Presentation by Seth Kaplan of Conservation Law Foundation at 2011 ABA Section on International Law Annual meeting

1. The push and pull between the “free market”, “local value”, “protectionism”, “preemption” in the development of Renewable Energy in the U.S. and cross-border implications Seth Kaplan Vice President for Policy and Climate Advocacy Conservation Law Foundation Presentation to ABA – Section of International Law “Competitive Alternatives to Fossil Fuels Electricity Generation” April 7, 2011 1

2. Factual and Legal Context 2 The Climate Context: 80% reduction economy wide means electric decarbonization and analyses like European Roadmap 2050 tells us that means mostly renewables Federal policy not relevant, if Federal RES had passed a very different story RES/RPS Key State tool Key distinction: What is eligible? A subject of great interest in Quebec, active campaign underway to change RPS eligibility in US (especially New England) states Biggest legal issues with international (re: Canada) implications are raised as domestic concerns about states protecting against each other and price concerns within states, preview of domestic legal issues: PURPA preemption as constraint on feed-in tariff and net metering Dormant Commerce Clause Explicit international issue is proverbial sleeping 800 lb. gorilla – GATT/NAFTA but it might be paper tiger

3. 3 RPS Policies www.dsireusa.org / March 2011 ME: 30% x 2000 New RE: 10% x 2017 VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 WA: 15% x 2020* MN: 25% x 2025 (Xcel: 30% x 2020) MT: 15% x 2015 NH: 23.8% x 2025 MA: 22.1% x 2020 New RE: 15% x 2020(+1% annually thereafter) MI: 10% + 1,100 MW x 2015* ND: 10% x 2015 OR: 25% x 2025(large utilities)* 5% - 10% x 2025 (smaller utilities) SD: 10% x 2015 WI: Varies by utility; 10% x 2015 statewide RI: 16% x 2020 NY: 29% x 2015 CT: 23% x 2020 NV: 25% x 2025* IA: 105 MW OH: 25% x 2025† PA: ~18% x 2021† CO: 30% by 2020(IOUs) 10% by 2020 (co-ops & large munis)* NJ: 22.5% x 2021 IL: 25% x 2025 WV: 25% x 2025*† CA: 33% x 2020 KS: 20% x 2020 UT: 20% by 2025* VA: 15% x 2025* MD: 20% x 2022 MO: 15% x 2021 DE: 25% x 2026* AZ: 15% x 2025 DC OK: 15% x 2015 NC: 12.5% x 2021(IOUs) 10% x 2018 (co-ops & munis) DC: 20% x 2020 NM: 20% x 2020(IOUs) 10% x 2020 (co-ops) PR: 20% x 2035 TX: 5,880 MW x 2015 HI: 40% x 2030 29 states + DC and PR have an RPS (7 states have goals) † Renewable portfolio standard Minimum solar or customer-sited requirement Renewable portfolio goal Extra credit for solar or customer-sited renewables Solar water heating eligible Includes non-renewable alternative resources

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5. Economic Motivation: Tension with anti-protectionism rules 5 Emissions Reduction Reduced Water Use/Discharge Diversification /Reliability Japan shows wind can help keep the lights on Self sufficiency, independence Zero fuel cost – price stability Every place has indigenous renewable resources (unlike fossil fuels) Jobs, attract employers, jobs, local property taxes, jobs and of course jobs Popular – which should matter in a democracy

6. Legal Issues 6 Public Utilities Regulatory Policy Act (PURPA) US Federal law enacted in 1978, among other things mandated purchase of power from renewables and other “Qualified Facilities” (“QFs”) at “avoided cost” What is “avoided cost” has been subject of extensive litigation Current hot issue - Application of PURPA when State doesn’t invoke it: At issue in both “net metering” and “feed-in tariff contexts – Can states require payments that will ensure that real projects get built? Can dueling definitions of net metering be reconciled? Dormant Commerce Clause A very messy area of the law – Supreme Court has made hash of the law but “facial discrimination” in favor of own state sets off alarm bells – and TransCanada lawsuits For almost twenty years threats of GATT/NAFTA complaints over restrictions that are claimed to be unfair to imports from Canada (like large hydro being ineligible for RPS compliance) have been made but no actual casesor complaints filed