Pacificorp v. Sixkiller

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT PACIFICORP, an Oregon business No. 24-4803 corporation, D.C. No. 3:23-cv-06155- Plaintiff - Appellant, TMC v. CASEY SIXKILLER, Director of the OPINION Washington State Department of Ecology, Defendant - Appellee. Appeal from the United States District Court for the Western District of Washington Tiffany M. Cartwright, District Judge, Presiding Argued and Submitted June 2, 2025 Seattle, Washington Filed August 7, 2026 Before: Johnnie B. Rawlinson, Daniel A. Bress, and Patrick J. Bumatay, Circuit Judges. Opinion by Judge Rawlinson; Dissent by Judge Bress 2 PACIFICORP V. SIXKILLER SUMMARY* Dormant Commerce Clause The panel affirmed 1) the district court’s dismissal with prejudice of PacifiCorp’s complaint alleging that the Washington State Department of Ecology violates the Dormant Commerce Clause through enforcement of decarbonization requirements under Washington’s Climate Commitment Act (CCA), and 2) the district court’s dismissal of PacifiCorp’s motion for a preliminary injunction as moot. Washington’s Clean Energy Transformation Act (CETA) was adopted in 2019 to address the impacts of climate change by transitioning the state’s electricity supply to one hundred percent carbon-neutral by 2030. In 2021, Washington adopted the CCA, requiring certain greenhouse- gas emitting entities located in Washington to obtain allowances for their annual greenhouse-gas emissions. The CCA contains a provision allowing electric utilities subject to CETA to be eligible for allowance allocation to mitigate the cost burden of the CETA program on electricity customers. Under the CCA, all electric utilities subject to the requirements of the CETA are eligible for no-cost allowances. PacifiCorp, a multi-state utility that serves customers in six states and which is subject to CETA, receives no-cost allowances for carbon emissions produced by electricity sold to Washington customers, but does not receive no-cost allowances for emissions from electricity exported outside * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.  PACIFICORP V. SIXKILLER 3 the state of Washington. PacifiCorp contends that enforcement of the decarbonization requirements under the CCA unconstitutionally increases electricity costs for PacifiCorp’s non-Washington customers. Agreeing with the district court that PacifiCorp has Article III standing and that PacifiCorp’s claims are ripe, the panel held that the district court’s dismissal of PacifiCorp’s complaint with prejudice was warranted because PacifiCorp failed to plausibly allege that Washington’s decarbonization regulations and its use of no-cost allowances were applied to similarly situated entities as required for violations of the Dormant Commerce Clause. The panel explained that because of the regulatory distinctions between the treatment of entities that produce in-state electricity and exported electricity under the CCA and CETA, PacifiCorp’s exported power, which is not subject to CETA, it is not similarly situated to utilities providing in-state power under CETA. The panel further held that because PacifiCorp is unable to plausibly allege a cognizable claim under the Dormant Commerce Clause, the district court did not err in dismissing PacifiCorp’s complaint without leave to amend, and PacifiCorp’s motion for preliminary injunction was correctly denied as moot. Dissenting, Judge Bress wrote that the CCA facially discriminates against interstate commerce by imposing greater costs on interstate electricity sales through the disallowance of associated no-cost allowances. He wrote that because this case is only at the pleading stage, the proper course here is to remand this case for factual development as to whether CETA’s compliance costs and the CCA allowances are “roughly equivalent” in a way that would 4 PACIFICORP V. SIXKILLER justify Washington’s otherwise discriminatory treatment of interstate electricity sales. COUNSEL Dallas S. DeLuca (argued), Paul S. Bierly, and Josephine C. Kovacs, Markowitz Herbold PC, Portland, Oregon, for Plaintiff-Appellant. Christopher H. Reitz (argued) and Zachary S. Packer, Assistant Attorneys General; Andrew A. Fitz, Senior Assistant Attorney General; Kelly T. Wood, Senior Counsel; Nicholas W. Brown, Washington Attorney General; Office of the Washington Attorney General, Olympia, Washington; for Defendant-Appellee. OPINION RAWLINSON, Circuit Judge: PacifiCorp is a utility that