Petition for Writ of Certiorari — PacifiCorp, an Oregon Business Corporation, Petitioner v. Casey Sixkiller, Director, Washington State Department of Ecology

No.

In the Supreme Court of the United States

PACIFICORP, PETITIONER,

v.

CASEY SIXKILLER, DIRECTOR OF THE WASHINGTON

STATE DEPARTMENT OF ECOLOGY

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

DALLAS S. DELUCA

MARKOWITZ HERBOLD PC

1455 S.W. Broadway

Suite 1900

Portland, OR 97201

THEODORE J. BOUTROUS, JR.

Counsel of Record

BLAINE H. EVANSON

PATRICK J. FUSTER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

(213) 229-7000

tboutrous@gibsondunn.com

LAVI M. BEN DOR

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, DC 20036

QUESTION PRESENTED

In General Motors Corp. v. Tracy, 519 U.S. 278

(1997), this Court held that a state-law exemption for

in-state businesses did not implicate the dormant Commerce Clause because the favored businesses and the

disfavored ones sold “different products” and “serve[d]

different markets.” Id. at 298-299. The Fifth and Sixth

Circuits have since confined Tracy to laws that distinguish between entities competing in “different retail

markets.” NextEra Energy Capital Holdings, Inc. v.

Lake, 48 F.4th 306, 319 (5th Cir. 2022); see Energy

Michigan, Inc. v. Michigan Public Service Comm’n,

126 F.4th 476, 493 (6th Cir. 2025).

Below, a divided Ninth Circuit rejected the Fifth and

Sixth Circuits’ focus on whether the regulated party

“produces the same product * * * for in-state and outof-state consumers.” App., infra, 11a. The court instead read Tracy to immunize Washington’s cap-andtrade system, which requires utilities to buy allowances

for greenhouse-gas emissions when generating exported

electricity but awards free allowances for electricity

sold to Washington retail customers—even though retail electricity is “the same product sold across multiple

geographic markets.” Id. at 42a (Bress, J., dissenting).

The question presented is:

Whether Tracy exempts a State from dormant Commerce Clause scrutiny when state law imposes different

burdens on the same product based on whether the

product is sold in state or out of state.

(I)

PARTIES TO THE PROCEEDING AND

RULE 29.6 DISCLOSURE STATEMENT

1. Petitioner PacifiCorp was the plaintiff in the district court and the appellant in the court of appeals. Respondent Casey Sixkiller, Director of the Washington

State Department of Ecology, was the defendant in the

district court and the appellee in the court of appeals.

He is sued in his official capacity and was automatically

substituted for his predecessor, Laura Watson, under

Federal Rule of Appellate Procedure 43(c)(2) while the

case was pending in the court of appeals.

2. PacifiCorp, doing business as Rocky Mountain

Power and as Pacific Power, is an Oregon corporation.

PacifiCorp is a wholly owned subsidiary of PPW Holdings LLC, which is a wholly owned subsidiary of Berkshire Hathaway Energy Company. Berkshire Hathaway Energy Company is a wholly owned subsidiary of

Berkshire Hathaway Inc., a publicly traded corporation

(NYSE: BRK.A, BRK.B). No other publicly held corporation owns 10 percent or more of PacifiCorp’s stock.

(II)

RELATED PROCEEDINGS

United States District Court (W.D. Wash.):

PacifiCorp v. Watson,

No. 23-cv-6155 (July 15, 2024)

United States Court of Appeals (9th Cir.):

PacifiCorp v. Sixkiller,

No. 24-4803 (Aug. 7, 2026)

(III)

TABLE OF CONTENTS

Page

Introduction ....................................................................... 1

Opinions below................................................................... 5

Jurisdiction ........................................................................ 5

Constitutional and statutory provisions involved .......... 5

Statement ........................................................................... 5

A. Legal background............................................... 5

B. Factual background ........................................... 8

C. Proceedings below ............................................ 10

Reasons for granting the petition ................................. 13

I. The decision below conflicts with this

Court’s decisions ...................................................... 14

II. The decision below creates a circuit conflict ......... 23

III. The question presented is exceptionally

important .................................................................. 28

Conclusion ........................................................................ 34

Appendix A — Court of appeals opinion

(Aug. 7, 2026) ............................................................... 1a

Appendix B — District court order

(July 15, 2024) ........................................................... 47a

Appendix C — Amended complaint

(Jan. 4, 2024).............................................................. 75a

Appendix D — Constitutional and statutory

provisions involved ................................................. 101a

(V)

TABLE OF AUTHORITIES

Page(s)

Cases:

American Trucking Ass’ns, Inc. v. Rhode

Island Turnpike & Bridge Authority,

123 F.4th 27 (1st Cir. 2024) ................................. 26

Arkansas Electric Cooperative Corp. v.

Arkansas Public Service Comm’n,

461 U.S. 375 (1983) ......................................... 21, 29

C & A Carbone, Inc. v. Clarkstown,

511 U.S. 383 (1994) ..................................... 3, 16, 22

Camps Newfound/Owatonna, Inc. v.

Town of Harrison,

520 U.S. 564 (1997) .................................... 15-17, 30

Comptroller of Treasury of Maryland v.

Wynne,

575 U.S. 542 (2015) ............................................... 16

Dep’t of Revenue of Kentucky v. Davis,

553 U.S. 328 (2008) ............................................... 20

Edelman v. Jordan,

415 U.S. 651 (1974) ............................................... 33

Energy Michigan, Inc. v. Michigan Public

Service Comm’n,

126 F.4th 476 (6th Cir. 2025) ...................... 3, 24-29

FERC v. Electric Power Supply Ass’n,

577 U.S. 260 (2016) ............................................... 29

Franchise Tax Board of California v.

Hyatt,

587 U.S. 230 (2019) ............................................... 30

Fulton Corp. v. Faulkner,

516 U.S. 325 (1996) ............................. 16, 18, 22, 32

(VI)

VII

General Motors Corp. v. Tracy,

519 U.S. 278 (1997) .............................. 3, 10, 11, 13,

19-21, 23, 24, 28

Lewis v. BT Investment Managers, Inc.,

447 U.S. 27 (1980) ................................................. 23

LSP Transmission Holdings II, LLC v.

Huston,

131 F.4th 566 (7th Cir. 2025) ............................... 26

LSP Transmission Holdings, LLC v. Sieben,

954 F.3d 1018 (8th Cir. 2020) .............................. 31

Maryland v. Louisiana,

451 U.S. 725 (1981) ............................................... 21

National Pork Producers Council v. Ross,

598 U.S. 356 (2023) ......................................... 15, 29

New England Power Co. v. New Hampshire,

455 U.S. 331 (1982) ............................................... 21

NextEra Energy Capital Holdings, Inc. v.

Lake,

48 F.4th 306 (5th Cir. 2022)........................ 4, 23-27

Oregon Waste Systems, Inc. v.

Dep’t of Environmental

Quality of Oregon,

511 U.S. 93 (1994) ......................... 12, 15, 17, 21, 22

Pennsylvania v. West Virginia,

262 U.S. 553 (1923) ............................................... 21

Tennessee Wine & Spirits Retailers

Ass’n v. Thomas,

588 U.S. 504 (2019) ....................................... 1, 4, 15

United Haulers Ass’n, Inc. v.

