The U.S. Court of Appeals for the Seventh Circuit has struck down as unconstitutional Illinois' 1991 Coal Act, which required state utility regulators to develop pollution control plans aimed at maximizing the use of high-sulfur coal mined in the state. The Act also allowed scrubber costs associated with the use of high-sulfur coal to be passed through to ratepayers. The decision affirms a 1993 federal district court ruling.
The appeals court ruled that the Act denied low-sulfur coal suppliers the right to compete on an equal footing with instate producers, violating the Constitution's commerce clause. It rejected allegations that western coal suppliers needed to prove lost sales to substantiate their claim of bias. The court reasoned that lost sales are not required to show competitive injury and that evidence would be hard to produce in light of the Act's requirement that the utilities favor local suppliers from the compliance planning stage. The court also explained that the guaranteed pass-through of scrubber costs was equivalent to "minimum price fixing" for the benefit of local producers, held unconstitutional by the U. S. Supreme Court in earlier cases. Alliance for Clean Coal v. Miller et al., No. 94-1369, Jan. 9, 1994 (7th Cir.).
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