developed by the MIT program on climate change).
372. Id.
373. See Bureau of Economic Analysis, National Economic Accounts (Nov. 25, 2008), available at http://www.bea.gov/national/index.htm#gdp ("current dollar and gross GDP"). The U.S. GDP was $13.8 trillion in 2007. Id. 1-2% of this amount, or $100-250 billion annually, would be the likely cost of auction of CO2 emission allowances.
374. 2).
375. Id.
376. Cash, supra note 63.
377. See generally FERREY, LAW OF INDEPENDENT POWER, supra note 23, §§ 2:5, 2:14 (discussing various prime mover technologies).
378. Id. § 2:5.
379. Id. § 10:37, at 10-249 to -250, nn.7-10.
380. The RGGI SWG is made up of representatives of the ten RGGI Northeast states which designed RGGI as a regional program for implementation by each state signatory to the RGGI MOU. Those states do not include Pennsylvania or West Virginia.
381. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, NOTICE OF PRE-PROPOSAL OF NEW YORK RGGI RULE (2006) available at http://www.dec.ny.gov/regulations/ 26450.html.
382. See infra Part III.C.
383. 461 U.S. 190, 216 (1983).
384. An Act to Provide for Control and Regulation of Public-Utility Holding Companies, and for Other Purposes (Federal Power Act), 74th Cong. ch. 687, 49 Stat. 803 (1935).
385. Snohomish County Pub. Util. Dist. No. 1 v. F.E.R.C, 471 F.3d 1053, 1066, (2006) aff'd in part and rev 'd in part sub nom. Morgan Stanley Capital Group, Inc. v. Pub. Util. Dist. No. 1, 128 S. Ct. 2733 (2008).
386. Id.
387. See City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624 (1973) (holding that the federal government occupied field of noise regulation for aircraft).
388. See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947); Hill v. Florida ex rel. Watson, 325 U.S. 538, 541-12 (1945); Rombom v. United Air Lines, Inc., 867 F.Supp. 214 (S.D.N.Y. 1994) (holding that state law can not stand as an obstacle to accomplishment and execution of the full purposes and objectives of Congress).
389. See Granite Rock Co. v. Cal. Coastal Comm'n, 480 U.S. 572 (1987), rev'g 768 F.2d 1077 (9th Cir. 1985).
390. See N.Y. State Dep't of Social Servs. v. Dublino, 413 U.S. 405 (1973) (no preemption where complementary state and federal statutes); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.S. 117 (1973) (state policy allowed absent conflict with federal scheme). For some courts, even where the federal act is pervasive, local regulation is permitted. See Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440 (1960).
391. 16 U.S.C. § 824(d) (2006).
392. Id. § 824(a)-(b).
393. See FERREY, supra note 218, at 548.
394. N. States Power Co. v. Minn. Pub. Utils. Comm'n, 344 N.W.2d 374, 378 (Minn. 1984), cert, denied, 467 U.S. 1256 (1984).
395. See Conn. Light & Power Co. v. Fed. Power Comm'n, 324 U.S. 515 (1945); City of Batavia v. Fed. Energy Reg. Comm'n, 672 F.2d 64, 68 n.2 (1982) (FERC regulates wholesale transactions; states regulate retail transactions).
396. 16 U.S.C. § 824(c) (2006).
397. The burden is on FERC to assert and prove jurisdiction. Fla. Power & Light Co. v. Fed. Power Comm'n, 430 F.2d 1377 (5th Cir. 1970), rev'don other grounds, 404 U.S. 453 (1972).
398. Jersey Cent. Power & Light Co. v. Fed. Power Comm'n, 319 U.S. 61, 70-72 (1943).
399. Fed. Power Comm'n v. S. Cal. Edison Co., 376 U.S. 205 (1964); Ark. Power & Light Co. v. Fed. Power Comm'n, 368 F.2d 376 (8th Cir. 1966).
400. United States v. Pub. Utils. Comm'n, 345 U.S. 295 (1953); Cincinnati Gas & Elec. Co. v. Fed. Power Comm'n, 376 F.2d 506 (6th Cir. 1967), cert, denied, 389 U.S. 842 (1967); Pub. Serv. Co. of Ind. v. Fed. Power Comm'n, 375 F.2d 100, 104 (7th Cir. 1967).