Oneida-Herkimer Solid Waste

Management Authority,

550 U.S. 330 (2007) ......................................... 19, 20

Wyoming v. Oklahoma,

502 U.S. 437 (1992) ......................................... 20, 21

VIII

Constitutional Provision:

U.S. Const. Art. I, § 8, cl. 3 ...................................... 15

Statutes:

28 U.S.C. § 1254(1) ...................................................... 5

42 U.S.C. § 1983......................................................... 10

Wash. Rev. Code § 19.405.020(27) ............................. 7

Wash. Rev. Code § 19.405.020(33) ............................. 7

Wash. Rev. Code § 19.405.040.................................... 8

Wash. Rev. Code § 19.405.040(1) ............................... 7

Wash. Rev. Code § 19.405.040(1)(a) .......................... 7

Wash. Rev. Code § 19.405.050(1) ............................... 7

Wash. Rev. Code § 19.405.060(3)(a) .......................... 8

Wash. Rev. Code § 70A.45.020(1)(a) ......................... 5

Wash. Rev. Code § 70A.65.010(1) .............................. 6

Wash. Rev. Code § 70A.65.010(21) ...................... 7, 17

Wash. Rev. Code § 70A.65.060(1) .............................. 6

Wash. Rev. Code § 70A.65.060(2) .............................. 6

Wash. Rev. Code § 70A.65.070(2) .............................. 6

Wash. Rev. Code § 70A.65.080(1)(a) ......................... 6

Wash. Rev. Code § 70A.65.100(1) .............................. 6

Wash. Rev. Code § 70A.65.120 ................................... 6

Wash. Rev. Code § 70A.65.200(2) .............................. 6

Wash. Rev. Code § 70A.65.200(3) .............................. 6

Regulations:

Cal. Code Regs. tit. 17, § 95800 et seq. .................... 29

Wash. Admin. Code § 173-446-230(2)(f) ............. 7, 17

IX

Wash. Admin. Code § 173-446-425 ............................ 6

Wash. Admin. Code § 173-446-600(4) .................. 9, 33

Wash. Admin. Code § 480-100-640(1) ........................ 8

Other Authorities:

VanderHart, ‘Prosperity Council’ Wish

List for Gov. Tina Kotek, Oregon

Public Broadcasting (June 25, 2026) .................. 29

In the Supreme Court of the United States

No.

PACIFICORP, PETITIONER,

v.

CASEY SIXKILLER, DIRECTOR OF THE WASHINGTON

STATE DEPARTMENT OF ECOLOGY

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

INTRODUCTION

Discrimination against interstate commerce is no

small matter. Shortly after the Founding, “state trade

barriers” threatened to tear apart a nation still in its

infancy. Tennessee Wine & Spirits Retailers Ass’n v.

Thomas, 588 U.S. 504, 515 (2019). Those barriers motivated the calling of the Constitutional Convention

and, ultimately, the Commerce Clause. Id. at 515-516.

For more than a century, this Court has held that the

Clause “prevents the States from adopting protectionist measures and thus preserves a national market for

goods and services.” Id. at 514.

(1)

2

Washington has recently tested the Constitution’s

commitment to an interstate market for electricity. In

2021, the State adopted a cap-and-trade system for

greenhouse-gas emissions. The law works by limiting

emissions (the cap) and then requiring emitters to buy

allowances to cover their emissions (the trade). The law

imposes massive costs on the energy sector. But Washington was unwilling to force its consumers to bear the

costs of its own climate regulations. To externalize

those costs onto interstate commerce, the State built in

a discriminatory provision through which the Washington State Department of Ecology makes free (called nocost) allowances available for emissions when electricity is sold to Washington customers but not when electricity is exported to out-of-state customers.

Petitioner PacifiCorp has acutely felt the effects of

Washington’s discriminatory cap-and-trade system.

PacifiCorp owns a power plant in Washington and once

allocated just under a quarter of the power that the

plant generated to serve Washington customers, directing the rest to PacifiCorp’s customers in other States.

But PacifiCorp has now spent tens of millions of dollars

every year buying allowances for any electricity generated with greenhouse-gas emissions that it exports because Washington law makes no-cost allowances available only when PacifiCorp sells electricity to Washington customers. Predictably, PacifiCorp has now shifted

to selling that power entirely in state to avoid the severe costs of exporting electricity.

PacifiCorp’s efforts to stop Washington’s discrimination hit a dead end in the Ninth Circuit. After the

district court dismissed PacifiCorp’s claims, a divided

panel affirmed, holding that Washington’s scheme for

no-cost allowances was immune from review under the

3

dormant Commerce Clause. The Ninth Circuit read

this Court’s decision in General Motors Corp. v. Tracy,

519 U.S. 278 (1997), to prevent any comparison between

in-state sales and out-of-state sales because Washington has imposed different regulations on each. In dissent, Judge Bress forcefully objected to that “novel extension of Tracy” to insulate Washington’s discrimination against exported electricity from review. App., infra, 35a.

The Ninth Circuit profoundly misunderstood Tracy,

which establishes only that States do not discriminate

against interstate commerce when they differentiate

between entities that sell “different products” in “different markets.” 519 U.S. at 299. In that scenario,

“there is no national market for competition for the

dormant Commerce Clause to protect.” App., infra,

35a (Bress, J., dissenting). But Tracy nowhere licensed

a chief evil that the Clause aims to prevent: discrimination against a single product “by reason of its origin

or destination out of State.” C & A Carbone, Inc. v.

Clarkstown, 511 U.S. 383, 390 (1994). Quite the contrary: This Court cautioned in Tracy that state utility

regulation is not “immune from [the] ordinary Commerce Clause jurisprudence.” 519 U.S. at 291 n.8. The

Ninth Circuit erred in abandoning the ordinary test in

favor of its maximalist reading of Tracy.

The Ninth Circuit stands alone in interpreting Tracy

to immunize discrimination against interstate commerce

within a single product market. Both the Fifth and

Sixth Circuits have held that Tracy applies only when a

state law differentiates between different product markets, not when a state law discriminates in favor of instate interests within a single product market. Energy

Michigan, Inc. v. Michigan Public Service Comm’n,

4

126 F.4th 476, 493-494 (6th Cir. 2025); NextEra Energy

Capital Holdings, Inc. v. Lake, 48 F.4th 306, 320 (5th

Cir. 2022). Because the Commerce Clause’s preservation of a free interstate economy depends on uniform

precedent across the country, this Court should not allow this conflict to persist.

The decision below will have deeply harmful consequences for free trade in general and the electricity market in particular. As Judge Bress warned in his dissent,

the Ninth Circuit’s “expansion of Tracy would swallow

the dormant Commerce Clause altogether.” App., infra,

24a. All a State needs to do under the Ninth Circuit’s

standard is impose some burdens on in-state sales of a

product and then the State can impose any burdens on

out-of-state sales of that same product. In the Ninth

Circuit, California already has a cap-and-trade system,

Oregon will soon consider proposals, and both could follow in Washington’s footsteps by shifting compliance

costs onto electricity exports. Such measures would

naturally spur retaliatory countermeasures of the very

sort that impelled the Framers to adopt the Commerce

Clause more than two centuries ago. This Court need

not wait and see how the decision below plays out to

know how this story ends.

In extending Tracy far beyond where any other

court of appeals has gone, the Ninth Circuit has created

an escape hatch from constitutional scrutiny for the

very sort of “state protectionism” that “the Commerce

Clause by its own force restricts.” Tennessee Wine &

Spirits, 588 U.S. at 518. This Court should grant the

petition and slam shut that escape hatch.