supplies electricity to customers in Washington, Utah, Wyoming, Idaho, Oregon, and California. PacifiCorp appeals the district court’s dismissal with prejudice of its complaint alleging that the Washington State Department of Ecology (Ecology) violates the Dormant Commerce Clause through enforcement of decarbonization requirements under Washington’s Climate Commitment Act (CCA). See Wash. Rev. Code § 70A.65. PacifiCorp contends that this enforcement unconstitutionally increases electricity costs for PacifiCorp’s non-Washington customers. PacifiCorp also challenges the district court’s  PACIFICORP V. SIXKILLER 5 dismissal of its motion for preliminary injunction as moot. We affirm. I. BACKGROUND PacifiCorp is “a multi-state utility that serves approximately two million customers in six states, with approximately 140,000 customers in Washington.” In its amended complaint, PacifiCorp alleged that it “owns and operates the Chehalis Generation Facility (Chehalis), . . . a gas-fired combined cycle electric generation facility located south of Chehalis, Washington.” In 2021, Washington enacted the CCA which “require[s] certain emitting entities located in Washington to obtain and retire allowances for their respective annual greenhouse-gas emissions.” “Some entities covered by the CCA will purchase allowances for their respective emissions at auction, while others are provided free (no-cost) allowances for emitting generation that serves Washington utility customers.” PacifiCorp alleged that “[t]hese no-cost allowances mitigate the costs for Washington utility customers who would otherwise be required to pay for CCA allowances at market prices.” In contrast, emitting resources like Chehalis, which are located in Washington but serve utility customers in other states in addition to Washington, do not receive no-cost allowances for the portion of emissions for service for out-of-state residents.” Under the CCA, “[t]hese no-cost allowances are assigned directly to electric utilities in an attempt to mitigate the cost burden of the program on electricity customers.” PacifiCorp further alleged that “[u]nder the CCA and its implementing regulations, electric utilities can transfer their no-cost allowances to the power plants that they own. Because these power plants are responsible for generating the electricity these utilities sell, and the emissions 6 PACIFICORP V. SIXKILLER associated with that electricity, these no-cost allowances eliminate some or all of a utility-owned power plants’ compliance costs caused by the CCA.” PacifiCorp alleged that “for emitting resources like Chehalis that are located in Washington but that serve customers both within Washington and in other states, PacifiCorp will not receive no-cost allowances for the portion of emissions for service for out-of-state residents.” “As a result, PacifiCorp’s non- Washington customers bear higher power costs to ensure Chehalis has sufficient allowances to cover its emissions for the energy that serves those customers.” “Alternatively, if utility regulators in those other states deny recovery of the cost of allowances because of this disparate treatment, PacifiCorp shareholders will bear the CCA compliance costs simply because it serves customers in other states.” PacifiCorp asserted that “Washington customers do not pay for CCA allowance costs for electricity generated at Chehalis, but PacifiCorp and PacifiCorp’s out-of-state customers do. The CCA’s allocation of no-cost allowances harms PacifiCorp’s non-Washington customers and PacifiCorp in direct proportion to the amount of Chehalis generation that crosses Washington’s border.” PacifiCorp alleged that “[t]his harm to PacifiCorp and its non-Washington customers will continue to increase because Chehalis incurs a new CCA compliance obligation for each metric ton of carbon dioxide equivalent that the plant emits,” and “approximately 77 percent of Chehalis’ emissions do not receive no-cost allowances, and it falls to PacifiCorp (an out-of-state entity) or its out-of-state customers to pay for Washington’s CCA compliance costs.” PacifiCorp further alleged that “[a]s applied to PacifiCorp and its out-of-state customers, [Ecology’s] implementation of the CCA’s allocation of no-cost allowances violates the  PACIFICORP V. SIXKILLER 7 Commerce Clause of the United States Constitution because it impermissibly discriminates against out-of-state businesses and customers.” According to PacifiCorp, “Washington utilities