T H E GEORGE WA SHI NGTON U N I V ER SIT Y L AW SCHOOL
ENVIRONMENTAL AND ENERGY LAW
Perspectives
PROGRAM ESTABLISHED 1970
PERSPECTIVES
A Comparative Examination of Energy Federalism Constraints in the United States and Australia: What is Politically Feasible for the United States? Adrienne L. Thompson, LLM ‘16
FALL 2015 ISSUE PERSPECTIVES 1, 10–19 WHAT’S NEW 1, 15–16 FACULT Y AND STAFF PUBLICATIONS AND PRESENTATIONS 4–5 RECENT EVENTS 6–7 IN PRINT 7 PROFILES 8–9 UPCOMING EVENTS 10
WHAT’S NEW
GW Law Faculty File Amicus Brief in FERC Case
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any of us take electricity for granted. We expect the lights to turn on and power to flow at the flip of a switch, all at a reasonable monthly cost. This expectation that power should be cheap, abundant, and reliable is deeply embedded in U.S. energy law and policy; however, climate change, renewables integration, and aging infrastructure are all stressing the American electricity grid in unprecedented ways.
These problems span the entire system and will require a comprehensive, integrated set of solutions—no small feat in light of the bright lines separating federal and state jurisdictions. In striking the right balance between state and federal authority, it may be helpful to explore the federalism structures of other countries. One such model is that of Australia, which emphasizes national-level decision making, as opposed to diffuse continued on page 10
ssociate Dean for Public Engagement and Professor Emily Hammond and Professor Richard J. Pierce have filed an amicus brief in the upcoming Supreme Court case Electric Power Supply Association v. FERC, which was argued in October 2015. The case considers whether the Federal Energy Regulatory Commission (FERC) has the power to set uniform rules for demand response compensation in the wholesale electricity markets. The professors, along with their co-authors, argue that the D.C. Circuit improperly interpreted parts of the Federal Power Act when it ruled against FERC. The brief is available online at http://sblog. s3.amazonaws.com/wp-content/uploads/2015/07/ Energy-Law-Scholars-Br..pdf. n
WHAT’S NEW
WHAT’S NEW Comparative Energy Law Program with the University of Groningen
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W Law students participated in the fourth annual summer energy law program with students from the University of Groningen in the Netherlands. Associate Dean Lee Paddock and University of Groningen Professor Martha Roggenkamp oversee the program, which this year focused on distributed generation issues. In August, students from both schools participated in a week-long program in Groningen, which included lectures, field trips, and opportunities for GW Law and Groningen students to work together in teams on research projects. This fall, students in the program will work on papers exploring legal issues associated
Charles and Kathryn Miller Award for Outstanding Achievement in Environmental Law
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ach year, the Charles and Kathryn Miller Award recognizes a graduating student who has made a significant contribution to the environmental law program at GW. Among the factors considered are leadership in student organizations, commitment to environmental issues, and academic achievement. The winner of the 2015 Miller Award was Brittany DeBord. She was active in the Environmental Law
Students from GW Law and the University of Groningen enjoy a field trip to energy generation facilities during the summer energy law program in the Netherlands.
with “community solar” projects, connecting distributed generation facilities to the grid, the creation of microgrids, and the concept of “distribution service organizations.” The Groningen students will come to GW in May 2016 for additional classes and field trips. The program will close with presentations
Association during each of her three years at GW and served as the President of Environmental Law Association during her third year. She was also a member of GW’s Journal of Energy and Environmental Law, and in 2014-2015 she participated in the joint University of Groningen, Netherlands-GW Law summer energy law program. Always enthusiastic and energetic, Brittany left her mark on the environmental law program at GW. She is currently clerking for a judge in her home state of New Jersey. n
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by the GW-Groningen teams of their research work. For more information about the summer energy law program at the Univeristy of Groningen, please visit our web site: www.law.gwu.edu/gwl/ environmental. n
Energy Law Advisory Board Expands
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he Energy Law Advisory Board is pleased to welcome David Dulick, JD ‘78, General Counsel, Allegheny Electric Cooperative, Inc. and Noel W. Black, Vice President for Federal Regulatory Affairs, Southern Company as new board members. Dulick, Black, and other advisory board members (see Perspectives, Spring 2015 for a list of additional members) provide GW Law’s Sustainable Energy Initiative and its Energy Program with insights into current industry issues and provide important financial support to GW Law. For more information about GW Law’s energy focus, please visit: http:// www.law.gwu.edu/Academics/research_ centers/SEI/Pages/Overview.aspx. n
WHAT’S NEW
Sustainable Energy for All
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he Legal Aspects of Sustainable Energy for All Community of Practice (CoP), co-led by Associate Dean Lee Paddock and Professor Thoko Kaime of the University of Essex, England, has continued its work in developing support mechanisms related to the United Nations’ goal of universal access to energy. The UN has incorporated this goal into the Sustainable Development Goals, which were adopted at the UN Summit on the Post-2015 Development Agenda in
September 2015. Goal 7 calls for ensuring “access to affordable, reliable, sustainable and modern energy for all.” The CoP, a group of interested academics and practitioners, was organized under the World Bank’s Global Forum on Law, Justice, and Development within the Thematic Working Group on Environment and Natural Resources. The CoP, including Associate Dean Paddock and Visiting Associate Professor Nicholas Bryner, recently prepared a grant proposal that would allow many of its members to launch important work in support of the Sustainable Energy for All (SE4All) effort and the implementation of SDG 7. This work would focus on sub-Saharan and West Africa and
would address critical needs for knowledge collection, knowledge sharing, and capacity building regarding legal aspects of improving access to sustainable energy, including: • Research on capacity building needs • In-person and distance-learning capacity building programs • Development of law school class modules related to SE4All • Convening a meeting of bar associations to determine the feasibility of an international bar-to-bar support network for SE4All • Creation of a legal knowledge hub for SE4All n
IUCN Academy of Environmental Law Colloquium: Forests and Marine Biodiversity
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isiting Associate Professor of Law and Environmental Law Fellow Nicholas Bryner and Associate Dean Lee Paddock presented a paper on the implementation of the Lacey Act’s timber provisions at the 13th IUCN Academy of Environmental Law Colloquium held at the Atma Jaya Catholic University in Jakarta, Indonesia, in early September. Associate Dean Paddock also presented research on the Consumer Goods Forum’s “No Net Deforestation by 2020” goal. The Consumer Goods Forum is made up of more than 400 companies located in more than 70 countries with combined sales in excess of 2.5 billion euros that sell retail products, including companies such as Tesco, Unilever, Nestle, PepsiCo, Cargill, GlaxoSmithKline, and many others.
The no net deforestation goal and the accompanying company pledges to meet the goal are an interesting example of the potential influence of green supply chain requirements on achieving sustainability goals. n
Above: Professor Bryner and Associate Dean Paddock at the IUCN Academy of Environmental Law Colloquium Right: Traditional Indonesian dancer during a cultural event at the IUCN Academy of Environmental Law Colloquium
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 3
FACULT Y AND STAFF PUBLICATIONS AND PRESENTATIONS: HIGHLIGHTS
Faculty and Staff Publications and Presentations: Highlights Associate Dean Lee Paddock spoke on “Next Generation Enforcement” issues at a joint conference of the International Network of Environmental Compliance and Enforcement (INECE) at Erasmus University and the Flanders Environmental Agency in Rotterdam in April 2015. This was a companion program to GW Law’s March 2015 Shapiro Conference on Advanced Monitoring; Remote Sensing: and the Generation, Use, and Disclosure of Data in Environmental Compliance and Enforcement. The EPA includes
in the concept of Next Generation Enforcement rules with built-in compliance (such as gas dispenser nozzles that prevented use of leaded gasoline in automobiles after leaded gasoline was banned for that use), advanced pollution monitoring, electronic reporting, increased transparency, and innovative enforcement strategies (such as a new scoring system to identify drinking water supplies with the most significant violations). Dean Paddock also gave a separate lecture at Erasmus University on hydraulic fracturing regulation in the United States. He lectured on hydraulic fracturing at the University of Strathclyde, Scotland, in August 2015 and at the National University of Singapore in September.
