Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF MAINE

GRAY YARMOUTH ROAD SOLAR LLC, )

et al., )

)

Plaintiffs, )

) 1:25-cv-00592-SDN

v. )

)

MAINE PUBLIC UTILITIES )

COMMISSION, et al., )

)

Defendants. )

ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION

In this matter, over 140 organizations involved in community solar development

(the “Plaintiffs”) have sued the Maine Public Utilities Commission (“PUC”) and various

Commission officers (collectively, the “Defendants”) over the implementation of Maine

public law LD 1777, codified at 35-A M.R.S. § 3209-F. Specifically, Plaintiffs challenge LD

1777’s “Project Charge,” which is a monetary assessment charged to community solar

developers participating in the State’s Net Energy Billing (“NEB”) Program. Plaintiffs

argue that LD 1777 constitutes an unconstitutional per se taking of private property and

request the Court enjoin enforcement of the law. On Friday, January 23, 2026, the Court

held a hearing to address the Plaintiffs’ pending motion for a preliminary injunction. For

the reasons discussed herein, the Court now DENIES the Plaintiffs’ motion.

BACKGROUND

I. Energy Distribution Overview

Prior to discussing the NEB Program and the relevant statutory changes at issue

here, an over-simplified explanation of energy distribution in Maine may be helpful. Solar

power is often generated using resources such as solar installations or solar “farms.”

These large-scale installations can be quite substantial, sometimes covering an area the

size of multiple football fields. Private utility companies, also known as transmission and

distribution utility companies, supply and distribute energy produced by energy

producers, including both solar and all other types of energy.

Once collected, energy is delivered to consumers via the electrical grid. That task

falls exclusively to the utility companies, which manage the “transmission”—the process

of moving electricity across the broader grid—and “distribution”—the delivery of that

electricity to individual homes and businesses over the local distribution system. The

utility companies also are responsible for the physical infrastructure required for this

movement of energy, including poles, wires, and substations. In addition, they perform

ongoing maintenance and repairs, such as fixing power lines after severe storms.

The retail electricity rates charged to consumers are composed of two components:

supply rates, which reflect the cost of generating energy, and delivery rates, which reflect

the cost of delivering energy to homes and businesses for consumer use. Decl. Sally Zeh

(“Zeh Dec.”), ECF No. 33 at ¶¶ 10, 15. Delivery rates themselves are composed of both

transmission and distribution rates, as described above. Id. at ¶ 16. Transmission rates

are set by the Federal Energy Regulatory Commission, while distribution rates are set by

the Defendant Maine PUC. Id. at ¶¶ 18, 20. Utility companies recover their transmission

and distribution costs through both “fixed charges”—a set charge regardless of specific

electricity usage—and “volumetric charges”—a variable charge based on the actual

amount of a customer’s electricity usage. Id. at ¶¶ 21–22.

II. History of NEB Program

The NEB Program is a state subsidy program designed to “encourage the adoption

of small-scale, renewable energy generation” in the State of Maine. Decl. Heather Sanborn

(“Sanborn Dec.”), ECF No. 34 at ¶ 5. At its inception, the NEB Program allowed individual

owners of qualifying renewable generation facilities (e.g., rooftop solar panels) to receive

a one-kilowatt hour (“kWh”) credit on their electric bill for every one kWh of energy

supplied to the electrical grid. Id. ¶ 6. This one-to-one credit on NEB participants’ utility

bills is based solely on the energy produced and sent to the electrical grid. However, NEB

participants do not pay any costs related to the utility company’s transmission and

distribution of the energy. Id. ¶ 9. This results in a “cost-shift” to non-NEB participants,

whose utility rates are increased to recover the transmission and distribution costs the

utility companies incur by delivering this energy. Id. Prior to 2019, NEB participants were

almost entirely individual customers who owned small rooftop solar installations on their

own residences. Id. at ¶ 10. The owners of these rooftop “facilities” received credits

directly on their own utility bills and each facility had a limited capacity. See id. Because

of the fewer number of participants and the limited capacity of their rooftop facilities, the

initial “cost-shifting” impact of the NEB Program was relatively minor. Id.

In 2019, the Maine legislature reformed and significantly expanded the NEB

Program by allowing larger “community solar” generators, such as Plaintiffs, to

participate in the NEB Program through a similar “kWh credit program.” See id. at ¶¶ 11–

15. Under the kWh credit program, the owner of an eligible community solar generator

(i.e., a “distributed generation resource” or “DGR”)1 contracts with individual

“subscribers” so that a percentage of the electricity generated by the DGR is credited to

each subscriber’s utility bill, just as if a portion of the solar generator’s panels were located

1 The 2019 NEB Act defines “[d]istributed generation resource” or “DGR” as “an electric

generating facility that uses a renewable fuel or technology . . . and is located in the service

territory of a transmission and distribution utility in the State.” 35-A M.R.S. § 3209-A(1)(B).

on the top of the subscriber’s own roof. See Sanborn Dec. ¶ 13.2 The kWh credit program

differs from the original NEB Program in that individuals may now subscribe to and

receive credits from a large-scale solar installation (i.e., a DGR) located elsewhere, rather

than installing solar rooftops on their own residence.

