California Energy Commission v. Department of Energy

Oct 28: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-71576. The California Energy Commission (CEC) petitions for review of an order of the U.S. Department of Energy (DOE) denying CEC’s request for a waiver of preemption under the Energy Policy and Conservation Act (EPCA). The CEC sought the waiver in order to establish water efficiency standards for residential clothes washers, as set forth in its state regulations. To obtain such a waiver, CEC was required to show by a preponderance of the evidence that the state regulation was “needed to meet unusual and compelling State or local . . . water interests.”

DOE rejected the CEC’s petition for three separate reasons, but asserts that “each [of the reasons] flowed from CEC’s failure to provide adequate information to DOE to allow the federal agency to make an informed decision.” The DOE also challenged the court’s jurisdiction under the EPCA to review the denial of the waiver, raising an issue of first impression in the Ninth Circuit.

The Appeals Court said, "We hold that this court has jurisdiction under the EPCA. Because the DOE’s stated justifications demonstrate an arbitrary and capricious failure meaningfully to address the CEC’s application for a waiver, we reverse the
DOE’s ruling and remand for further proceedings."

The Appeals Court ruled further, "The CEC has requested that this Court order the DOE to grant the CEC’s waiver petition. However, this Court’s appropriate role is not to engage in the underlying analysis to determine whether the statutory criteria are met, even if the CEC might have supplied the DOE with sufficient information to do so. . . Considering the significant number of
issues left for resolution, many of which require factual findings in the DOE’s area of expertise, we decline to order a waiver on the present record. We reverse the challenged order of the DOE and remand for further proceedings consistent with this opinion."

Access the complete opinion (click here).