The Erasmusbrug (Erasmus Bridge) in Rotterdam, Netherlands
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Assistant Dean of Students Robin Juni visited the Universidad del Salvador in Buenos Aires, Argentina, in June to present lectures on air pollution control and on agency decisionmaking processes. In addition, she was invited by Argentinian environmental law professors to attend a program at the Supreme Court of Argentina, led by Chief Justice Ricardo L. Lorenzetti, on the critical importance of environmental law in the country.
Associate Dean and Professor Emily Hammond testified at a hearing in June 2015 before the House Committee on Energy and Commerce’s Subcommittee on Energy and Power. The hearing focused on the Obama Administration’s Quadrennial Energy Review and related programs and recommendations, including the committee’s discussion draft energy legislation.
Also in June, the U.S. Court of Appeals for the Ninth Circuit cited Professor Robert L. Glicksman’s treatise, Public Natural Resources Law, in one of its decisions. The case, WildEarth Guardians v. U.S. Forest Service, involved an environmental group’s
FACULT Y AND STAFF PUBLICATIONS AND PRESENTATIONS: HIGHLIGHTS
Professor Bryner and the planning committee for the World Environmental Law Congress in Rio de Janeiro, Brazil, in March 2015.
challenge against Forest Service approval of snowmobile use in a Montana national forest. The court’s opinion is available online at http://cdn.ca9.uscourts.gov/datastore/opinions/2015/06/22/12-35434.pdf. Professor Glicksman presented testimony before the House Committee on Energy and Commerce’s Subcommittee on Commerce, Manufacturing ,and Trade, as well as the Subcommittee on Energy and Power, at a hearing on “EPA’s Proposed Ozone Rule: Potential Impacts on Manufacturing” on June 16, 2015.
In March 2015, Visiting Associate Professor and Environmental Program Fellow Nicholas Bryner spoke in Montego Bay, Jamaica, at the Inter-American Congress on Environmental Rule of Law, organized by the Organization of American States (OAS) and the United Nations
Environment Programme (UNEP). Professor Bryner presented research on the application of the principle in dubio pro natura—resolving legal uncertainty of favor of the environment—in the Americas. The Congress included participation of judges, prosecutors, legislators, scholars, and officials from international organizations through the Western Hemisphere. His work will be published in the proceedings of the Congress published by the OAS and in the Revista de Direito Ambiental in Brazil. (More information about the event is available at http://www. oas.org/en/sedi/dsd/ELPG/aboutELPG/ Events/IA_congress_2015.asp) Throughout the year, Professor Bryner also has participated in meetings on behalf of the IUCN World Commission on Environmental Law. These include planning meetings in Brazil and New York City for the upcoming World Environmental Law Congress, to be held in Rio de Janeiro in April 2016, and participation in the IUCN Regional Conservation Forum in June 2015. n
Golden Lion Tamarin outside Rio de Janeiro, Brazil. Professor Bryner and a group from the IUCN visited a reserve managed by the Associação Mico-LeãoDourado (Golden Lion Tamarin Association) in March 2015. The golden lion tamarin is endangered, but its population has recovered significantly in the past several decades due to the work of conservation organizations and zoos that helped reintroduce captive tamarins into protected areas in Brazil.
Environmental and Energy Law Perspectives Environmental and Energy Law Perspectives is published biannually by the Environmental and Energy Law Program at The George Washington University Law School. Editor: Lee Paddock, Associate Dean for Environmental Studies Assistant Editor: Nicholas Bryner, Visiting Associate Professor of Law and Environmental Program Fellow Send questions or comments to: Lee Paddock lpaddock@law.gwu.edu | 202.994.0417 The George Washington University Law School Environmental and Energy Law Program 2000 H Street, NW | Washington, D.C. 20052 grad@law.gwu.edu www.law.gwu.edu/environmental bit.ly/linkedin_gwlaw_eelaw
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 5
RECENT EVENTS
Recent Events Environmental Compliance and Enforcement
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he 2015 J.B. and Maurice C. Shapiro Environmental Law Symposium was held in March, on the topic of Advanced Monitoring; Remote Sensing; and Data Gathering, Analysis, and Disclosure in Compliance and Enforcement. The two-day conference included presentations and panel discussions with representatives from the business community; law schools; state, federal, and foreign environmental agencies; and other organizations involved in new developments in environmental compliance and enforcement. Keynote speakers were Assistant Administrator Cynthia Giles of the EPA’s Office of Enforcement and Compliance Assurance
Associate Dean and Professor Emily Hammond and Associate Dean Lee Paddock welcome speakers and participants to the 2015 J.B. and Maurice C. Shapiro Environmental Law Symposium.
and Professor Gary Marchant of Arizona State University Sandra Day O’Connor College of Law. Co-sponsors of the symposium included the Environmental Law Institute, the Environmental Council of the States, The George Washington Journal of
Energy and Environmental Law ( JEEL), The George Washington Environmental Law Association, RSM Erasmus University Rotterdam, and the International Network for Environmental Compliance and Enforcement. n
Solutions Forum on Innovative Finance and Clean Power
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n June 25, 2015, GW Law hosted an event on clean energy and energy efficiency financing, presented by the Center for Climate and Energy Solutions (C2ES). The forum brought together three key groups of stakeholders: financial institutions, utilities, and state agencies. Highlights of the event included a conversation between C2ES President Bob Perciasepe and the Commissioner of the Tennessee Department of Environment and Conservation Robert Martineau regarding state perspectives on clean energy finance. Panelist speakers discussed legal tools and challenges for mobilizing financing and investment in clean energy and efficiency projects. They also provided examples of innovative
C2ES President Bob Perciasepe (left) and panel discussants during the Solutions Forum on Innovative Finance and Clean Power hosted by GW Law.
approaches, including bonds and other mechanisms, for states and local governments to encourage clean energy and efficiency investment, and they suggested possibilities for scaling up these models for broader application. The
6 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
program was part of an ongoing series of C2ES Solutions Forum events. More information, including a video of the forum, is available online at http://www. c2es.org/events/2015/innovative-financeclean-power-solutions-forum. n
RECENT EVENTS • IN PRINT
Cybersecurity and Environmental Infrastructure
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n May 2015, GW Law and the ABA Section on Environment, Energy, and Resources hosted a summit on environmental infrastructure and cybersecurity. The event focused on security issues and potential safe threats with regard to two sectors of critical infrastructure in the United States—energy and water. Speakers, including representatives from electric and water
In Print Professor Robert Glicksman Books: • NEPA Law and Litigation (Thomson Reuters, 2015) (with D. Mandelker and others) (published annually) • Public Natural Resources Law (Thomson-Reuters, 2nd ed., June and October 2015) • Annual updates to Administrative Law: Agency Action in Legal Context (Foundation Press, 2nd ed., 2015) • Annual updates to Environmental Protection: Law and Policy (WoltersKluwer, 7th ed., 2015) Article: • “An International Legal Framework for SE4All: Human Rights and Sustainable Development Law Imperatives,” 38 Fordham Int’l L.J. 1405 (2015) (with T. Kaime) Other Publications: • ”The Clean Power Plan: Issues to Watch,” in The Clean Power Plan: Issues to Watch (CPR Issue Alert # 1506, August 2015), http://progressivereform.org/articles/CPP_1506.pdf (with co-authors) • Response, “Michigan v. Environmental Protection Agency,” Geo. Wash. L. Rev. Docket ( July 2, 2015), wwww.gwlr.org/ michigan-v-environmental-protectionagency/
GW Law’s Donna Attanasio moderated a panel on cybersecurity and electricity.