that serve only or predominantly Washington customers do not have the same CCA compliance cost burden as PacifiCorp, which serves out-of-state customers with electricity from Chehalis,” and “[t]hese protectionist effects and the explicit legislative text that the CCA shall be implemented to mitigate the cost burden for customers in Washington, and only in Washington, confirm that the CCA’s allocation of no-cost allowances imposes Constitutionally impermissible burdens on interstate commerce.” PacifiCorp sought a motion for preliminary injunction to enjoin Ecology “from enforcing the no-cost allowance provisions of the CCA in a manner that discriminates between in-state and out-of-state customers.” The district court concluded that dismissal of PacifiCorp’s Dormant Commerce Clause claims was warranted because “[t]he electricity PacifiCorp generates to send out of state is not substantially similar to the electricity it sells in Washington because the exported energy is not covered by” Washington’s Clean Energy Transformation Act (CETA). See Wash. Rev. Code § 19.405. The district court opined that “[a]ccepting PacifiCorp’s [Dormant Commerce Clause] argument would elevate the energy it produces in Washington but then sends out of state above Washington’s entire regulatory framework for reducing carbon emissions: it would be exempt from both the decarbonization mandate of CETA and the purchase of allowances under the CCA.” The district court observed that: 8 PACIFICORP V. SIXKILLER Throughout PacifiCorp’s complaint and description of how no-cost allowances under the CCA are allocated, there is not one mention of CETA’s existence, despite the CCA and its implementing regulations making clear that an electric utility is only eligible for no-cost allowances to the extent that it is subject to CETA’s requirements. But the existence of CETA, and its role in the allocation of no-cost allowances, is not an inconvenient fact that PacifiCorp can avoid by artful pleading. The district court concluded that the CCA and CETA operate in tandem to reduce carbon emissions because: The CCA requires covered entities to buy allowances for carbon emissions, subject to a cap on allowances that decreases each year, so that market pressure will encourage those entities to decarbonize. But electric utilities serving Washington customers [do not] need that market pressure because CETA already requires them to decarbonize, and on a faster schedule. In contrast, the emissions that PacifiCorp generates within Washington’s borders at its Chehalis plant, but uses to export electricity to customers in other states, are not covered by CETA at all. This fundamental difference in preexisting regulation means that the two categories of  PACIFICORP V. SIXKILLER 9 emissions are not substantially similar for purposes of the Dormant Commerce Clause. The district court also rejected PacifiCorp’s reliance on Dormant Commerce Clause precedent involving the compensatory tax doctrine because “the CCA’s allocation of no-cost allowances to utilities already subject to CETA’s requirements is not the equivalent of a facially discriminatory tax.” The district court clarified that the compensatory tax doctrine is “a specific way of justifying a facially discriminatory tax as achieving a legitimate local purpose that cannot be achieved through discriminatory means.” See Oregon Waste Sys. v. Dep’t of Envt’l Qual. Of State of Or., 511 U.S. 93, 102 (1994). Rather than applying a discriminatory tax analysis, the district court determined that the relevant inquiry for this case is whether “the competing entities were subject to different regulatory regimes.” Finally, the district court opined 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—a fact acknowledged by both the Federal Power Act and the Supreme Court’s Commerce Clause cases.” See e.g., Arkansas Elec. Coop. Corp. v. Ark. Pub. Svc. Com’n, 461 U.S. 375, 395 (1983) (“[T]he national fabric does not seem to have been seriously disturbed by leaving regulation of retail utility rates largely to the States.”); see also Electric Pwr. Supply Ass’n v. Star, 904 F.3d 518, 525 (7th Cir. 2018) (“Illinois has not engaged in any discrimination beyond what is required by the rule that a state must regulate within its borders. All carbon- emitting plants in Illinois need to buy credits.”). The district court explained that “[u]nder this [balkanized] system, 10 PACIFICORP V. SIXKILLER PacifiCorp’s retail electricity