TransCanada renewable lawsuit scores a win in MA

TransCanada renewable lawsuit scores a win in MA

June 11, 2010 09:33

It’s only been about three months since TransCanada Power Marketing Ltd. sued the Massachusetts Department of Public Utilities (DPU), its commissioners, and several other Commonwealth agencies, claiming that Section 83 of the Green Communities Act discriminates against out-of-state renewable energy projects in violation of the U.S. Constitution, but the case has already scored a win for TransCanada.

This week, the DPU issued an emergency rule eliminating the in-state requirement from the regulation that mandates electric utilities buy their renewable energy from projects installed in Massachusetts or off-shore wind in the Cape Cod area.  The emergency rule came just 9 days after TransCanada filed a notice of dismissal “with prejudice” to drop its lawsuit against the three named individual commissioners of the DPU.

Renewable energy industry insiders were buzzing with talk about this case at the 17th Annual New England Energy Conference in Providence, RI, Monday and Tuesday.  Rumors had it that Commonwealth lawyers and officials were anxious to settle with TransCanada to make this case go away.  And so the emergency rule issued on June 9th takes a major step in that direction.  In fact, the Boston Herald observed this week that the Legislature apparently suspected this provision was unconstitutional when the Green Communities Act was enacted two years ago because the act allowed the DPU to specifically strike down the provision in the event of legal action to challenge it.

Without a court decision on the merits of the TransCanada case, however, the question remains how far a state can go in promoting in-state installations of renewable energy projects without running afoul of the Dormant Commerce Clause of the U.S. Constitution. Can a state survive a constitutional attack if it mandates in-state renewable installations in exchange for in-state qualifying renewable energy certificates?

While it’s possible the federal court in Massachusetts might get a chance to decide this issue as part of TransCanada’s pending motion for a preliminary injunction, I expect that the rest of the case will get settled quickly as well and the court will not get a chance to issue a decision on the merits.  We will likely have to wait another day for the courts to answer the constitutional questions presented by renewable carve-out provisions.

Climate Change | Legislation | Regulation | Renewable Energy

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