To participate in the kWh credit program, subscribers pay the DGR directly, not

the utility companies, for the value of their interest in the community solar facility. Zeh

Dec. ¶ 44. In return, subscribers receive a credit for the energy the DGRs generate and are

not charged any additional costs for transmission and distribution of that energy that the

subscriber would otherwise pay to the utility. Id. at ¶ 45. As alleged by Defendants, this

process results in owners of DGRs receiving a twofold benefit from ratepayers. See ECF

No. 32 at 7. First, DGR owners receive from subscribers the full retail rate of electricity,

rather than the wholesale market rate, which increases DGR owners’ revenues. Id.

Second, the rate DGR owners receive from subscribers includes the “volumetric delivery

charge” the utility company would normally receive from the subscriber that includes the

transmission and distribution charges. Id. However, the utility—not the DGR—is still

delivering the electricity, so the utility is still incurring the transmission and distribution

costs. Id. As such, the delivery costs of electricity are shifted to ratepayers through a fixed

monthly charge on each ratepayer’s utility bill. See id.

Since the expansion of the NEB Program in 2019, electricity prices in Maine have

risen dramatically due to factors unrelated to community solar developers, such as the

2 According to Plaintiffs, because the cost of constructing large solar arrays requires significant

upfront investment, the State expanded the NEB Program as a way to induce the construction of

large community solar generators: the DGRs. ECF No. 3 at 1. Plaintiffs assert the DGRs provide

“considerable benefits” to Maine, including “energy price suppression, [] reduced greenhouse gas

emissions[,] and other environmental benefits.” Id. at 2.

2022 Russian invasion of Ukraine and severe winter storms in Maine in 2023 and 2024.

Sanborn Dec. ¶ 39. Additionally, transmission and distribution costs have been impacted

by an increase in investment from utility companies to maintain, modernize, and replace

aging infrastructure. Id. Each of these events caused spikes in the costs of both energy

supply and delivery. See id. Additionally, because the value of the credit given to

subscribers is tied to the total retail rate—which includes these inflated delivery costs that

solar developers do not actually incur—these price hikes have resulted in an unexpected

windfall for larger solar generators. Id. ¶ 40. Consequently, the general public bears the

burden, as utility companies must raise rates for all ratepayers to fund the higher credit

payments triggered by these external costs. See id. ¶¶ 39–40. The scale of this increase is

stark: the total cost of NEB has risen from approximately $8.7 million in 2021 to an

estimated $158.6 million in 2025, with approximately $47 million attributable to the kWh

credit program. See id. ¶ 44; Zeh Dec. ¶ 55. In an effort to rein in the rising costs of NEB,

the Maine legislature has since considered, and enacted, various bills and proposals

amending the NEB Program, including imposing additional requirements and

restrictions on DGRs. See Zeh Dec. ¶¶ 68–71; see also ECF No. 32 at 9–10.

III. LD 1777 (“Project Charge”)

The State’s most recent effort to reduce NEB costs is the enactment of the 2025

NEB Act, or “LD 1777”—the legislation Plaintiffs now challenge. As relevant here, LD 1777

imposes a monthly “Project Charge” on participating DGRs in the kWh credit program to

offset costs associated with the NEB Program.3 Sanborn Dec. ¶ 60. The statute also

3 LD 1777 was signed into law on June 27, 2025, and the Project Charge was scheduled to go into

effect on January 1, 2026. On November 24, 2025, Plaintiffs filed their complaint and motion for

a preliminary injunction against LD 1777. ECF Nos. 1, 3. During the first week of December 2025,

prescribes the amount of the Project Charge and tiers it based on the size and capacity of

the DGR.4 Zeh Dec. ¶ 87. Under LD 1777, if a DGR owner fails to pay the Project Charge,

the utility company is required to cease applying credits to subscribers’ utility bills and

prohibit the application of any credits that accrue during periods of non-payment of the

Project Charge. Id. at ¶ 102. According to Defendants, the legislature enacted LD 1777 to

offset costs imposed by the NEB Program, thus reducing the transmission and

distribution costs otherwise borne by ratepayers. See id. at ¶ 104. However, the revenue

raised by the Project Charge likely will still not fully recover the overall NEB and kWh

credit program costs. For instance, current estimates project the Project Charge will

generate approximately $28 million in 2026, while kWh credit program costs are

expected to reach at least $47 million. Sanborn Dec. ¶ 65.

LD 1777 also provides for an “off-ramp” for DGR owners who may not want to

continue participating in the NEB Program. An owner of a DGR with less than a 75%

subscription rate may exit the NEB Program by entering into a “power purchase

agreement” (“PPA”) with the utility company in its service territory. Id. at ¶ 72; Zeh Dec.

¶ 89. Defendants assert the PPA option cost to ratepayers is less than the continued

participation of DGRs in the NEB Program, while still providing benefit to DGR owners.

the Court held several telephone conferences with counsel for parties to discuss the briefing and

hearing schedule for Plaintiffs’ motion, given the statute’s January 1, 2026, implementation

deadline. ECF Nos. 22, 25, 29. Following these conferences, Defendant PUC postponed collection

of any Project Charges to March 1, 2026. ECF No. 46 at 1 (“By unanimous vote, the [PUC]

determined . . . it will not open, during the time period January 1, 2026 through March 2, 2026,

an investigation into any transmission and distribution utility who is directed by statute or rule

to assess the recently enacted net energy bill project charge but fails to do so.”).

4 Under LD 1777, “the initial monthly charge must be for a distributed generation resource with a

capacity of: (A) Three megawatts or more and less than 5 megawatts, $6.00 multiplied by the

nameplate capacity of the resource in kilowatts; (B) One megawatt or more and less than 3

megawatts, $2.80 multiplied by the nameplate capacity of the resource in kilowatts; and (C) Less

than one megawatt, zero.” Zeh Dec. ¶ 87 (citing 35-A M.R.S. § 3209-F(3)).

See Sanborn Dec. ¶ 74. According to Defendants, these benefits include a guaranteed

contract price for up to twenty years and greater revenue stability by reducing exposure

to fluctuation in electric rates, subscription rates, and any future regulatory changes. See

id. ¶¶ 73–74, 79; Zeh Dec. ¶ 91.

In their motion, Plaintiffs assert they “collectively own—directly or indirectly—84

community solar projects” enrolled in the kWh credit program throughout Maine, “that

were induced by, and constructed in reliance on, the NEB Program’s statutory

framework” as it existed prior to LD 1777. ECF No. 3 at 3. Plaintiffs assert they relied on

the original program structure to secure real property rights, obtain project financing, and

complete construction of their solar facilities. See id. at 3–4. Because NEB participation

was central to project financing, the governing debt instruments for these projects

specifically mandated continued participation in the NEB Program. Id. at 4. Plaintiffs

contend that even if they could exit the NEB to avoid the Project Charge, all but four

projects would be unable to meet their financial obligations by selling energy on the

wholesale power markets. Id. at 5. Plaintiffs argue that such an outcome would trigger

widespread defaults, foreclosure, and the loss of their real property. Id.

DISCUSSION

“To grant a preliminary injunction, a district court must find the following four

elements satisfied: (1) a likelihood of success on the merits, (2) a likelihood of irreparable

harm absent interim relief, (3) a balance of equities in the plaintiff’s favor, and (4) service

of the public interest.” Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, Inc., 794

F.3d 168, 171 (1st Cir. 2015). “The sine qua non of this four-part inquiry is likelihood of

success on the merits: if the moving party cannot demonstrate that [it] is likely to succeed

in [its] quest, the remaining factors become matters of idle curiosity.” New Comm

Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002) (citing Weaver v.

Henderson, 984 F.2d 11, 12 (1st Cir. 1993)). However, “[i]njunctive relief is an

extraordinary and drastic remedy that is never awarded as of right.” Carey v. Town of

Rumford, 25-cv-00356, 2025 WL 2978795, at *2 (D. Me. Oct. 22, 2025) (quoting Calvary

Chapel of Bangor v. Mills, 459 F. Supp. 3d 273, 282 (D. Me. 2020)).

I. Arguments

Plaintiffs now move to enjoin the enforcement of LD 1777 and the associated

Project Charge, alleging it constitutes an unconstitutional per se taking under the Fifth

Amendment.5 ECF No. 3 at 6–7. Plaintiffs argue they are likely to succeed on the merits

of their claim based on the application of the “unconstitutional conditions” doctrine to

the Takings Clause. See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 604

(2013); Dolan v. City of Tigard, 512 U.S. 374, 385 (1994); Nollan v. Cal. Coastal Comm’n,

483 U.S. 825, 831 (1987). Plaintiffs’ argument rests on two pillars. First, they contend the

Project Charge is an unconstitutional monetary exaction tied specifically to their real

property: the DGRs. See ECF No. 3 at 8–11. Second, Plaintiffs assert the State cannot

demonstrate either a sufficient nexus or rough proportionality between the Project

Charge and the social impact of their participation in NEB, as is required for such

monetary exactions under the Nollan-Dolan standard. See id. at 11–13.

Plaintiffs next argue LD 1777 cannot be upheld as constitutional on the theory that

participation in the NEB Program—and the resulting assessment of the Project Charge—

is voluntary. Instead, they contend their participation is effectively involuntary due to

5 While Plaintiffs allege three counts against the implementation of LD 1777’s Project Charge—a

per se taking, a regulatory taking, and a violation of the Contracts Clause, see ECF No. 1 at 78–83,

their motion for a preliminary injunction is limited strictly to their per se taking claim, as

confirmed by Plaintiffs’ counsel at the January 23 hearing.

both legal and economic compulsion. Id. at 16–23. First, Plaintiffs assert existing

financing agreements and contracts mandate they maintain their status in NEB to satisfy

debt obligations. Id. at 16. Second, Plaintiffs argue exiting the NEB Program to sell power

on the wholesale market or entering into a PPA are not viable economic options. Plaintiffs

argue selling power on the wholesale market would cause revenues to fall below debt

service requirements, leading to imminent default and the loss of their real property.

Plaintiffs argue this “draconian” consequence makes leaving the NEB Program equivalent

to leaving the energy market entirely, thus making the decision whether to participate in

NEB involuntary. Id. at 17–23. Plaintiffs likewise assert PPAs are only available to DGRs

below a 75% subscription rate and no Plaintiff would qualify for that option based on their

current subscription rates of at least 85%. ECF No. 38 at 12 (citing ECF No. 1 at ¶ 119(a)).6

In response, Defendants maintain that Plaintiffs are unlikely to succeed on the

merits of their claim, primarily because the Project Charge does not fall under either

established Takings Clause exceptions for monetary assessments—the Koontz-Nollan-

Dolan “unconstitutional conditions” exception, or the specific, identifiable fund of money

exception. ECF No. 32 at 20. Defendants further dispute Plaintiffs’ characterization of

participation in the NEB as involuntary and offer multiple alternatives to participation,

including selling solar power on the wholesale market, or entering into a PPA directly with

utility companies, which offer rates for their solar power that are significantly higher than

wholesale market rates. See id. at 13.

6 Defendants assert, by way of a declaration from Heather Sanborn, that Plaintiffs have the option

to either unilaterally terminate subscribers, or consolidate subscribers from one DGR to another,

to allow each DGR to be eligible to enter into a PPA rather than sell solar power on the wholesale

market. Second Heather Sanborn Decl. (“Second Sanborn Dec.”), ECF No. 43 at ¶¶ 4–6.

Plaintiffs further allege they will suffer irreparable harm if LD 1777 is not enjoined

for two reasons: (1) harms flowing from the violation of their constitutional rights under

the Taking Clause are per se irreparable; and (2) should Plaintiffs later prevail on the

merits, Maine’s sovereign immunity would prevent them from recouping any payments

already made under the Project Charge. ECF No. 3 at 26–28. Defendants dispute

Plaintiffs’ argument on irreparable harm, both because no established case law supports

the proposition that Takings Clause violations constitute per se irreparable harm, and

because should Plaintiffs prevail, they could seek reimbursement from utility companies

directly, bypassing any sovereign immunity issues. ECF No. 32 at 28–29.

Finally, Plaintiffs argue the balance of the equities and the public interest both

favor the issuance of an injunction. ECF No. 3 at 28–29. In response, Defendants contend

that LD 1777 and the Project Charge are essential to the sustainability of the NEB Program

and the State’s renewable energy goals, in addition to the State’s need to provide relief to

Maine ratepayers who subsidize these solar projects, each of which outweigh any

“minimal harm” to the Plaintiffs. ECF No. 32 at 28–30.

II. Analysis

A. Likelihood of Success on the Merits

“Likelihood of success is the main bearing wall of the four-factor

framework.” Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 16 (1st Cir.

1996). On this issue the district court need only make “an estimation of likelihood of

success and ‘need not predict the eventual outcome on the merits with absolute

assurance.’” Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 10 (1st Cir. 2013) (quoting Ross-

Simons, 102 F.3d at 16). Failure to demonstrate a likelihood of success on the merits is

ordinarily dispositive. See New Comm Wireless Servs., 287 F.3d at 9.

The Takings Clause of the Fifth Amendment of the Constitution, made applicable

to the States through the Fourteenth Amendment, see Chi., B. & Q.R. Co. v. City of Chi.,

166 U.S. 226, 239 (1897), provides: “[N]or shall private property be taken for public use,

without just compensation.” U.S. Const. amend. V. The Takings Clause principally serves

“to bar Government from forcing some people alone to bear public burdens which, in all

fairness and justice, should be borne by the public as a whole.” Armstrong v. United

States, 364 U.S. 40, 49 (1960).

The Plaintiffs cannot demonstrate likelihood of success on the merits. The Project

Charge does not fall within either recognized exception to the general rule that monetary

assessments are not takings; neither the unconstitutional conditions exception nor the

specific and identifiable fund of money exception applies here. Moreover, Plaintiffs’

participation in the NEB Program is voluntary, which independently precludes their per

se takings claim. The Court addresses each of these issues below.

1. Exceptions for Monetary Assessments

Federal courts generally reject the notion that the obligation to pay a monetary

assessment constitutes an unconstitutional taking under the Fifth Amendment. See, e.g.,

United States v. Sperry Corp., 493 U.S. 52, 62 n.9 (1989); E. Enters. v. Apfel, 524 U.S.

498, 540 (Kennedy, J., concurring in judgment and dissenting in part) (“The law simply

imposes an obligation to perform an act, the payment of benefits. . . . To call this sort of

governmental action a taking as a matter of constitutional interpretation is both imprecise

and, with all due respect, unwise.”); see also Commonw. Edison Co. v. United States, 271

F.3d 1327, 1340 (Fed. Cir. 2001) (“In short, while a taking may occur when a specific fund

of money is involved, the mere imposition of an obligation to pay money . . . does not give

rise to a claim under the Takings Clause.”). Indeed, “all circuits that have addressed the

issue have uniformly found that a taking does not occur when the statute in question

imposes a monetary assessment that does not affect a specific interest in property.”

McCarthy v. City of Cleveland, 626 F.3d 280, 285 (6th Cir. 2010) (collecting cases).

However, a statutory monetary assessment may alone constitute a taking in

certain, limited circumstances. First, a taking may occur when the government imposes a

“monetary exaction” or obligation as an unconstitutional condition for the grant of a land

use permit. See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 612 (2013);

see Dolan v. City of Tigard, 512 U.S. 374, 386–88 (1994); Nollan v. Cal. Coastal Comm’n,

483 U.S. 825, 831–32 (1987). The Nollan-Dolan line of cases represents a “special

application” of the unconstitutional conditions doctrine in the Takings Clause context,

which “protects the Fifth Amendment right to just compensation for property the

government takes when owners apply for land-use permits.” Koontz, 570 U.S. at 604.

