Case Explained: PACIFICORP V. SIXKILLER

Court: United States Court of Appeals for the Ninth Circuit Filed: 2026-08-07 Docket: 3:23-cv-06155- The Ninth Circuit affirmed the district court’s dismissal with prejudice of PacifiCorp’s complaint alleging that Washington State’s Climate Commitment Act (CCA) and Clean Energy Transformation Act (CETA) violate the Dormant Commerce Clause by discriminating against interstate commerce through the allocation of no-cost carbon allowances. The court held that PacifiCorp failed to plausibly allege a cognizable claim because the electricity generated for in-state sale and the electricity exported out-of-state are not “similarly situated” entities under the Dormant Commerce Clause analysis. The panel applied the standard that discrimination under the Dormant Commerce Clause requires differential treatment of similarly situated economic interests. The court reasoned that the regulatory distinctions between the two categories of emissions render them dissimilar: electricity sold to Washington customers is subject to the comprehensive decarbonization mandates of CETA, whereas exported electricity is not covered by CETA’s requirements. Consequently, the legislature’s decision to provide no-cost allowances only to utilities subject to CETA’s preexisting regulatory regime does not constitute unconstitutional discrimination against out-of-state commerce. The court further rejected PacifiCorp’s reliance on compensatory tax precedents, noting that the state was not imposing a discriminatory tax but rather regulating different entities under different statutory schemes. Because the complaint failed to state a claim upon which relief could be granted, the district court properly dismissed it without leave to amend, and the motion for a preliminary injunction was correctly denied as moot. As a practical consequence, PacifiCorp’s challenge to Washington’s carbon allowance program is terminated, and the state’s regulatory scheme remains in effect. The utility must continue to purchase allowances for emissions associated with exported electricity while receiving no-cost allowances only for emissions tied to in-state sales, subject to the existing CETA compliance obligations. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.