Allco Finance Ltd. v. Klee

The Connecticut legislature enacted two separate programs that promoted renewable energy. First, the commissioner of the Connecticut Department of Energy & Environmental Protection (DEEP), Robert Klee (defendant) was authorized by statute to solicit proposals for renewable energy and to direct electric utilities to enter into bilateral power purchase agreements with the winners, subject to the approval of the Connecticut Public Utilities Regulatory Authority (PURA). The utilities were not obligated to accept any bids and could enter the contracts at their own discretion. Second, Connecticut’s renewable portfolio standard (RPS) program required Connecticut utilities to purchase renewable energy credits (RECs) generated within the six states located in the ISO-New England (ISO-NE) region or issued by the New England Power Pool Generation Information System (NEPOOL-GIS). There existed a national market for RECs independent of geographic areas. Allco Finance Limited (Allco) (plaintiff), a New York-based company (that is, outside of the ISO-NE region), submitted proposals for five solar projects to DEEP, but none were selected. Allco sued the commissioner of DEEP, alleging that the two state programs were preempted by federal law and violated the Dormant Commerce Clause of the United States Constitution. The district court granted the commissioner’s motion to dismiss. Allco appealed.