whether by restricting transfers of SO2
allowances to the Upwind States or requiring forfeiture of sums received
for unrestricted transfers, is meant to reduce the number of SO2
allowances that are available to units in the Upwind States.
Theoretically, fewer allowances being available will result in lesser
SO2 emissions. However, this theory is contradicted by actual practice:
Midwestern states used 4.67 million fewer SO2 allowances than they had
available in 2000. Additionally, any reduction in SO2 emissions in the
Upwind States must result in less acid deposition in New York State in
order to fulfill the goal of the Air Pollution Mitigation Law. There is
also no guarantee that the law will reduce the number of allowances
available in the Upwind States, since the remainder of the states are
free to transfer any number of allowances to units in the Upwind States.
Moreover, as the defendants concede, 97.7% of the allowances purchased by
Upwind States were from states other than New York. The substantial
disjunct between the law itself and its purpose undermines its
legitimacy, particularly in light of the burden imposed upon interstate
The law restricts transfers of SO2 allowances to Upwind States. It
imposes upon in-state units the entire cost of compliance, either by
forfeiture of receipts from unrestricted transfers or by reduced value of
restricted SO2 allowances. It attempts to halt altogether transfers of
SO2 allowances from New York units to units in Upwind States. It does
this in spite of a federal system designed for free nationwide
transferability of SO2 allowances. It imposes a burden upon interstate
Defendants contend that the burden on interstate commerce is
inconsequential. In support of this contention, they point to the minimal
number of allowances allocated to New York units when compared to the
nationwide numbers. For example, in 1995 only 2.65% of the total
allowances were allocated to New York units, and in Phase II only 2.99%
are allocated to New York units. These statistics demonstrate the extent
of the discrimination upon interstate commerce rather than establish that
there is no discrimination. See Wyoming v. Oklahoma, 502 U.S. 453, 455,
112 S.Ct. 789, 801 (1992) (striking down an Oklahoma law that required
in-state utilities to use at least 10% Oklahoma-mined coal).
Because a burden on interstate commerce has been demonstrated,
defendants must now justify the law in terms of "local benefits flowing
from the statute and the unavailability of nondiscriminatory alternatives
adequate to preserve the local interests at stake." Id. (internal
quotation omitted); Pike, 397 U.S. at 142, 90 S.Ct. at 847. As set forth
above, the local benefits flowing from the statute are tenuous at best.
Moreover, defendants have not established that nondiscriminatory
alternatives are unavailable. For example, would requiring New York units
to further reduce SO2 emissions result in a similar decrease in acid
deposition? Thus, even under the Pike balancing test the Air Pollution
Mitigation Law cannot pass constitutional muster.
CAMG has standing to pursue this suit by virtue of its member, NRG
Energy, Inc. New York's Air Pollution Mitigation Law is preempted by
Title IV of the Federal Clean Air Act.
The Air Pollution Mitigation Law is protectionist legislation that
violates the Commerce Clause of the United States Constitution. Even if
it were not considered protectionist, the Air Pollution Mitigation Law
violates the Commerce Clause because the burden it imposes upon
interstate commerce is not justified by its purported purpose. No
material facts are disputed and CAMG is entitled to summary judgment as a
matter of law. The Air Pollution Mitigation Law is null and void and its
enforcement must be enjoined. Accordingly, it is ORDERED that
1. The summary judgment motions brought by defendant Pataki and the PSC
defendants are DENIED;
2. Plaintiff CAMG's cross motion for summary judgment is GRANTED;
3. The Air Pollution Mitigation Law, New York Public Service Law §
66-k, is preempted pursuant to the Supremacy Clause, U.S. Const., Art.
VI, cl. 2, and therefore is null and void;
4. The Air Pollution Mitigation Law, New York Public Service Law §
66-k, violates the Commerce Clause, U.S. Const., Art. 1, § 8, cl. 3,
and therefore is null and void; and
5. Defendants are permanently enjoined from enforcing or taking any
action to enforce the Air Pollution Mitigation Law, New York Public
Service Law § 66-k.
The Clerk of the Court is directed to enter judgment accordingly.
IT IS SO ORDERED.