Under the Nollan-Dolan doctrine, the “government may not condition the approval of a

land-use permit on the owner’s relinquishment of a portion of his property unless there

is a ‘nexus’ and ‘rough proportionality’ between the government’s demand and the effects

of the proposed land use.” Id. at 599. Second, a taking may occur when the government

directs payments from a specific and identifiable fund of money. See, e.g., Phillips v.

Wash. Legal Found., 524 U.S. 156, 160 (1998); Webb’s Fabulous Pharms., Inc. v.

Beckwith, 449 U.S. 155, 163–64 (1980); Brown v. Legal Found. Of Wash., 538 U.S. 216.

235 (2003). For the reasons that follow, the Court concludes neither exception applies to

the monetary assessment of LD 1777’s Project Charge.

i. Unconstitutional Conditions Doctrine

Plaintiffs first argue the Project Charge constitutes a per se taking under the

unconstitutional conditions doctrine. ECF No. 3 at 8. The “fairly well-developed” doctrine

of unconstitutional conditions prevents the government from requiring “a person to give

up a constitutional right . . . in exchange for [a] discretionary benefit conferred by the

government where the benefit sought has little or no relationship to the property.” Philip

Morris, Inc. v. Reilly, 312 F.3d 24, 46 (1st Cir. 2002) (quoting Dolan, 512 U.S. at 385).

The Supreme Court has noted “the unconstitutional conditions doctrine forbids

burdening the Constitution’s enumerated rights by coercively withholding benefits from

those who exercise them.” Koontz, 570 U.S. at 606. Here, Plaintiffs contend the Project

Charge unconstitutionally burdens their real property rights and must therefore

withstand scrutiny from the Nollan-Dolan nexus and rough proportionality standard.

However, unlike the instant case, the Koontz-Nollan-Dolan line of cases all

involved Takings Clause challenges where the government conditioned the approval of a

land use permit on a concession or payment by landowners. See id. at 599 (conditioning

approval of construction permit on owner’s deed of conservation easement to district and

landowner’s funding of offsite mitigation projects on public lands); Nollan, 483 U.S. at

827 (conditioning approval of construction of larger house on beachfront property on

public easement across property for beach access); Dolan, 512 U.S. at 378 (conditioning

approval of store expansion and paving of parking lot on dedication of land for public

greenway and for pedestrian/bicycle pathway to relieve traffic congestion). Indeed, the

Koontz Court explicitly stated “Nollan and Dolan ‘involve a special application’ of th[e

unconstitutional conditions] doctrine that protects the Fifth Amendment right to just

compensation for property the government takes when owners apply for land-use

permits.” Koontz, 570 U.S. at 604 (quotation modified); see also Sheetz v. Cnty. of El

Dorado, 601 U.S. 267, 275–76 (2024) (applying Nollan-Dolan to legislatively imposed

development impact fees conditioned on building permit approval).

Plaintiffs argue, both in their pleadings and during oral argument, that the

distinction between the permit approval in Koontz and their NEB Program participation

is “immaterial to the constitutional analysis,” because in both cases, “permission from the

government . . . is conditioned upon giving up a right linked to specific property.” ECF

No. 3 at 10 n.7. However, the Plaintiffs fail to establish the constitutional right they must

give up in exchange for a government benefit so as to constitute a violation of the

unconstitutional conditions doctrine. Put another way, the Court finds Plaintiffs do not

have a constitutional right to continued participation in the NEB Program to sell their

solar power at a specific or preferable rate. Unlike the permit conditions in Koontz and

other cases, LD 1777 does not regulate land use or prevent Plaintiffs from continuing to

develop and generate solar power outside of the NEB Program. The record demonstrates

instead that Plaintiffs may continue to generate and sell solar power through alternative

means, such as on the wholesale market and through PPAs.7 See ECF No. 32 at 13.

The unconstitutional conditions cases Plaintiffs cite do not alter my determination

that LD 1777 does not burden any constitutional right of Plaintiffs, should they continue

to participate in the NEB Program. For instance, in Levin v. City and Cnty. of S.F., 71 F.

Supp. 3d 1072 (N.D. Cal. 2014), the district court held that a city ordinance requiring

property owners who sought to withdraw their rent-controlled property from the rental

market to pay a lump sum payment to displaced tenants, constituted an unconstitutional

taking by “conditioning property owners’ right to withdraw their property on a monetary

7 During the hearing, Plaintiffs argued the alternative options to participation in the NEB Program

are not viable primarily due to economic impact and loss in revenue received under the NEB

Program and kWh credit program. However, for reasons described in further detail below, the

Court finds that a mere loss in economic benefit does not constitute a per se taking. See Section

II.A.2, infra; see also Philip Morris, Inc. v. Harshbarger, 159 F.3d 670, 679 (1st Cir. 1998).

exaction not sufficiently related to the impact of the withdrawal.” Levin, 71 F. Supp. 3d at

1074. In reaching this conclusion, however, the Levin court specifically applied the

“special application” of the Nollan-Dolan cases involving land use permits and monetary

exactions. See id. at 1081. Crucial to the court’s holding was the fact the ordinance at issue

required a property owner who wished to withdraw their property to apply to the city for

an “Ellis Act permit,” which was granted only on the condition that the property owner

would pay any evicted tenant from the withdrawn unit an “enhanced” lump-sum payout.