401. Jersey Cent., 319 U.S. at 70 n.9 (quoting Federal Power Act of 1935, § 210(b) (1935) Pub. L. No. 74-333, 49 Stat. 847).
402. 16 U.S.C. § 824(c) (2006).
403. Fed. Power Comm'n v. Florida Power & Light Co., 404 U.S. 453 (1972).
404. In Federal Power Commission v. Florida Power & Light Co., 404 U.S. 453 (1972), the Supreme Court made clear that federal jurisdiction attaches even if the utility has no direct connection with another utility outside the state but is interconnected with another utility that in turn has interstate connections with other utilities.
405. Appalachian Power Co. v. Pub. Serv. Comm'n, 630 F. Supp. 656 (S.D. W. Va. 1986), aff'd, 812 F.2d 898 (4th Cir. 1987).
406. Hartford Elec. Light Co. v. Fed. Power Comm'n, 131 F.2d 953, cert, denied, 319 U.S. 741 (1943).
407. Id.
408. See supra Part II.A-B.
409. Snohomish County Pub. Util. Dist. No. 1 v. F.E.R.C, 471 F.3d 1053, 1066, (2006) aff'd in part and rev'd in part sub nom. Morgan Stanley Capital Group, Inc. v. Pub. Util. Dist. No. 1, 128 S. Ct. 2733 (2008); Entergy Louisiana, Inc., v. La. Pub. Serv.Comm'n, 539 U.S. 39 (2003).
410. E.g., Ark. Power & Light Co. v. Fed. Power Comm'n, 368 F.2d 376 (8th Cir. 1966); Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953 (1986); New England Power Co. v. New Hampshire, 455 U.S. 331 (1982).
411. In re Sinclair Mach. Prods., Inc., 498 A.2d 696, 706 (N.H. 1985).
412. However, the Supreme Court has determined that Congress, in enacting the Federal Power Act, intended to vest exclusive jurisdiction in the FERC to regulate interstate wholesale utility rates. Fed. Power Comm'n v. S. Cal. Edison Co., 376 U.S. 205, 216 (1964); Narragansett Elec. Co. v. Burke, 381 A.2d 1358, 1361 (R.I. 1977) (federal preemption of state discretion on retail rate pass-through of wholesale rated established pursuant to federal jurisdiction), cert, denied, 435 U.S. 972 (1978), superseded by statute, Utility Restructuring Act, R.I. Gen. Laws § 39-1-27 (1996), as recognized in Narragansett Elec. Co. v. Pub. Utils. Comm'n, 773 A.2d 237 (2001);
413. Spence v. Smyth, 686 P.2d 597, 600 (Wyo. 1984) (citing N. States Power Co. v. Hagen, 314 N.W.2d 32, 38 (1981)). A state court in Pennsylvania developed the so-called "Pike County" exception, allowing states to review the prudence of utility wholesale purchases or allocations and deny pass-through of FERC-approved wholesale costs. Pike County Light & Power Co. v. Pa. Pub. Util. Comm'n, 465 A.2d 735 (Pa. Commw. Ct. 1983).
414. See Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 963 (1986) ("This Court has held that the filed rate doctrine applies not only to the federal-court review at issue in Montana-Dakota, but also to decisions of state courts."); Miss. Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 372 (1988) (holding that the filed rate doctrine applies without exception to state regulation of interstate holding companies);
415. Entergy La., Inc., v. La. Pub. Serv. Comm'n, 539 U.S. 39 (2003) (holding that no residual prudency power of the states can alter a federal rate or term).
416. See supra note 371 for an explanation of the Pike County prudency theory.
417. See Entergy La., Inc. v. La. Pub. Serv. Comm'n, 539 U.S. 39, 46 (2003) (holding federal energy regulation preempts state commission of public service).