utilities and private practitioners, gave presentations on experiences preparing for potential scenarios of cyber and physical attacks on water and energy
supply systems. The summit included discussions on trends in law related to information sharing and liability protection in these areas. n
• “Defusing Blunderbuss Constitutional Attacks on EPA’s Proposed Regulation of Existing Power Plants to Abate Climate Change,” posted on CPRBlog, http://www.progressivereform.org/ CPRBlog.cfm?idBlog=6747EF06E05A-0502-3DB2C1EC5EC9339B (Apr. 12, 2015)
Political Review of Administrative Agencies (ABA, 2nd ed., Richard Murphy and Kathryn A. Watts, eds., 2015)
Associate Dean Lee Paddock Book Chapters: • “Private Environmental Enforcement: Using Supply Chain Requirements to Achieve Better Environmental Outcomes,” in Implementing Environmental Law (Edward Elgar Press) (with Molly Masterton, JD ‘14) • “Environmental Enforcement Networks in the United States,” in Environmental Enforcement Networks: Concepts, Implementation and Effectiveness (Edward Elgar Press)
Associate Dean and Professor Emily Hammond Book: • Energy, Economics, and the Environment: Cases and Materials (Found. Press, 4th ed., 2015) (with Joel Eisen, Jim Rossi, David Spence, Jacqueline Lang Weaver, and Hannah Wiseman): author of chapter on nuclear energy; co-author of introductory chapter and chapter on externalities of fossil fuel generation Book Chapters: • “Chevron Step One” and “Chevron Step Two,” in A Guide to Judicial and
Other Publications: • “Iterative Energy Policy: Resisting an Apology,” 33 Yale J. Reg. Online 1 (2015) • Book review of Steve Isser, Electricity Restructuring in the United States: Markets and Policy from the 1978 Energy Act to the Present (Cambridge Univ. Press, 2015) • “State Agency Coordination, Policy Options, and Jurisdictional Considerations,” in The Clean Power Plan: Issues to Watch (CPR Issue Alert #1506, August 2015) • “Energy Law’s Jurisdictional Boundaries: A Call for Course Correction,” Geo. Wash. L. Rev. Docket (Oct. Term 2014) (April 2015)
Professor Nicholas Bryner Article: • “In Dubio Pro Natura: A Principle for Strengthening Environmental Rule of Law,” 78 Revista de Direito Ambiental 245 (2015) (Brazil)
Professor Steve Charnovitz Article: • “Canada-Renewable Energy: Implications for WTO Law on Green and Not-So-Green Subsidies,” World Trade Review (April 2015) (with Carolyn Fischer) n
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 7
PROFILES
Profiles Peter Y. Malyshev, Professorial Lecturer in Law
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eter Y. Malyshev, counsel, practices corporate law at Reed Smith’s Washington, D.C., office and focuses his practice on regulatory, compliance, and transactional issues relating to commodities, securities, Peter Y. Malyshev and derivatives products markets. He also serves as an adjunct faculty member at GW Law, co-teaching a seminar on energy commodities with Daniel Waldman of Arnold & Porter LLP. Since 2008, Mr. Malyshev has been actively involved in assisting market participants in drafting and commenting on the proposed derivatives legislation in the U.S. Congress; this legislation subsequently became the Dodd-Frank Act of 2010. After the passage of the DoddFrank Act, Mr. Malyshev has continued assisting clients with drafting comment letters on the Commodity Futures Trading
Adriana Vélez-León, 2L
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driana VélezLeón is a secondyear student at GW Law pursuing a career in environmental law. Born and raised in Puerto Rico, Adriana has had the opportunity to explore an astonishingly diverse range of Adriana Vélez-León geological and biological habitats that ultimately fueled her passion for environmental issues.
Commission (CFTC) and the Securities and Exchange Commission (SEC) rulemakings under the Dodd-Frank Act. As part of this effort, Mr. Malyshev also is actively engaged with the National Futures Association (NFA) and the Financial Industry National Regulatory Association (FINRA) implementation efforts under the Dodd-Frank Act. Mr. Malyshev assists various derivatives markets participants with formulating their regulatory compliance efforts under the Dodd-Frank Act; these clients include swap execution facilities (SEFs), swap data repositories (SDRs), swap dealers, and major swap participants. Clients also included end-users, futures commission merchants, introducing brokers, designated contract markets (DCMs), derivatives clearing organizations (DCOs) and clearing agencies, “special entities” as well as commodity pool operators (CPOs), commodity trading advisors (CTAs), and industry trade associations. These entities include both U.S. and non-U.S. based entities that require assistance with extraterritoriality and inter-affiliate transactional application of the Dodd-Frank Act, such as foreign boards of trade (FBOTs), non-U.S. intermediates and foreign regulators. As a part of Mr. Malyshev’s broader practice, he advises and assists clients in structuring risk management and hedging transactions with financial institutions,
energy traders, agricultural producers, and commodities dealers, as well as other end-users and dealers such as airlines, emission and ethanol producers, and insurance companies. Mr. Malyshev has negotiated numerous master agreements, energy purchase and sale agreements, and energy optimization and management agreements. He also advises concerning credit arrangements in connection with asset acquisitions and has supervised several energy portfolio acquisitions. He is recognized as a notable practitioner by Chambers USA for his “expertise on regulatory, compliance and transactional matters related to commodities, securities and derivatives products.” Before joining Reed Smith, Mr. Malyshev was in private law practice with other international US law firms in Washington, as well as in Moscow, London, and San Francisco. He has worked as a lawyer at the CFTC’s Division of Economic Analysis, where he focused on exempt energy derivatives markets and interpretations of the Commodity Futures Modernization Act of 2000. His experience also includes work at the Federal Reserve Bank of San Francisco, as well as work on behalf of Harvard University at the Federal Commission on Securities Markets in Moscow, and most recently work in Rabat, Morocco, where he participated
Currently, Adriana serves as a research assistant to Associate Dean Lee Paddock, whom she has helped develop two issues of the “Environmental and Energy Law Perspectives” newsletter. Furthermore, she is a member of the George Washington Journal of Energy and Environmental Law. This past summer, Adriana was a summer associate at Ferraiuoli, LLC, a full-service law firm in Puerto Rico. During her time at Ferrauoli she worked primarily for the Environmental Law, Energy, and Land Use practice group, where she gained varied practical knowledge regarding environmental and energy law. She had the opportunity to work on a variety of legal research and drafting
assignments, including revising option to lease agreements for the development of solar renewable energy projects in Puerto Rico and researching environmental laws, such as the Clean Water Act and Clean Air Act and the U.S. Environmental Protection Agency’s regulations. As a first-year student, Adriana was an active member of the GW Environmental Law Association serving as a 1L representative for the Jackson Inn. n
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continued on page 9
PROFILES
Laura Mulherin, 2L
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aura Mulherin’s interests are energy, environmental, and administrative law. In addition to serving as a research assistant to Associate Dean Lee Paddock researching Clean Water Act enforcement regulations, Laura Laura Mulherin is a member of The George Washington Law Review and the Moot
Darcy Sharp, 2L
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arcy Sharp received her undergraduate degree in 2010 from the University of Memphis in political science with a focus on environmental and comparative international law. During her senior year, she wrote Darcy Sharp a more than 60-page thesis, providing an in-depth comparison of the two main schools of thought behind environmental policy making
Malyshev from page 8
in drafting commodities and securities legislation and advised the Russian and Moroccan central banks on derivatives and custody issues. Mr. Malyshev is the founder and chair of the Washington, D.C., Bar Derivatives and Futures Standing Sub-Committee of Business Law Section. For his work on the Derivatives, Securitization, and Project Finance Committee, The Steering Committee of the D.C. Bar Corporation, Finance and Securities
Court Board, and she serves as a Writing Fellow during the 2015-16 academic year. Laura is also an active member of the GW Environmental Law Association, serving as their Secretary for this school year. Her interest in environmental law began during her undergraduate career at Virginia Tech, where she studied public and urban affairs, focusing on urban planning. As an undergraduate student, Laura interned with the City of Newport News Public Works Department in the Sustainability Division, where she was able to work on the city’s first sustainability plan, The Roadmap to Sustainability. After graduating from
college, Laura returned to Newport News as a Sustainability Analyst in the Public Works Department for one year. During that year, she helped develop the School Green Space project, a program focused on revitalizing underutilized green spaces at schools. During her first summer in law school, Laura interned with the U.S. Department of the Interior (DOI) in the Office of the Solicitor for the Division of Mineral Resources. While at DOI, her work encompassed a variety of regulatory issues involving onshore minerals, wind energy, statutory interpretation, and administrative law. n
styles—protective and exploitive—and won the best paper award from her undergraduate research journal. She also worked on sustainability initiatives around her campus. Her interest in the environment and in sustainable energy, however, began long before her higher education.“I grew up aware of environmental issues. My parents were very conscious of things and did their best to teach me about sustainable living and wildlife preservation,” she says. “We had a compost pile and grew our own vegetables. I spent half my summers pulling weeds and the other half helping can green beans. That’s just the way life was. Then in high school, I started looking around, and I
realized that I could make a career out of my childhood passions.” She was also very involved in her Girl Scout council’s lake cleanup and recycling efforts from kindergarten through her college years. At GW Law, Darcy immediately joined the Environmental Law Association and attended many networking events during her first year. During this semester, she is taking environmental, administrative, and toxic torts law, as well as interning with the American Wind Energy Association. She hopes to continue to intern with both private and public sector employers to further her experience within the field of environmental and energy law. n
Law Section awarded Mr. Malyshev the Best Committee of 2010-2011. He served as the chair of this sub-committee for 2012. Mr. Malyshev is on the roll of solicitors for the Law Society of England and Wales, is involved in the ABA’s Diversity Committee and in his spare time studies the Arabic language. He has been appointed as Chairman of the D.C. Bar Committee on Derivatives and Futures and is also a member of the Board of Editors of the Futures and Derivatives Law Report.
