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NextEra Energy Capital Holdings, Inc. v. Walker

ELR Citation: 50 ELR 20048
Nos. 1:19-cv-626-LY, (W.D. Tex., 02/26/2020) (Yeakel, J.)

A district court held that a Texas right-of-first-refusal law giving existing electricity transmission providers in the state a preference to build and operate new lines is constitutional. An energy company argued the Texas law barred it from obtaining a certificate of convenience and necessity for construction of a transmission line in East Texas because the law restricted the interstate market to develop transmission facilities only to owners of interconnecting local facilities or in-state entities the local owners designated, and thus impermissibly discriminated in violation of the Commerce Clause. The court found that the law only regulated the construction and operation of transmission lines and facilities within Texas, and did not impermissibly discriminate in favor of in-state interests because it did not purport to regulate transmission of electricity in interstate commerce. The company also argued that the law impacted the company's contractual interests, and thus effected a substantial impairment of the contractual relationship in violation of the Contracts Clause. The court found that to the extent, if any, the law impaired the company's contractual interests, the law rested on and was promoted by significant and legitimate state interests, and thus that the company failed to plead a claim. It therefore dismissed the suit.