418. Pike County, 465 A.2d at 738.
419. Entergy Louisiana, 539 U.S. 39. This case involved a long-running battle between the Louisiana PUC and Entergy, an integrated multi-state electric utility holding company operating in four southern states, whose in-state LSE retail affiliate purchased wholesale power from affiliated wholesale suppliers and then "equalized" payments among its state LSEs to compensate those who supplied the most capacity. Paying for this capacity through equalization payments under the FERC-approved tariff, especially when those payments flowed out of state to affiliates, was contested. This allocation scheme was approved by FERC but was viewed by the Louisiana PUC to unfairly burden the Louisiana retail affiliate LSE and its ratepayers with excess above-market wholesale costs. Because of the Filed Rate Doctrine, the PUC was forced to pass on the federally approved wholesale costs in local retail rates. It challenged the prudency of the Louisiana LSE electing to purchase power from its affiliated (higher cost) supplier with embedded excess capacity.
420. Id. at 49-50.
421. Id.
422. Id. at 47, 50. Regarding the effort of the state to attempt to disallow as imprudent a particular element that the FERC tariff did not specifically address, the Court unanimously held: "FERC-mandated cost allocations could not be second-guessed by state regulators," and continued, "[i]t matters not whether FERC has spoken ⋯ but only whether the FERC tariff dictates how and by whom that classification should be made." Id.
423. Indep. Energy Producers Ass'n v. Cal. Pub. Utils. Comm'n, 36 F.3d 848 (9th Cir. 1994) (finding no separate basis for the state PUC to act to establish a premium price for renewable low-carbon power projects).
424. Id. at 858.
425. S. Cal. Edison Co., 70 F.E.R.C. ¶ 61,215 (1995) (holding that the costs of renewable energy not to exceed the market or bid price of all other sources of energy makes ratepayers indifferent as to the procurement of wholesale power), requests for reconsideration denied, 71 F.E.R.C. ¶ 61,269 (1995). California LSEs, inter alia, had picked the most favorable renewable power bids from QFs, even where those renewable price bids were in excess of the avoided cost of wholesale power supplied by other eligible non-renewable independent power project bidders. While this case involved renewable QFs operating as beneficiaries of the PURPA purchasing requirements, PURPA is an amendment to, and an integral part of, the Federal Power Act. The Filed Rate Doctrine and Supremacy Clause federally preempt state authority on PURPA rates and terms to the same degree that they affect non-PURPA transactions. The state regulation at issue, which promoted certain types of renewable fuels for power supply by allowing for a price premium above and beyond the FERC-established avoided cost price established by all wholesale power transactions, was held preempted by the Federal Power Act and stricken. Under FERC precedent, a state cannot set market-clearing prices for renewable electric power supply sources at a higher price than non-renewable supply sources. Id.
426. See Miss. Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 372 (1988).
427. See, e.g., ISO-NE FERC Form 1 tariff, available at http://www.isone.org/regulatory/ferc/orders/index.html (reliability must-run (RMR) designations exist for a limited number of generation plants in ISO-NE which occupy an essential geographic location and ability to deliver power to high-load centers);
428. see also ISO New England Inc., Market Rule 1: Standard Market Design, FERC Electric Tariff No. 3, §§ III. 1.7.6, HI.1.10.8, III.1.15.5, III. 10 (2006), available at http://www.isone.org/regulatory/tariff/sect-3/ 08-11-7-mrl-sect-l-12.pdf.
429. Fed. Power Comm'n v. S. Cal. Edison Co., 376 U.S. 205, 215-16 (1964).
430. Id.
431. Note that the ROOI auction is not akin to an application or annual compliance fee imposed by the state environmental regulatory agency on all generators. The ROOI auction imposes a fee that is a function of differential operation attributes that vary depending on the fossil fuel burned, as the CO2 emitted varies as a function of the carbon content differences of different fossil fuels.; there is no history of any such environmental fees in the RGOI states.
432. See, e.g. Perez v. Campbell, 402 U.S. 637 (1971), superseded by statute, Act of Nov. 6, 1978, Pub. L. 95-598, 92 Stat. 2593.
433. See, e.g., Granite Rock Co. v. Cal. Coastal Comm'n, 768 F.2d 1077, 1083 (9th Cir. 1985), rev'don other grounds, 480 U.S. 572 (1987).