customers in Washington and other states do not compete in the way that typically triggers dormant Commerce Clause scrutiny. If PacifiCorp succeeds in passing the compliance costs of the CCA on to its out-of- state customers, it will be because each state’s utility commission has approved charging its own residents those rates.” On the other hand, “if PacifiCorp fails, then its shareholders will incur those costs not because they serve out-of-state customers, but because they own and operate a power plant in Washington state that produces emissions not already covered by CETA’s decarbonization schedule—just like any other comparable covered entity under the CCA.” PacifiCorp did not seek leave to amend its complaint, and the district court dismissed PacifiCorp’s complaint with prejudice because its “ruling [was] based on the plain text of the CCA and CETA and the way the statutes interact, rather than on insufficient factual allegations.” The district court also denied PacifiCorp’s motion for preliminary injunction as moot. PacifiCorp filed a timely notice of appeal. II. STANDARDS OF REVIEW “We review de novo a district court’s dismissal under Fed. R. Civ. P. 12(b)(6), accepting as true all allegations of fact in a well-pleaded complaint and construing those facts in the light most favorable to the plaintiff.” DeFrancesco v. Robbins, 136 F.4th 933, 938 (9th Cir. 2025) (citation and internal quotation marks omitted). “Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment. . . .” Webb v.  PACIFICORP V. SIXKILLER 11 Trader Joe’s Co., 999 F.3d 1196, 1204 (9th Cir. 2021) (citation omitted). “The denial of a motion for preliminary injunction will be reversed only if the district court abused its discretion or based its decision on an erroneous legal premise. . . .” F.T.C. v. Microsoft Corp., 136 F.4th 954, 964 (9th Cir. 2025) (citation omitted). III. DISCUSSION A. Standing and Ripeness of PacifiCorp’s Claims Ecology does not challenge the district court’s rulings that PacifiCorp had standing to assert its Dormant Commerce Clause claim, and that the claim was ripe for adjudication. Nevertheless, “[s]tanding is a threshold consideration that must be determined before considering the merits.” Day v. Henry, 152 F.4th 961, 967 (9th Cir. 2025), as amended, (citation omitted). For Article III standing, “a plaintiff must have (1) suffered an injury-in-fact that is (2) traceable to the defendant’s challenged conduct, and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id. (citation omitted). “[A] plaintiff satisfies redressability when he shows that a favorable decision will relieve a discrete injury to himself, not that a favorable decision will relieve his every injury. . . .” Id. (citation and internal quotation marks omitted) (emphasis in the original). The district court held that PacifiCorp had standing because “[t]he CCA requires PacifiCorp to obtain allowances for its Chehalis emissions, either through purchase at auction or the award of no-cost allowances,” and “PacifiCorp . . .plausibly alleged that it will have to spend money to purchase allowances for the emissions generated 12 PACIFICORP V. SIXKILLER for exported electricity.” The district court emphasized that, “[e]ven if PacifiCorp might eventually be allowed to pass those costs on to its customers, PacifiCorp remains the regulated entity required to obtain the allowances in the first place,” resulting in “a sufficiently concrete and particularized injury for PacifiCorp to challenge the CCA’s method of deciding when an electric utility must buy allowances rather than receive them for free.” We agree with the district court that PacifiCorp’s “alleged injury is caused by the requirements of the challenged statute and it could be redressed by an injunction requiring Ecology to distribute no-cost allowances for exported electricity or exempting PacifiCorp from the purchase of allowances altogether.” PacifiCorp’s challenge to the manner in which Washington provided no-cost allowances was a sufficient injury-in-fact, and “the district court was capable of granting at least some relief” by enjoining “enforcement of the statutory scheme.” Day, 152 F.4th at 968. “This solution would negate the Commerce Clause issue by eliminating enforcement of the allegedly discriminatory laws altogether. . . .” Id. (footnote reference omitted). PacifiCorp’s claims are also ripe. “For a suit to be ripe within the meaning of Article III, it must present concrete legal