Energy Law Archives - Columbia Law Review

Introduction Creating new agencies is a tempting solution to new or intractable problems. Legal scholars are especially fond of prescribing new regulatory entities. Consider the following examples: Andrew Tutt recommends a new expert regulator modeled after the FDA to screen algorithms before they can be put into use.[footnote]Andrew Tutt, An FDA for Algorithms, 69 Admin. L. Rev. 83, 122 (2017).[/footnote] Arti Rai and Stuart Benjamin advocate a new entity in the executive branch to promote innovation across federal agencies.[footnote]Stuart Minor Benjamin & Arti K. Rai, Fixing Innovation Policy: A Structural Perspective, 77 Geo. Wash. L. Rev. 1, 6 (2008).[/footnote] Cristina Rodríguez calls for a new, independent agency with authority over aspects of immigration policy.[footnote]Cristina M. Rodríguez, Constraint Through Delegation: The Case of Executive Control over Immigration Policy, 59 Duke L.J. 1787, 1791 (2010) (contending that a new, independent agency should set visa policy).[/footnote] Glen Staszewski proposes a Federal Inaction Commission to police agency delay.[footnote]Glen Staszewski, The Federal Inaction Commission, 59 Emory L.J. 369, 372 (2009).[/footnote] Policymakers appear equally enthusiastic about new agencies and offices, especially as a response to perceived government failure. Congress created the Consumer Financial Protection Bureau (CFPB) in the wake of the subprime mortgage crisis of 2008 to protect American consumers from Wall Street’s excesses.[footnote]See David A. Hyman & William E. Kovacic, Why Who Does What Matters: Governmental Design and Agency Performance, 82 Geo. Wash. L. Rev. 1446, 1485–86 (2014) (explaining the creation of the CFPB in the wake of the 2008 financial crisis).[/footnote] The Office of Homeland Security emerged as a promised safeguard of American well-being in the days following the 9/11 terrorist attacks.[footnote]See Dara Kay Cohen, Mariano-Florentino Cuéllar & Barry R. Weingast, Crisis Bureaucracy: Homeland Security and the Political Design of Legal Mandates, 59 Stan. L. Rev. 673, 684 (2006) (explaining the creation of this office immediately after the attacks and before the creation of the larger DHS).[/footnote] President Richard Nixon established the EPA in response to growing public awareness of environmental degradation (and as part of his effort to rebrand himself as the “environmental candidate”) in the early 1970s.[footnote]Richard J. Lazarus, Senator Edmund Muskie’s Enduring Legacy in the Courts, 67 Me. L. Rev. 239, 240 (2015).[/footnote] More recently, reflecting their different approaches to climate and energy policy, then-presidential candidate Joe Biden proposed the creation of a new Environmental and Climate Justice division within the DOJ,[footnote]Umair Irfan, We Asked Joe Biden’s Campaign 6 Key Questions About His Climate Change Plans, Vox (Oct. 22, 2020), https://www.vox.com/21516594/joe-biden-climate-change-covid-19-president (on file with the Columbia Law Review ).[/footnote] while President Donald Trump reestablished the Arctic Energy Office within the Department of Energy (DOE).[footnote]Press Release, U.S. Dep’t of Energy, U.S. Department of Energy Announces Establishment of Office of Arctic Energy (Sept. 17, 2020), https://www.energy.gov/articles/us-department-energy-announces-establishment-office-arctic-energy [https://perma.cc/B7QU-P4EH].[/footnote] Other candidates in the 2020 presidential race proposed a raft of new agencies, including a Department of Peace and a Department of Cybersecurity.[footnote]Courtney Bublé, 2020 Democrats Have Plans to Add New Federal Agencies, Gov’t Exec. (Aug. 20, 2019), https://www.govexec.com/oversight/2019/08/2020-democrats-have-plans-add-new-federal-agencies/159311 [https://perma.cc/WLY8-RYLF].[/footnote] Certainly, agency genesis is an arresting way for politicians to signal attention to an issue. But when is it the best approach to managing new problems? And when is it mere window dressing?[footnote]One scholar of government reorganization has concluded that agency genesis as a solution to policy challenges is “largely ineffective, and often has significant unintended negative consequences on the efficiency and effectiveness of government.” B. Guy Peters, Government Reorganization: A Theoretical Analysis, 13 Int’l Pol. Sci. Rev. 199, 199 (1992).[/footnote] The phenomenon of agency genesis is poorly understood and has never been the subject of scholarly treatment in its own right. This Article begins to remedy that deficit. It does so by exploring the phenomenon within a single domain: that of state energy agencies. State energy regulation is a fruitful context in which to investigate agency genesis and its implications for several reasons. First, unlike environmental regulation, food safety regulation, and other areas where the federal government has preempted broad swaths of state authority, much of energy regulation remains within state control. The extent of state regulatory authority over energy has produced considerable innovation in administrative structures governing electricity, natural gas, and related areas. Second, the proliferation of state energy agencies has followed a remarkably stable path. State creation of energy agencies occurred in waves over the past century, beginning with the advent of public utility commissions (PUCs) in the early part of the twentieth century and culminating in the recent creation of climate- or energy transition–specific bodies.