Follow the Money! Article I and Article VI constitutional barriers to renewable energy in the U.S. future

Abstract

When one "follows the money," the current Administration‘s economic stimulus funding injected unprecedented billions of dollars into new energy-related capital investments. In doing so, it endeavors to fundamentally re-sculpt the legal fabric and infrastructure of the U.S. economy in a once-in-a-generation change of watershed proportion. However, this re-sculpting is hitting fundamental constitutional barriers under Articles I and VI.

There is a jurisdictional barrier: Renewable energy investments, promoted primarily at the state level, confront real challenges pursuant to the Constitution‘s Supremacy Clause (Article VI) and Commerce Clause (Article I). Among the most litigated constitutional issues before the U.S. Supreme Court, these constitutional articles establish hard legal limits on what states can and cannot do by regulation. In addition, as states collaborate on renewable energy policy, the Compact Clause raises distinct constitutional limits.

Some states have ignored these constitutional limits in their regulatory requirements to promote the new renewable infrastructure. This article "follows the money" through the maze to identify the constitutional trip-wires. The article examines the array of the most employed regulatory methods by the fifty states – tax incentives, Renewable Portfolio Standards, feed-in tariffs, net metering, and direct renewable subsidies – to analyze which will and will not survive legal challenge and why.

Getting the legal metric correct at the state level is no small issue. No state statute or regulation on renewable energy can survive constitutional violation. In the past year, constitutional challenges to renewable infrastructure have occurred in five of the most sophisticated states – California, Massachusetts, New Jersey, Missouri, and New York. None of these states have prevailed in the first wave of these mounting legal confrontations over renewable energy programs.

This article takes apart the various infrastructure pieces and policies for renewable power in the states and examines the multi-faceted looming constitutional challenges. Popular renewable policy mechanisms for implementation of a new energy infrastructure confront constitutional perils that must be overcome. This outcome amid challenge will sculpt the energy future of the twenty-first century.