By Dr. David Schnare
General Counsel

In May, the U.S. District Court for Colorado cleared the path for appellate review by the U.S. Court of Appeals for the 10th Circuit of the question as to whether Colorado can force renewable energy producers in other states to meet Colorado regulations. The District Court decision is in stark contrast to a decision handed down only three weeks ago by the U.S. District Court for Minnesota. The decisions of the two courts are diametrically opposed. The U.S. Court of Appeals for the Ninth Circuit reflects this major split in the judiciary. In that case, heavily relied on by the Colorado District court, a two-to-one decision by a panel of the 9th Circuit received a vigorous dissent from seven other 9th Circuit judges.

The Colorado renewable energy mandate establishes renewable quotas that can only be met through generation that meets Colorado’s renewable energy definitions. While some of the renewable energy used in Colorado is produced in-state, much of it does not. To meet Colorado quotas, local electric utilities must purchase renewable energy “credits” that meet Colorado regulatory definitions. Since many of these credits must come from outside Colorado and are part of the interstate market for renewable energy credits, the Colorado regulations reach beyond state borders. The Colorado court held this was not “extraterritorial” regulation. The Minnesota Court held that it was. The Tenth Circuit will now have to decide whether it agrees with the Minnesota court’s decision or the Colorado court’s decision, whether it agrees with the two judges in the 9th Circuit Court of Appeals or the 7 judges in the 9th Circuit Court of Appeal. The seven judge dissent in the 9th Circuit argues that the two-judge decision reverses long-standing jurisprudence in not only the 9th Circuit but the law as decided by the Supreme Court. We believe the Supreme Court jurisprudence is correct and we plan to make that argument before the 10th Circuit.

The decision reaches no farther than the borders of Colorado and perhaps not even that far. Because the law on these questions is unsettled, all 30 states with similar regulatory quotas will watch with great attention what next happens in the appellate court.

As an environmental matter, the Colorado renewable energy mandate has had no meaningful impact on air quality within the State. Colorado met all National Ambient Air Quality Standards related to electricity production many years ago and the air has been safe to breathe ever since. The effect of the Colorado renewables quotas has no measureable effect on global warming or local weather or climate, at most it would prevent 0.0029 degree of warming.