Evolving Energy Federalism: Zero Emissions Credits and Opportunities in State Energy Policy


Matt Flaherty


Faculty editor: Tim Duane
Publication: Journal of Climate & Energy Law
Volume: 10
Start Page: 1
Month: August
Year: 2019
Type: Article
Subject Area: Environmental Law
Instititional Repository (IR) location of full article: https://digital.sandiego.edu/jcel/vol10/iss1/


Courts traditionally view regulation of the energy sector as a dual federalism framework in which a “bright line” separates sovereignty of the states from the power reserved to federal regulators. In particular, the Federal Power Act (FPA) grants the Federal Energy Regulatory Commission (FERC) authority over wholesale electricity markets. Courts generally interpret this authority over wholesale markets as exclusive, which ensures the federal government and states occupy different fields of the electric industry. States retain authority in fields that bookend FERC’s power over wholesale markets— electric power generation on one side and retail sales of electricity on the other…. Part II of this Article briefly reviews how the electric sector functions and its substantial evolution over the last few decades. Part III discusses the traditional dual federalism approach to regulation in the energy sector and how the 2016 Supreme Court decisions transitioned the regulatory scheme towards a cooperative federalism framework. Part IV analyzes the ZEC cases and addresses the lower and appellate courts’ rationales in Village of Old Mill Creek and Coalition for Competitive Electricity, with focus on the preemption analyses under EPSA and Hughes. Finally, Part V discusses implications of the 2016 Supreme Court cases, the ZEC cases, and recent FERC actions related to state policies designed to encourage new or clean power generation.