434. Entergy La., Inc., v. La. Pub. Serv. Comm'n, 539 U.S. 39 (2003).
435. The Supreme Court extends the filed rate doctrine generally to include most aspects of federal-state utility regulation: moreover, the filed rate doctrine is not limited to "rates" per se; "our inquiry is not at an end because the orders do not deal in terms with prices or volumes of purchases." N. Natural Gas Co. v. State Corp. Comm'n, 372 U.S. 84, 90-91 (1963); accord Nantahala Power & Light Co. v. Thomburg, 476 U.S. 953,966-67 (1986).
436. Nantahala Power, 476 U.S. 953; Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 371 (1988); accord Miss. Indus, v. Fed. Energy Reg. Comm'n, 808 F.2d 1525, 1535-49 (D.C. Cir. 1985), cert, denied, 484 U.S. 985 (1985).
437. See generally FERREY, LAW OF INDEPENDENT POWER, supra note 23, §§ 10:17.1 to 10:17.9.
438. Snohomish County Pub. Util. Dist. No. 1, 471 F.3d 1053, 1067 (9th Cir. 2006);
439. see also FERREY, LAW OF INDEPENDENT POWER, § 10:145, at 10-560 to -561.
440. Snohomish, 471 F.3d at 1067.
441. See, e.g., id.
442. See id. at 1066-67.
443. See supra Part II.A.
444. See CAL. PUB. UTILS. COMM'N, FINAL OPINION ON GREENHOUSE GAS REGULATORY STRATEGIES 21 (2008), available at http://docs.cpuc.ca.gov/word-pdf/AGENDA-DECISION/ 90810.pdf (noting recommendation of "first seller approach").
445. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 9.3.
446. See supra text accompanying notes 73-77 for a discussion of both U.S. and EU historic practices on fee emission and carbon allowance allocation.
447. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 10:87, at 10-406 (describing FERC-approved tariffs for ISO operations in these states).
448. See FERC Form 1 Tariff, supra note 390.
449. Gross Income Tax Div. v. Chicago Dist. Elec. Generating Corp., 139 N.E.2d 161, 124 (Ind. 1965); New England Power Co. v. New Hampshire, 455 U.S. 331, 340 (1982) (stating that intrastate sale of wholesale power is explicitly within FERC's jurisdiction under the FPA);
450. accord Consol. Edison Co. v. Pub. Service Comm'n, 472 N.E.2d 981, 987 (N.Y. 1984) (stating that the FPA was specifically enacted in part to fill the regulatory "gap" left by Public Utilities Commission v. Attleboro, 273 U.S. 83 (1927), regarding intrastate wholesale sale of electricity).
451. See CAL. PUB. UTILS. COMM'N, INTERIM OPINION ON GREENHOUSE GAS REGULATORY STRATEGIES 60-61 (2008), available at http://docs.cpuc.ca.gov/efile/PD/78643.pdf (noting intention of regulation and unintentional consequences).
452. See Miller v. Ariz. Corp. Comm'n, No. CV-08-1096SA (Ariz, filed June 27, 2008), complaint available at http://www.goldwaterinstitute.org/ Common/Img/Miller%20v%20Arizona%20Corporation %20Commission.pdf (challenging 2006 agency action where there was no specific RPS legislation in the state, but rules approved by Arizona Attorney General in 2007).
453. See generally Ferrey, Inverting Choice, supra note 23, at 1908-09.
454. See FERREY, LAW OF INDEPENDENT POWER, supra note 23, § 10:79.
455. See S. Cal. Edison Co., 70 F.E.R.C. ¶¶ 61,215,61,676-77 (1995).
456. Pac. Gas & Elec. Co. v. State Energy Res. Conservation and Dev. Comm'n, 461 U.S. 190 (1983) (upholding the Warren-Alquist Act).
457. Consol. Edison Co. v. Pub. Serv. Comm'n, 472 N.E.2d 981,987 (N.Y. 1984).
458. S. Cal. Edison Co., 70 F.E.R.C. ¶¶ 61,215, 61,676 (1995). FERC goes on to note that "[i]n setting an avoided cost rate, a state may account for environmental costs of all fuel sources included in an all-source determination of avoided cost." Id. FERC also notes that the costs imposed in such evaluations must be only actual costs incurred by the utility buyer of the power. Id. ¶ 61,676. Therefore, environmental "adders" or "subtracters" must be based on real environmental externality costs, substantiated on a record before the state regulatory agency. See id. An addition or decrement could be used to factor in environmental externalities of costs imposed by the emissions from the combustion of certain types of fuel, so as to monetize the full impact of environmental costs.
