Court Greenlights GHG Nuisance Claims Against Power Companies

The U.S. Second Circuit Court of Appeals handed down a ruling on Monday in Connecticut v. American Electric Power Co. resurrecting lawsuits brought by eight states, New York City and three land trusts against several power companies over carbon dioxide emissions. In doing so, the court took a big step towards opening the courthouse doors to lawsuits over climate change.

The district court originally had dismissed the cases on the grounds that there was no recognized federal common law basis for abating greenhouse gas (GHG) emissions that allegedly contribute to global warming, separation of powers precluded the court from adjudicating the issues, and Congress had displaced any federal common law to address global warming issues. According to the district court, the elected branches of government must make an initial policy determine regarding global warming before the courts could adjudicate a nuisance claim over global warming. In addition, the district court had ruled that the plaintiff states, city and trusts did not have standing to sue on account of global warming and the absence of a justiciable claim deprived the court of jurisdiction.

The Second Circuit's 139-page decision overruled the district court on each of these grounds, but the significant portion concerns the "political question" basis for the dismissal. The political question doctrine has been used by other district courts to dismiss climate change litigation in Comer v. Murphy Oil Co. and California v. General Motors.

Under long-standing Supreme Court case law, separation of powers is intended to restrain the judiciary from inappropriate inteference in the business of the other branches of government. Thus, in the words of Chief Justice John Marshall in the 1803 Marbury v. Madison case: "Questions, in their nature political, or which are, by the constitution and laws, submitted to the executive, can never be made in this court." The Supreme Court in other cases has outlined a number of attributes of a "political question," but three are primary: (1) whether there is a textually demonstrable Constitutional committment of the issue to a coordinate political department; (2) whether there is a lack of judicially-discoverable and manageable standards for resolving the case; and (3) whether it is impossible to decide the case without an initial policy determination of a kind clearly for nonjudicial discretion.

The court in Connecticut v. AEP said that there was no provision in the Constitution that granted the legislative or executive branches responsibility for resolving issues concerning carbon dioxide emissions or other forms of alleged nuisance. Indeed, the court said if any branch had been conferred with the responsibility it is the judiciary. Furthermore, the court said that federal courts have successfully adjudicated complex common law public nuisance claims for more than a century, including cases involving air pollution.

Finally, the court that the absence of legislative or executive action on global warming, if anything, highlighted the need for the courts to act. For example, if existing statutes governing water pollution do not cover a plaintiff's claims and provide a remedy, a plaintiff still is free to bring a claim under the federal common law of nuisance and is not required to await a comprehensive legislative approach to domestic water pollution.

The decision covers several other issues, but the political question portion of the decision may have the widest repercussions. The two other lawsuits also dismissed on political question grounds are on appeal as well -- Comer v. Murphy Oil Co., in the 5th Circuit, is a class action alleging that various oil, chemical and power companies' GHG emissions contributed to climate change and worsened the effects of severe storms, such as Hurricaine Katrina; and California v. General Motors, in the 9th Circuit where the automakers are being sued for creating and contributing to a public nuisance, i.e. climate change. No doubt both courts will look at the Connecticut decision very carefully and weigh its rationale in their own cases.

Another significant aspect of this decision is the fact that the court took the political question issue head on. The court in the Connecticut case could have easily affirmed the dismissal on the political question basis in recognition of the EPA's much-anticipated endangerment finding and Congress' on-going efforts to craft climate change legislation. When a court as influential as the Second Circuit takes on an issue such as this, it sends a very strong signal that the judiciary will play a significant role in the climate change debate in the months to come.

California Renewable Energy Goals -- Real or Moving Goalposts?

California's legislative Assembly is supposed to vote this week on a measure to increase the state's renewable energy target to 33% by 2020, a goal the utilities commission calls "highly ambitious." Two bills, SB 14 and AB 64, would raise the existing target of 20% by 2010. Backers say that passage of the measures will demonstrate that California is serious about reducing greenhouse gases. Indeed, it would have to be since the projected cost is upwards of $115 billion.

While the basic goal has widespread support, its the details that are causing the most heartburn. One issue is that the three investor-owned utilities (IOUs), Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric, aren't likely to meet the current 20% by 2010 goal. The last quarterly status report indicated that renewables accounted for 13% of all IOU electric retail sales in 2008 and probably won't reach the 20% goal until 2013 or 2014. Moving the goalposts out to 33% by 2020 would require nearly tripling the amount of renewable energy sources from what existed at the end of 2007, and its hard to imagine the IOUs being able to meet that target as well. The bills propose building in some pad for missing the 2020 deadline, but even that may not be enough.

Other problems include all the new transmission lines needed to carry the additional power, how much of the renewable power will be generated in state, and what to do about other sources that might not be considered "renewable" and yet are highly efficient.

A draft implementation analysis by the California Public Utilities Commission (CPUC) said that achieving the 33% target by the year 2020 "is highly ambitious, given the magnitude of the infrastructure buildout required." As it is, meeting the 20% by 2010 target will require four major new transmission lines costing $4 billion total, although three of those lines already are underway. But reaching the higher goal by 2020 will require seven additional lines at a total cost of $12 billion. SB 14 and AB 64 both have mechanisms for speeding up approval of new transmission lines, but are not expected to substantially shorten the current 18-month average because of built in delays, such as requiring data for all four seasons necessary for project review under the California Enviromental Quality Act.

Certainly the 33% mandate could be a boon for California job creation, but California alone probably can't build enough wind, solar, geothermal or biomass projects to meet the target, so it will have to turn to outside sources. At issue in the two measures is whether there should be limits on how much renewable energy IOUs can buy out of state, or even out of the country. States like Oregon and Washington have been building wind farms in anticipation that some of the generation will go to help California IOUs meet the renewable goals, and British Columbia is hoping to sell some of its hydro power. However, Oregon and Washington have their own renewable energy targets and will want assurances that projects built in their state primarily benefit their states' consumers. SB 14 and AB 64 also would require that out-of-state projects meet California environmental management standards, and there is some question whether, for example, a hydro project in Canada would qualify.

Finally, and this is something that doesn't get a lot of attention in the popular press, is whether the emphasis should be on a "renewable" portfolio or broadened to energy efficiency resource standards so that technologies such as combined heat and power (CHP) could be included. CHP, which also is known as co-generation, takes a single fuel source and simultaneously produces electricity and heat, resulting in much higher efficiencies than do separate heat and light systems. Right now California doesn't include CHP, even a biomass fuel source CHP, in the mix of eligible renewable energy sources. While the IOUs in California have never been big fans of CHP (having had CHP power forced on them by the federal Public Utility Regulatory Policies Act of 1978), inclusion of CHP might actually help the IOUs meet the 33% target. Exclusion of CHP, however, would increase regulatory barriers to the detriment of an existing technology that reduces air pollutants, including greenhouse gases, has lower operating costs and high reliability.

Consequently, it may be one thing to change the goals, but an entirely different matter of making the goals happen. How California deals with all this is sure to have impacts not just within the state, but throughout the West.