The federal district court for the Western District of Washington ruled that neither an out-of-state company that alleged that it owned a Washington power plant through a chain of subsidiaries nor the in-state subsidiary that owned the power plant had standing for their constitutional challenges to the Washington Climate Commitment Act’s (CCA’s) allocation of greenhouse gas emissions allowances. The companies alleged that the CCA’s allocation of “no-cost” allowances to electric utilities but not to owners of electricity generating facilities violated the dormant Commerce Clause and the Equal Protection Clause. The court held that the parent company lacked standing for either claim because it did not own the power plant, while the subsidiary lack standing for the dormant Commerce Clause claim because, as an in-state entity, it could not allege an injury in fact. The court concluded, moreover, that their dormant Commerce Clause claims would fail even if the companies had standing because they failed to allege that the CCA discriminated against out-of-state economic interests on its face or in purpose or effect. In addition, the equal protection claim would fail because utilities and electricity generating facility owners are not similarly situated and because the different treatment of utilities and owners of electricity generating facilities was rationally related to the legitimate government purpose of mitigating the cost of electricity sold to public consumers.

Out-of-state power plant owner's challenge to the Washington’s Climate Commitment Act's allocation of no-cost greenhouse gas emissions allowances.

Invenergy Thermal LLC v. Watson

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Federal Court Dismissed Power Plant Owners’ Challenge to Washington Law’s Allocation of Emissions Allowances

Filed

United States of America

Washington

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Federal Court Dismissed Power Plant Owners’ Challenge to Washington Law’s Allocation of Emissions Allowances

Target

Policy instrument

Risk

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance