Constitutional questions about state-mandated renewable tariffs.
Steven Ferrey is professor of law at Suffolk University Law School, and has served as a primary legal advisor to the World Bank and to the U.N. on global warming and renewable energy policy in developing countries. Chad Laurent is a project consultant with Meister Consultants Group in Boston, and was manager of renewable energy programs at Massachusetts Energy Consumer Alliance. Cameron Ferrey is president of Computers Across Borders, a non-profit NGO distributing renewable energy-powered computers to schools in developing countries on three continents.
The attempt by many U.S. states to copy verbatim the European model of feed-in tariffs (FIT) to promote renewable power will not fit through the eye of the needle regarding requirements of the U.S. Constitution. Feed-in tariff rates are set by the state above the already-set mandatory federal wholesale price of energy and above avoided cost rate levels. With U.S. states now advancing FIT, Constitutional impediments will complicate the exercise of this state regulatory authority. As many as 10 states have introduced actual FIT legislation, while others are considering FIT policies: Arkansas, California, Florida, Hawaii, Illinois, Indiana, Iowa, Maine, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia and Washington.
The Supremacy Clause of the U.S. Constitution creates a legal barrier to certain state-mandated regulatory actions. The legal gauntlet already was thrown: Recently, the first legal challenge to state regulation of carbon emissions from power plants was filed and settled in favor of the challenger to the state of New York.
How U.S. courts decide challenges yet to come will determine whether feed-in tariffs become part of the American energy-policy landscape.