Varnum LLP successfully represented Energy Michigan, a trade group for alternative energy suppliers, in challenging the Michigan Public Service Commission’s (MPSC) buy-local rule requiring energy providers to source a portion of their electricity locally.
MPSC’s buy-local rule mandates that power providers in much of Michigan’s Lower Peninsula either purchase or produce at least 2.7% of their energy locally. The Sixth Circuit found that this requirement discriminates against out-of-state energy producers and may violate the Constitution’s dormant commerce clause. The Sixth Circuit sent the case back to a lower court, instructing it to evaluate whether the rule is essential in achieving Michigan’s goal of securing a reliable energy supply.
Energy Michigan argued the rule unfairly disadvantaged alternative energy suppliers including many who operate outside of Michigan. These suppliers said the regulation made it difficult to compete with large utilities and effectively reserved parts of the energy market for in-state providers.
In comparing Michigan’s rule to a similar energy law struck down by the U.S. Supreme Court in 1992, the Sixth Circuit found Michigan’s restrictions limit interstate trade and do not meet constitutional standards.
Varnum Partner Brion Doyle represented Energy Michigan in the case. “This decision is a significant step forward in ensuring fair competition in Michigan’s electricity market. The court’s ruling affirms our argument that Michigan’s electricity suppliers and their customers deserve access to the most cost-effective and reliable energy sources available.”