5

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a46a) will be published in the Federal Reporter and is

available at 2026 WL 2277099. The order of the district

court granting Ecology’s motion to dismiss and denying

as moot PacifiCorp’s motion for a preliminary injunction (App., infra, 47a-74a) is not published in the Federal Supplement but is available at 2024 WL 3415937.

JURISDICTION

The court of appeals entered its judgment on August

7, 2026. This Court has jurisdiction under 28 U.S.C.

§ 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Relevant provisions are reproduced in the appendix.

App., infra, 101a-106a.

STATEMENT

A. Legal Background

Washington has enacted several measures aimed at

requiring utilities that sell electricity to residential customers to reduce their greenhouse-gas emissions significantly.

1. In 2021, the State adopted the Climate Commitment Act, which mandates that in-state greenhouse-gas

emission levels dip 45%, 70%, and 95% below their 1990

levels by 2030, 2040, and 2050, respectively. Wash. Rev.

Code § 70A.45.020(1)(a). The Climate Commitment Act

instructs the Washington State Department of Ecology

to achieve these goals through a “cap and invest” (better known as cap-and-trade) program. App., infra, 25a.

6

To administer the program, Ecology establishes an

annual, declining “cap” on emissions from “covered entities,” defined as any owner or operator of a power

plant that emits at least 25,000 metric tons of carbon

dioxide equivalent per year.

Wash. Rev. Code

§§ 70A.65.060(1)-(2), 70A.65.080(1)(a). Ecology then effectuates that cap through the sale of “allowances,”

each of which authorizes the emission of one metric ton

of carbon dioxide equivalent. § 70A.65.010(1). Ecology

distributes allowances at quarterly auctions and reduces the number of allowances available for purchase

each year, consistent with the Climate Commitment

Act’s emission-reduction mandates. §§ 70A.65.070(2),

70A.65.100(1).

A covered entity may emit only as much greenhouse

gas as its allowances cover. If its emissions exceed that

amount, the entity must surrender four “penalty” allowances for every allowance exceeded—and would

face fines of up to $10,000 per day per violation until it

coughs up the penalty allowances. Wash. Rev. Code

§ 70A.65.200(2)-(3).

To “mitigate the cost burden” of this cap-and-trade

program “on electricity customers,” the Climate Commitment Act allows certain retail electric utilities to obtain “no cost allowances” (i.e., free credits) without

needing to buy them at auction. Wash. Rev. Code

§ 70A.65.120. Utilities may transfer their no-cost allowances to the power plants they own, eliminating some

or all of those plants’ compliance costs. Wash. Admin.

Code § 173-446-425.

Washington defrays the cost of the Climate Commitment Act’s cap-and-trade system only for in-state consumers of electricity. App., infra, 53a. No-cost allowances mitigate the “[c]ost burden” of “the impact on

7

rates or charges to customers of electric utilities in

Washington state * * * caused by the program.”

Wash. Rev. Code § 70A.65.010(21) (emphasis added).

Ecology’s implementing regulations also establish a

one-to-one ratio between the award of no-cost allowances and the greenhouse-gas emissions associated

with retail electricity consumed in state. Wash. Admin.

Code § 173-446-230(2)(f). As a result, utilities may obtain free allowances only “in direct proportion to how

much electricity they provide to Washington residents.” App., infra, 26a (Bress, J., dissenting).

The upshot is that a utility’s costs of complying with

the Climate Commitment Act turn directly on the destination of its electricity—in particular, on whether its

electricity is bound for in-state or out-of-state customers. App., infra, 85a. “[I]f a utility in Washington sells

90% of its electricity to out-of-state customers, only

10% of its emissions will be eligible for no-cost allowances under the CCA.” Id. at 22a (Bress, J., dissenting). But if a Washington utility sells 90% of its electricity to in-state customers, no-cost allowances will be

available for 90% of its emissions.

2. Washington enacted the Climate Commitment

Act two years after another emissions-reduction mandate, the Clean Energy Transformation Act. That law

requires that “all retail sales of electricity to Washington retail electric customers be greenhouse gas neutral

by January 1, 2030.” Wash. Rev. Code § 19.405.040(1).

By 2045, only renewable and non-emitting resources

can be used to supply retail electricity sold in state.

§§ 19.405.020(27), (33), 19.405.050(1).

The Clean Energy Transformation Act does not require greenhouse-gas-neutral electricity until the mandate takes effect in 2030. See Wash. Rev. Code

8

§ 19.405.040(1)(a). Before then, utilities must file “clean

energy implementation plans” with the Washington

Utilities and Transportation Commission every four

years describing their progress toward satisfying the

neutrality and renewable-only standards. Wash. Admin. Code § 480-100-640(1). Utilities may ultimately

satisfy their obligations through a variety of means—

switching to non-emitting generation, purchasing renewable energy credits, investing in energy transformation projects, or making alternative compliance payments. Wash. Rev. Code §§ 19.405.040, 19.405.060(3)(a).

B. Factual Background

PacifiCorp is an Oregon corporation that provides

retail electricity service to over two million customers

across six western States: Washington, Oregon, California, Utah, Wyoming, and Idaho. App., infra, 2a.

Around 7% (or 140,000) of those customers live in

Washington. Ibid.

PacifiCorp owns and operates the Chehalis Generation Facility, a natural-gas-fired power plant south of

Chehalis, Washington. App., infra, 2a. The plant’s

emissions make PacifiCorp a covered entity under the

Climate Commitment Act. Id. at 2a-3a. When (and only

when) PacifiCorp sells electricity to Washington retail

customers, PacifiCorp is eligible for no-cost allowances

under the Climate Commitment Act. Id. at 3a, 11a n.1.

PacifiCorp in 2024 allocated about 23% of the electricity

generated at Chehalis to Washington retail customers

and the remaining 77% to customers in other States.

Id. at 79a. With a total compliance burden of nearly

$48 million in just 2024, PacifiCorp accordingly received no-cost allowances for only 23% of the plant’s

9

emissions and had to buy allowances at auction for the

rest (roughly $37 million). Id. at 79a, 86a.

The costs of complying with the Climate Commitment Act recurred every year Chehalis operated and

generated power that people outside Washington consumed. Those costs fell on out-of-state interests: Either PacifiCorp’s out-of-state customers “bear higher

power costs” for Chehalis electricity, or PacifiCorp

bears them itself “simply because it serves customers

in other states.” App., infra, 3a. Because PacifiCorp is

a regulated utility in every State it serves, it may pass

costs through to customers only with each State’s regulatory approval. Id. at 54a. Utility commissions in

Idaho, Oregon, and Wyoming have denied PacifiCorp’s

requests to recover those costs from their States’ ratepayers, leaving PacifiCorp to absorb them—to the tune

of almost $23 million for just the costs that PacifiCorp

sought to recover from Oregon and Wyoming customers in 2024 alone. Id. at 54a, 78a; see Pet. C.A. Br. 48

n.8.

Because of the immense costs of serving out-of-state

customers with power generated within Washington,

PacifiCorp began reallocating all power generated at

Chehalis to Washington retail customers in 2026. App.,

infra, 27a. But PacifiCorp continues to owe allowances

worth tens of millions of dollars for power generated at

the Chehalis plant that served out-of-state customers

under the Climate Commitment Act’s first compliance

period, id. at 86a-87a, which spans 2023 through 2026,

id. at 76a. On November 1, 2027, PacifiCorp must surrender to Ecology its remaining allowances for the

first compliance period. Wash. Admin. Code § 173-446600(4).

