Tag Archives: Energy Law

William’s World: An Essay About the History of Just Price

Reading Professor William Boyd’s fine piece, Just Price, Public Utility, and the Long History of Economic Regulation in America, I couldn’t help but think of Jostein Gaardner’s international bestselling novel Sophie’s World. To be clear, there’s no teenage girl in Boyd’s essay receiving letters from a mysterious stranger that enlighten her on the history of philosophy (or, in Boyd’s case, economic regulation). But, like Gaardner, Boyd does an outstanding job of bringing to life and making accessible what many might otherwise consider a dense, perhaps even tedious subject matter—the history of price regulation. And unlike Gaardner, Boyd manages to do so with remarkably little sacrifice in breadth and depth of coverage.

Professor Boyd’s essay takes readers on an intriguing journey through time, tracing the doctrine of “just price” all the way back to the Aristotelian concept of corrective justice, devoted to preserving equality in exchange, commonly understood as an arithmetic proportion around a mean. From ancient Greece, readers are guided to medieval Italy where Thomas Aquinas and other Scholastics expanded Aristotle’s framing into the notion of commutative justice, a construct intended to encompass the full range of voluntary and involuntary interpersonal relationships, including but not limited to economic exchange. Continue reading "William’s World: An Essay About the History of Just Price"

Clean Electricity for the People by the People

Shelley Welton, Clean Electrification, 88 U. Colo. L. Rev. 571 (2017), available at SSRN.

Climate change has made the timely decarbonization of the electric grid a top priority for policymakers in the United States and across the globe. In the absence of a meaningful price on carbon, net metering, tax credits, and other incentive programs dominate the low-carbon policy landscape. Critics of clean energy incentives have long argued that government should not engage in the business of picking winners and losers among competing technologies. With her thoughtful article, Clean Electrification, Professor Shelley Welton reminds us that public policy support for a low-carbon energy economy has disparate impacts not only on technologies but also on ratepayers, utilities, and other stakeholders.

U.S. policymakers increasingly seek to enlist ratepayers in the war on carbon, harnessing technology innovation to turn previously passive electricity customers into active partners in grid decarbonization efforts. This vision of a “participatory grid” rests on smart appliances, rooftop solar, energy storage, and other technologies capable of empowering ratepayers to more actively manage their energy consumption, generation, and other grid interactions. Access to these technologies and, hence, to the benefits of active grid participation, however, comes at considerable cost raising concerns over the vision’s implications for distributional equity, as evidenced by “solar fairness” debates across the country. Continue reading "Clean Electricity for the People by the People"

Empowering Federal Regulation for a Changing Electricity Sector

Joel B. Eisen, FERC’s Expansive Authority to Transform the Electric Grid, 49 U.C. Davis L. Rev. 1783 (2016).

Today’s electricity sector has little in common with the industry’s humble origins in the late 1800s, when small power plants located every ten blocks or so served nearby customers through a local grid. Nor does it share many commonalities with the heavily regulated, largely monopolized electricity sector of the 1930s, whose interstate grid prompted passage of the 1935 Federal Power Act. And yet, this more than eighty-year-old statute continues to define the requirements and scope of federal and, indirectly, state regulatory authority over today’s electricity sector. As deregulation and competitive markets, the rise of renewable energy, smart metering, and demand response transform the way electricity is generated, traded, transmitted, and used, regulators and courts are struggling to apply the Federal Power Act to a changing industry.

Earlier this year, the Supreme Court offered its views when, in Federal Energy Regulatory Commission v. Electric Power Supply Association, the Court recognized federal authority to regulate wholesale market operators’ compensation of demand response—temporary reductions in electricity consumption by end-users at times of peak demand. In his thoughtful article FERC’s Expansive Authority to Transform the Electric Grid, Professor Joel B. Eisen places FERC v. EPSA in historical context, proposes a set of principles to guide FERC’s regulation of rules and practices that affect rates in wholesale power markets, and applies these principles to a hypothetical carbon price added to fossil-fueled electricity. Continue reading "Empowering Federal Regulation for a Changing Electricity Sector"

A Dormant Commerce Clause Approach to Interstate Electricity Transmission

Alexandra B. Klass & Jim Rossi, Revitalizing Dormant Commerce Clause Review for Interstate Coordination, 100 Minn. L. Rev. 129 (2015).

