Summary
The Ninth Circuit affirmed the district court's dismissal of PacifiCorp's complaint alleging that Washington's Climate Commitment Act violates the Dormant Commerce Clause by denying no-cost carbon allowances for electricity exported out-of-state. The panel held that in-state and exported electricity are not similarly situated because in-state power is subject to the state's Clean Energy Transformation Act, while exported power is not. Consequently, the regulatory distinction does not constitute unconstitutional discrimination against interstate commerce. The court also found PacifiCorp had standing and its claims were ripe, while a dissent argued the statute facially discriminates against interstate commerce.
Topics
Practice areas
Questions Presented
- Whether Washington's Climate Commitment Act, as applied, violates the Dormant Commerce Clause by facially discriminating against interstate electricity sales.
- Whether the district court's dismissal of PacifiCorp's complaint and its denial of a preliminary injunction were proper.
Holdings
- The district court's dismissal with prejudice was proper because PacifiCorp failed to plausibly allege that Washington's regulations discriminate against interstate commerce; the entities are not similarly situated.
- The denial was proper because the complaint was dismissed, leaving no live controversy; therefore the injunction request was moot.
Key quotations
“We affirm.”
“The district court correctly concluded that the CCA and CETA operate in tandem to reduce carbon emissions because: The CCA requires covered entities to buy allowances for carbon emissions, subject to a cap on allowances that decreases each year, so that market pressure will encourage those entities to decarbonize.”
Factual background
PacifiCorp is a multi‑state utility that operates the Chehalis gas‑fired plant in Washington. Washington enacted the Climate Commitment Act (CCA) and the Clean Energy Transformation Act (CETA). Under the CCA, utilities that are subject to CETA receive no‑cost allowances for emissions tied to in‑state electricity sales, but PacifiCorp does not receive such allowances for the portion of emissions attributable to electricity exported out of state. PacifiCorp alleges that this disparate treatment discriminates against interstate commerce.
Procedural history
The district court dismissed PacifiCorp's complaint under Rule 12(b)(6) for failure to plausibly allege a Dormant Commerce Clause violation and denied its motion for preliminary injunction as moot. PacifiCorp appealed.