10

C. Proceedings Below

1. In December 2023, PacifiCorp sued the Director

of the Washington State Department of Ecology under

42 U.S.C. § 1983, seeking declaratory and injunctive relief. App., infra, 54a. PacifiCorp claimed that awarding

no-cost allowances under the Climate Commitment Act

only for in-state electricity sales facially discriminates

against interstate commerce in violation of the Commerce Clause “by increasing the cost of electricity for

PacifiCorp’s out-of-state customers, compared to PacifiCorp’s Washington customers, for electricity produced

by the same generation facility.” Id. at 79a.

PacifiCorp moved for a preliminary injunction that

would require Ecology either to issue no-cost allowances for emissions associated with exported electricity

or to exempt PacifiCorp from having to purchase allowances for any of its sales to retail customers. App., infra, 48a. Ecology opposed PacifiCorp’s motion and

moved to dismiss the complaint. Id. at 55a.

2. The district court dismissed the complaint and

denied PacifiCorp’s preliminary-injunction motion as

moot. App., infra, 47a-74a. The court decided that the

Washington laws limiting no-cost allowances to power

consumed in state were immune from scrutiny under

the Commerce Clause because “PacifiCorp’s energy

produced at Chehalis for in-state versus exported electricity is subject to a different regulatory scheme”: the

Clean Energy Transformation Act. Id. at 66a. In the

court’s view, the existence of separate regulations for

electricity sold within Washington meant that in-state

retail power and out-of-state retail power were not

“substantially similar” products. Id. at 63a (quoting

General Motors Corp. v. Tracy, 519 U.S. 278, 298-299

11

(1997)). The court refused to consider whether the Climate Commitment Act imposed greater costs on the

generation of exported electricity than the Clean Energy Transformation Act imposes on the generation of

electricity sold to Washington customers. Id. at 67a.

3. A divided panel of the Ninth Circuit affirmed.

App., infra, 1a-46a.

a. The majority held that the Climate Commitment

Act’s provision making no-cost allowances available for

emissions only when PacifiCorp sells electricity to

Washington customers did not implicate the dormant

aspect of the Commerce Clause’s prohibition on discrimination against interstate commerce. App., infra,

1a-21a.

Applying this Court’s decision in Tracy, the majority

held that “PacifiCorp’s exported power is not similarly

situated to utilities providing in-state power.” App., infra, 15a (citing Tracy, 519 U.S. at 299). The majority

framed Washington’s “decarbonization regime” as

simply “impos[ing] different regulatory requirements”

for emissions from electricity generated for in-state

consumption (the Clean Energy Transformation Act’s

decarbonization mandate, coupled with the Climate

Commitment Act’s bounty of no-cost allowances) and

for emissions from electricity generated for export (no

decarbonization mandate, coupled with a mandate to

buy allowances to cover emissions). Id. at 18a. According to the majority, those “regulatory distinctions” dispensed with any need to compare the respective burdens on “in-state electricity and exported electricity.”

Id. at 11a; see id. at 19a n.4.

b. Judge Bress dissented. App., infra, 22a-46a. He

explained that the Climate Commitment Act “facially

discriminates against interstate commerce by imposing

12

greater costs on interstate electricity sales through the

disallowance of associated no-cost allowances.” Id. at

22a. He noted that Ecology might seek to rebut that

claim of discrimination against out-of-state sales by establishing that the Climate Commitment Act’s free allowances for in-state sales “balance out [the Clean Energy Transformation Act’s] burdens and place in-state

and out-of-state electricity sales on equal footing.” Id.

at 22a-23a. But to prevail on that defense, Ecology

would need to prove that the costs of obtaining allowances under the Climate Commitment Act for exported

electricity and the costs of complying with the Clean

Energy Transformation Act for electricity sold to

Washington customers “are ‘roughly equivalent’ in a

way that would justify Washington’s otherwise discriminatory treatment of interstate electricity sales.” Id. at

23a (citing Oregon Waste Systems, Inc. v. Dep’t of Environmental Quality of Oregon, 511 U.S. 93, 103

(1994)). Factual uncertainties about Ecology’s ability

to prove that the compliance costs offset each other

made a pleading-stage decision on the defense “premature.” Id. at 33a.

Judge Bress objected to the majority’s decision to

sidestep the question whether the two statutes imposed

offsetting compliance costs on the theory that exported

electricity and electricity sold in Washington are not

“substantially similar” under Tracy. App., infra, 35a46a. As he observed, “Tracy’s rarely invoked exception” is meant to “prevent application of the dormant

Commerce Clause to market participants that do not

compete with each other in the same product market.”

Id. at 35a. That rationale has no force here because

Washington law discriminates within “the retail electricity product market.” Id. at 41a. If Judge Bress had

13

his way, he would have placed this case “far outside”

Tracy’s reach because “Washington is not engaging in

the differential treatment of differently situated entities, but rather the differential treatment of a product—retail electricity—based on whether it enters interstate commerce.” Id. at 42a.

Judge Bress warned that the majority’s “flawed”

and “far-reaching” treatment of Tracy lacks any limiting principle. App., infra, 44a. States often “apply some

sort of regulatory framework to in-state sales of a product.” Id. at 43a. If the existence of such regulations

makes in-state sales substantially different from out-ofstate sales, then States could burden out-of-state sales

“without limitation.” Ibid. That approach to Tracy

would “swallow the dormant Commerce Clause altogether.” Id. at 24a.

REASONS FOR GRANTING THE PETITION

The decision below opens a giant loophole in this

Court’s dormant Commerce Clause decisions. The Climate Commitment Act penalizes utilities for emissions

attributable to power that leaves the State but forgives

the identical emissions for power consumed at home.

Judge Bress correctly observed that such facial discrimination against interstate commerce violates the

Commerce Clause unless Ecology can establish that

Washington law imposes a roughly equivalent burden

on in-state sales. But in the Ninth Circuit’s view, Washington can escape constitutional scrutiny under General Motors Corp. v. Tracy, 519 U.S. 278 (1997), of any

burden (no matter how big) on exported electricity so

long as it also imposes a burden (no matter how small)

on in-state electricity. That conclusion has no foundation in Tracy, a narrow decision holding that state laws

14

do not discriminate against interstate commerce by differentiating among different product markets.

That error warrants immediate review. The Ninth

Circuit broke with the Fifth and Sixth Circuits, both of

which have refused to read Tracy to immunize regulations of public utilities from dormant Commerce Clause

scrutiny. The scope of Tracy also has internally divided

both the Ninth and Sixth Circuits, ensuring that the issue has been analyzed from all angles across multiple

opinions. The stakes are high because the decision below hands every State a blueprint for burdening exports of electricity—and of anything else for which it

regulates in-state sales. And the consequences of the

status quo are dire for the interstate electricity market,

which could soon be fractured by States with heated

policy disagreements about what climate regulations to

adopt and who should foot the bill. This case is an ideal

vehicle for clearing up confusion about Tracy, resolving

the circuit conflict, and reining in abuses that are otherwise sure to follow.

I. THE DECISION BELOW CONFLICTS WITH

THIS COURT’S DECISIONS

The Commerce Clause forbids discrimination based

on a product’s out-of-state destination. The Climate

Commitment Act does just that, awarding no-cost allowances for emissions from generating electricity sold

to Washington customers but requiring the purchase of

pricey allowances for emissions related to exported

electricity. But the Ninth Circuit held that Washington

can insulate that discrimination from constitutional

scrutiny by imposing different regulatory obligations

on in-state power sales. Its decision badly misreads this

15

Court’s decision in Tracy and along the way subverts

the Commerce Clause’s antidiscrimination principle.

