In a ruling issued July 13, 2015, the U.S. Court of Appeals for the Tenth Circuit affirmed the decision of the lower court dismissing the claim of the Energy and Environment Legal Institute (EELI) that Colorado’s renewable energy mandate, as approved by Colorado voters, violates the “dormant commerce clause” of the U.S. Constitution. The case is Energy and Environment Legal Institute, et al., v. Epel, Tarpey, Patton, Commissioners of the Colorado Public Utilities Commission.
A ballot initiative requires electricity generators to ensure that 20% of the electricity they sell in Colorado comes from renewable sources. An EELI member is an out-of-state coal producer that sells coal to Colorado electricity generators, and the Colorado law, it argues, reduces the demand for coal and limits the portion of the Colorado electricity-generation market it may serve. This harm to out-of-state coal producers will also limit its ability to sell to out-of-state utilities that feed their power into the grid serving Colorado and several other states, as well as portions of Canada and Colorado.
Under the “dormant commerce clause” doctrine, judges have claimed the authority to strike down state laws that unduly interfere with interstate commerce. EELI bases its argument on a 1935 Supreme Court ruling in Baldwin, et al., v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935). However, the Tenth Circuit points out that these commerce clause decisions, especially those on which EELI relies, concerned price controls, which are almost always declared to be illegal on a per se basis. The Tenth Circuit notes that the Colorado law is not a price control statute because it doesn’t discriminate against “out-of-staters” and, if anything, the Colorado law will raise prices for Colorado consumers. The Tenth Circuit If, as EELI argues, the law requires the rejection of any state law or regulation that controls out of state conduct as per se unconstitutional, then the courts would be obliged to strike down state health and safety regulations that affect the designs and labels used by out-of-state manufacturers, and since the Supreme Court hasn’t taken this step, neither will the Tenth Circuit.