Vol. 50-2

By Josh Katz and Emily Meier

Recent Publications

An Analysis of “Private Energy” by Yael R. Lifshitz

Introduction

In her article “Private Energy,” Yael R. Lifshitz contributes to the growing legal discussion around distributed generation. Distributed generation (DG) encompasses various technologies that generate electricity at or near where it will be used.[1] Using this approach, Lifshitz evaluates the DG market through the lens of a private law regime[2] and  focuses on aspects of property law and the apparent connection to energy. Lifshitz argues that the role of property law in energy production and consumption is often ignored, and this oversight stands in the way of effective policy.

Lifshitz’s Analysis

Lifshitz begins her discussion by pointing out the function of property entitlements in the realm of the energy industry.[3] She highlights the importance of the locations that energy production and consumption take place. Property entitlements provide access to these unique locations. For example, oil production is ruled by the ability of developers to gain “mineral rights” to drill. Compare this to wind energy, which requires developers to gain “wind rights” to build a large-scale wind farm.   In sum, the different energy resources require distinct property entitlements.[4]

Next, Lifshitz connects property entitlements to the greater energy market and its management, examining the influence of property law on the field of energy.[5] For example, according to the National Renewable Energy Laboratory, over one third of households and commercial enterprises nationwide rent or lease their dwellings.[6] The typical rental or lease agreement prohibits renters from participating in the distributed generation market making it impossible to host a solar photo-voltaic system.[7] Lifshitz calls this the “renters’ problem,” and proposes a change in the standard landlord-tenant leases to include “distributed energy enabling clauses.” These clauses would allow renters to safeguard a right to use solar panels through their lease agreements. [8]

Lifshitz also suggests a novel solution to the renters’ problem called “we-solar.” Under this model, renters would share an interest in pooled-energy and distributed generation resources.  Analogous to a carshare program or a co-working space,[9] we-solar would allow renters to access distributed energy when and where they need it.[10] Lifshitz’s model differs from “community solar” because it allows for a broader range of energy resources—off-site projects, on-site projects, microgrids, and crowd-funding solar.[11]   Moreover, this model gives renters—or even homeowners who do not have the necessary property rights to install solar panels—access to distributed energy.[12]

Finally, from a policy standpoint, Lifshitz establishes three pillars for which policy makers should pay attention if they wish to advocate for the use of distributed generation in their respective states and municipalities. [13] First, they should focus on property entitlements throughout the entire energy cycle, from production, to transmission, and ultimately consumption.[14] Second, policy makers should look to private law tools when approaching the interaction of energy policy and climate change.[15] Third, policy makers need to think about property law as a facilitator and shaper of public policy.[16]

Conclusion

Lifshitz’s proposal utilizes property law in energy production and consumption in a way that has never been considered. Her novel policy proposals could affect the general public’s access to solar energy in the future, and she even considers potentially expanding into implications of the peer-to-peer trading we are currently seeing. Research plays an important role in shaping how policy is formed and how legal communities will need to increasingly utilize creative problem-solving skills.

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

Emily Meier is a third-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.

 

[1]       Distributed Generation of Electricity and its Environmental Impacts, Envtl. Prot. Agency, https://www.epa.gov/energy/distributed-generation-electricity-and-its-environmental-impacts (last visited Mar. 20, 2020).

[2]       Yael R. Lifshitz, Private Energy, 38 Stan. Envtl. L.J. 119 (2019).

[3]       Id. at 128.

[4]       Id. at 129.

[5]       Id.

[6]       Id. at 140–42.

[7]       Id. at 126.

[8]       Id.

[9]       Id. at 146.

[10]     Id. at 149.

[11]     Id. at 153–56.

[12]     Id.

[13]     Id. at 127.

[14]     Id.

[15]     Id.

[16]     Id.

Vol. 50-1 Recent Publications

By Joshua Katz and Caleb Ray

Recent Publications

EPA Rule: Navigable Water Protections Rule and Ongoing Litigation

Introduction

The Clean Water Act (CWA) is the primary United States federal law governing water pollution. Under the CWA, the federal government has jurisdiction over all “navigable waters,” which the Act defines as “the waters of the United States, including territorial seas.”[1] The CWA does not further define navigable waters or the waters of the United States (WOTUS). Instead, a combination of Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers regulations and U.S. Supreme Court decisions have defined and redefined WOTUS, thereby determining what waters fall within CWA federal regulatory jurisdiction.[2]