A. As Judge Bress explained, PacifiCorp alleged a

straightforward dormant Commerce Clause claim under this Court’s decisions. App., infra, 27a-34a. The

Climate Commitment Act’s hoarding of no-cost allowances for the generation of power sold to in-state customers facially discriminates against interstate commerce.

1. The Commerce Clause vests in Congress the

power “[t]o regulate Commerce * * * among the several States.” U.S. Const. Art. I, § 8, cl. 3. This Court

has long read that grant to contain a “‘negative’” command: Even absent congressional action, States may

not “adop[t] protectionist measures” that discriminate

against or unduly burden interstate commerce. Tennessee Wine & Spirits Retailers Ass’n v. Thomas, 588

U.S. 504, 514 (2019) (citation omitted). This “antidiscrimination principle” is at the “‘very core’” of this

Court’s “dormant Commerce Clause jurisprudence.”

National Pork Producers Council v. Ross, 598 U.S. 356,

369 (2023) (quoting Camps Newfound/Owatonna, Inc.

v. Town of Harrison, 520 U.S. 564, 581 (1997)).

The prohibition on discrimination against interstate

commerce generally forbids “differential treatment of

in-state and out-of-state economic interests that benefits the former and burdens the latter.” Oregon Waste

Systems, Inc. v. Dep’t of Environmental Quality of Oregon, 511 U.S. 93, 99 (1994). That rule protects not only

out-of-state competitors but also interstate commerce

itself: A State may not “give local consumers an advantage over consumers in other States,” Camps Newfound, 520 U.S. at 578 (citation omitted), “tax a transaction or incident more heavily when it crosses state

16

lines than when it occurs entirely within the State,”

Comptroller of Treasury of Maryland v. Wynne, 575

U.S. 542, 549 (2015) (citation omitted), or otherwise

“discriminate against an article of commerce by reason

of its origin or destination out of State,” C & A Carbone,

Inc. v. Clarkstown, 511 U.S. 383, 390 (1994).

This Court has strictly enforced this rule, repeatedly stressing that “[s]tate laws discriminating against

interstate commerce on their face are ‘virtually per se

invalid.’” Camps Newfound, 520 U.S. at 575 (citations

omitted). In Camps Newfound, the Court held unconstitutional a Maine law denying a property-tax exemption to charities “‘operated principally for the benefit

of persons who are not residents of Maine’” because

the statute “singl[ed] out” entities serving “mostly instaters” for “beneficial tax treatment” and “penalize[d]” those that “do a principally interstate business.”

Id. at 568, 576 (citation omitted). And in Fulton Corp.

v. Faulkner, 516 U.S. 325 (1996), the Court decided that

a North Carolina law that taxed corporate stock “only

to the degree that its issuing corporation participates

in interstate commerce” unconstitutionally discriminated against interstate commerce. Id. at 333. Camps

Newfound and Fulton Corp. establish that a State may

not penalize businesses for the degree to which they engage in out-of-state transactions.

2. Under this Court’s decisions, PacifiCorp plausibly alleged a violation of the Commerce Clause. The

Climate Commitment Act “discriminat[es] between

transactions on the basis of some interstate element.”

Wynne, 575 U.S. at 549 (citation omitted). And Ecology

has not demonstrated that the Clean Energy Transformation Act imposes roughly equal burdens on in-state

power.

17

The Climate Commitment Act “‘expressly distinguishes between entities that serve a principally interstate clientele and those that primarily serve an intrastate market,’” rewarding utilities “‘that serve mostly

in-staters’” with no-cost allowances while penalizing

utilities “‘that do a principally interstate business’ by

foisting the costs” of buying allowances on them. App.,

infra, 30a (Bress, J., dissenting) (quoting Camps Newfound, 520 U.S. at 576). Free allowances are available

“in direct proportion to how much electricity [utilities]

provide to Washington residents” through a one-to-one

match with in-state consumption. Id. at 26a (citing

Wash. Rev. Code § 70A.65.010(21); Wash. Admin. Code

§ 173-446-230(2)(f)). Just like the discriminatory laws

in Camps Newfound and Fulton Corp., the Act “impos[es] costs” because an entity does “out-of-state business” and thus “presumptively violates the dormant

Commerce Clause” as a form of facial discrimination

against interstate commerce. Id. at 30a.

Nothing overcomes that presumption here. “In limited circumstances,” discrimination “can be justified ‘as

achieving a legitimate local purpose that cannot be

achieved through nondiscriminatory means.’” App., infra, 31a (Bress, J., dissenting) (quoting Oregon Waste,

511 U.S. at 102). The “compensatory tax doctrine” upholds a discriminatory tax on interstate commerce if it

is “the rough equivalent of an identifiable and ‘substantially similar’ tax on intrastate commerce.” Oregon

Waste, 511 U.S. at 102-103 (citation omitted). Such an

imposition must “approximate—but not exceed—the

amount of the tax on intrastate commerce.” Ibid.

Ecology cannot establish on the complaint’s face

that the obligation to buy allowances is “designed

18

simply to make interstate commerce bear a burden already borne by intrastate commerce.” Fulton Corp.,

516 U.S. at 331 (citation omitted); see App., infra, 34a

(Bress, J., dissenting). Nor could Ecology make that

showing even after factual development: Although the

Clean Energy Transformation Act sets prospective limits on the sources of energy sold within Washington,

discrimination as to allowances in the Climate Commitment Act imposes an immense here-and-now burden on

the export of power generated within Washington. See

App., infra, 33a-34a (Bress, J., dissenting). Future decarbonization mandates are not a free pass for States to

enact cap-and-trade systems that discriminate in the

present day.

B. The Ninth Circuit proceeded down “a very different path.” App., infra, 35a (Bress, J., dissenting).

The majority interpreted this Court’s decision in Tracy

to exempt Washington’s cap-and-trade system from the

baseline prohibition on discrimination against interstate commerce. Id. at 13a. In its view, electricity sold

to in-state customers is not “substantially similar” to

electricity sold to out-of-state customers because the

Clean Energy Transformation Act sets prospective requirements to decarbonize power sold within Washington. Id. at 13a-14a. The majority refused on that basis

even to consider whether the Climate Commitment Act

burdens interstate electricity sales more than the Clean

Energy Transformation Act burdens intrastate electricity sales. Id. at 15a-16a.

1. The Ninth Circuit was wrong to read Tracy as a

sweeping exemption from the ordinary dormant Commerce Clause framework. Tracy is a narrow decision

about differential treatment of in-state and out-of-state

businesses that are in different markets—not a license

19

to immunize States from justifying burdens they place

on “the same product sold in the same product market.”

App., infra, 35a (Bress, J., dissenting).

In Tracy, this Court rejected a dormant Commerce

Clause challenge by out-of-state gas sellers to Ohio’s

exemption of state-regulated public utilities from its

general sales and use taxes. 519 U.S. at 282-283. The

Court explained that the out-of-state gas sellers subject

to the tax and the public utilities were not “similarly situated” because they “provide[d] different products”

and “serve[d] different markets.” Id. at 298-299. Specifically, the Court identified two markets: a “captive”

local market for distributing gas “bundled” with other

services to end ratepayers, served exclusively by the

regulated in-state public utilities, and a separate, “competitive” interstate market for commercial and industrial users who bought gas wholesale unbundled from

those services. Id. at 301-302. Because the gas sellers

did not compete in the “core” captive market, and because there was no evidence that the exemption affected competition in the peripheral competitive market, the Court concluded that the public utilities were

“dissimilar” from the gas sellers, which thus could not

state a claim of discrimination against interstate commerce. Id. at 302-304.

