347 Conn. 101
Conn.2023Background:
- Voluntary renewable offers (VROs) are retail electricity products that bundle supply with extra renewable energy certificates (RECs); RECs are tradable attributes (1 MWh) separate from the physical electricity.
- In October 2020 PURA adopted rules for VROs: a geographic restriction limiting eligible RECs to NEPOOL GIS, NYGATS, and PJM-GATS (a multi-state "permitted control area") and a marketing restriction requiring disclosure that REC-backed VROs are not themselves "renewable energy" unless supported by ownership or a power purchase agreement (PPA).
- Plaintiffs (retail electric suppliers) challenged PURA’s decision in Superior Court on dormant commerce clause, free speech, contract clause, and UAPA procedural grounds; the trial court upheld PURA.
- Connecticut Supreme Court applied the Pike balancing test and the Second Circuit’s Allco/Tracy framework to determine whether the restrictions discriminated against out-of-state commerce or imposed burdens clearly excessive relative to local benefits.
- The court affirmed: treated in-region RECs as functionally distinct for state policy purposes; both geographic and marketing restrictions survived Pike balancing; free speech and contract claims were not preserved before the agency; UAPA claims failed for lack of prejudice.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Geographic restriction — Dormant Commerce Clause | Geographic ban discriminates against out-of-region REC generators by denying access to CT VRO market | Restriction is nondiscriminatory; in-region RECs uniquely advance CT environmental/health goals; apply Pike balancing following Allco/Tracy | Pike test applies; in-region and out-of-region RECs not similarly situated; burden not clearly excessive; restriction upheld |
| Marketing restriction — Dormant Commerce Clause / regulatory conflict | Requirement conflicts with FTC guidance and other states, creating interstate regulatory burdens and inconsistent rules | Rule applies evenhandedly; no actual conflict with federal or other-state rules; any burden is incidental compliance cost | No substantial conflict shown; burdens not clearly excessive; upheld under Pike |
| Free speech and Contract Clause claims | Marketing disclosure requirement violates suppliers’ speech; restrictions disrupt existing automatic-renewal contracts | Claims were not raised before PURA; agency could address constitutional concerns; claims waived | Claims not raised administratively; prudentially not reviewed on appeal (waived / not preserved) |
| UAPA / Procedural due process | PURA relied on unsworn comments and outside scientific materials without adequate disclosure or opportunity to cross-examine | Statements were filed pre-hearing; parties could have sought witnesses or rebuttal; PURA also relied on witness testimony and prior decisions | Plaintiffs failed to show unlawful procedure or prejudice to substantial rights; UAPA challenge rejected |
Key Cases Cited
- Allco Finance Ltd. v. Klee, 861 F.3d 82 (2d Cir. 2017) (Second Circuit upheld regional REC limitation for RPS and applied Tracy framework to find in-region RECs distinct)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (U.S. 1970) (establishes balancing test for nondiscriminatory laws with incidental burdens on interstate commerce)
- General Motors Corp. v. Tracy, 519 U.S. 278 (U.S. 1997) (framework for deciding whether entities are similarly situated for dormant commerce clause analysis)
- National Pork Producers Council v. Ross, 143 S. Ct. 1142 (U.S. 2023) (recent Supreme Court guidance on dormant commerce clause and state regulation burdens)
- United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330 (U.S. 2007) (plurality: environmental/health benefits can justify laws with incidental burdens on interstate commerce)
- New York v. Federal Energy Regulatory Comm'n, 535 U.S. 1 (U.S. 2002) (states retain important regulatory authority over local utility matters)