[footnote]See infra section I.A.[/footnote] This permits more informed theorizing about the motivations for agency genesis. Notwithstanding these general trends, the diversity across states enables useful comparisons. Some states have delegated significant planning, education, and coordination functions to their state energy offices, for example.[footnote]See infra notes 89–95 and accompanying text.[/footnote] Others have created separate siting agencies for energy infrastructure.[footnote]See infra section I.A.3.[/footnote] One state, Colorado, recently created an Office of Just Transition to work with communities disproportionately impacted by the shift away from fossil fuels.[footnote]Colo. Rev. Stat. § 8-83-503 (2020) (establishing an Office of Just Transition).[/footnote] Investigating agency genesis also has important lessons for energy law and policy. It is past time for energy scholars to turn more serious attention to administrative arrangements. Energy commentators have focused significant attention on the question of whether monopolistic provision of energy services yields better outcomes than market competition.[footnote]See generally William Boyd, Public Utility and the Low Carbon Future, 61 UCLA L. Rev. 1614 (2014) [hereinafter Boyd, Public Utility] (suggesting ways in which traditional monopoly regulation can promote electricity decarbonization); David B. Spence, Can Law Manage Competitive Energy Markets?, 93 Cornell L. Rev. 765 (2008) (considering how to balance the tradeoffs that come with increased competition in energy markets); David B. Spence, Naïve Energy Markets, 92 Notre Dame L. Rev. 973 (2017) (questioning the fervor with which some have pursued market competition in its idealized form); Joseph P. Tomain, The Past and Future of Electricity Regulation, 32 Env’t L. 435 (2002) (arguing in favor of increasing competition between energy providers in the states); Jacqueline Lang Weaver, Can Energy Markets Be Trusted? The Effect of the Rise and Fall of Enron on Energy Markets, 4 Hous. Bus. & Tax L.J. 1 (2004) (examining the impact of market manipulation on enthusiasm for increased competition).[/footnote] Meanwhile, the question of whether a single regulator or multiple regulators can better superintend private sector arrangements and implement public sector policy remains unexplored. This omission is surprising, especially since the relationship between regulator and regulated entity was originally such a strong driver of theory in the field.[footnote]See Boyd, Public Utility, supra note 16, at 1636–51 (narrating the rise of the “public utility” concept and PUCs and collecting sources). For the canonical treatment of this relationship in administrative law more broadly, defending the architectural choices of the New Deal agencies and noting the connection between private and public forms of institutional organization, see generally James M. Landis, The Administrative Process (1938).[/footnote] This Article refocuses attention on the regulatory side of the energy equation. It builds on the newly vital literature on state administrative law by examining and questioning the law and policy of energy-agency genesis in the states. In doing so, it investigates how insights from the public administration, political science, and administrative law literatures on state government play out on the ground within a single policy domain. This Article has two major aims. First, it brings the question of agency genesis into sharp focus. Commentators have spilled much ink on the question of internal agency structure.[footnote]For a sampling of recent treatments, see generally Brian D. Feinstein, Designing Executive Agencies for Congressional Influence, 69 Admin. L. Rev. 259 (2017) (suggesting design changes to agencies that would maximize legislative control); Jacob E. Gersen, Designing Agencies , in Research Handbook on Public Choice and Public Law 333 (Daniel A. Farber & Anne Joseph O’Connell eds., 2010) (surveying the work of positive political theory on agency design); Kristin E. Hickman, Symbolism and Separation of Powers in Agency Design, 93 Notre Dame L. Rev. 1475 (2018) (expressing skepticism about judicial refashioning of agency design through severance remedies); Ganesh Sitaraman & Ariel Dobkin, The Choice Between Single Director Agencies and Multimember Commissions, 71 Admin. L. Rev. 719 (2019) (arguing that single-director agencies are preferable to multimember commissions).