Since Tracy, its “exception” from the dormant Commerce Clause has played a very limited role in this

Court’s decisions. App., infra, 38a (Bress, J., dissenting). The Court has relied on Tracy to support the modest proposition that “States and municipalities” engaged in waste disposal are not “‘substantially similar’”

to “private businesses” that haul trash for profit.

United Haulers Ass’n, Inc. v. Oneida-Herkimer Solid

Waste Management Authority, 550 U.S. 330, 342 (2007)

20

(quoting Tracy, 519 U.S. at 298). Unlike “a law [that]

favors in-state business over out-of-state competition,”

a law that treats state and municipal entities differently

from market participants is unlikely to be the “product

of ‘simple economic protectionism.’” Id. at 343 (quoting

Wyoming v. Oklahoma, 502 U.S. 437, 454 (1992)); see

also Dep’t of Revenue of Kentucky v. Davis, 553 U.S.

328, 342-343 (2008) (similar).

This case is worlds away from Tracy and United

Haulers. The electricity that PacifiCorp generates at

its Chehalis plant, no matter its destination, remains “in

the same product market: retail electricity.” App., infra, 40a (Bress, J., dissenting). Because “‘power is fungible,’” “the exact same electricity is dispatched to either Washington consumers or out-of-state consumers,” as demonstrated by PacifiCorp’s recent decision

to shift power generated at Chehalis to serve in-state

consumers and thereby maximize eligibility for no-cost

allowances. Id. at 44a, 46a (citation omitted); see p. 9,

supra. And Washington law draws distinctions based

on the destination of the electricity, not public ownership of the entities. Cf. United Haulers, 550 U.S. at

342-343. Despite the Ninth Circuit’s attempts to overcomplicate this case, Washington’s discriminatory

scheme for favoring in-state retail customers by requiring utilities to buy allowances for emissions associated

with exported electricity but not with retail electricity

sold in state is “simple economic protectionism.” Id. at

343 (citation omitted).

2. The Ninth Circuit’s rationales for stretching

Tracy into an immunity for laws that disfavor exported

power strike at the heart of the antidiscrimination principle in this Court’s dormant Commerce Clause decisions.

21

First, the majority reasoned that “the retail electric

market in the United States is already the type of Balkanized system that the Dormant Commerce Clause in

competitive markets serves to guard against” because

state utility commissions regulate rates in their respective States. App., infra, 6a-7a (quoting id. at 69a, and

citing Arkansas Electric Cooperative Corp. v. Arkansas Public Service Comm’n, 461 U.S. 375, 395 (1983)).

But Arkansas Electric and Tracy both refute that proBalkanization stance. In Arkansas Electric, this Court

held that “state utility regulation” is not a “special province insulated from [the] general Commerce Clause jurisprudence.” 461 U.S. at 391. The Court then reiterated in Tracy that state utility regulation is “not, as a

constitutional matter, immune from” the “ordinary”

framework. 519 U.S. at 291 n.8.

Second, the majority relied on the “regulatory distinctions” in Washington’s treatment of entities producing in-state and exported electricity. App., infra, 11a.

But this Court has repeatedly held unconstitutional discriminatory state laws in industries of pervasive state

regulation—including energy. E.g., Wyoming, 502 U.S.

at 454-459 (requirement that in-state utilities burn instate coal); New England Power Co. v. New Hampshire, 455 U.S. 331, 339 (1982) (restriction on exporting

hydroelectric power generated within State); Maryland v. Louisiana, 451 U.S. 725, 756-760 (1981) (firstuse tax on natural gas whose exemptions and credits favored in-state consumption); Pennsylvania v. West

Virginia, 262 U.S. 553, 596-600 (1923) (law requiring

pipeline companies to meet in-state demand before

serving out-of-state customers); see also Oregon Waste,

511 U.S. at 95 (applying compensatory-tax doctrine

even though “Oregon comprehensively regulates the

22

disposal of solid wastes within its borders”). Under the

Ninth Circuit’s contrary approach, States could “insulat[e]” all manner of “facially discriminatory law[s]

from any constitutional scrutiny” just by imposing different (even if less onerous) regulations on intrastate

commerce. App., infra, 46a (Bress, J., dissenting).

Third, the majority held that “exported power is not

similarly situated to utilities providing in-state power”

because PacifiCorp “‘serve[s] different markets’”: the

Washington retail market and other States’ retail markets. App., infra, 15a. But Tracy could not possibly

mean that products cease to be substantially similar

when offered in “different geographic markets.” Id. at

42a (Bress, J., dissenting). Allowing States to discriminate based on geography would “contradict the fundamental logic of the dormant Commerce Clause”—that

States cannot “regulate the same product differently

based on where it is sold or purchased.” Id. at 43a (citing C & A Carbone, 511 U.S. at 390).

In short, Tracy represents a narrow exception for

laws that distinguish between entities that do not even

compete in the same product market. Yet the Ninth

Circuit distorted Tracy into a blanket immunity from

the dormant Commerce Clause for regulations of public

utilities that discriminate against power exports, relieving Ecology of its burden to prove under Oregon Waste

that the costs imposed on in-state electricity under the

Clean Energy Transformation Act offset the costs imposed on exported electricity under the Climate Commitment Act. Tracy does not “open such an expansive

loophole in [this Court’s] carefully confined compensatory tax jurisprudence.” Fulton Corp., 516 U.S. at 335

(quoting Oregon Waste, 511 U.S. at 105 n.8).

23

II. THE DECISION BELOW CREATES A CIRCUIT

CONFLICT

The Ninth Circuit stands alone in its misguided

overreading of Tracy. The decision below is directly at

odds with decisions from the Fifth and Sixth Circuits,

which have refused to interpret Tracy as broadly immunizing public-utility regulations from Commerce

Clause scrutiny. Only this Court’s intervention could

resolve the conflict.

A. The Fifth and Sixth Circuits correctly limit

Tracy’s reach to cases involving different products in

different markets and treat entities providing similar

products as substantially similar even if they are subject to different regulatory schemes.

1. In NextEra Energy Capital Holdings, Inc. v.

Lake, 48 F.4th 306 (5th Cir. 2022), cert. denied, 144

S. Ct. 485 (2023) (No. 22-601), the Fifth Circuit considered a Texas law restricting the building and operation

of new electricity transmission lines to entities that already have facilities in the State. Id. at 314. The outof-state competitor advanced a clear-cut dormant Commerce Clause claim that the law facially discriminated

against entities without existing “contacts with the local

economy.” Id. at 324 (quoting Lewis v. BT Investment

Managers, Inc., 447 U.S. 27, 42 (1980)). In response,

Texas sought to evade scrutiny altogether on the theory

that its “regulation of the interstate transmission market enjoys immunity from the Commerce Clause” under Tracy. Id. at 318.

The Fifth Circuit rejected Texas’s “broad reading”

of Tracy. NextEra, 48 F.4th at 320. As it stressed,

Tracy disavowed any intent to render utilities “immune

from ordinary Commerce Clause jurisprudence.” Id. at

24

318 (quoting Tracy, 519 U.S. at 291 n.8) (alteration

omitted). Tracy instead dealt with a law that “operated

in two different retail markets.” Id. at 319. Texas’s law

did not present the same “dilemma”: Both the favored

entities with in-state presence and the disfavored outof-state entrants “offer the same services: building, operating, and owning transmission lines.” Ibid. Because

the two groups did not “‘provide different products’

* * * when it comes to transmission,” they were similarly situated. Id. at 320 (quoting Tracy, 519 U.S. at

298-299).

