A three-judge panel of the U.S. Court of Appeals for the Second Circuit on Friday lifted an injunction that had halted awards in a renewable energy solicitation in New England, according to the State Power Project, a website of the Harvard Law School’s Environmental Policy Initiative.
The injunction had halted the awarding of 460 MW of projects under the New England Clean Energy Request for Proposals, a solicitation conducted jointly by Connecticut, Massachusetts and Rhode Island.
Beyond the injunction, the case, Allco v Klee, which was filed against Connecticut’s Department of Energy and Environmental Protection, raised questions about whether or not state renewable energy solicitations infringe on federal law.
The Allco case raises two major questions: whether or not state-mandated RFPs for renewable energy are preempted by the Federal Power Act because they “compel” utilities to enter into contracts with specific generators, and whether or not a state’s renewable portfolio standard violates the dormant commerce clause of the Constitution because it requires that Renewable Energy Credits (RECs) used for compliance be associated with energy that is delivered into the New England region.
In questioning the plaintiff and defendant about whether Connecticut had compelled a wholesale power sale, the judges kept coming back to the fact, admitted by both sides, that the Federal Energy Regulatory Commission has final authority to regulate the rates selected under the RFP.
“It is not pre-emption if FERC could take action” even if they elect not to take that action, Judge Reena Raggi, said.
On the REC question, the judges sought to understand if there was any discrimination in the RFP against projects outside of the New England ISO and immediately abutting states. Their line of questioning asked whether Connecticut had added fees to extra-regional bids and whether extra-regional bids offered the same benefits as in-region bids.
The final question in the hearing regarding whether Allco has legal standing to bring the complaint. In broad terms, a party must be able to claim injury from an action to bring a case in court.
The judges asked whether Allco’s standing was statutory or constitutional. If it is constitutional, that issue would need to be resolved before the case could move forward. If it is statutory, the facts of the case could have a bearing on the question of standing.
Thomas Melone, president and chairman of Allco, told the court that his argument was constitutional.
“It might be better for you if it’s constitutional,” Judge Raggi said before bringing the hearing to a close.
There is no deadline for the court to make a decision.