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Allco Finance Limited v. Klee

United States Court of Appeals, Second Circuit

June 28, 2017

ALLCO FINANCE LIMITED Plaintiff-Appellant,
v.
ROBERT J. KLEE, in his official capacity as Commissioner of the Connecticut Department of Energy and Environmental Protection, Defendant-Appellee, KATHERINE S. DYKES, JOHN W. BETKOSKI, III, and MICHAEL CARON, in their official capacities as Commissioners of the Connecticut Public Utilities Regulatory Authority, Defendants-Appellees.

          Argued: December 9, 2016

          Thomas Melone, Allco Renewable Energy Limited, New York, New York, for Plaintiff-Appellant.

          Robert D. Snook, Assistant Attorney General, Hartford, Connecticut, for George Jepsen, Attorney General for the State of Connecticut, for Defendant-Appellee Robert J. Klee.

          Seth Hollander, Assistant Attorney General (Clare E. Kindall, Assistant Attorney General, on the brief), New Britain, Connecticut, for George Jepsen, Attorney General for the State of Connecticut, for Defendants-Appellees Katherine S. Dykes, John W. Betkoski, III, and Michael Caron.

          Ann H. Rubin, Carmody Torrance Sandak & Hennessey LLP, Waterbury, Connecticut, for Amicus Curiae The Connecticut Light and Power Company, DBA Eversource Energy, in support of Defendants-Appellees.

          Gene Grace (Julia Dreyer, on the brief), American Wind Energy Association and RENEW Northeast, Washington, D.C., for Amicus Curiae American Wind Energy Association, in support of Defendants-Appellees.

          M. Elaine Meckenstock, Deputy Attorney General (Robert W. Byrne, Senior Assistant Attorney General, Gavin G. McCabe, Supervising Deputy Attorney General, and Melinda Pilling, Deputy Attorney General, on the brief), Oakland, California, for Xavier Becerra, Attorney General, California Office of the Attorney General, for Amici Curiae States of Massachusetts, New York, Oregon, Vermont, and Washington, and the California Air Resources Board, in support of Defendants-Appellees.

          Before: CALABRESI, RAGGI, LYNCH, Circuit Judges. [*]

          CALABRESI, Circuit Judge:

         Plaintiff-Appellant Allco Finance Limited ("Allco" or "Plaintiff") appeals from a final judgment entered by the United States District Court for the District of Connecticut (Haight, J.), which dismissed two of Allco's related, but not formally consolidated, Complaints ("the Complaints"). The Complaints focus on Connecticut's implementation of Connecticut Public Acts 13-303 and 15-107, which empower the state's energy regulator to solicit proposals for renewable energy generation, to select winning bids from such solicitations, and then to "direct" Connecticut's utilities to "enter into" wholesale energy contracts with the winning bidders. One of the Complaints also challenges a separate Connecticut program, the Renewable Portfolio Standard, which requires Connecticut's utilities either to produce renewable energy themselves or to buy renewable energy credits from other renewable energy producers located in the region.

         Allco brought these two actions against the Commissioners of Connecticut's state energy regulators in their official capacities ("the Defendants"), arguing that the state programs violate federal law and the dormant Commerce Clause of the United States Constitution, and that Connecticut's implementation of the programs has injured Allco. In addition to seeking damages and fees under 42 U.S.C. §§ 1983 and 1988, Allco sought declaratory judgments that Connecticut regulators had violated federal law in their implementation of the programs, and that any contracts that arose out of solicitations conducted under Public Acts 13-303 and 15-107 were void. Allco also sought equitable relief in the form of an injunction barring Connecticut from violating federal law in any pending or future solicitation.

         In each action, the Defendants moved to dismiss the Complaint for lack of standing and for failure to state a claim. Allco opposed these motions, and moved for preliminary injunctive relief. On August 18, 2016, in a single omnibus decision, the district court granted Defendants' motions to dismiss the Complaints and denied Allco's motions for injunctive relief as moot. Allco filed a timely notice of appeal on August 23, 2016, and then, on October 3, 2016, filed a motion for an emergency injunction pending this appeal. On November 2, 2016, a motions panel of this court granted the emergency injunction and expedited this appeal. We heard oral arguments on December 9, 2016, and vacated the emergency injunction on December 12, 2016.