Both the majority and the dissent in the Fifth Circuit recognized that “Texas has an interest in promoting reliable electricity service, including the power to

approve the siting and construction of transmission

lines.” NextEra, 48 F.4th at 320; id. at 329 (Elrod, J.,

concurring in part and dissenting in part). But in the

majority’s view, Texas could advance that interest only

in an attempt to justify the discrimination, not to prevent the court from even “answering the threshold

dormant Commerce Clause question” whether the law

discriminated against interstate commerce. Id. at 320.

2. The Sixth Circuit reached a similar result in Energy Michigan, Inc. v. Michigan Public Service Commission, 126 F.4th 476 (6th Cir. 2025), which concerned

a Michigan requirement that entities providing electricity to end users “procure some amount of [their]

capacity” from within the State. Id. at 484. The court

concluded that the regulations facially discriminated

against interstate commerce by “reserv[ing] a segment

of [Michigan’s] electricity market for Michigan electricity to the exclusion of [electricity] generated in other

states.” Id. at 490.

25

The Sixth Circuit emphatically rejected Michigan’s

effort to insulate geographic discrimination from scrutiny under Tracy. Energy Michigan, 126 F.4th at 492499. Tracy stands for the “more modest proposition

that Commerce Clause discrimination presupposes discrimination between two similar entities or articles of

commerce.” Id. at 496. Public utilities and gas resellers

were not comparable in Ohio’s natural-gas market,

which “consisted of two distinct (but related) markets.”

Id. at 493. Like the Fifth Circuit, the Sixth Circuit concluded that “[l]imiting Tracy to its unique factual setting makes good sense” to avoid “licens[ing] blatant

economic protectionism.” Id. at 497 (citing NextEra, 48

F.4th at 320).

On that understanding, the Sixth Circuit held that

Tracy was no obstacle to the dormant Commerce

Clause challenge. The Michigan law did not distinguish

between types of market participants—there, public

utilities and alternative energy suppliers. Energy

Michigan, 126 F.4th at 494. Instead, Michigan law discriminated “on a geographic basis,” preferring electricity generated within the State. Id. at 493-494. That

“factual distinction ma[de] all the difference” under

Tracy: Because the in-state and out-of-state capacity

were “interchangeable on a national grid,” they

“qualif[ied]” as similarly situated and triggered the

dormant Commerce Clause. Id. at 494.

Judge Boggs dissented on the ground that Michigan’s geographic-preference rule was “exempt from

constitutional scrutiny” under Tracy. Energy Michigan, 126 F.4th at 502. In his view, Michigan law had

created “fragmented markets” for retail electricity in

which the State could impose its requirement that all

suppliers obtain electricity locally. Id. at 503-504. He

26

read Tracy as a broad license to steer clear of “the intricate area of energy regulation.” Id. at 505.

3. Others have interpreted Tracy the same way as

the Fifth and Sixth Circuits. In American Trucking

Associations, Inc. v. Rhode Island Turnpike & Bridge

Authority, 123 F.4th 27 (1st Cir. 2024), the First Circuit

explained that entities are not similarly situated under

Tracy when they sell “different products to different

consumer markets” and rejected a claim that Rhode Island discriminated against “out-of-state tractor-trailers

in favor of in-state single-unit trucks” absent evidence

that the two competed with each other. Id. at 38. And

in LSP Transmission Holdings II, LLC v. Huston, 131

F.4th 566 (7th Cir. 2025), Judge Scudder agreed that

Tracy applies only when “companies provide different

products in different markets and would continue to do

so even if the alleged discriminatory burden on interstate commerce were removed.” Id. at 593 (dissenting

opinion); see id. at 576 (majority opinion) (rejecting

claim for lack of standing without reaching merits under Tracy).

B. The Ninth Circuit’s approach to Tracy squarely

conflicts with NextEra and Energy Michigan. Both the

Fifth and Sixth Circuits understand Tracy to create a

narrow exception to dormant Commerce Clause principles for laws that distinguish among entities that compete in “distinct (but related) markets.” Energy Michigan, 126 F.4th at 493; see NextEra, 48 F.4th at 319.

Judge Bress likewise read Tracy to apply only to “market participants that do not compete with each other in

the same product market.” App., infra, 35a (dissenting

opinion). But the Ninth Circuit rejected such a focus

on “whether PacifiCorp produces the same product,

27

specifically electricity, for in-state and out-of-state consumers.” Id. at 11a. Its decision is irreconcilable with

NextEra and Energy Michigan.

In the Fifth and Sixth Circuits, PacifiCorp would

have stated a claim of facial discrimination against interstate commerce. Energy Michigan is an especially

good parallel. There, the Sixth Circuit held that Michigan had to satisfy strict scrutiny to justify its discrimination based on the “geographic origins” of electricity

by favoring “local electrical capacity” over out-of-state

capacity. 126 F.4th at 493. Here, the Ninth Circuit held

that Washington could avoid any review of its discrimination based on the geographic destination of electricity by awarding no-cost allowances to power that remains within Washington and requiring PacifiCorp to

buy allowances for the same power if it leaves Washington. App., infra, 14a-15a. Nothing in Tracy explains

those incompatible conclusions.

Instead of asking whether Washington law discriminated within the same product market or differentiated between different product markets, the Ninth Circuit relied exclusively on the “regulatory distinctions

between the treatment of entities that produce in-state

electricity and exported electricity.” App., infra, 11a.

That interpretation of Tracy would have flipped the result in both NextEra and Energy Michigan. Entities

with an in-state presence would not be similarly situated in the transmission market to new entrants, which

are not currently subject to Texas’s “local control over

what is inherently a local business.” NextEra, 48 F.4th

at 329 (Elrod, J., concurring in part and dissenting in

part) (citation omitted). And in-state generation would

not be similarly situated to out-of-state generation,

28

which Michigan deemed less reliable in its highly regulated retail electricity market. Energy Michigan, 126

F.4th at 504 (Boggs, J., dissenting).

All told, the Ninth Circuit alone holds that discrimination against interstate commerce makes the out-ofstate activity no longer similarly situated to the in-state

activity. That interpretation of Tracy turns the dormant

Commerce Clause on its head.

III. THE QUESTION PRESENTED IS EXCEPTIONALLY IMPORTANT

The decision below could “swallow the dormant

Commerce Clause altogether.” App., infra, 24a (Bress,

J., dissenting). It clears a path for States to bypass that

Clause’s antidiscrimination principle while enacting

protectionist laws that favor their own consumers at the

expense of interstate commerce. That outcome undermines the constitutional design and threatens major destabilizing effects for the interstate economy—particularly in the energy sector. This Court’s prompt review

is necessary to restore the Commerce Clause’s promise

of a national economy free from discriminatory state

laws.

A. The decision below is a roadmap for States to

undercut the “national market for competition undisturbed by preferential advantages conferred by a State

upon its residents” that this Court has long understood

the Commerce Clause to safeguard. Tracy, 519 U.S. at

299. Under the Ninth Circuit’s approach, “[a]ll a state

must do to escape dormant Commerce Clause scrutiny

is apply some sort of regulatory framework to in-state

sales of a product,” use that regulatory scheme to paint

the in-state and out-of-state sales as not similarly situ-

29

ated, and then burden out-of-state sales “without limitation.” App., infra, 43a (Bress, J., dissenting); accord

Energy Michigan, 126 F.4th at 498. That green light

for discrimination against interstate commerce unsettles the “very structure of the Constitution, which ‘was

framed upon the theory that the peoples of the several

States must sink or swim together.’” Pork Producers,

598 U.S. at 370 (brackets and citation omitted).

The implications of the Ninth Circuit’s decision are

particularly stark for the interstate electricity market.

