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Supremacy and Clean Energy Commerce: Understanding Federalism vs. States' Rights in Renewable Energy Project Development

(176 reviews)

Produced on July 20, 2016

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Course Information

Time 1h 30m
Difficulty Intermediate
Topics covered in this course: Oil, Gas, & Energy

Course Description

States and federal energy regulators are increasingly challenging each other’s traditional understanding of the balance of power between the federal government and states’ rights to adopt incentives to promote renewable energy and this year’s Supreme Court term has presented the opportunity for the Court to issue a trio of decisions that clarify the balance of energy regulatory power between the federal and state governments when it comes to regulating the electricity and natural gas industries. 

Renewable energy project developers and their financiers are finding new legal frameworks that are helping to clarify a renewed spirit of cooperative federalism across the U.S., especially in organized competitive wholesale power markets. The recent Supreme Court decisions are helping to clarify the applicability of the Federal Power Act’s balance of powers to emerging clean energy demand response technologies, including the roles of demand response, energy efficiency and net metering policies across state lines. 

One recent case dealt with whether the Federal Energy Regulatory Commission (FERC) went too far and infringed on states’ rights when FERC issued a 2010 rule, called Order No. 745, that requires wholesale power market operators to pay electric consumers for commitments not to use power at certain key times. And Order No. 745 required that these payments be equal to the same amount that wholesale power generators were to be paid for generating electricity. In this way, FERC was essentially ordering that “megawatts” equal megawatts.  Another case challenged that certain Mid Atlantic region states went too far in trying to incentivize new wholesale power generators with long-term contracts. A third case dealt with states’ ability under antitrust law to review transactions in the wholesale natural gas industry regulated by FERC. Taken together, renewable energy project developers and their financiers have new guidance on the cooperative federalism at play in various states.

This course, presented by Stephen J. Humes of Holland & Knight’s New York City Office, reviews the legal issues arising in the development of renewable energy projects and the roles of FERC and the states in establishing rules and promoting project incentives to meet clean energy standards.


Learning Objectives:

I.     Understand the statutory federalism vs. states’ rights framework of the Federal Power Act and Natural Gas Act

II.    Learn about the trio of recent U.S. Supreme Court Cases interpreting the role of cooperative federalism in electric and gas projects

III.    Identify the federalism vs. states’ rights issues in renewable energy project development

IV.    Provide practice guidance to reduce legal risk and avoid surprises in renewable energy project deal structuring

Credit Information

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Stephen J. Humes

Holland & Knight LLP

Stephen J. Humes is a partner in Holland & Knight's New York office and practices environmental, energy, public utility and infrastructure law. He has substantial experience advising clients on renewable energy project finance and development, especially grid scale and net metered solar photovoltaics. For decades, he has advised clients on energy regulatory and environmental issues, including those associated with conventional and renewable power plant development, cogeneration, liquefied natural gas and pipeline facilities, geothermal and other utility facility siting matters. His energy-related environmental experience includes advising on environmental justice and climate change issues. Mr. Humes guides clients through state and federal administrative proceedings, including advancing rate cases in administrative litigation and defending clients in enforcement actions. He also counsels clients on a full range of state and federal environmental compliance and enforcement matters and handles energy and environmental issues effectively in corporate M&A transactions, including acquisitions and divestitures of power plants.


At a time of steadily increasing public and private support for investments in renewable and sustainable energy projects as a response to global climate change, Mr. Humes is a key member of the firm's Green Bank Financing Practice and International Energy Project Finance Team, supporting investments in North America and beyond. State sponsored green banks are growing rapidly to offer government assistance in stimulating private capital investments in clean energy and Mr. Humes provides energy regulatory and transactional advice in support of such transactions. Typical clean energy project finance transactions that Mr. Humes supports include solar PV from utility scale to residential, wind farms, geothermal projects in the Caribbean and Latin America, and distributed thermal energy storage projects that offset peak day electric demand. Mr. Humes has supported projects financed by major state green banks, International Finance Corporation, private equity providers and tax equity investors.


Mr. Humes represents independent power producers, exempt wholesale generators, PURPA- qualifying facility owners, retail electric suppliers, and electric and gas utility companies in transactions and administrative regulatory proceedings before such agencies as the Connecticut Public Utilities Regulatory Authority, Connecticut Siting Council, New Jersey Board of Public Utilities, Massachusetts Department of Public Utilities, New York State Public Service Commission, ISO New England, New England Power Pool and Federal Energy Regulatory Commission. He has also advised competitive energy companies and the companies that finance them throughout the New England and the Mid-Atlantic regions.


Mr. Humes advises property owner and developer clients regularly on alternative energy facility development, including obtaining regulatory approvals, interconnection and other siting issues for solar PV, wind, bio fuels, geothermal, biomass and cogeneration. He frequently negotiates power purchase agreements, EPC agreements, and other financing and transactional documents in support of renewable energy project finance and development.



Eric H.

This was a great overview of this subject.

Suzanne V.

Excellent course! Great materials and presentation. I look forward to additional courses by Stephen Humes.

Brian O.

He did a nice job on a complicated topic. Well done.

Thomas B.

Very well presented.

Julie A. B.

A new-to-me field. Consequently, felt like I was dropped into a cave. The well-informed speaker serves as a flashlight navigating the legal issues surrounding the development of renewable energy projects along with the roles of the Federal Energy Regulatory Commission (FERC) and the states in establishing rules as well as promoting project incentives to meet clean energy standards.

Benjamin L.

This program really stood out for being informative and useful.

Paul S.

Excellent overview of a new-to-me area of the law!

Frank K.

good presentation

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