         We now AFFIRM the district court's judgment. We hold: (1) that Allco failed to state a claim that Connecticut's renewable energy solicitations conducted pursuant Connecticut Public Acts 13-303 and 15-107 are preempted by federal law, and (2) that Allco failed to state a claim that Connecticut's Renewable Portfolio Standard program violates the dormant Commerce Clause.

         I. BACKGROUND

         A. The Federal Power Act and the Public Utility Regulatory Policies Act

         The Federal Power Act ("FPA") gives the Federal Energy Regulatory Commission ("FERC") exclusive authority to regulate the sale of electric energy at wholesale in interstate commerce. See 16 U.S.C. § 824(b)(1); Hughes v. Talen Energy Mktg., LLC, 136 S.Ct. 1288, 1292 (2016). A "sale of electric energy at wholesale" is defined as a "sale of electric energy to any person for resale." 16 U.S.C. § 824(d). The FPA requires "FERC to oversee all prices for those interstate transactions and all rules and practices affecting such prices, " and further "provides that 'all rates and charges made, demanded or received by any public utility for or in connection with' interstate transmissions or wholesale sales . . . must be 'just and reasonable.'" FERC v. Elec. Power Supply Ass'n, 136 S.Ct. 760, 767 (2016) ("EPSA") (quoting 16 U.S.C. § 824d(a)). "If 'any rate [or] charge, ' or 'any rule, regulation, practice, or contract affecting such rate [or] charge' falls short of that standard, " FERC "must rectify the problem: It then shall determine what is 'just and reasonable' and impose 'the same by order.'" Id. (quoting 16 U.S.C. § 824e(a)) (alterations in original). Although the FPA "places beyond FERC's power, leaving to the States alone, the regulation of 'any other sale'-i.e., any retail sale-of electricity, " id. at 762 (quoting 16 U.S.C. § 824(b)), states may not regulate interstate wholesale sales of electricity unless Congress creates an exception to the FPA. 16 U.S.C. § 824(b).

         The Public Utility Regulatory Policies Act[1] ("PURPA") contains such an exception, permitting states to foster electric generation by certain power production facilities ("qualifying facilities" or "QFs") that have no more than 80 megawatts of capacity and use renewable generation technology. Id. § 824a-3; see id. § 796(17)(A). A state may regulate wholesale sales of electricity made by QFs by requiring utilities to purchase power from QFs at the utilities' "avoided costs, " which are the costs that the utility would have otherwise incurred in procuring the same quantity of electricity from another source. See id. § 824a-3(b); 18 C.F.R. § 292.304(b)(2). Section 210(a) of PURPA, 16 U.S.C. § 824a-3(a), also provides all QFs with a guaranteed right to sell their energy and capacity to electricity utilities at the utilities' avoided costs. See 16 U.S.C. § 824a-3(b), (d); 18 C.F.R. § 292.304(b)(2); see also Am. Paper Inst., Inc. v. Am. Elec. Power Serv. Corp., 461 U.S. 402, 404-06, 417 (1983). PURPA imposes obligations on each state regulatory authority to implement FERC's PURPA regulations, 16 U.S.C. § 824a- 3(f)(1), and provides a private right of action to QFs to enforce a state's obligations under PURPA, see id. § 824a-3(h)(2)(B); FERC v. Mississippi, 456 U.S. 742, 772 & n.2 (1982).[2]

         B. The Interstate Electricity Market

         Three general categories of actors in the interstate electricity market are relevant to this opinion: generators, load serving entities (LSEs), and transmitters. See Hughes, 136 S.Ct. at 1292. Generators include power plants and other sources of electricity production. LSEs, otherwise known as utilities, sell electricity at retail to end users. Id. Transmitters transmit the electricity from generators to the LSEs. Id.

         "Until relatively recently, most state energy markets were vertically integrated monopolies-i.e., one entity, often a state utility, controlled electricity generation, transmission, and sale to retail consumers." Id. Over the past few decades, however, many states, including Connecticut, have deregulated their energy markets. Id. In deregulated markets, LSEs purchase electricity at wholesale from independent power generators. Id. In order "[t]o ensure reliable transmission of electricity from independent generators to LSEs, FERC has charged nonprofit entities, called Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs), with managing certain segments of the electricity grid." Id. The New England ISO ("ISO-NE"), the transmitter involved in this case, manages the grid in most of New England, including all of Connecticut.