“[A]lmost all electricity” flows through regional grids

that make up “‘a part of a vast pool of energy that is

constantly moving in interstate commerce,’ linking producers and users across the country.” FERC v. Electric

Power Supply Ass’n, 577 U.S. 260, 267 (2016) (citation

omitted). Given that interconnectivity, this Court has

observed that “uncontrolled regulation by the States”

of energy “can patently interfere with broader national

interests.” Arkansas Electric, 461 U.S. at 377.

Washington will not have the last word with its discriminatory cap-and-trade system. Under the Ninth

Circuit’s interpretation of Tracy, “nothing would stop

other states with decarbonization mandates from imposing their own discriminatory taxes on exported electricity without any dormant Commerce Clause review.”

App., infra, 44a (Bress, J., dissenting). The decision

below surely will not escape the notice of California,

which already has a cap-and-trade program, Cal. Code

Regs. tit. 17, § 95800 et seq., and Oregon, which may

soon be weighing legislative proposals for one,

VanderHart, ‘Prosperity Council’ Wish List for Gov.

Tina Kotek, Oregon Public Broadcasting (June 25,

2026), tinyurl.com/bd6wfrm5.

30

The costs of discriminatory provisions that limit free

allowances to in-state consumption in cap-and-trade

systems must be borne by someone—either by other

States’ consumers or by energy producers who are penalized for exporting power to out-of-state customers.

Attempts by States to externalize the cost of their climate regulations onto other States would destabilize

the interstate flow of electricity and potentially trigger

precisely the sort of “‘economic Balkanization’” and

“‘retaliatory acts [by] other States’” that this Court has

repeatedly intervened to prevent. App., infra, 44a

(Bress, J., dissenting) (quoting Camps Newfound, 520

U.S. at 577). That state of affairs would undermine the

Constitution’s text and structure, which preserve

“[e]ach State’s equal dignity and sovereignty” by preventing States from resorting to “traditional diplomatic

and military tools,” such as measures against imports

and exports. Franchise Tax Board of California v. Hyatt, 587 U.S. 230, 245 (2019).

Recognizing the importance of preserving a national

electricity market free of state protectionism, the past

two Administrations have objected to attempts to overread Tracy. The United States first went on record for

a challenge to a Minnesota right-of-first-refusal law that

allegedly gave preferential treatment to in-state electric

transmission owners. In its amicus brief, the United

States rejected the view that Tracy “establish[es] a categorical rule shielding all electricity-related regulation

from dormant Commerce Clause scrutiny,” stressing

that Tracy must be read against the “background” of

this Court’s decisions repeatedly “invalidat[ing] state

electricity regulations that discriminated against or

burdened interstate commerce.” U.S. Br. at 11-12, LSP

Transmission Holdings, LLC v. Sieben, 954 F.3d 1018

31

(8th Cir. 2020) (No. 18-2559). Ultimately, the Eighth

Circuit did not “decide whether Tracy is applicable” because the state law was not discriminatory under a “full

dormant Commerce Clause analysis.” 954 F.3d at 1027.

The United States forcefully reiterated its position

when this Court called for the views of the Solicitor

General three Terms ago after Texas sought certiorari

in NextEra. The United States endorsed the Fifth Circuit’s interpretation of Tracy, which dealt with a law

“that applie[d] with equal force” to two different markets and “does not insulate” laws that “restric[t] only a

single market” from “ordinary Commerce Clause principles.” U.S. Br. at 14-16, NextEra, supra (No. 22-601)

(formatting omitted). At the time, “no court of appeals”

had “adopted [Texas’s] expansive view of Tracy.” Id. at

18. The Ninth Circuit has now taken that very step,

misinterpreting Tracy and creating a circuit split in the

process.

B. This case is an ideal vehicle to resolve whether

the Ninth Circuit correctly departed from the Fifth and

Sixth Circuits. Last year, Ecology successfully opposed

review of a similar question presented on the ground

that an earlier decision was “unpublished and ha[d] no

precedential value, even within the Ninth Circuit.” Br.

in Opp. at 25-26, Invenergy Thermal LLC v. Sixkiller,

146 S. Ct. 94 (2025) (No. 24-1027). Ecology now has a

published yet divided opinion in hand that fully ventilates the issues and cements the Ninth Circuit’s view

that Tracy immunizes its discriminatory cap-and-trade

system from review under the dormant Commerce

Clause. Little could be gained at this point from further

percolation.

PacifiCorp’s experience under the Climate Commitment Act also vividly illustrates the stakes of the Ninth

32

Circuit’s failure to faithfully apply this Court’s dormant

Commerce Clause precedents. For 2024 alone, PacifiCorp estimated that its cost of compliance with the Act

would nearly reach $48 million before accounting for

no-cost allowances, which Ecology made available only

to the extent that PacifiCorp sold the electricity within

Washington. App., infra, 27a (Bress, J., dissenting);

see id. at 85a-86a. PacifiCorp must spend tens of millions of dollars on allowances to account for each year’s

out-of-state electricity sales—costs that it to date has

been prohibited from passing through to its customers.

Id. at 54a.

These onerous costs forced PacifiCorp this year to

reallocate all the power it generates at the Chehalis

plant away from out-of-state customers and toward

Washington customers. App., infra, 27a (Bress, J., dissenting). That outcome, like none other, reveals the

consequences of making no-cost allowances available

only for emissions generated by power that is consumed

inside Washington. Such discrimination unsettles expectations in past investments in facilities to serve outof-state customers. And it may deter future investments in generation that could economically serve multiple States but that make no business sense for intrastate commerce alone. As a result, this case perfectly

epitomizes why this Court has interpreted the Commerce Clause to prevent States from “discourag[ing]”

firms “from plying their trades in interstate commerce.” Fulton Corp., 516 U.S. at 333.

This Court’s prompt intervention is necessary to

stop Washington’s discriminatory cap-and-trade system

from landing a major blow against interstate commerce. Washington law requires PacifiCorp to surrender its remaining allowances for the first compliance

33

period to Ecology by November 1, 2027. Wash. Admin.

Code § 173-446-600(4). Without a decision this Term,

PacifiCorp could be forced to hand over allowances

worth tens of millions of dollars for emissions related to

exported electricity from 2023 to 2026. Sovereign immunity may then shield Ecology from efforts to recoup

allowances that the State collected wrongfully through

discrimination against PacifiCorp’s selling electricity

outside of Washington. See Edelman v. Jordan, 415

U.S. 651, 663 (1974). To facilitate this Court’s ability to

resolve this case before the end of the Term, PacifiCorp

has moved expeditiously to file this petition within a

month of the Ninth Circuit’s decision.

34

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

DALLAS S. DELUCA

MARKOWITZ HERBOLD PC

1455 S.W. Broadway

Suite 1900

Portland, OR 97201

THEODORE J. BOUTROUS, JR.

Counsel of Record

BLAINE H. EVANSON

PATRICK J. FUSTER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

(213) 229-7000

tboutrous@gibsondunn.com

LAVI M. BEN DOR

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, DC 20036

Counsel for Petitioner

SEPTEMBER 4, 2026