Mr. Malyshev is a frequent speaker at industry conferences, such as the Futures Industry Association (FIA), ABA, Practicing Law Institute (PLI), and others. He recently authored an article for the Futures and Derivatives Law Reporter titled “SEFs in Review, a Two-Year Anniversary Amid Growing Pains.” He is also an adjunct professor at Georgetown University Law Center in Washington D.C., where he lectures on energy commodities and derivatives financial regulation. n ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 9
UPCOMING EVENTS • PERSPECTIVES
Upcoming Events Shapiro Symposium 2016: The Electricity Mix of the Future: Environment, Economics, and Governance
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he 2016 J.B. and Maurice C. Shapiro Environmental Law Symposium will focus on environmental, economic, and governance issues for the electricity mix in the coming few decades. The two-day symposium will be held March 10 and 11, 2016, and
Comparative Examination from page 1
state-level efforts more common in the United States. In this article, we consider Australia’s national federalism model as compared to our state-focused system and discuss some recent energy federalism scholarship that might suggest a workable middle ground between the two.
Challenges Facing the U.S. and Australian Electricity Systems Electricity systems worldwide face challenges on multiple fronts. In the United States and Australia, regulators must grapple with three compounding problems in particular. First, the systems in both countries are aging and underfunded. In the United States, at least 70 percent of the nation’s transmission lines are more than 25 years old, and 60 percent of circuit breakers are at least 30 years old.1 In addition, more than 75 percent of the nation’s coal-fired plants have outlived their projected 30-year lifespans.2 In the coming years, many of those plants will have to be closed either because their age makes them uneconomical to run or because they emit harmful
will bring together a multi-disciplinary group of legal scholars, economists, engineers, and regulators for a series of panels and discussions structured around the issues listed below. First, environmental attributes of electricity fuels and their substitutes are not directly or consistently valued across the spectrum of wholesale markets, regional power pools, and state retail rates. Can (and should) electricity markets ever be up to the task of incorporating environmental attributes? What legal and governance changes would be necessary to facilitate this change, if it were to be a policy option? At the retail level, what options are available to states, considering both the Clean Power Plan and the preemptive reach of the Federal Power Act? Second, many regulatory decisions are informed by modeling, as evidenced by EPA’s models accompanying the Clean Power Plan. What do various models of the electricity mix of the future predict, and how much uncertainty is embedded
in those predictions? To what extent can policymakers rely on these models, and what caveats should they consider in developing next steps? How can we structure legal regimes that are sufficiently adaptive to new circumstances to best optimize electricity resources, when much of our energy infrastructure requires very long-term planning and significant capital investments? Finally, many of the questions raised above relate to the traditional grid infrastructure. But what are the implications of distributed generation, demand response, and storage in the next several decades? As new state policies regarding these electricity services emerge, what predictions can be made regarding the need for traditional generation, infrastructure, and governance? Are our current federal regulatory regimes sufficiently flexible to account for these electricity services? Is widespread experimentation at the state level preferable? n
chemicals and/or carbon dioxide at rates beyond current or projected regulatory levels. The stakes are high: if future infrastructure investment needs are not met, the national economic toll could result in 530,000 lost jobs and a $496 billion reduction in GDP by 2020.3
Australia’s coal-fired power plants will be over 40 years old by 2030.4 Transmission and distribution networks will need updating as well. For example, much of Victoria’s distribution and transmission network infrastructure will have to be replaced within 10 to 15 years.5 The task of gradually updating Australia’s electricity network infrastructure is immense: stretching out nearly 5,000 kilometers, the country’s electricity grid is the largest alternating current system in the world.6 A second major challenge facing both U.S. and Australian electricity system regulators is how to interconnect more renewable resources without compromising system reliability. In the United States, renewable energy integration is driven in large part by renewable portfolio standards, which currently exist in 29 states plus the District of Columbia. In Australia, renewable energy and environmental policies have taken a back seat to the country’s mining industry under the recently-ousted Tony Abbott Administration.7 Despite good renewable integration performance from
In the United States, at least 70 percent of the nation’s transmission lines are more than 25 years old, and 60 percent of circuit breakers are at least 30 years old. In Australia, regulators recognize that updating the country’s aging infrastructure is an urgent matter. According to one report, more than 65 percent of
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PERSPECTIVES
individual states like South Australia and Queensland,8 the Abbott administration spear-headed efforts to reduce the country’s overall Renewable Energy Target of reaching 20 percent renewables by 2020.9 Nonetheless, as one of the sunniest and windiest countries in the world, Australia has tremendous renewable energy potential, and regulators insist that renewables “will continue to play an important role” in Australia’s energy future.10 Third, along with other countries, Australia and the United States must manage the risks to the electricity grid posed by climate change. For years, scientists have sounded the alarm about the effects of climate change-related problems on our electricity infrastructure. This presents more than a minor inconvenience; blackouts and brownouts are economically disruptive, to the tune of $20-55 billion every year.11 In addition, global temperature rise not only threatens the United States’s aging electricity grid but also its water supply and coastlines.12 Likewise, Australia’s electric grid is also vulnerable to climate change effects. For instance, in late 2010 and early 2011, the country experienced record rainfall and flooding, which not only caused substantial property damage but also buried many of the country’s coal mines and rail lines in mud, decreasing coal production and raising electricity prices as a result.13 Furthermore, while some parts of the country received
unprecedented levels of rainfall recently, other parts of Australia are learning to cope with protracted droughts,14 which will have serious implications on the country’s generation sector, which relies on water-intensive, coal-fired generation to meet 72 percent of its capacity needs.15 The country’s bushfire-prone transmission and distribution networks16 will be affected as well.