The most recent update to the definition of WOTUS came in the EPA’s publication of the Navigable Waters Protection Rule (NWPR), which took effect June 22, 2020, and replaced the 2015 Clean Water Rule (CWR).[3] The NWPR reduces the scope of the CWA and limits federal jurisdiction to waters that are sufficiently and visibly connected to traditionally navigable waters.[4] Predictably, the NWPR faces several legal challenges in federal district court. The challenges fall into two main categories. In the first category, which this article broadly labels as those with conservation interests, the plaintiffs are states, environmental groups, and tribes.[5] These conservation plaintiffs are challenging the NWPR’s interpretation of WOTUS as waters with a physical, surface water connection to traditional navigable waters as a violation of the Administrative Procedure Act (APA) because a majority of the U.S. Supreme Court has already rejected that definition.[6] In the second category, which this article broadly labels as those with industry interests, the plaintiffs are agricultural groups.[7] These industry plaintiffs are challenging on the grounds that the CWA specifically regulates navigable waters, which Congress meant to mean waters that are navigable-in-fact, while the NWPR includes bodies of water that are not themselves navigable.[8] This article provides a brief background of the recent changes to the definition of WOTUS and an overview of the ongoing legal challenges to the NWPR.

Recent History of WOTUS: Rapanos v. U.S., Clean Water Rule, and Navigable Water Protection Rule

In Rapanos v. U.S., the U.S. Supreme Court’s most recent holding on the CWA and WOTUS, the Court issued a four-Justice plurality opinion that the CWA only provided jurisdiction over waters with a continuous surface connection to traditional jurisdictional waters.[9] Writing for the plurality, Justice Scalia defined WOTUS to mean “relatively permanent, standing, or continuously flowing bodies of water” and specifically excluded intermittent or ephemeral bodies of water resulting from precipitation.[10] Wetland and other remote waters, Scalia reasoned, were not within federal jurisdiction unless they had “continuous surface connection” to a relatively permanent WOTUS, “making it difficult to tell where the water ends and the wetland begins.”[11] A mere hydrologic connection to a body of water within federal jurisdiction under the CWA, the plurality held, was insufficient for a water body to fall within federal jurisdiction.

Justice Kennedy, in his concurring opinion, articulated the analysis of the Court’s prior WOTUS holdings and defined a WOTUS as a body of water with a significant nexus to a water that falls within federal jurisdiction.[12] Because Congress enacted the CWA to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” Justice Kennedy reasoned that bodies of water fall within federal jurisdiction under the CWA if they “significantly affect the chemical, physical, and biological integrity of other covered waters.”[13] According to Justice Kennedy’s significant nexus test, a body of water falls within federal jurisdiction if it has hydrological connection significant enough to affect the water quality of traditional navigable waters.[14]

Rapanos provides the basis for both the CWR and the NWPR. In the CWR, the EPA formalized Justice Kennedy’s significant nexus test to determine jurisdictional waters under the CWA on a categorical and case-by-case basis.[15] Per the CWR, “significant nexus means that a water, including wetlands, either alone or in combination with other similarly situated waters in the region, significantly affects the chemical, physical, or biological integrity of” traditionally navigable waters.[16] This includes categorical waters, such as wetlands adjacent to other waters and noncontinuous tributaries, and waters not otherwise excluded by the rule on a case-by-case basis.[17] The NWPR dispenses with the CWR’s implementation of Kennedy’s significant nexus analysis and instead presents a federal jurisdiction over “those waters and wetlands that maintain a significant surface water connection to traditional navigable waters.”[18]

Challenges to the NWPR

The NWPR was challenged in two federal district court cases on April 27, 2020, six days after the final rule was published.[19] In the first case, Chesapeake Bay Found. v. Wheeler, plaintiffs with conservation interests challenged the rule on the grounds that its interpretation of WOTUS violated the APA and was too narrow.[20] Eight similar cases have since been filed in different district courts.[21] In the second case, New Mexico Cattle Growers’ Association v. EPA, plaintiffs with industry interests challenged the rule on the grounds that its interpretation of WOTUS was too broad, as it provided federal jurisdiction over waters not navigable-in-fact.[22] Two other similar cases have since been filed.[23]

Plaintiffs with conservation interests, have filed the nine suits challenging the NWPR seeking to have the rule overturned for being too narrow.[24] The plaintiffs’ reasoning in each complaint is similar.[25] For example, in California v. Wheeler, the complainant states argued that the NWPR violates the APA by applying Justice Scalia’s plurality opinion in Rapanos.[26] In Rapanos, a minority of the Court agreed with Justice Scalia that the CWA only extends federal jurisdiction to “relatively permanent, standing or continuously flowing bodies of water.”[27] While Justice Kennedy agreed with the result, he did not agree with the reasoning and instead would have relied on the significant nexus test to determine the outcome.[28]  As a result, the complainant states argued that the court should enjoin the NWPR because the rule is improperly “based on the plurality opinion in Rapanos even though a majority of the Justices in Rapanos found that the plurality’s interpretation of ‘waters of the United States’ was inconsistent with the CWA’s text and purpose.”[29] In Wheeler, the U.S. District Court for the Northern District of California denied the plaintiffs’ request for an injunction on the grounds that the complainants were likely to fail on the merits.[30] In Colorado v. EPA, however, the U.S. District Court for Colorado enjoined the NWPR, reasoning that it was in the public interest to maintain the status quo while the case was decided on the merits.[31] Both cases were appealed and all nine cases are ongoing.[32]