         Given the changes to the energy market that came with deregulation, FERC altered its regulatory methods, and today it "often forgoes the cost-based rate-setting traditionally used to prevent monopolistic pricing. [FERC] instead undertakes to ensure 'just and reasonable' wholesale rates by enhancing competition-attempting . . . 'to break down regulatory and economic barriers that hinder a free market in wholesale electricity.'" EPSA, 136 S.Ct. at 768 (quoting Morgan Stanley Capital Grp. Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 536 (2008)). Thus, in Connecticut and other states that have deregulated their energy markets, interstate wholesale transactions typically occur through two FERC-regulated mechanisms. The first mechanism is bilateral contracting, whereby LSEs agree to purchase a certain amount of electricity from generators at a particular rate over a specified period of time. Hughes, 136 S.Ct. at 1292. After the parties have agreed to contract terms, FERC may review the rate to ensure it is "just and reasonable" under 16 U.S.C. 824d(a). See Morgan Stanley, 554 U.S. at 531-32. If these bilateral contracts are made in good faith and are the result of arm's-length negotiations, FERC presumes their terms are reasonable. See NRG Power Mktg., LLC v. Me. Pub. Utils. Comm'n, 558 U.S. 165, 167, 175 n.4 (2010); Morgan Stanley, 554 U.S. at 545-48. Second, RTOs and ISOs administer a number of competitive wholesale auctions. FERC extensively regulates the structure and rules of such auctions, in order to ensure that they produce just and reasonable results. See Hughes, 136 S.Ct. at 1293-94; EPSA, 136 S.Ct. at 769.

         Allco's first claim is that Connecticut's renewable energy solicitation program conducted pursuant to Connecticut Public Acts 13-303 and 15-107- which aims to encourage the creation of new bilateral wholesale energy contracts between LSEs and generators-violates the FPA and PURPA. As we shall see, Allco has made several attempts to put forth that argument.

         C. Connecticut's Renewable Energy Procurement Program

         1. The 2013 RFP, Allco I, and Allco II

         In 2013, the Connecticut Department of Energy and Environmental Protection ("DEEP"), which oversees energy policy and planning in Connecticut, see Conn. Gen. Stat. § 16a-3, issued a memorandum setting forth the state's first "Comprehensive Energy Strategy, " which included findings and policy goals to direct the state's energy and environmental planning. 2013 Comprehensive Energy Strategy for Connecticut, Dep't of Energy and Envtl. Prot. (Feb. 19, 2013), available at http://www.ct.gov/deep/lib/deep/energy/cep/2013_ces_final.pdf ("2013 CES"). The 2013 CES articulates a commitment (a) to promoting "diversification" of Connecticut's energy generation sources in order to mitigate "price and reliability risks, " id. at 81-82, and (b) to increasing renewable energy generation in the state and in adjacent states in order to meet the requirements of various environmental regulatory programs, such as the Global Warming Solutions Act and the Regional Greenhouse Gas Initiative, id. at 76 & n.20.

         The Connecticut legislature enacted a statute that authorized the DEEP Commissioner, "in accordance with the policy goals outlined in the [2013 CES], adopted pursuant to [Conn. Gen. Stat. § 16a-3d], " (a) to solicit proposals for renewable energy, (b) to select winners of the solicitation, and (c) to "direct [Connecticut's utilities] to enter into" bilateral contracts, called "power purchase agreements, " with the chosen winners "for energy, capacity and environmental attributes, or any combination thereof, for periods of not more than twenty years." Act Concerning Connecticut's Clean Energy Goals, 2013 Conn. Pub. Acts 13-303, § 6 (codified at Conn. Gen. Stat. § 16a-3f) ("Section 6").[3] Any contracts that were successfully negotiated between utilities and winning bidders also required the approval of the Connecticut Public Utilities Regulatory Authority ("PURA"), id., the agency charged with regulating the two principal utility companies in Connecticut.

         In July 2013, the DEEP Commissioner solicited proposals, under Section 6, from providers of renewable energy (the "2013 RFP"). Allco, an owner, operator, and developer of various solar projects throughout the country, submitted proposals for five solar projects, each of which had less than of 80 megawatts of capacity, and therefore were QFs under PURPA. The DEEP Commissioner did not select Allco's projects. Instead, it chose two others: (a) a wind project located in Maine called Number Nine Wind-which, with 250 megawatts of capacity, was too large to be a QF-and (b) a QF solar project located in Connecticut, called Fusion Solar, which was independent of Allco. The DEEP Commissioner then "directed" the Connecticut utilities to execute power purchase agreements with the generators that had been selected. PURA subsequently reviewed the resulting contracts, and approved them.