Id. Unlike the statutory scheme requiring a permit in Levin, LD 1777 here does not require

Plaintiffs to apply for a permit to continue using their land to generate and sell solar

power. Plaintiffs remain free to withdraw from the NEB Program and sell solar power

elsewhere without paying a third party or without applying for a permit. Further, while

the Levin plaintiffs sought to exit a government program without penalty, Plaintiffs here

seek to remain in a government program while avoiding any costs.

Accordingly, because the monetary assessment imposed by LD 1777 does not

constitute an unconstitutional condition on Plaintiffs’ property rights, the Court need not

apply the Nollan-Dolan nexus and proportionality standard. See City of Monterey v. Del

Monte Dunes at Monterey, Ltd., 526 U.S. 687, 702 (1999) (“Although in a general sense

concerns for proportionality animate the Takings Clause . . . we have not extended the

rough-proportionality test of Dolan beyond the special context of exactions—land-use

decisions conditioning approval of development on the dedication of property to public

use.” (internal citation omitted)); Reilly, 312 F.3d at 46 n.20 (declining to apply Dolan

rough-proportionality test in non-land permit use context).8

Regardless, even if the Project Charge is analyzed as a monetary exaction under

the unconstitutional conditions doctrine, it easily satisfies the Nollan-Dolan standard. LD

1777 and the Project Charge respond directly to an unforeseen increase in Maine

electricity rates that has created an “unexpected windfall to solar generators in the [NEB]

program and an uncontrolled exponential growth in the costs of the program that must

be borne by Maine ratepayers.” Sanborn Decl. ¶ 40. In 2026, the kWh credit program

specifically will cost Maine ratepayers $47 million, which the Project Charge will offset by

an estimated $28 million. Id. at ¶ 65. These costs are tied directly to Plaintiffs’

participation in the NEB and kWh credit programs, as the cost-shifting mechanisms of

the programs result in increased fixed charges on ratepayers’ utility bills. Accordingly, the

Project Charge bears an “essential nexus” and “rough proportionality” to the State’s

legitimate interest in reining in costs to Maine ratepayers. See Dolan, 512 U.S. at 386.

Plaintiffs instead argue the record demonstrates the NEB Program results in net

societal benefits; consequently, the Project Charge necessarily lacks the requisite nexus

and rough proportionality, as there are no societal costs to offset. See ECF No. 38 at 9–11.

In support, Plaintiffs point to a Maine PUC report highlighting the NEB Program’s

environmental and reliability benefits generally. Id. at 10; see ECF No. 38-4. However,

8 Although City of Monterey and Reilly were both decided prior to the Supreme Court’s decision

in Koontz, the Koontz decision does not alter this analysis. Koontz expanded the Nollan-Dolan

standard only in that it included the denial of land use permits (in addition to the approval of

land use permits) conditioned on the surrender of constitutional rights—it did not expand the

doctrine’s application beyond the realm of the land-use-permit context. See Koontz, 570 U.S. at

606 (“The principles that undergird our decisions in Nollan and Dolan do not change depending

on whether the government approves a permit on the condition that the applicant turn over

property or denies a permit because the applicant refuses to do so.”) (emphasis in original).

that same PUC report also discusses the net costs imposed by the NEB Program on Maine

ratepayers. See generally ECF No. 38-4 at 44–55. Defendants assert the Maine

legislature, in enacting LD 1777 and the Project Charge, specifically focused its cost-

benefit analysis on the financial burden to those ratepayers. See Sanborn Dec. ¶ 65 (“The

amount of the initial project charge . . . was carefully considered during the negotiations

regarding LD 1777, as legislators were particularly concerned about striking a careful

balance between reining in the unaffordable cost of the program to ratepayers and

ensuring financial viability of existing [DGR] projects.”). This Court’s role is not to

second-guess the legislature’s policy judgment as to which specific costs or benefits

should be prioritized. Because the legislature identified a documented cost to Maine

ratepayers and tailored the Project Charge to mitigate that specific impact, the Court finds

that even if the Project Charge could be characterized as a monetary exaction under the

Takings Clause, it satisfies the Nollan-Dolan nexus and proportionality standard and

therefore passes constitutional muster.9

ii. Specific and Identifiable Fund of Money

The second exception to the general rule against monetary assessments rising to

the level of an unconstitutional taking applies when the government directs payments

from a specific and identifiable fund of money. See, e.g., Phillips, 524 U.S. at 160 (seizure

of interest income held in lawyer trust accounts is private property of the owner of the

9 Similarly, even if analyzed as a user fee, the Project Charge is constitutional. Taxes and user fees

generally are not takings. See Koontz, 570 U.S. at 615. A user fee is constitutional if it is a “fair

approximation of the cost of benefits supplied,” United States v. Sperry Corp., 493 U.S. 52, 60

(citation omitted) (1989), and only becomes a taking if “so clearly excessive as to belie [its]

purported character as [a] user fee[],” id. at 62. Because the Project Charge is designed to offset

specific costs shifted to Maine ratepayers through Plaintiffs’ NEB participation, it does not reach

the level of “clear excessiveness” required to constitute a taking.

principal under Takings Clause and constitutes takings violation); Webb’s, 449 U.S. at 163

(appropriation of interest accruing on an interpleader fund is “analogous to the

appropriation of the use of private property” to constitute takings violation); Brown, 538

U.S. 216, 235 (2003) (state court’s seizure of interest on client funds held in escrow

account constituted an unconstitutional taking).