459. Id. This case involved a QF selling to a utility. Id. ¶ 61,666-67. In this opinion, FERC articulated that if the seller was not a QF under PURPA, the sale would still be under FERC's jurisdiction based on the exclusive authority given to FERC under the Federal Power Act. See id. ¶ 61,675-77 (discussing FERC jurisdiction).
460. See Shaffer v. Heitner, 433 U.S. 186, 197 (1977) ("[A]ny attempt 'directly' to assert extraterritorial jurisdiction over persons or property would offend sister States and exceed the inherent limits of the State's power."); C. & A. Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 392-93 (1994);
461. Cf. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935) (invalidating New York prohibition on cheaper out-of-state milk being sold in state for less than New York minimum price, thus discriminating against the competitive advantage of foreign producers).
462. See U.S. CONST, art. I, § 10, cl. 3.
463. Carothers, supra note 174, at 242 (citing JOSEPH F. ZIMMERMAN, INTERSTATE COOPERATION: COMPACTS AND ADMINISTRATIVE AGREEMENTS 40,43 (2002)).
464. See id. at 241 (referencing Patricia S. Florestano, Past and Present Utilization of Interstate Compacts in the United States, 24 PUBLIUS 19 (1994)).
465. See WILLIAM KEVIN VOIT & Gary NITTING, COUNCIL of STATE GOV'TS, INTERSTATE COMPACTS & agencies 1998 (1999).
466. Applicability of the Compact Clause to Use of Multiple State Entities Under the Water Resources Planning Act, 4B U.S. Op. Off. Legal Counsel 828 (1980), 1980 WL 20996.
467. Carothers, supra note 174, at 250 ("The presence of an overarching administrative body assisting in the implementation and monitoring of compliance with the plan suggests binding terms more akin to a compact than an agreement ⋯. [g]iven ⋯ the complex nature of the RGGI, it is not likely to escape characterization as a compact by merely posing as a 'Memorandum of Understanding.'").
468. Columbia River Gorge United-Protecting People & Prop. v. Yuetter, 960 F.2d 110, 114 (9th Cir. 1992) (holding that the compact between Oregon and Washington did not violate the Compact Clause because it had the conditional consent of Congress due to an express condition in a federal statute that the compact had to model the terms from that same federal statute).
469. Carothers, supra note 174, at 251 (citing MARIAN E. RlDGEWAY, INTERSTATE COMPACTS: A QUESTION OF FEDERALISM 19,20 (1971)).
470. Fisher v. Carroll, 375 F. Supp. 2d 385,394 n.13 (D. Del. 2005).
471. 434 U.S. 456, 458 (1978) (stating that the purposes of the MTC were "(1) facilitating proper determination of state and local tax liability of multistate taxpayers ⋯ ; (2) promoting uniformity and compatibility in state tax systems; (3) facilitating taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration; and (4) avoiding duplicative taxation").
472. Id. at 458.
473. See id. at 473-477 (following Virginia v. Tennessee, 148 U.S. 503 (1893)).
474. Id. at 457.
475. Id.
476. Id. The dissent, as well as the reaction of many scholars to the decision, voiced concern that the Court was putting too much emphasis on actual threats to the federal power, as opposed to potential threats. Id. at 480-481 (White, J., dissenting);
477. see also Michael S. Greve, Compacts, Cartels, and Congressional Consent, 68 Mo. L. REV. 285, 307-17 (2003).
478. See Ne. Bancorp, Inc. v. Bd. of Governors of the Fed. Reserve Sys., 472 U.S. 159, 175 (1985).
479. See RGGI MOU, supra note 50, at 9.
480. See id.
481. See United States Steel, 434 U.S. at 477-79.
482. U.S. CONST, art. 1, § 8, cl. 3 (exclusive federal power to regulate commerce with foreign nations); see, e.g., Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 380-81 (2000) (finding that a Massachusetts state act restricting trade with Burma was preempted by a federal act that gave Congressional power over commerce with Burma to the President);
483. Nat'l Foreign Trade Council v. Giannoulias, 523 F. Supp. 2d 731, 747-50 (N.D. 111. 2007) (finding that an Illinois state act limiting trade with Sudan was found unconstitutional under Article I, section 8, clause 3).