U.S. and Australian Electricity Regulatory Frameworks Addressing these problems will require a number of regulatory and policy responses, the most significant of which being electric system planning. Although the United States can learn many lessons from how different countries adopt and adapt different policy tools to address system planning issues, the value of those lessons will inevitably be limited by America’s particular federalism approach. A. The U.S. Electric System The primary federal regulator of the nation’s electric system is the Federal Energy Regulatory Commission (FERC). Under Section 201 of the 1935 Federal Power Act (FPA), FERC is given exclusive jurisdiction over “transmission of electric energy in interstate commerce,” the “sale of electric energy at wholesale in interstate commerce,” and over “all facilities for such transmission or sale of electric energy.”17 Mindful of preserving
traditional jurisdictional boundaries between intra- and interstate commerce, the FPA explicitly exempted from federal regulation “any other sale of electric energy” as well as “facilities used for the generation of electric energy or over facilities used in local distribution or only for the transmission of electric energy in intrastate commerce, or over facilities for the transmission of electric energy consumed wholly by the transmitter.”18 FERC is aided in exercising its authority by various regional transmission organizations (RTOs) and insystem perators (ISOs) across the country, as well as by the quasi-governmental North American Electric Reliability Corporation (NERC), which serves as the nation’s electric reliability organization. Considering the nature of electric energy and the difficulty of tracing the flow of electrons through a grid, the distinction between “interstate” and “intrastate” may seem both arbitrary and blurry. Although FERC’s regulation of interstate wholesale transactions and transmission is important to the electric system, often it is the control that states wield over generation and transmission siting that has the most influence over
Although the United States can learn many lessons from how different countries adopt and adapt different policy tools to address system planning issues, the value of those lessons will inevitably be limited by America’s particular federalism approach. continued on page 12
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As evidenced by its self-sufficient energy sector, Australia is well endowed with abundant natural resources. the build-out of the electric system. This is seen most acutely in the context of transmission line siting, which is largely administered through state land use law. Recognizing the growing problem of transmission constraints, in 2005 Congress gave FERC transmission siting authority in certain limited situations, most of which are triggered by state action or inaction, or are outright neutralized by a state’s denial of a siting permit. FERC’s one attempt to use this “backstop” siting power, however, was rejected by the Fourth Circuit in 2009 on the basis that the commission exceeded its authority. Short of Congress completely preempting state regulatory schemes through its Commerce Clause power,19 transmission siting will remain an arduous, state-driven process. Despite the transmission constraints on the electricity grid and Congress’s reluctance to use its preemption authority to address them, states remain in control of many electricity policy decisions involving land use law. As Australia illustrates, however, it is possible to structure a federalism model that allows national interest infrastructure projects to move forward more easily. B. The Australian Electric System As evidenced by its self-sufficient energy sector, Australia is well endowed with abundant natural resources. The country is the world’s second- and third-largest exporter of coal and uranium, respectively, and the fourth-largest exporter of gas.20 Australia’s electricity sector relies primarily on coal- and gas-fired generators, accounting for 78 percent and 12 percent of output, respectively.21 Although government policies in the late 1990s and early 2000s promoted renewable generation, the government recently repealed the country’s carbon
tax,22 approved the country’s largest open mine to be developed in Southwest Queensland,23 and plans to increase energy exports, which already account for nearly 50 percent of the country’s export revenues.24 Fossil fuels, especially coal, will continue to provide the bulk of Australia’s power generation in the years to come; however, the country remains committed to reducing emissions to five percent below 2000 levels by 2020.25 Meeting that goal, as well as addressing the challenges mentioned in part two of this paper, will require coordinated system planning, which Australia already has streamlined fairly well at the national level. Australia’s constitution is silent on the subject of electricity supply and energy policy. As such, before the emergence of a national energy policy, such actions were taken at the state level.26 The electricity industry developed unevenly throughout the country initially, but as population centers grew and transmission expanded beyond city borders, electric system planners began to see the value in statewide or regional systems, as opposed to smaller, municipal grids.27 Similar to the United States and Europe, Australia began deregulating its electric sector in the 1980s. Up to that point, government-owned, vertically-integrated utilities provided most of the country’s electricity supply.28 Over the course of 1990s and the 2000s, Australia’s six states gradually instituted wholesale and retail competition 29 and partially privatized the electricity sector, although in New South Wales, Queensland, Tasmania, and Western Australia, the state governments still own many or all generation and network assets.30 During the same timeframe, the Commonwealth and state governments
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collaborated to jointly devise and implement the landmark National Electricity Law (NEL). The NEL established the National Energy Market (NEM) as well as various regulatory bodies that are discussed in the next section.31 The NEM serves more than 90 percent of Australia’s electricity demands and is the primary electricity wholesale market for retail utilities in all states and territories other than Western Australia and the Northern Territory.32 Unlike some RTO and ISO markets in the United States, there are no separate capacity sales in the NEM; rather, the NEM is an energy-only market with some ancillary services markets.33 As a result, day-ahead and real-time energy sales are the means by which generators can receive their revenues, a reality that often results in high-spot prices. Some critics argue that system planning can be more difficult without separate capacity markets, but others assert that the NEM “has operated very satisfactorily with an energy-only market.”34 Since its enactment in 1999, the National Electricity Law has been
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amended on a number of occasions, and some of the original regulators have been folded into new or existing institutions. In 2009, the Australian Energy Market Operator (AEMO) was formed to be the NEM independent system operator, oversee NEM wholesale market operation and settlement procedures, and conduct transmission planning for the state of Victoria. The AEMO, the NEM, and all market participants must operate pursuant to the National Electricity Rules, which are themselves administered by the Australia Energy Market Commission (AEMC) and enforced by the Australian Energy Regulator (AER).35 Finally, in 2011 a new comprehensive planning entity was formed: the Standing Council on Energy and Resources.36 Although national in scope, the NEM consists of five regions, which reflect the state-based nature of transmission system development. The individual state and territory regulators maintain regulatory responsibility over retail distribution. As more electricity functions gradually come under the auspices of the AER, however, “it is likely that a single national approach to regulation will be adopted.”37 One significant way in which Australia’s national energy regulatory model differs from that of the United States is how electricity transmission is planned and approved. Unlike in the United States, where siting decisions are made at the individual state level, all proposed investments and expansions for each network within the NEM are centrally planned and approved by the AER.38
With the oldest federalbased system in the world, the United States is often considered the prototypical example of federalism.