         Disappointed by its failure to receive a contract through the 2013 RFP, Allco sued the DEEP Commissioner in the United States District Court for the District of Connecticut, alleging that the DEEP Commissioner's implementation of Section 6, by means of the 2013 RFP, was preempted by the FPA. Allco complained that the Commissioner's implementation of the 2013 RFP had the effect of "fixing" wholesale energy prices, a power that Allco alleged was reserved to FERC under the FPA. Allco argued that the DEEP Commissioner's actions could avoid preemption by the FPA only if they were conducted in compliance with the limited authority granted to Connecticut by PURPA to regulate some wholesale interstate sales, and that the 2013 RFP failed to operate within the scope of this authority.

         In addition to seeking damages and fees under 42 U.S.C. §§ 1983 and 1988, Allco sought equitable relief to void the contract with Number Nine Wind[4] and to enjoin the DEEP Commissioner from violating the FPA or PURPA in any similar procurement process in the future.

         The district court dismissed the complaint for two independent reasons. First, it held that Allco lacked standing because its injuries were not within the FPA or PURPA's "zone of interests, " and because its injuries were not likely to be redressed by a favorable judgment. Allco Fin. Ltd. v. Klee, No. 13-cv-1874, 2014 WL 7004024, at *3-6 (D. Conn. Dec. 10, 2014) ("Allco I"). Alternatively, the district court concluded that Allco's claim failed on the merits because the State Defendants' "implementation of Section 6 does not seek to regulate wholesale energy sales but rather is a permissible regulation of utilities under the State's jurisdiction." Allco I, 2014 WL 7004024, at *10.

         On November 6, 2015, a panel of our court affirmed the district court's dismissal of the Allco I complaint on "alternative grounds." Allco Fin. Ltd. v. Klee, 805 F.3d 89, 91 (2d Cir. 2015), as amended (Dec. 1, 2015) ("Allco II"). Specifically, the panel determined (1) that PURPA's private right of action under 16 U.S.C. § 824a-3(h)(2)(B), which was created to vindicate any rights conferred by PURPA, foreclosed Allco's claims under 42 U.S.C. §§ 1983 and 1988; (2) that Allco had failed to exhaust its administrative remedies under 16 U.S.C. § 824a- 3(h)(2)(B), a prerequisite for its equitable action seeking to enjoin the DEEP Commissioner from conducting future procurements that violate the FPA and PURPA; and (3) that Allco lacked standing to bring a preemption action seeking solely to void the contracts awarded to the successful 2013 RFP bidders, because doing so would "not redress its injury, i.e., its not being selected for a Section 6 contract." Allco II, 805 F.3d at 94-98.

         2. The 2015 RFP and the Allco III Complaint

         While the Allco II appeal was pending, Allco filed another Complaint in the District of Connecticut, this time against both the DEEP Commissioner and the PURA Commissioners. The suit-which we will call Allco III-is one of the two suits now before us on appeal.

         The Complaint in Allco III focused on a draft RFP that the DEEP Commissioner issued on February 26, 2015, soliciting a second round of interstate wholesale energy generation proposals ("the 2015 RFP") under Sections 6 and 7 of Connecticut Public Act 13-303, as well as Connecticut Public Act 15-107.[5] This solicitation was to be closed to generators with less than 20 megawatts of capacity and open to bidders with more than 80 megawatts of capacity-i.e., it excluded bids from smaller QFs and accepted bids from renewable energy generators too large to be QFs. Although the 2015 RFP was to be accompanied by a contemporaneous RFP open exclusively to bidders with 2-20 megawatts of capacity, the amount of generation capacity solicited through that RFP was smaller, and so Allco claimed it presented a less-valuable opportunity for Allco's facilities.

         The draft 2015 RFP included new language stating that, "[t]his RFP process . . . does not obligate [utilities] to accept any bid." Allco III App. at 29. Allco nonetheless alleged in its Complaint that DEEP "plans to issue the final request for proposals, which is likely to be in substantially the same form as the draft RFP . . ., in the spring of 2015 and compel wholesale energy transactions soon after it completes its review of proposals." Complaint ¶ 30, Allco Fin. Ltd. v. Klee, No. 3:15-cv-608 (D. Conn. Apr. 26, 2015), ECF No. 1 ("Allco III Compl.") (emphasis added).