484. In November 2007, six participating Midwestern states and Manitoba, Canada province, executed a regional greenhouse gas emission reduction strategy. This included Minnesota, Illinois, Indiana, Iowa, Michigan, Kansas, Ohio, South Dakota, Wisconsin, and Manitoba and Ontario. Three of these nine states are observing rather than participating initially. The group worked to develop a cap-and-trade carbon program in 2008 for implementation in 2010. This accord will not set a specific target but will attempt to cut emissions by 2020.
485. In a regional effort to address climate change, the governors of Oregon, Washington, California, Arizona, New Mexico, and Utah, as well as the premiers of British Columbia, Manitoba, Quebec, and Ontario signed an agreement establishing the Western Climate Initiative. The original agreement was signed in February 2007 by Governors of Arizona, California, New Mexico, Oregon, and Washington. In May 2007, the state of Utah and the Canadian provinces of British Columbia and Manitoba joined. The states of Kansas, Colorado, Wyoming and Nevada, the Canadian provinces of Ontario, Quebec and Saskatchewan and one Mexican state, Sonora, will participate in WCI as observers. See Cathy Cash, Western Region Plan to Reduce GHG Emissions has Energy Suppliers Waiting for Specifics, ELECTRIC UTILITY WEEK 20 (Aug. 27, 2007);
486. see also http://www.westernclimateinitiative-org.
487. Most RGGI states are enacting legislation to authorize, although many do it as an afterthought. For example, Massachusetts announced it was joining RGGI in late 2006, but only enacted legislation encompassing RGGI in mid 2008. S.B. 2768, 2008 Mass. Leg. Serv. 169 (West).
488. AES & Dynegy, supra note 316, at 5.
489. The RGGI MOU was subsequently amended on August 8, 2006. See generally REG'L GREENHOUSE GAS INITIATIVE, AMENDMENT TO MEMORANDUM OF UNDERSTANDING (2006) (amending 2005 MOU), http://rggi.org/docs/mou-8-8-06.pdf.
490. First RGGI Allowance Auction May Trigger Coal Industry Lawsuits, CARBON CONTROL News, July 21, 2008.
491. Id.
492. Id. at 5.
493. Health Servs. Med. Corp. of C.N.Y., Inc. v. Chassin, 668 N.Y.S.2d 1006, 1009-10 (Sup. Ct. 1998) (quoting Radio Common Carriers of N.Y., Inc. v. New York, 601 N.Y.S.2d 513, 517 (Sup. Ct. 1993)).
494. Id. at 1010 (quoting In re Torsoe Bros. Constr. Corp. v. Bd. of Trustees, 375 N.Y.S.2d 612, 617 (N.Y. App. Div. 1975));
495. see also Mobil Oil Corp. v. Town of Huntington, 380 N.Y.S.2d 466, 474 (Sup. Ct. 1975) (The amount of a fee "must be such ⋯ as will legitimately assist in regulation of the business or occupation, and it should not exceed the necessary or probable expense of issuing the license and of inspecting and regulating the business which it covers.").
496. See AES & Dynegy, supra note 316, at 5, 36 ("[T]he present value of New York RGGI revenues would [be] about $3 billion, while the present value of the New York RGGI administrative costs would be about $320 million.") (quoting accompanying affidavit of Dr. Harrison).
497. Dispute over California Carbon-Fee Authority May Spur Legal Fight, CARBON CONTROL NEWS, July 21, 2008.
498. Id.
499. See Divisions Deepen Over California Ghg Emission-Allowance Plan, CARBON CONTROL NEWS, June 9, 2008 (noting Sempra objections over legality of redistribution).