The three cases brought by plaintiffs with industry interests argue that the courts should enjoin the NWPR because it defines navigable waters too broadly.[33] They allege that the term navigable waters in the CWA is similar to the phrase “navigable capacity of the waters of the United States” in the Rivers and Harbors Act of 1899, and Congress, therefore, intended them to be interpreted in the same way.[34] The language in the Rivers and Harbors Act applies to navigable-in-fact waters that can be used for transportation in commerce, and plaintiffs argue that the CWA should not extend to waters that do not meet that same threshold.[35] Because the NWPR allows for federal jurisdiction over waters that are not navigable-in-fact, the plaintiffs ask the courts to hold that the rule is an unlawful interpretation of the CWA.[36] The U.S. District Court for Oregon dismissed one such lawsuit for lack of standing.[37] The two other cases are ongoing.[38]

Uncertainty and the Possible Patchwork Definition of Jurisdictional Waters

Uncertainty about the WOTUS definition and, therefore, what waters are under federal jurisdiction is likely to continue for the near future. While the NWPR is active in every state except for Colorado, eleven cases challenging the rule are ongoing in different jurisdictions. If federal district or circuit courts reach different conclusions, as courts already have in Colorado and California, it would create an unpredictable patchwork of jurisdictional waters rules across the country.[39] The definition of WOTUS and the corresponding scope of federal jurisdiction will remain uncertain at least until the ongoing cases challenging the NWPR reach their conclusions and potentially long afterwards.

Joshua Katz is an attorney at Bickerstaff Heath Delgado Acosta LLP in Austin, TX. He practices in the areas of environmental law, administrative law, water law, electric utility regulation, and civil litigation.

Caleb Ray is in his fourth and final year of a dual degree program pursuing a Master of Global Policy Studies from the LBJ School of Public Affairs and a JD from the University of Texas School of Law. He is an Articles and Notes Editor for the Texas Environmental Law Journal.

 

[1] 33 U.S.C. § 1362(7).

[2] About the Waters of the United States, Env’t Prot. Agency, https://www.epa.gov/nwpr/about-waters-united-states (last visited Nov. 26, 2020).

[3] The Navigable Waters Protection Rule: Definition of “Waters of the United States,” 85 Fed. Reg. 22,250, 22250 (Apr. 21, 2020).

[4] Id. at 22,252.

[5] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[6] See, e.g., Wheeler, 467 F.Supp.3d at 873; Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[7] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[8] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[9] Rapanos v. U.S., 547 U.S. 715, 739 (2006).

[10] Id. at 716.

[11] Id.

[12] Id. at 759; see also Solid Waste Agency of N. Cook County v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001); U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[13] Rapanos, 547 U.S at 780 (quoting 33 U.S.C. § 1251(a)).

[14] Id. at 784.

[15] Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,055–56 (June 29, 2015).

[16] Id. at 37,106.

[17] Id. at 37,105–06, 37,018.

[18] The Navigable Waters Protection Rule: Definition of “Waters of the United States, 85 Fed. Reg. 22,250, 22,252 (Apr. 21, 2020).

[19] First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr, 27, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); 85 Fed. Reg. 22250.

[20] Complaint at 24–25, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020). 

[21] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[22] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[23] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[24] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[25] See id.

[26] Cal. v. Wheeler, No. 3:20-cv-03005 at *6 (N.D. Cal. 2020).

[27] Rapanos, 547 U.S. at 716.

[28] Id. at 716.

[29] Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[30] Cal. v. Wheeler, No. 3:20-cv-03005 at *8 (N.D. Cal. 2020).

[31] Colo. v. Env’t Prot. AgencyNo. 1:20-cv-01461 at *1313 (D. Colo. 2020).

[32] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[33] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[34] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019) (quoting Rivers and Harbors Act, 33 U.S.C. § 403).

[35] Id.

[36] Id. at 5, 22.

[37] N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Aug. 7, 2020).

[38] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[39] See, e.g., Congressional Research Service, “Waters of the United States” (WOTUS): Current Status of the 2015 Clean Water Rule 6 (2018) (explaining that the 2015 Clean Water Rule is in effect in twenty-two states and enjoined in twenty-eight states).