Federal Preemption and Clean Energy Floors

Abstract

Federal policies regarding renewable and clean energy often lack clear definition, are incomplete, and are scattered across multiple statutes and agencies. Yet at the same time, recent decisions of both federal agencies and courts have attributed a preemptive effect to federal statutes that threatens to hobble innovation in renewable and clean energy policy by subnational regulators. One consequence of this approach is that most significant policies promoting clean and renewable energy are channeled toward subsidies from the federal fisc, rather than diverse policies undertaken independently by state governments or regional customers and suppliers.

This Article argues that, contrary to many agency and judicial decisions, the text, structure, history and purpose of key federal statutes does not require a singular approach to federalism in clean energy policy. Borrowing from environmental law, we plant a flag for a preemption approach that we call the “clean energy floor,” and show that this is consistent with the history and structure of federal energy legislation, including both New Deal and more modern statutes. As a normative matter, we also argue that reading of federal energy statutes to incorporate regulatory floors is a good idea, to the extent that it allows federal and state energy regulators an opportunity to work together to overcome problems of fragmentation, stagnation and stalemate -- and especially to address important issues related to climate change and new technologies such as renewable energy and fracking, even absent new congressional action or completely defined federal policy. Our approach to clean energy federalism also has some important implications for how courts should interpret other statutes in the regulatory contexts where federal and state authority are often perceived as substitutes for one another, such as health care.