issues, presented in actual cases, not abstractions.” Planned Parenthood Great Nw. v. Labrador, 122 F.4th 825, 839 (9th Cir. 2024) (citation and internal quotation marks omitted). “In many cases, the constitutional component of ripeness is synonymous with the injury-in-fact prong of the standing inquiry. . . .” Id. (citation and internal quotation marks omitted). The district court correctly held that “PacifiCorp’s obligation to at least front the cost of allowances is identifiable and imminent,” and that  PACIFICORP V. SIXKILLER 13 “PacifiCorp’s responsibility to bear the cost of CCA allowances—regardless of the results of its administrative appeals to pass on those costs to its customers—rebut[ted] Ecology’s ripeness argument.” See id. B. The District Court’s Dismissal of PacifiCorp’s Complaint PacifiCorp contends that the district court erred in dismissing its complaint on the basis that PacifiCorp’s respective generation of electricity under the CCA for in- state use and its generation of electricity for exportation were not similarly situated uses under the Dormant Commerce Clause. The Commerce Clause provides that “[t]he Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” U.S. Const. art. 1, § 8, cl. 3. “The negative reading of this clause—known as the dormant Commerce Clause— prevents states from adopting protectionist measures that unduly restrict interstate commerce. . . .” Day, 152 F.4th at 969 (citation and internal quotation marks omitted). “The first step in analyzing any law under the dormant Commerce Clause is to determine whether it regulates evenhandedly with only incidental effects on interstate commerce, or discriminates against interstate commerce.” Id. at 970 (citation and internal quotation marks omitted). “Discrimination means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Id. (citation and internal quotation marks omitted). “This differential treatment must be as between persons or entities who are similarly situated.” Id. (citation and internal quotation marks omitted). 14 PACIFICORP V. SIXKILLER Consistent with “the Supreme Court’s clear instruction . . . that extreme caution is warranted before a court deploys its implied authority to reject a state law under the dormant Commerce Clause,” Flynt v. Bonta, 131 F.4th 918, 926 (9th Cir. 2025) (citation and internal quotation marks omitted), we conclude that the district court correctly dismissed PacifiCorp’s Dormant Commerce Clause claims. In this case, the focus of the Dormant Commerce Clause analysis is not primarily on whether PacifiCorp produces the same product, specifically electricity, for in-state and out-of- state consumers. See Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 127-28 (1978) (explaining that the Commerce Clause “protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations”). Rather, it is the regulatory distinctions between the treatment of entities that produce in-state electricity and exported electricity under the CCA and CETA that undermine PacifiCorp’s contention that carbon emissions from its production of electricity for in-state and out-of-state customers are similarly situated for purposes of the Dormant Commerce Clause.1 In 2019, the Washington legislature adopted CETA to “address the impacts of climate change by leading the transition to a clean energy economy,” and “to eliminate coal-fired electricity, transition the state’s electricity supply to one hundred percent carbon-neutral by 2030, and one hundred percent carbon-free by 2045.” Wash. Rev. Code 1 Further complicating the Dormant Commerce Clause analysis in this case is the fact that PacifiCorp also sells electricity to Washington customers. PacifiCorp acknowledges that “CETA applies to gas- powered facilities like Chehalis,” thus entitling PacifiCorp to receive no- cost allowances under the CCA for electricity sold to Washington customers. See Wash. Rev. Code § 70A.65.120(1).  PACIFICORP V. SIXKILLER 15 § 19.405.010(1)-(2). To advance the state’s decarbonization efforts, each electric utility was required to file a clean energy implementation plan with the Washington Utilities and Transportation Commission (Commission) by October 1. 