Here, Plaintiffs argue that “DGRs are similar to [] interest-bearing accounts”

because DGR assets, once built and operational, function “in all relevant aspects like a

bank account—used to collect revenue and pay debt.” ECF No. 3 at 14–15. Specifically,

Plaintiffs contend that because a DGR’s only cash flow consists of passive revenue from

customer subscriptions—which they liken to interest generated on the asset itself—the

Project Charge unlawfully confiscates their property.10 See id. at 15. In response,

Defendants argue characterizing DGR revenues as specific funds of money akin to

interest-bearing accounts is misplaced; instead, they contend the Project Charge operates

like any other monetary liability incurred by a business that may happen to be satisfied

by a DGR’s operating revenue. ECF No. 32 at 27.

The Court disagrees that Plaintiffs’ DGRs function like the interest-bearing

accounts in Webb’s or other similar cases. For instance, as discussed during the hearing,

the operation of DGRs requires ongoing maintenance, subscriber acquisition, and

servicing. Consequently, DGRs resemble active, profit-earning business entities rather

than passive interest-bearing escrow accounts. Thus, the Court finds LD 1777 and the

10 “Put simply, the DGRs are akin to a bank account that holds KWH Plaintiffs’ principal; the

revenue collected from subscriber credits is best analogized as the interest those assets earn; and

the Project Charge skims that interest making it an unlawful, targeted exaction, not a broad-based

fee.” ECF No. 38 at 13–14.

Project Charge do not constitute a per se taking under the “specific and identifiable fund

of money” exception.

2. Voluntary Participation

Even if Plaintiffs could establish that the Project Charge falls within either

established exception for monetary assessments—which they cannot—their claim would

still fail because their participation in the NEB is voluntary.11 The Supreme Court has

made clear that even in the context of per se takings, the distinction between a mandatory

requirement and voluntary condition remains relevant. See Horne v. Dep’t of Agric., 576

U.S. 350, 365–67 (2015). Accordingly, the Court finds that Plaintiffs’ participation in the

NEB is voluntary and thus cannot sustain their per se takings claim.12

For statutes such as LD 1777 to constitute a per se taking, a “property owner must

be legally compelled to engage in price-regulated activity.” Franklin Mem’l Hosp. v.

Harvey, 532 F. Supp. 2d 204, 208 (D. Me. 2008) (quoting Garelick v. Sullivan, 987 F.2d

913, 916 (2d Cir. 1993)). Conversely, where a service provider voluntarily participates in

a price-regulated program, “there is no legal compulsion . . . and thus there can be no

taking.” Id. (quoting Garelick, 987 F.2d at 916). The Takings Clause, therefore, does not

shield voluntary participants from the inherent risk of regulatory or statutory changes

11 The Court notes that Plaintiffs raised their argument regarding the inapplicability of

voluntariness to the Koontz-Nollan-Dolan line of cases for the first time at the January 23

hearing. However, their brief specifically addresses the issue of voluntariness extensively. See,

e.g., ECF No. 3 at 17 (“Horne is just one brick in a solid wall of case law demonstrating that

economic compulsion is sufficient to render participation in . . . the NEB Program[] involuntary.”)

(emphasis in original)). Many of the cases cited by parties in their briefing discussed voluntariness

specifically in the context of regulatory takings—a theory Plaintiffs have explicitly disclaimed for

this Preliminary Injunction Motion. In any event, for the reasons explained herein, the Court finds

Plaintiffs’ participation in the NEB Program is voluntary.

12 Regardless, given my holding that the Project Charge does not fit into either exception for

monetary assessments, see Section II.A.1, supra, the issue of voluntariness is non-dispositive.

that may alter their property rights. See Philip Morris, Inc. v. Harshbarger, 159 F.3d 670,

679 (1st Cir. 1998).

Plaintiffs argue their NEB participation is “involuntary” due to a combination of

legal and economic constraints. Legally, they point to third-party financing agreements

and contracts that mandate their continued participation in the NEB Program. See ECF

No. 3 at 15–17. Economically, they argue their only alternatives to participation—joining

the PPAs and selling power on the wholesale market—are either not feasible because of

the DGRs’ current subscription rates or, would result in “devastating economic impacts,”

including widespread debt defaults and foreclosures. Id. at 20–21.

The Court is unpersuaded. As an initial matter, private contractual obligations to

third-party lenders do not transform a voluntary state program into a compulsory one.

The State was not a party to those financing agreements, and a developer’s decision to

pledge its NEB participation as collateral is a private and independent business risk.

Furthermore, “the choice to participate in a voluntary government program does not

become involuntary simply because the alternatives . . . appear to entail worse, even

substantially worse, economic outcomes.” Boehringer Ingelheim Pharms., Inc. v. U.S.