[/footnote] But such treatments rarely address agency genesis head-on. By tackling the question of agency genesis directly, and by situating the theory in the context of a rich case study, this Article contributes to a more nuanced understanding of state administrative law dynamics and their effect on policy output. This Article also puts agency genesis in context, focusing on new agencies as members of regulatory ecosystems in which both coordination and friction are key to understanding policy dynamics. In this way, it adds dimension to the literature on the administrative separation of powers,[footnote]See generally Sharon B. Jacobs, The Statutory Separation of Powers, 129 Yale L.J. 378 (2019) [hereinafter Jacobs, Statutory Separation of Powers] (emphasizing the separation of statutory powers among federal agencies); Jon D. Michaels, An Enduring, Evolving Separation of Powers, 115 Colum. L. Rev. 515, 529–51 (2015) [hereinafter Michaels, An Enduring, Evolving Separation of Powers] (focusing on political appointees, members of the civil service, and members of the public as the key actors in the administrative separation of powers); Jon D. Michaels, Of Constitutional Custodians and Regulatory Rivals: An Account of the Old and New Separation of Powers, 91 N.Y.U. L. Rev. 227 (2016) (same). For additional relevant literature, see Neal Kumar Katyal, Internal Separation of Powers: Checking Today’s Most Dangerous Branch from Within, 115 Yale L.J. 2314, 2322–42 (2006) (identifying internal checks and balances within the executive branch); Gillian E. Metzger, The Interdependent Relationship Between the Internal and External Separation of Powers, 59 Emory L.J. 423, 442–47 (2009) [hereinafter Metzger, Interdependent Relationship] (emphasizing ways in which the constitutional separation of powers can reinforce intra-executive branch checks).[/footnote] which has thus far taken federal agencies as its subject, by exploring relationships between multiple state agencies with related mandates. This Article’s second major aim is to provide an institutional analysis of the energy transition. Much existing scholarship on the transition focuses on its substance, giving less weight to questions about the institutions that will administer it.[footnote]See generally John C. Dernbach, Legal Pathways to Deep Decarbonization: Lessons from California and Germany, 82 Brook. L. Rev. 825 (2017) (offering examples of laws the United States might adopt to achieve decarbonization goals); Hari M. Osofsky, Jacqueline Peel, Brett McDonnell & Anita Foerster, Energy Re-Investment, 94 Ind. L.J. 595 (2019) (proposing corporate and security law changes to shift patterns of energy investment); Melissa Powers, An Inclusive Energy Transition: Expanding Low-Income Access to Clean Energy Programs, 18 N.C. J.L. & Tech. 540 (2017) (advocating expanded planning, partnership, and investment strategies for making clean energy options more accessible). For articles that do give weight to questions about institutions, however, see Hari M. Osofsky & Hannah J. Wiseman, Hybrid Energy Governance, 2014 U. Ill. L. Rev. 1, 5–12 (analyzing overlapping federal, state, local, and private energy governance regimes); Shelley Welton, Grasping for Energy Democracy, 116 Mich. L. Rev. 581, 602–34 (2018) [hereinafter Welton, Grasping for Energy Democracy] (exploring options for more direct democratic input into energy transition decisionmaking); Shelley Welton, Public Energy, 92 N.Y.U. L. Rev. 267, 313–28 (2017) (advocating more widespread public operation of electric utilities).[/footnote] But structure and substance are not so easily compartmentalized.[footnote]On the relationship between form and regulatory output, see, for example, Alejandro E. Camacho & Robert L. Glicksman, Reorganizing Government: A Functional and Dimensional Framework 2 (2019) [hereinafter Camacho & Glicksman, Reorganizing Government] (“We proceed on the premise that institutional structures can significantly influence the fate of regulatory programs.”).[/footnote] New agencies can shift power dynamics in favor of a state governor, thereby either increasing the rate at which decarbonization occurs or setting up roadblocks (depending on gubernatorial preference). New administrative bodies set up to advocate for particular perspectives can heighten the influence of previously underrepresented stakeholders in key regulatory proceedings. Moreover, increasing the number of state energy agencies can enhance the expertise available to tackle problems such as the rapid buildout of renewable energy infrastructure, compensation for the early retirement of fossil-fuel plants, and the more robust integration of demand-side resources into utility planning. Understanding the particular dynamics of state administrative government in this context is all the more vital because state governments are now on the front lines of electricity decarbonization. Behemoths like California are leveraging their considerable economic and regulatory might to banish carbon from their economies.[footnote]For an overview of California’s strategies, see Michael Colvin, How to Decarbonize California’s Economy Without Breaking the Bank, EDF: Energy Exch. (June 25, 2019), http://blogs.edf.org/energyexchange/2019/06/25/how-to-decarbonize-californias-economy-without-breaking-the-bank [https://perma.cc/7TYQ-9UKZ].