In a 2013 report, the American Society of Civil Engineers awarded the U.S. electricity grid the grade “D+” noting that aging components and limited maintenance contribute to a growing number of brownouts and blackouts. Indeed, the 450,000 miles of high-voltage transmission lines that connect America’s nearly 7,000 power plants with some 6 million miles of lower-voltage distribution networks are based on a grid architecture that dates back to the 1880s. The average transformer in the national power grid is 42 years old and, hence, two years past its projected useful life. Every year power outages cost the economy billions of dollars in lost output and wages, spoiled inventory, production delays, among others. Meanwhile, successful mitigation of global climate change urges the transition to a low-carbon energy economy fueled by solar, wind, and other renewables. But the best renewable resources are often located far from population centers, such as wind resources in the upper Midwest and Plains states or solar resources in the desert southwest. As a result, the U.S. electricity grid requires both modernization and expansion calling for $1 trillion of investment to maintain even current levels of grid reliability. In Revitalizing Dormant Commerce Clause Review for Interstate Coordination, professors Alexandra B. Klass and Jim Rossi take stock of the regulatory impediments to upgrading and expanding the electricity grid, and propose a fresh take on dormant Commerce Clause review to incentivize greater interstate coordination on long-distance transmission projects.

Notwithstanding the vast macroeconomic benefits of an upgraded and expanded electric grid, transmission lines remain highly unpopular and subject to strong “not-in-my-backyard” reactions – at the individual and institutional level alike. Drawing on a series of precedents, professors Klass and Rossi illustrate how states use their virtually exclusive authority over electric transmission line siting and eminent domain to block and, ultimately, defeat interstate transmission projects. “In the context of multi-jurisdictional energy infrastructure projects, a single state or local holdout can keep an infrastructure project from going forward.” Such regulatory holdouts are especially popular among “pass-through” states that often struggle to identify benefits to local constituents from transmission lines that originate and end out-of-state. In the words of Klass and Rossi, “interest group dynamic[s] along with many existing siting and eminent domain laws enable, and may even encourage, these kinds of state and local government holdouts.” Continue reading "A Dormant Commerce Clause Approach to Interstate Electricity Transmission"

A Story Well Told

Oliver A. Houck, The Reckoning: Oil and Gas Development in the Louisiana Coastal Zone, 28 Tul. Envtl. L.J. 185 (2015).

Professor Oliver Houck’s recent article, The Reckoning: Oil and Gas Development in the Louisiana Coastal Zone, is easily one of the best articles that I have read in the last ten years and should be required reading regardless of one’s specialty. I should admit that I am not an environmental law professor and the environmental law articles I ordinarily read are those that intersect with one of my primary research areas: Indian law. So I initially downloaded The Reckoning expecting that I would skim it quickly. But it is a remarkable article. Although on its face, the article tells a story of oil and gas development in the fragile wetlands of Louisiana’s coast, it also has lessons about political corruption and short-sightedness that extend far beyond the environmental destruction at the heart of the article.

Professor Houck convincingly argues that the state government and oil and gas interests are seen as essentially the same, so much so that Houck refers to them collectively simply as “the company.” Louisiana actively courted oil and natural gas development to such an extent that the very state entities tasked with protecting the coastal zone participated in the promotion of development above all else, even above reason. As the article shows, it would be inaccurate to say that the state became the puppet of corporate interests or that it rubber-stamped the web of canals that destroyed the wetlands because nearly every Louisiana institution was and is invested in the rush to please big energy. Problematically, the list of those involved in opening up the wetlands, in denying the connection between development and destruction, and in attempting to shift the restoration costs away from oil and gas companies and unto the American taxpayer includes not only the ironically named Louisiana Department of Natural Resources, which time and again saw itself as an industry partner, but also parish governments, state-university academics and centers, politicians at the federal, state, and local levels, and even major environmental groups. As Professor Houck shows, no part of the Louisiana coast has been spared from devastation caused by “the company,” yet “the company” is unwilling to take responsibility and has largely succeeded in avoiding the costs associated with such destruction. Continue reading "A Story Well Told"

Green Go! – The Military’s Sustainability Mission

­­Sarah E. Light, The Military-Environmental Complex, 55 B.C. L. Rev. 879 (2014).

“Green Go!” The U.S. battle cry in the Mexican-American War that, according to some etymologists, earned Americans their nickname as “gringos” offers a fitting description of the Department of Defense’s growing interest in sustainable energy generation and use. In The Military-Environmental Complex, Sarah E. Light takes stock of the military’s complicated, often conflicted relationship with environmental objectives and explores the drivers behind the armed forces’ recent promotion of sustainable energy. Building on the military-industrial complex’s history of fostering technology innovation while also enabling abusive rent-seeking, Light offers recommendations to ensure that the emerging military-environmental complex strikes a socially beneficial balance between mission objectives and broader environmental goals.

From an environmentalist perspective, the military’s many statutory and regulatory exemptions from environmental laws that conflict with its national security mission raise concerns that military and sustainability objectives are inherently at odds with one another. But Light makes a convincing case that both types of objectives may, in fact, be more aligned than is commonly recognized. Continue reading "Green Go! – The Military’s Sustainability Mission"

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