How Federalism Informs U.S. and Australian Electricity Policy and Regulation A. Origins and Evolution of Federalism in the United States With the oldest federal-based system in the world, the United States is often considered the prototypical example of federalism. The decision to allocate authority between the federal and state governments dates back to the Constitution’s ratification in 1789 and, in the context of energy regulation, became fully pronounced with passage of the Federal Power Act and the Natural Gas Act in the New Deal era.39 Since then, however, courts and agencies have struggled to delineate the boundaries between state and federal jurisdictions. This dilemma is yet again headed to the Supreme Court, where in fall 2015, the justices will hear arguments on a 2014 decision from the D.C. Circuit Court of Appeals striking down a FERC regulatory order on jurisdictional grounds. As Justice O’Connor stated in her opinion in New York v. United States, “discerning the proper division of authority between the federal government and the states” is “our oldest question of constitutional law.”40 At its core, the federal-state jurisdictional divide reflects an ongoing rift between two forms of federalism: dual federalism,
which “sees the Constitution as a collection of restraints on the national government,”41 and national federalism, which “holds that when the nation’s government is pursuing authorized constitutional ends it may freely disregard the reserved powers of the states.”42 Beginning with the landmark national federalism decision in McCulloch v. Maryland, and through most of the 19th century, most of the early federalism cases involved the Supreme Court striking down overly intrusive state laws,43 but eventually the court pivoted to a dual-federalism approach to protect states from federal overreach in the Lochner era.44 Dual federalism prevailed up to the New Deal but eventually gave way in the face of such cases as NLRB v. Jones & Laughlin Steel Corp and Wickard v. Filburn, which expanded the interpretation of the Commerce Clause to reach activities that, even a few years prior, might not have been seen as within reach of Congress.45 Dual federalism resurged with the Rehnquist court and has been fairly well supported under current Chief Justice John Roberts.46 New York v. United States resulted in a landmark decision in which the Supreme Court set down firm federalism markers under the 10th Amendment. In addition, dual federalism in the context of the Commerce Clause came roaring back with such cases as continued on page 14
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Comparative Examination from page 13
United States v. Lopez, and United States v. Morrison,47 with a brief return to a national federalism approach in Gonzales v. Raich. Most recently, in National Federation of Independent Business v. Sebelius, the Supreme Court, led by Chief Justice Roberts, upheld the Affordable Care Act’s “individual mandate” as a constitutional use of the federal government’s tax power. Relevant for this discussion, however, is that in dicta the court noted that the mandate constituted an unconstitutional use of the Commerce Clause, thus signaling that the court was not ready to give up on Lopez and Morrison in favor of a federalism approach à la Raich.48 B. Federalism in Australia The individual Australian states and territories forfeited certain powers when they created the Commonwealth in 1901. Section 51 of the Australian Constitution enumerates the powers delegated to the national government from the states, and any power not explicitly stated there is generally deemed to be retained by the states. Similar to the supremacy clause in the U.S. Constitution, a Commonwealth law promulgated within the bounds of Section 51 will preempt any contrary state
law on that subject.49 In determining the scope of the Commonwealth’s ability to carry out its constitutional authority, the Australian High Court relied heavily on the U.S. Supreme Court decision in McCulloch v. Maryland.50 Today, Australia is considered one of the most stable federal systems in the world. Like that of the United States, the country’s constitution distributes power between the national and the state governments. Unlike the U.S. system, however, the Australian federalism model arguably delegates more authority to the Commonwealth. This is especially the case with energy policy, where most of the goals and standards are set at the federal level, with implementation and some policymaking left to the individual states.51 As described above, this delegation paved the way for the NEL, and ultimately, for a nationally operated transmission and distribution system and marketplace.
Under Section 51 of the Australian Constitution, the Commonwealth government is given authority to manage national infrastructure projects and regulate certain activities that tend to cross state borders.52 The state and Commonwealth governments recognized the need to craft cooperative approaches to important national issues, and toward that end, the Council of Australian Governments (COAG) was formed in 1992. COAG is comprised of the heads of the Commonwealth, state, and territory governments and has been promoting a National Reform Agenda on a variety of policies, including energy, since 2006.53 A significant impetus behind promulgating the NEL and otherwise establishing a nationwide energy policy came after a 1989 Commonwealth study concluding that the nation’s gas and electric industries were inefficient and subject to redundant regulation.54 In response, the states formed an intergovernmental agreement, spearheaded by COAG, thereby establishing the basis for NEL and the governance framework for the national energy regulators. Although the Commonwealth arguably had the authority under Section 51 to craft such regulation, the ratification and agreement of each of the six Australian states bolstered the endeavor and ensured its success.55 Although the Australian national-leaning federalism system is a useful model for U.S. policymakers to consider as counterpoint to our own state-leaning model, it is not without its faults. Recent surveys of Australian citizens reveal a growing consensus that the scales of federalism have tipped too far in favor of the Commonwealth government.56 Indeed, for years, states have complained of both the increasing national government involvement in traditional state-regulated matters, as well as their inability to
Today, Australia is considered one of the most stable federal systems in the world.
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levy the taxes and other revenues necessary to finance their spending priorities.57 This so-called “vertical fiscal imbalance” has been one of the root causes leading to current dissatisfaction with Australia’s federalism model.58 The Commonwealth got the hint, and in June 2014, the Tony Abbott Administration announced plans to release a comprehensive white paper by the end of 2015 discussing ways to reform the country’s federalism model to particularly address state-level revenue-raising concerns.59
The Literature Around Energy Federalism And Lessons That U.S. Regulators Can Learn From Australia’s Experience In light of the challenges facing electricity systems, Australia has arguably struck an effective balance with its federalism model. Its NEM is heralded as the poster child for a well-regulated wholesale energy market, and necessary system infrastructure projects are more readily approved, unlike in the United States. Pivoting to a similar model would require federal preemption—a legislative action that, although technically feasible, is politically unpopular.60 Such a national reckoning and willingness to go back to the drawing board may not be possible in the United States, considering the long history of dual federalism and Supreme Court support. Rather than stripping states of most of their regulatory authority, there may be a middle ground that the United States can find between dual and national federalism through what some scholars call “process preemption” or “dynamic federalism.”61 Although the legal scholarship on energy federalism issues discusses federalism issues in a variety of contexts, such as transmission and renewable portfolio standards,62 it typically asks the same question: “which level of government is most appropriate and how concurrent authority at more than one level of government should be shared[?]”63 Considering the magnitude of the challenges facing the interstate electricity grid, some scholars argue for federal preemption over certain energy concerns, such as transmission siting, similar to FERC’s sole authority to site natural gas
pipelines under the Natural Gas Act.64 But federal preemption is politically unpopular and would require massive reform of state and federal energy law.65 However, two other alternatives—process preemption and dynamic federalism— could provide a workable middle ground for U.S. regulators to pursue. As first proposed by Professor Ashira Ostrow, in a process preemption system, local regulators still maintain the primary decision-making authority over siting decisions but must work within Congressionally imposed federal constraints.66 This approach is not new to Congress; it was first applied in the Telecommunications Act (TCA) of 1996.67 As with transmission, telecommunication siting decisions are traditionally a subject of state land use law. Similarly with transmission, by 1996, the telecommunications industry was hampered by
of action in federal court, which is heard on an expedited basis.69 Otherwise, the TCA leaves state siting laws largely in place. Ostrow and other scholars argue that such a lose framework could be similarly used in the transmission siting context.70 A second option for U.S. regulators to consider is termed dynamic federalism. Although this moniker has been used by other scholars, especially in the realm of environmental law,71 Professors Osofsky and Wiseman co-opted the term to promote a form of energy governance that breaks out of the traditional vertical and horizontal structures. As articulated in their article “Dynamic Federalism” and applied in their recent follow-up article “Hybrid Energy Governance”72 their model is comprised of three primary components. The first is the need for multi-institutional structures that can
the lack of a uniform telecommunications siting policy. In the TCA, Congress tried to strike the balance between states’ traditional land use role while imposing a backstop federal framework. Procedurally, local governments were required to respond to cell phone tower construction requests “within a reasonable period of time,” as well as “in writing and supported by substantial evidence contained in a written record.”68 For persons aggrieved in the state siting process, the TCA provides a judicial right
have cross-jurisdictional regulatory authority. Second, these new institutions must be structured to reduce fragmentation, redundancies, and promote interjurisdictional cooperation and conflict resolution. Finally, public and private stakeholders must be integrated into the new decision-making processes.73 One institutional structure that is capable of realizing these three goals is what Professors Osofsky and Wiseman term “hybrid institutions,” that is, continued on page 16
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“institutions that combine authority from more than one source, whether as a formal or informal part of their structure or governance process.”74 Although no such hybrid institution exists for the purpose of carrying out national, regional, and statewide energy policy goals, there are hybrid institutions tasked with carrying out certain discrete mandates within the energy sector. For example, there are institutions created through Congressionally approved interstate compacts, such as the Delaware River Basin Commission, charged with addressing interstate resource demands on the Delaware River Basin.75 There is also NERC and the RTO hybrid structures, which are already familiar with cross-jurisdictional regulation and could be able to handle added authority over, for example, energy facility siting decisions and cost allocation.76
Conclusion The electricity system in the United States, once praised as the “supreme engineering achievement of the 20th century” by the National Academy of Engineering is struggling to cope with 21st century challenges. Like electricity system regulators around the globe, U.S.
regulators must grapple with how to update aging transmission and generation infrastructure, how to interconnect distant renewable energy sources, and how to bolster the system in the face of climate change-induced extreme weather events. Notwithstanding the national grid impact that these problems pose, their localized nature often means that states are the first, and sometimes the only, government able to address them. The grid’s cross-border interconnectivity, however, means that comprehensive, cross-border problem solving is necessary, but such solutions are rendered extremely difficult because of the U.S. dual federalism model. One other federalism approach to consider is Australia’s national federalism scheme. The dominance of the Commonwealth in national policymaking has resulted in a fairly efficiently run and centralized national electricity market in which necessary system investments are not so easily stymied by individual state obstructionism. On the other hand, however, such a heavyhanded approach has not been popular in other policy areas, as evidenced by the Commonwealth’s recent decision to reconsider its national federalism model.