         Allco's preemption argument in Allco III, with respect to the 2015 RFP, thus differed slightly from the preemption argument it made against the 2013 RFP in Allco I and Allco II. Instead of focusing on the allegation that Connecticut violated PURPA and the FPA by "fixing" wholesale rates outside of PURPA, Allco put forth the theory that Connecticut violated PURPA and the FPA because "the outcome of the . . . RFP process will likely be the Commissioner's decision to force a utility to enter a wholesale power contract." Allco III Compl. ¶ 43 (emphasis added). According to Allco, this "compulsion of transactions for wholesale transmissions services, " id. ¶ 39, constitutes state regulation of wholesale sales not authorized by PURPA, and therefore in violation of the FPA, id. ¶¶ 43-45. Allco also argued that (1) minimum generation capacity limits placed on the generators allowed to submit bids into the 2015 RFP and (2) the fees charged to generators submitting bids constituted a regulation of the interstate wholesale energy market in violation of the FPA. Id. ¶¶ 47, 53. Additionally, Allco attacked Connecticut's implementation of its Renewable Portfolio Standard program (see infra Section I.C, discussing this claim), id. ¶¶ 63-71, and asserted §§ 1983 and 1988 claims similar to those in Allco I, id. ¶¶ 72-80.

         3. FERC's Notice of Intent Not To Act, and the Allco IV Complaint

         On November 9, 2015, several days after we issued our decision in Allco II, and while the Allco III suit was still before the district court, Plaintiff filed with FERC a petition for enforcement under PURPA, see 16 U.S.C. § 824a-3(h), thereby pursuing the administrative remedy that the Allco II panel held had not been properly exhausted. Allco's petition alleged that both the 2013 RFP and the 2015 RFP violated or would violate PURPA, asked FERC to invalidate the 2013 RFP, and also asked FERC to enjoin Connecticut from proceeding with the 2015 RFP. Allco Renewable Energy Ltd., Notice of Petition for Enforcement, FERC Docket No. EL16-11-000 (filed Nov. 9, 2015). On January 8, 2016, FERC issued a Notice of Intent Not To Act on Allco's petition. Allco Renewable Energy Ltd., Notice of Intent Not To Act, FERC Docket No. EL16-11-000, 154 FERC ¶ 61, 007 (2016). The Notice expressed no opinion on the merits of Allco's claims under PURPA.

         Claiming that it had now exhausted its administrative remedies regarding both the 2013 RFP and the 2015 RFP, Allco filed, on March 30, 2016, the second Complaint at issue in this appeal, which we will call Allco IV. While the Allco III Complaint concerned only the draft 2015 RFP, the Allco IV Complaint, in addition to addressing the (by then, finalized) 2015 RFP, also reached back to the 2013 RFP. The Complaint sought to invalidate the Number Nine Wind contract that resulted from the 2013 RFP and to enjoin the 2015 RFP from proceeding.

         As in the Allco III Complaint, the Allco IV Complaint asserted that Connecticut was violating PURPA and the FPA by issuing an RFP under which Connecticut would "compel[]" and "order" the utilities to enter into wholesale energy contracts on a particular set of proposed terms. Complaint ¶¶ 8, 28, Allco Fin. Ltd. v. Klee, No. 3:16-cv-508 (D. Conn. Mar. 30, 2016), ECF No. 1 ("Allco IV Compl."). Allco also argued that both the 2013 RFP and the 2015 RFP, by virtue of the restrictions and fees imposed on bidders, regulated wholesale sales of electricity, and that because they did not fit within the limited regulatory authority over wholesale sales granted to Connecticut by PURPA, they violated the FPA.[6]Id. ¶¶ 7-8, 48.

         On July 11, 2016, Allco notified the district court that because the Number Nine Wind contract had been terminated for reasons unrelated to Allco's lawsuits, Allco's claims regarding the 2013 RFP were moot and it was proceeding solely on its claims related to the 2015 RFP.[7]

         D. Connecticut's Renewable Portfolio Standard Program

         In its Complaint in Allco III, Allco claims that a separate Connecticut program, the Renewable Portfolio Standard ("RPS"), Conn. Gen. Stat. § 16-245a(b), violates the dormant Commerce Clause.