[/footnote] Even states with less well-established track records of environmental regulation, including Colorado,[footnote]In addition to its goal of carbon-free electricity by 2050, Colorado seeks to reduce statewide greenhouse gas emissions to ninety percent below 2005 levels by the same date. U.S. Climate All., 2019 State Factsheets: Colorado (2019), https://static1.squarespace.com/static/5a4cfbfe18b27d4da21c9361/t/5d8e51cbee8f446c5857a542/1569608140582/USCA_2019+State+Factsheet-CO_20190924.pdf [https://perma.cc/7XXH-AYGD].[/footnote] Nevada,[footnote]Nevada’s goal is to become carbon neutral by 2050. U.S. Climate All., 2019 State Factsheets: Nevada (2019), https://static1.squarespace.com/static/5a4cfbfe18b27d4da21c9361/t/5d8e52bd98ac8952cb360222/1569608382779/USCA_2019+State+Factsheet-NV_20190924.pdf [https://perma.cc/GT9U-DKBC].[/footnote] and New Jersey,[footnote]New Jersey has rejoined the Regional Greenhouse Gas Initiative (RGGI), a cooperative carbon cap-and-trade scheme made up of states in New England and the Mid-Atlantic region. See Welcome, Reg’l Greenhouse Gas Initiative, https://www.rggi.org [https://perma.cc/4NN9-MY7K] (last visited Oct. 25, 2020).[/footnote] are taking ambitious actions to mitigate carbon emissions from electricity generation. In total, fifteen states and jurisdictions have announced efforts to achieve electricity-sector carbon neutrality by midcentury.[footnote]See David Iaconangelo, 100% Clean Energy Group Launches, with Eyes on Coronavirus, E&E News: Energywire (Apr. 2, 2020), https://www.eenews.net/energywire/stories/1062762687 (on file with the Columbia Law Review ). For a detailed description of state targets and deadlines, see Sophia Ptacek & Amanda Levin, Race to 100% Clean, Nat’l Res. Def. Council (Dec. 2, 2020), https://www.nrdc.org/resources/race-100-clean [https://perma.cc/4BKT-9BMD].[/footnote] Energy-agency dynamics in these states offer clues about how their transitions will unfold. This Article proceeds as follows. Part I offers a descriptive history of state-energy-agency creation, beginning with the rise of PUCs in the Progressive Era.[footnote]The term “energy” is broad and can encompass oil and gas regulation as well as transportation fuels. This Article focuses on electricity agencies.[/footnote] It then charts two subsequent waves of energy-agency genesis: the creation of state energy offices and siting boards beginning in the 1970s, and the more recent emergence of climate- and energy transition–specific bodies. This Part also tells a positive story of these waves, drawing on the public administration and political science literatures for insights into how and why new structural forms appear and diffuse across state lines. Part II explores the law and policy of state agency genesis. After setting out the legal mechanics of agency creation in the states, it proposes a normative framework for evaluating new agency creation. There are significant benefits to creating new agencies and offices to tackle new problems, among them the vigor of new agency actors, the signaling function of agency creation, the efficiency advantages of bypassing antiquated structures, and enhanced administrative checks and balances. But the framework does not ignore the drawbacks of agency multiplicity, which include resource costs and coordination challenges. This Article does not take an ultimate position on reform versus reorganization of state energy agencies or of bureaucracy in general.[footnote]For a comparable approach, see Camacho & Glicksman, Reorganizing Government, supra note 21, at 8 (professing no interest in “‘essentializing’ interjurisdictional relations” and emphasizing that “[a]llocational and structural choices will largely be context-specific”).[/footnote] Instead, it highlights the advantages and drawbacks of each approach in a way that can inform the decisions of state policymakers and other stakeholders. Part III describes the present moment in energy regulation and explains how the energy transition may exacerbate classic critiques of PUCs. Finally, Part IV applies the framework from Part II to assess how states’ architectural choices affect their abilities to meet the decarbonization challenge. Creation of new administrative bodies to complement PUCs has benefits. In addition to the classic advantages of vitality, signaling, and friction, some newer state energy agencies—especially state energy offices, but also siting boards and climate councils—can facilitate public participation and boast particular administrative strengths in planning and coordination that many PUCs lack. Nevertheless, new agencies are expensive, can take time to establish themselves, and make policy coordination more challenging. State agency creation might also result from political jostling for position and control rather than good governance inclinations. Part IV concludes by proposing guidelines for managing energy-agency multiplicity. But enthusiasm for “the new” risks overshadowing debates about reinvention or restructuring of existing agencies. Part V therefore suggests opportunities for reforming state PUCs as either an alternative or complement to agency genesis.