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Such criticisms would be sure to follow any effort by Congress to fully preempt state energy regulatory authority in the United States. Thus, the Australian model is useful to consider, not as a model to aspire to, but rather as an illustration of what a more nationally run energy policy framework could look like. That leaves the question of what politically feasible middle ground there could be between the U.S. dual federalism model and Australia’s national federalism scheme. Two approaches considered in this paper were process federalism and dynamic federalism through hybrid institutions. Process federalism has the benefit (or the pitfall, depending on your perspective) of tinkering with the existing vertical power dynamic between states and the federal government. Through this model, Congress could still allow states to exercise authority over facility siting decisions but impose an added layer of FERC oversight and a fast-tracked judicial right of action for any party aggrieved by a state siting decision. In addition, as Professors Osofky and Wiseman point out, there exist hybrid governance models in the energy sector already, chiefly illustrated by NERC and RTOs/ISOs. Congress has already authorized NERC, acting through FERC, to create enforceable reliability standards throughout the country. In addition, RTOs are quite familiar with their respective regional electric grids and have been taking on a more active role in system planning. Thus, both of these entities not only understand the demands of cross-jurisdictional regulation, but they know how to involve key stakeholders and coordinate across multiple levels of government. A process federalism approach may be a good first step, considering its success in the telecommunications context. If that process proves unworkable, however, Congress would do well to empower existing hybrid institutions, such as NERC or the RTOs, which are already familiar with planning processes, regulatory enforcement, and how to bring various stakeholders to the table.
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Endnotes American Society of Civil Engineers, Failure to Act: The Economic Impact of Current Investment Trends in Electricity Infrastructure, 19 (2011), available at www. asce.org/uploadedFiles/Infrastructure/ Failure_to_Act/energy_report_FINAL2. pdf; Harris Williams & Co., Transmission & Distribution Infrastructure (2010), 4, available at www.harriswilliams.com/ sites/default/files/industry_reports/ final%20TD.pdf 1
Rachel Cleetus et al., Union of Concerned Scientists, Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants (Nov. 2012), 1, available at www. ucsusa.org/sites/default/files/legacy/ assets/documents/clean_energy/Ripefor-Retirement-Full-Report.pdf; U.S. Energy Information Administration, Most Coal-fired Electric Capacity was Built Before 1980 ( June 28, 2011) www.eia.gov/ todayinenergy/detail.cfm?id=1990. 2
American Society of Civil Engineers, supra note 1, at 8-10. 3
Andrew Stock, Climate Council of Australia, Australia’s Electricity Sector: Aging, Inefficient and Unprepared, 10, (2014), available at www. climatecouncil.org.au/uploads/ f9ba30356f697f238d0ae54e913b3faf.pdf. 4
Lee Godden & Anne Kallies, Electricity Network Development: New Challenges for Australia in Energy Networks and the Law: Innovative Solutions in Changing Markets, 3, (2012). 5
Id.; see also Grayson Heffner, et al., Berkeley National Laboratory, LBL-62701, Loads Providing Ancillary Services: Review of International Experience, 2, (May 2007) available at certs.lbl.gov/ pdf/62701-app.pdf. 6
See, e.g., Ariel Bogle & Will Oremus, Slate, The Saudi Arabia of the South Pacific (Sept. 24, 2014), www.slate.com/articles/ technology/future_tense/2014/09/ australia_s_environmental_movement_ has_been_overthrown.single.html. 7
Stock, supra note 4, at vii (“While Australia overall is not keeping pace with international investment and uptake of 8
renewable electricity, there are some Australian jurisdiction exceptions where renewable leadership is world class. South Australia has world leading wind and solar power [28% of its total capacity, id. at iv], Queensland is strong in solar generation, and the ACT is on track to make 90% of its power from wind and solar by 2020.”). Jason Scott, Australia Seeks to Reduce Renewable Energy Target to ‘Real’ 20%, Bloomberg, (Oct. 22, 2014) www. bloomberg.com/news/2014-10-22/ australia-seeks-to-reduce-renewableenergy-target-to-real-20-.html. 9
Australian Department of Industry, Energy White Paper: Green Paper 2014: To Inform Preparation of a White Paper, vi, (Sept. 2014) available at ewp.industry. gov.au/files/egp/energy_green_paper.pdf [Hereinafter Energy White Paper: Green Paper]. 20
Alan Moran & Rajat Sood, Evolution of Australia’s National Electricity Market in Evolution of Global Electricity Markets, 579, (Fereidoon P. Sioshansi ed. 2013). 21
Australian Department of Industry, Energy White Paper: Green Paper 2014, vi, available at ewp.industry.gov.au/files/egp/ energy_green_paper.pdf. 10
U.S. Dept. of Energy, U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather (2013) at 35, available at energy.gov/sites/prod/ files/2013/07/f2/20130710-Energy-SectorVulnerabilities-Report.pdf. 11
12
Id. at i.
Asian Development Bank, Climate Risk and Adaptation in the Electric Power Sector, 8, (2012), available at adb.org/sites/default/ files/pub/2012/climate-risks-adaptationpower-sector.pdf. 13
Ian Lloyd Neubauer, Is Drought Becoming the New Normal for Australia, Time, (Feb. 14, 2014) time.com/7320/ is-drought-becoming-the-new-normalfor-australia/. 14
Origin Energy, Energy Explorer, www. originenergy.com.au/4226/Natural-gas. 15
Lee Godden & Anne Kallies, Electricity Network Development: New Challenges for Australia in Energy Networks and the Law: Innovative Solutions in Changing Markets, 3, 9-12, (2012). 16
17
16 U.S. Code § 824(b)(1).
18
Id.
See e.g., Alexandra B. Klass & Elizabeth J. Wilson, Interstate Transmission Challenges for Renewable Energy: A Federalism Mismatch, 65 Vand. L. Rev. 1828-29, n144 (2012). 19
Rob Taylor & Rhiannon Hoyle, Australia Becomes First Developed Nation to Repeal Carbon Tax, The Wall Street Journal, ( July 17, 2014) www.wsj.com/articles/ australia-repeals-carbon-tax-1405560964. 22
See, e.g., James Whitmore, Approval of Australia’s Largest Coal Mine Ignores Climate and Water, The Conversation ( July 28, 2014) theconversation.com/ approval-of-australias-largest-coal-mineignores-climate-and-water-29780. 23
continued on page 18
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Australian Department of Foreign Affairs and Trade, Trade at a Glance 2013, 2, (2013) available at www.dfat. gov.au/publications/trade/trade-at-aglance-2013/downloads/trade-at-aglance-2013.pdf. 24
Australian Department of Industry, Energy White Paper: Green Paper 2014: To Inform Preparation of a White Paper, 49, (Sept. 2014) available at ewp.industry.gov. au/files/egp/energy_green_paper.pdf. 25
International Conference on Large High Voltage Electrical Systems, A Dictionary on Electricity: Australia 2, (1996), available at www.ewh.ieee.org/ r10/nsw/subpages/history/electricity_in_ australia.pdf. 26
27
Id. at 5.