         Connecticut's RPS program requires utilities to have an increasing percentage of their generation portfolios be "generated from" renewable energy. Conn. Gen. Stat. § 16-245a(a). Connecticut's RPS program allows utilities to satisfy this requirement either by generating renewable energy themselves, or by purchasing renewable energy certificates ("RECs"). See id. § 16-245a(b). (Each REC represents one megawatt-hour of renewable energy produced by a third-party generator.) [8]

         "RECs are inventions of state property law whereby the renewable energy attributes are 'unbundled' from the energy itself and sold separately." Wheelabrator Lisbon, Inc. v. Conn. Dep't of Pub. Util. Control, 531 F.3d 183, 186 (2d Cir. 2008) (per curiam). As such, different states define RECs differently, focusing on various attributes which they deem to be especially relevant.

         Connecticut's RPS program defines two types of RECs that count towards the requirement placed on Connecticut utilities. Each of these involves particular kinds of renewable energy generation technology that Connecticut is seeking to encourage, see Conn. Gen. Stat. §§ 16-245a(b) (limiting eligible RECs to those produced by "Class I" and "Class II" generators), 16-1(a)(20)-(21) (defining "Class I" and "Class II" RECs based on the type of renewable power generation technology used). And each of these must be issued and tracked by the New England Power Pool Generation Information System ("NEPOOL-GIS"), see id. § 16-245a(b), an independent association of electric utilities, which was founded in 1971, and which is supervised by FERC, see Braintree Elec. Light Dep't v. FERC, 550 F.3d 6, 9 (D.C. Cir. 2008).

         The first type is a REC that is generated by a renewable energy source located within the jurisdiction of ISO-NE (i.e., Connecticut, Massachusetts, Vermont, New Hampshire, Rhode Island, and most of Maine). The second type is a REC that is issued by NEPOOL-GIS for energy that may be imported into the ISO-NE grid from generators in adjacent control areas, pursuant to NEPOOL-GIS Operating Rule 2.7(c). Conn. Gen. Stat. § 16-245a(b). These adjacent control areas include ISO-New York, the Northern Maine Independent System Administrator, Inc., and Quebec and New Brunswick in Canada. Although Connecticut utilities are free to purchase RECs that do not meet these requirements-for example, RECs from generators which cannot transmit their energy into the ISO-NE grid pursuant to NEPOOL-GIS Rule 2.7(c)-such RECs will not count towards their requirements under the RPS.

         Connecticut has articulated several reasons for incorporating these geographic limitations into its RPS program. Central among these is the State's interest in encouraging the development of new renewable energy generation facilities that are able to transmit their electricity into the ISO-NE grid. See The Conn. Dep't of Energy & Envtl. Prot., Restructuring Connecticut's Renewable Portfolio Standard, at i (Apr. 26, 2013), http://www.ct.gov/deep/lib/deep/energy/rps/rps_final.pdf; 2013 CES at 81-82. Connecticut argues that increased in-region renewable energy production would improve air quality for its citizens and protect them from price and supply shocks that could result if, for example, there was a natural gas shortage or a nuclear power plant were to go off-line. See 2013 CES at 82. The state contends that placing regional limitations on RECs, if they are to satisfy the RPS requirement, is necessary if the program is to help increase the development of renewable generation facilities that are capable of effectuating these and similar goals.

         Plaintiff, in its Allco IV Complaint, argues that it has been injured by two different features of Connecticut's RPS program, both of which, Plaintiff claims, amount to discriminatory "regional protectionism" in violation of the dormant Commerce Clause. First, Allco alleges that it has a solar power facility in Georgia that has been discriminated against by Connecticut's RPS program insofar as Connecticut utilities cannot satisfy the RPS program's requirements by purchasing the Georgia RECs. Second, Allco argues that it has been injured by the fact that renewable energy generators in adjacent control areas-though able to sell qualifying RECs-must pay a fee to transmit their energy into the ISO-NE grid in order to sell their RECs to Connecticut utilities pursuant to NEPOOL GIS Rule 2.7(c). Allco asserts that it owns such a renewable facility in New York, and that it "will not deliver its electricity into the ISO-New England control area because of the additional cost burdens involved in doing so." Allco III Compl. ¶ 34.

         E. The District Court's Decision in Allco III and Allco IV

         On August 18, 2016, the district court dismissed both of Allco's Complaints, with prejudice, in a single ruling. Allco Fin. Ltd. v. Klee, No. 3:15-CV-608, ...


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