A federal appeals court has upheld Washington state’s authority to enforce decarbonization requirements against PacifiCorp, rejecting the utility’s challenge to the state’s carbon emissions cap-and-invest program, created by the Climate Commitment Act in 2021.
The Ninth Circuit Court of Appeals affirmed the dismissal of PacifiCorp’s lawsuit against the Washington Department of Ecology. The utility had argued that the state’s enforcement of the climate rules violated the dormant Commerce Clause, a constitutional principle that limits states from discriminating against businesses from outside their borders.
The court found that PacifiCorp had not plausibly shown that Washington was applying its decarbonization requirements differently to similarly situated entities. That failure was central to the court’s decision to uphold the dismissal.
Ruling Reinforces Washington’s Climate Framework
The decision provides additional support for Washington’s Climate Commitment Act, which establishes emissions reduction requirements for utilities and other regulated entities. PacifiCorp receives no-cost allowances covering carbon emissions associated with electricity it sells to Washington customers.
The case is part of a series of legal challenges surrounding the state’s climate legislation. The latest ruling gives regulators greater certainty as they continue implementing the program and provides companies with guidance on the legal standard that could apply to future challenges.
Relevant: Washington State Advances Toward Joining California-Québec Carbon Market
For businesses operating under Washington’s decarbonization rules, the decision highlights the importance of demonstrating unequal treatment among comparable entities when pursuing claims under the dormant Commerce Clause.
The ruling also strengthens the state’s position as it seeks to reduce greenhouse gas (GHG) emissions and shift its energy system toward cleaner sources. For other jurisdictions developing similar climate policies, the decision could offer a legal reference point for designing and enforcing emissions regulations.
While the decision does not eliminate potential legal challenges to Washington’s climate policies, it reinforces the state’s current authority to administer its decarbonization requirements.
Read more: Colorado And Wyoming Sign Agreement On Cross-Border CO2 Storage