Alan Moran & Rajat Sood, Evolution of Australia’s National Electricity Market in Evolution of Global Electricity 28
Markets, 582, (Fereidoon P. Sioshansi ed. 2013). 29
Id. at 582-84.
Id. at 607 (discussing persistent policy of government ownership still in place in parts of Australia). 30
31
Id. at 586.
Iain MacGill & Stephen Healy, Is Electricity Industry Reform the Right Answer to the Wrong Question? Lessons from Australian Restructuring and Climate Policy in Evolution of Global Electricity Markets, 623, (Fereidoon P. Sioshansi ed. 2013). Western Australia and the Northern Territory have been excluded from the NEM because those states lack sufficient grid interconnections and their load centers are significantly far apart. David Crossley, Regulatory Assistance Project, Demand-Side Participation in the Australian National Electricity Market, 2 (Aug. 2011). 32
Moran & Sood, supra note 28, at 587-88; see also id. at 591 (discussing the ancillary services offered in the NEM). 33
Transmission-Frameworks-ReviewFinal-Report.aspx. Scott Hempling, Regulating Public Utility Performance, 358 (2013). 39
New York v. United States, 505 U.S 144, 149 (1992). 40
Sotirios A. Barber, Defending Dual Federalism: A Self-Defeating Act in Federalism and Subsidiarity, 4 ( James E. Fleming & Jacob T. Levy eds 2014). 41
Id. at 3. For a further discussion of national federalism see id. at 15-16. 42
Ernest A. Young, The Puzzling Persistence of Dual Federalism, in Federalism and Subsidiarity, 53-57 ( James E. Fleming & Jacob T. Levy eds 2014) (describing the Supreme Court’s federalism jurisprudence evolution over the years). 43
44
Id. at 54.
Id. at 54 (quoting one legal scholar, Edward Corwin, to note that by 1950, “‘the entire system of constitutional interpretation’ embodied in dual federalism lay ‘in ruins.’”). 45
34
Id. at 589; MacGill & Healy, supra note 32, at 624 (noting that “NEM’s rather unusual design by comparison with other restructured industries appears to have achieved reasonable success to date in efficiently operating the electricity industry”).
46
Grayson Heffner, et al., Berkeley National Laboratory, LBL-62701, Loads Providing Ancillary Services: Review of International Experience, (May 2007), 3, available at certs.lbl.gov/pdf/62701-app. pdf.
47
Young, supra note 43, at 55.
48
Id. at 56.
35
36
Moran & Sood, supra note 28, at 587.
David Crossley, Regulatory Assistance Project, Demand-Side Participation in the Australian National Electricity Market, 2 (Aug. 2011). 37
Australian Energy Market Commission, Final Report: Transmission Frameworks Review, ii (Apr. 11, 2013), available at www. aemc.gov.au/getattachment/c4773c34c142-41da-95b0-35697b8b1109/ 38
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Barber, supra note 41, at 16; See generally Christopher Banks & John Blakeman, Chief Justice Roberts, Justice Alito, and New Federalism Jurisprudence, 38 Jour. of Federalism 576 (2008), available at www2.kent.edu/polisci/people/upload/ chief-justice-roberts-justice-alito.pdf.
Chief Justice Robert French, The Future of Federalism: The Incredible Shrinking Federation Voyage to a Singular State? ( July 2008), available at www.austlii.edu.au/au/ journals/FedJSchol/2008/17.html. 49
See H. B. Higgins, McCulloch v. Maryland in Australia, 18 Harv. L. Rev. 559, 561 (1905). 50
For a brief description of Australia’s energy policy, especially as it pertains to the smart grid, see IEEE SmartGrid, Australia, smartgrid.ieee.org/resources/ public-policy/australia; see also International Conference on Large High 51
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Voltage Electrical Systems, supra note 38 (describing the Australian energy sector and electric system). 52
French supra note 49.
53
Id.
54
Id.
55
See id.
Griffith University, Latest Constitutional Values Survey Released (Oct. 10, 2014) https://app.griffith.edu.au/ news/2014/10/10/latest-constitutionalvalues-survey-released/. 56
Brian Dollery, A Century of Vertical Fiscal Imbalance in Australian Federalism, 36 History of Econ. Rev. 26, 26-43 (Summer 2002), available at www.hetsa. org.au/pdf/36-A-03.pdf 57
See, e.g., Queensland Government, Financial and Economic Policy: Vertical Fiscal Imbalance https://www.treasury. qld.gov.au/office/clients/commonwealth/ intergovernmental/vertical-imbalance. shtml. 58
Prime Minister of Australia, White Paper on Reform of the Federation, ( June 28, 2014) www. pm.gov.au/media/2014-06-28/ white-paper-reform-federation. 59
See, e.g., Caleb Nelson, Preemption, 86 Va. L. Rev. 225, 226-28 (2000); Klass & Wilson, supra note 19, at 1859-65. 60
Ashira Pelman Ostrow, Process Preemption in Federal Siting Regimes, 48 Harv. J. on Legis. 289 (2011); Hari Osofsky & Hannah J. Wiseman, Dynamic Energy Federalism, 72 Md. L. Rev. 773 (2012-2013) [Hereinafter Dynamic Energy Federalism]. 61
See, e.g., Jim Rossi, The Trojan Horse of Electric Power Transmission Line Siting Authority, 39 Envtl. L. 1015 (2009); Lincoln L. Davis, Power Forward: The Argument for a National RPS, 42 Conn. L. Rev. 1339 (2010). 62
Hari Osofsky & Hannah J. Wiseman, Dynamic Energy Federalism, 72 Md. L. Rev. 809 (2012-2013) [Hereinafter Dynamic Energy Federalism]. 63
15 U.S.C. ยง 717 (2012); Klass & Wilson, supra note 19 at 1805-09. 64
See Hari M. Osofsky & Hannah J. Wiseman, Hybrid Energy Governance, 2014 U. Ill. L. Rev. 1, 64 (2014) [Hereinafter Hybrid Energy Governance]. 65
66
Ostrow, supra note 61 at, 290. n.
67
47 U.S.C. ยง 332(c)(7) (2012).
68
Id. ยง 332(c)(7)(B)(ii)-(iii).
69
Id. ยง 332(c)(7)(B)(v).
Dynamic Energy Federalism, supra note 63, at 840-43. 73
74
Id. at 841.
See, e.g., Hybrid Energy Governance, supra note 65, at 21. 75
Id. at 43-55; see id. at 8 (noting the powerful influence that states exert over transmission cost allocation agreements). n 76
Ostrow, supra note 61, at 320; see also Klass & Wilson, supra note 19, at 1859-65. 70
See, e.g., Kirsten H. Engel, Harnessing the Benefits of Dynamic Federalism in Environmental Law, 56 Emory L.J. 159 (2006). 71
Hybrid Energy Governance, supra note 65, at 64. 72
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 1 9
Law School Environmental and Energy Law Program 2000 H Street, NW Washington, D.C. 20052
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Help Us Celebrate 150 Years of GW Law TO MARK GW LAW’S 150TH ANNIVERSARY and to prepare for a continued bright future, the law school has launched the 150th Anniversary Law Capital Campaign. In support of our outstanding Environmental and Energy Law Program, which was established an impressive 45 years ago, we ask that GW Law alumni and friends contribute funds to provide scholarships so that GW Law can continue to enroll the best and brightest students—the next generation of environmental and energy law attorneys—and to support leading-edge faculty research and scholarship, as well as new initiatives such as the Sustainable Energy Initiative. Please join us by making a gift to GW Law designated for the Environmental and Energy Law Program. Every gift strengthens your program. To make a gift today, please visit our web site at www.law.gwu.edu or contact Margie Shepard, Director of Development at 202.994.0287 or by email at mshepard@law.gwu.edu. Every gift will enhance the GW Law experience for our Environmental and Energy Law faculty and students.
Celebrating our rich history and bright future