500. See AES & DYNEGY, supra note 316, at 6 (arguing RGGI proposal does not comply with applicable New York law).
501. 2 allowances) to other governmental entities for ultimate issuance or sale. Also, NYSDEC is not authorized by the provisions of the State Administrative Procedures Act ("SAPA") and the Uniform Procedures Act ("UPA") to issue licenses/permits to NYSERDA for ultimate sale to the highest bidder." Id.
502. New Hampshire will return amounts over $6/ton to consumers and Connecticut's governor plans to return a percentage of revenues above $5/ton to consumers as rebates, even though the Connecticut Attorney General has ruled this illegal under state law. RGGI Effect is Beyond Mandates, Brings Wave of Changes to New England Energy Policy, ELECTRIC UTIL. WEEK, Sept. 1, 2008, at 1. The EIA documents that New England already has the country's highest electricity rates, with Connecticut the highest rates in the continental U.S. Id.
503. See U.S. Steel Corp. v. Multistate Tax Comm'n 434 U.S. 452(1978).
504. See supra Part II.A.
505. See supra Part III.A.
506. See supra Part III.A.
507. See supra Part III.A.
508. See supra Part III.
509. See Dean Milk Co. v. City of Madison, 340 U S. 349 (1951) (a state must consider the least burdensome ways to accomplish its state interests); C. & A. Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994) (the financial purpose of a state is not sufficient justification for a commerce clause violation in state regulations).
510. See Ferrey, supra note 99, at 59-60.
511. See supra Part III.C.
512. See supra Part IV.
513. See McKibben, supra note 4, at 23 (citing Jim Hansen, The Threat to the Planet, N.Y. REV., July 13, 2006).
514. Id.
515. See, e.g., Miller v. Ariz. Corp. Comm'n, No. CV-08-1096SA (Ariz, filed June 27, 2008), complaint, available at http://www. goldwaterinstitute.org/Common/Img/Miller%20v%20Arizona% 20Corporation%20Commission.pdf.
516. Ferrey, supra note 99, at 54;
517. see also supra text accompanying note 98.
518. RGGI WORKING GROUP, supra note 22, at 56-57.
519. See Ferrey, supra note 99, at 53, 58-59.
520. Approximately eighteen states and the District of Columbia have partially or wholly deregulated electric power supply, where there is no guarantee of power sale by any wholesale entity. See DEP'T OF ENERGY, STATUS OF STATE ELECTRIC INDUSTRY RESTRUCTURING ACTIVITY (2003), available at http://www.eia.doe.gov/cneaf/electricity/chg-str/restructure.pdf.
521. The RGGI regulations target only power generation of 25 MW or larger. REG'L GREENHOUSE GAS INITIATIVE MODEL RULE § XX-1.4(a) (2007) available at http://www.rggi.org/docs/model-rule-corrected-l-5-07.pdf. California meanwhile plans to regulate all publicly owned electric utilities; see Cal. Energy Comm'n, SB 1368 Performance Emission Standards, http://www.energy.ca.gov/ emissionstandards/index.html (last visited Nov. 30, 2008) (describing regulation of public utilities).
522. See Regional Greenhouse Gas Initiative, http://www.rggi.org (last visited Nov. 30, 2008).
523. See e.g., EDISON ELECTRIC INSTITUTE, COMMENTS ON DRAFT REGIONAL GREENHOUSE GAS INITIATIVE MODEL RULE 4 (2006), available at http://www.rggi.org/docs/eei-ltr- comments.pdf (hypothesizing adverse affects of RGGI on system reliability, fuel diversity, capital investment and leakage).
524. x/ozone trading program, the allowances have been dispensed by the relevant government air regulators without changing for the quantity of allowances or credits possessed. See supra text accompanying note 73.
525. Weinzimer, supra note 305, at 7, 8. Curt Barry, First RGGI Allowance Auction may Trigger Coal Industry Lawsuits, CARBON CONTROL NEWS, July 21, 2008.
526. Challenge would be premature prior to implementation of final regulations. See Kleppe v. Sierra Club, 427 U.S. 390 (1976); FERREY, supra note 218, at 57-58 (pertaining to ripeness of action).
527. See Harvard Electric Policy Group, supra note 62, at 41. Note that the RGGI states have never indicated that they would remove RGGI if there were a federal carbon regulation program. Id. at 45.