Senate Judiciary Committee Cites Risks From Trump's FERC And Coal Plant Owners To CA Environmental Policies Under SB 540, Causing "Significant Harms To Its Energy Goals", Says Consumer Watchdog

SACRAMENTO, Calif., April 28, 2025 /PRNewswire/ -- The California Senate Judiciary Committee analysis of SB 540 (Becker), which would change our electricity market from a California-only market to a Western regional market, cites the dangers of federal preemption of California clean energy laws by the Trump Administration and coal plant managers. The analysis states, "California could see significant harms to its energy goals and its standing in the regional market." SB 540 is to be heard Tuesday in the committee.

"Senators need to listen to this analysis," said Jamie Court, president of Consumer Watchdog. "This is not the time to be turning power over California environmental laws to Trump."

"These dangers are even greater now that President Trump has put a target on California's green energy laws and directed the United States Attorney General to find ways to curtail our state's climate change efforts and to identify opportunities to challenge our state policies through various legal angles, such as federal preemption and discrimination (Dormant Commerce Clause) legal angles," the analysis states. "Currently, California is able to exert a certain amount of influence over the direction of the CAISO with regard to interstate energy with a board appointed by the Governor and subject to approval by the California State Senate. Under this bill, California would open the state up to federal challenges….The two major legal concerns that arise from this bill are based on the federal preemption doctrine and the Dormant Commerce Clause."

The analysis cites Consumer Watchdog's letter stating, "Consumer Watchdog writes the following in opposition to SB 540: 'Consumer Watchdog opposes SB 540, which gives power over California environmental laws to the Federal Energy Regulatory Commission (FERC) at grave risk to California's renewable portfolio standard (RPS) and other clean energy laws.' There is a growing volume of case law that supports the reality of these risks," according to the Committee.

"This bill, coupled with President Trump's laser focus on 'Reinvigorating America's Beautiful Clean Coal Industry' and undoing California's green energy policy and actual directive to the United States Attorney General to find ways to combat California's green energy laws through theories of preemption and the Dormant Commerce Clause, truly make California's policies vulnerable to challenge.  It is safe to assume that California will be more susceptible to being found to run afoul of the Dormant Commerce Clause or preempted by federal law for impinging on the jurisdiction of FERC should this law be enacted. Should such fears materialize, California could see significant harms to its energy goals and its standing in the regional market."

"Once the CAISO approves participation in the IRO, regional issues are strictly overseen by FERC, and there are no guarantees, especially because the IRO does not operate under the political oversight of the California Legislature… FERC has expansive jurisdiction over energy that is transferred through interstate commerce. Given the current administration and its ever-increasing appetite to usurp California's state control, it would arguably be dangerous policy to authorize the CAISO and the electrical corporations whose transmission is operated by the CAISO to use voluntary energy markets governed by an IRO in lieu of the CAISO managing related energy markets. This would increase the risk that FERC and this administration find a hook to challenge a host of laws in California, not to mention take control over what type of energy is generated and used in California and how much it costs."

"Given that the President's Executive Orders precisely target California and what he refers to as our 'state overreach' this is arguably not the year to pass this legislation," the analysis states. "It would be prudent to proceed with caution and wait and see how the United States Attorney General identifies and takes 'action against state laws and policies that burden the use of domestic energy resources and that are unconstitutional, preempted by federal law, or otherwise unenforceable' without giving the Trump Administration another new opportunity upon which to take action against our state's green energy efforts".

SOURCE Consumer Watchdog