Rigged Market? Price Surge Tied To PA Rules

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West Virginia is hauling Pennsylvania into federal court, arguing the Keystone State rigged its green energy rules to lock out competitors and jack up electric bills across the region.

Quick Take

West Virginia Attorney General J.B. McCuskey sued Pennsylvania’s Public Utility Commission on September 3, claiming its renewable energy laws break the U.S. Constitution’s Commerce Clause.
The lawsuit targets Act 40 of 2017 and Act 114 of 2020, which require many “green” energy credits to come from inside Pennsylvania.
West Virginia says the rules helped push Pennsylvania renewable credit prices from 22 cents to nearly $27 per megawatt-hour.
Courts have split on these fights before, with the Supreme Court recently making such challenges harder to win.

West Virginia Accuses Pennsylvania of Rigging the Market

West Virginia Attorney General J.B. McCuskey filed the lawsuit in federal court, calling Pennsylvania’s energy rules “naked economic warfare” against neighboring states. He argues Pennsylvania built “a wall around” its energy market, blocking out-of-state power producers from selling renewable energy credits inside the state. The suit names the Pennsylvania Public Utility Commission along with Chairman Stephen DeFrank and Vice Chair Kimberley Barrow.

Pennsylvania’s Act 40, passed in 2017, says qualifying solar credits must come from power generated inside the state or connected directly to Pennsylvania’s transmission system. Act 114, passed in 2020, added more rules for other renewable sources, requiring them to deliver power straight to Pennsylvania customers or hold a state environmental permit. West Virginia’s complaint calls Act 40 “facially discriminatory” against outside competitors.

How the Rules Raise Costs for Everyone

Pennsylvania law forces electric companies to get 18 percent of their power supply from alternative sources, or buy credits proving they did. Those credits are traded in a regional power market called PJM, which covers 13 states including West Virginia. By walling off that credit market to mostly in-state sellers, West Virginia claims Pennsylvania drove prices for those credits from 22 cents up to nearly $27 per megawatt-hour, a cost that ultimately lands on ratepayers’ bills.

This is exactly the kind of government-engineered price hike conservatives have warned about for years. Green energy mandates already force families to pay more for power. Now West Virginia says Pennsylvania made it worse by picking winners and losers based on zip code instead of letting the free market decide who provides the cheapest, cleanest power. Energy expert Jonathan Lesser argues the fix is simple: let out-of-state generators compete on a level playing field.

The Constitutional Question Courts Will Decide

The Commerce Clause of the Constitution gives Congress, not individual states, the power to regulate trade between states. Courts have long read into this an unwritten rule called the Dormant Commerce Clause, which stops states from favoring their own businesses over out-of-state competitors. West Virginia argues Pennsylvania’s rules do exactly that, discriminating openly against sellers from other states.

Pennsylvania’s defenders could point to a mixed record in similar fights. The Tenth Circuit Court of Appeals, in an opinion written by now-Justice Neil Gorsuch, upheld Colorado’s renewable energy rule against a similar challenge. Courts have also upheld Connecticut’s and Illinois’s programs because they didn’t flatly ban out-of-state generators from applying. The Supreme Court’s 2023 ruling in National Pork Producers Council v. Ross also made these challenges tougher to win nationwide.

Still, West Virginia’s case stands on stronger footing because its complaint points to specific statutory language requiring in-state location or direct connection to Pennsylvania’s grid, not a neutral rule that merely happens to favor local producers. Judge Richard Posner once warned that states “cannot” tilt these programs toward their own producers without running into Commerce Clause trouble, and West Virginia’s lawyers are betting that logic wins the day.

Green Energy Mandates Meet the Commerce Clause | Jonathan Lesser, RealClearEnergy

Pennsylvania’s renewable energy mandate is finally facing a constitutional test. In a lawsuit filed September 3, West Virginia argues that Pennsylvania’s requirement that many qualifying renewable… pic.twitter.com/4y1WfSsfIS

— Owen Gregorian (@OwenGregorian) October 3, 2026

West Virginia isn’t asking Pennsylvania to scrap its clean energy goals altogether. It simply wants Pennsylvania to stop using those goals as cover to shield its own producers from fair competition. For conservatives who believe states shouldn’t be allowed to use green mandates as a backdoor tax on neighbors, this case could become a model for challenging similar protectionist schemes nationwide.