(Source: MIRS.news, Published 01/16/2025) Michigan's requirement that a certain amount of the Lower Peninsula's electricity must be generated within the borders of the Lower Peninsula violates the U.S. Commerce Clause and can't be enforced, a U.S. appellate court ruled Thursday. 

Created during the state's 2016 energy re-write, these “local clearing requirements” are designed to keep more of Michigan's electricity generation within its borders, but the U.S. Sixth Circuit Court of Appeals ruled in a 2-1 decision that the law “overtly blocks the flow of interstate commerce at a state's borders” and is discriminatory. 

Whether it's a law that only allows local wineries to ship alcohol directly to customers, a law that allows for only pasteurized milk processed within five miles of the city center to be sold in that city or a law requiring electricity to be generated in the state that it will be used is no different, the majority wrote. 

“It is black letter law that 'state and local governments may not use their regulatory power to favor local enterprise by prohibiting patronage of out-of-state competitors of their facilities,” read the majority opinion from Judges Richard F. Suhrheinrich and Chad A. Readler. 

The federal case was pushed by Energy Michigan, which represents the state's alternative energy suppliers (AES), and the Association of Businesses Advocating Tariff Equity (ABATE), which represents the industrial and manufacturing customers who use these AESs. 

The suit came against the Michigan Public Service Commission (MPSC) created the “local clearing requirements” in 2017 and 2018 in response to the 2016 law. 

Thursday's decision reverses a lower court ruling from U.S. District Judge David Lawson from February 2023. 

Judge Danny J. Boggs wrote in his dissent that the federal courts carved out an exception to the U.S. Commerce Clause when it came to what counts as discrimination in highly regulatory markets like electricity. He claimed that the exception applies in this case. 

He wrote eliminating the in-state electricity generation requirement would do nothing to advance the Commerce Clause's objective of preserving a national market for competition and would undermine the reliability of Michigan's energy grid.