Federal Judge: Michigan Renewable Energy Mandate Unconstitutional

Court battles over the Colorado and Minnesota renewable energy mandates could potentially mark the beginning of the end for similar laws in other states, including Michigan.

In June, Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit Court wrote that Michigan's in-state renewable energy mandate violates the Commerce Clause and is therefore unconstitutional. Judge Posner's statement did not have the weight of law because the issue wasn't directly before him. Nonetheless, many received it as a wake-up call and possible harbinger of things to come.

In 2008, the Michigan Legislature passed a law mandating that 10 percent of the state’s energy be produced by in-state renewable energy sources by 2015. This law was supposedly enacted to reduce greenhouse gas emissions. However, aspects of it appear inconsistent with that goal.

The law did not include monitoring requirements to test what effects, if any, the mandate actually has on emissions. Also, although there are several so-called renewable energy sources with wind energy the predominate source used to meet the mandate in Michigan. This has been so in spite of the fact that the federal government says Michigan is not well-suited for wind energy production.

If courts find that in-state renewable energy mandates violate the Commerce Clause, many think it would virtually kill wind energy in Michigan. Such a ruling would force Michigan's wind energy industry to compete on an open market. Wind energy cannot be produced efficiently in Michigan. As a result, without an in-state mandate, Michigan produced wind energy would simply lose out to cheaper energy produced from other sources or even by wind energy from some other states.

At the U.S. District Court in Colorado, the Energy & Environmental Legal Institute (E&E Legal) is arguing the same point Judge Posner made. At issue in the lawsuit, ATI v. Epel, is whether Colorado's 30 percent renewable energy mandate violates the Commerce Clause.

"The case against Colorado demonstrates that nearly every state's renewable energy mandate violates the Constitution's Commerce Clause." said David W. Schnare, general counsel for E&E Legal and lead attorney on the case. "A state may not tell an electric company outside its borders how to make electricity or how to make renewable energy credits.

"Once we prevail in Colorado, the first domino will have fallen and we expect to see state legislatures throughout the nation scrambling to find a Constitutional way to mandate renewables," he said. "They will not succeed, as the only way to do so and still remain within the Commerce Clause is to pass a federal mandate."

Some believe the U.S. District Court in Minnesota could be the first to rule that in-state renewable mandates violate the Commerce Clause. Two years ago, North Dakota filed a lawsuit, The State of North Dakota v. Swanson, over Minnesota's 25 percent renewable energy mandate, which was signed into law in 2007.

The Minnesota mandate law prohibits utilities serving Minnesota from importing energy from other states unless any additional carbon dioxide emissions are offset. North Dakota, which sits on the world's largest deposit of lignite coal, clearly has a great deal at stake in this case.

Attorneys for North Dakota argue that the Minnesota mandate violates the Commerce Clause. According to media accounts, they also claim the Minnesota law is just a "symbolic gesture" against global warming.