Dep’t of Health & Hum. Servs., 150 F.4th 76, 90 (2d Cir. 2025) (rejecting, in takings

context, pharmaceutical company’s argument that opting out of Medicaid programs

would bring economic devastation, making any “choice” to avoid program “illusory”).

Plaintiffs are sophisticated commercial entities operating in a highly regulated

industry. Given the history of rapid statutory and regulatory changes within the NEB

Program since 2019, see generally ECF No. 32 at 4–11, the possibility of further legislative

modification was not only foreseeable, but expected, see Harshbarger, 159 F.3d at 679

(recognizing the “reality that a governmental entity which creates a market’s supply or

sets its prices may be expected to alter property rights in the course of modifying its

regulations”). While the “exit ramps” available to Plaintiffs—such as the wholesale market

or consolidating subscribers to qualify for PPAs—may be less profitable or even lead to

significant economic loss, they still remain alternatives to the Project Charge. Because the

Plaintiffs retain the right to exit the NEB Program, their continued participation in the

program is a choice, not a confiscatory taking. Accordingly, Plaintiffs cannot establish the

compulsion necessary to sustain a per se Takings Claim on these grounds.

B. Irreparable Harm

While certain constitutional violations—such as those involving free speech or

privacy rights—carry a qualitative importance that makes them “irremediable by any

subsequent relief,” not all constitutional violations constitute per se irreparable harm.

Me. Forest Prods. Council v. Cormier, 586 F. Supp. 3d 22, 62 (D. Me. 2022), aff’d, 51

F.4th 1 (1st Cir. 2022) (quoting Vaqueria Tres Monjitas, Inc. v. Irizarry, 587 F.3d 464,

484 (1st Cir. 2009)). Plaintiffs argue a Takings Clause violation alone constitutes

irreparable harm and cite numerous cases involving violations of various constitutional

rights, but none relating specifically to the Takings Clause. See ECF No. 3 at 26–27. The

Takings Clause does not proscribe the taking of property; it proscribes the taking of

property without just compensation. See Knick v. Twp. of Scott, Pa., 588 U.S. 180, 189

(2019). Because the injury from a takings violation is the denial of just compensation, the

potential for such a violation does not, by itself, constitute irreparable harm. Unlike the

violation of free speech or privacy rights, a takings violation lacks the “qualitative

importance as to be irremediable by subsequent relief.” Cormier, 586 F. Supp. 3d at 62.

Plaintiffs further contend that Maine’s sovereign immunity would prevent them

from recouping Project Charge payments should they ultimately prevail. ECF No. 3 at

27–28. In response, Defendants contend that because Plaintiffs pay the Project Charge to

utilities rather than the State, nothing precludes Plaintiffs from later seeking

reimbursement from those utilities directly. ECF No. 32 at 29. Irreparable harm

ordinarily consists of “a substantial injury that is not accurately measured or adequately

compensable by money damages.” Ross-Simons of Warwick, Inc., v. Baccarat, Inc., 217

F.3d 8, 13 (1st Cir. 2000); see Rosario-Urdaz v. Rivera-Hernandez, 350 F.3d 219, 222

(1st Cir. 2003) (“Where a plaintiff stands to suffer a substantial injury that cannot

adequately be compensated by an end-of-case award of money damages, irreparable

harm exists.”). Should Plaintiffs ultimately prevail on the merits, which, as explained

above, the Court finds unlikely, they could recover any monetary damages resulting from

the Project Charge directly from the utility companies.13 Accordingly, Plaintiffs have failed

to establish irreparable harm.

C. Balance of Equities and Public Interest

Finally, the remaining factors—the balance of equities and the public interest—

both weigh against a preliminary injunction. The third and fourth factors of the

preliminary injunction standard merge “when the government is the opposing party.”

Does 1–6 v. Mills, 16 F.4th 20, 37 (1st Cir. 2021) (quotation modified). The Defendants

have already stayed implementation of LD 1777 until March 1, 2026. Any further delay in

implementation of the law risks the sustainability of the NEB Program in the face of

Maine’s rapidly increasing electricity rates. See ECF No. 32 at 29–30. Plaintiffs’

13 Plaintiffs argue that because Defendants control how and when funds are disbursed to

ratepayers, any funds used to reduce rates would be beyond the reach of the utilities or the Court.

ECF No. 38 at 15. However, Plaintiffs do not explain why they could not recover a future judgment

directly from the utility companies, who would then offset those costs by readjusting rates for all

ratepayers—effectively restoring the NEB Program’s status quo without implicating the State’s

sovereign immunity.

arguments regarding the final factors rest primarily on the alleged unconstitutional

nature of LD 1777. See ECF No. 3 at 28 (“It is hard to conceive of a situation where the

public interest would be served by enforcement of an unconstitutional law or regulation.”)

(quoting Condon v. Andino, Inc., 961 F. Supp. 323, 331 (D. Me. 1997)). Because the Court

finds Plaintiffs’ constitutional claim unlikely to succeed, this argument is unavailing.

CONCLUSION

Accordingly, for the foregoing reasons, the Plaintiffs’ motion for a preliminary

injunction, ECF No. 3, is DENIED.

SO ORDERED.

Dated this 17th day of February, 2026.

/s/ Stacey D. Neumann

UNITED STATES DISTRICT JUDGE