2021, and every four years thereafter. The clean energy implementation plan was to describe “the utility’s plan for making progress toward meeting the clean energy transformation standards [as] informed by the utility’s clean energy action plan.” Wash. Admin. Code 480-100-640(1).2 In 2021, the Washington legislature adopted “a cap on greenhouse gas emissions from covered entities and a program to track, verify, and enforce compliance through the use of compliance instruments,” and imposed “[a]nnual allowance budgets that limit emissions from covered entities.” Wash. Rev. Code § 70A.65.060(1)-(2) (2021). Under the CCA, a covered entity is one that “owns or operates a facility and the facility’s emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent.” Wash. Rev. Code § 70A.65.080(1)(a). The CCA provides for allowances, which authorize the emission of “up to one metric ton of carbon dioxide equivalent.” Wash. Rev. Code 2 In 2024, the Commission determined that PacifiCorp had not shown “meaningful progress towards meeting CETA standards,” and ordered an investigation into PacifiCorp’s CETA update. Washington Utilities & Transp. Comm’n v. PacifiCorp, No. UE-210829, 2024 WL 1364108, at *5 (Wash. U.T.C. Mar. 25, 2024). The enforcement action against PacifiCorp and CETA’s regulatory mandates undermine PacifiCorp’s assertion that there are not two categories of emissions because CETA does not require utilities to be “greenhouse gas neutral” until 2030. CETA does not apply to exported power, thus justifying denial of cost allowances for sale of electricity to out-of-state customers irrespective of the timing set by the Washington legislature for its decarbonization goals. 16 PACIFICORP V. SIXKILLER § 70A.65.010(1). These allowances must be purchased at auction. The CCA also contains a provision allowing electric utilities subject to CETA “to be eligible for allowance allocation . . . in order to mitigate cost burden of the [CETA] program on electricity customers.” Wash. Rev. Code § 70A.65.120(1). Most of the covered entities obtain the required allowances by purchasing them at auctions conducted by Ecology. However, under the CCA, all electric utilities subject to the requirements of the 2019 CETA are eligible for no-cost allowances. See Wash. Rev. Code § 70A.65.120(i); see also Wash. Admin. Code § 173- 446-530. PacifiCorp is among the electric utilities eligible to receive no-cost allowances. Utilities such as PacifiCorp, which are subject to CETA, receive no-cost allowances for carbon emissions produced by electricity sold to Washington customers, but these utilities do not receive no-cost allowances for emissions from electricity that is not subjected to CETA’s requirements, i.e., electricity exported outside the State of Washington, and therefore not subject to CETA. See id. As the district court explained, “[t]he energy PacifiCorp produces for use in-state is subject to a preexisting, comprehensive regulatory regime—the Clean Energy Transformation Act—that its exported energy is not.” “[A]ny notion of discrimination [in violation of the Dormant Commerce Clause] assumes a comparison of substantially similar entities.” General Motors Corp. v. Tracy, 519 U.S. 278, 298 (1997) (footnote reference omitted). The district court correctly concluded that, due to the separate emission mandates imposed by CETA and the  PACIFICORP V. SIXKILLER 17 CCA, PacifiCorp was unable to plausibly allege that its carbon emissions resulting from in-state production of electricity and its carbon emissions emanating from its exported electricity were similarly situated for purposes of the Dormant Commerce Clause. As the district court explained, When the Washington legislature enacted the CCA, it was not writing on a blank slate. Because CETA already existed, the legislature faced a situation where a certain class of emitters otherwise subject to the CCA—electric utilities serving Washington residents—were already regulated by a separate and more aggressive decarbonization mandate. Rather than subject those utilities—including PacifiCorp—to overlapping sets of requirements, and potentially subject Washington’s electric customers to unnecessary increased costs beyond what they already face under CETA, the legislature chose to issue no-cost CCA allowances to electric utilities to the extent that their emissions were already covered by CETA’s decarbonization schedule. Although one would not learn it from reading PacifiCorp’s complaint—which does not mention CETA at all, and instead frames the no-cost allowances as simply a giveaway to Washington customers—the connection between no-cost allowances for electric utilities and CETA’s preexisting regulatory 18 PACIFICORP V. SIXKILLER regime is in the plain text of the CCA and its regulations. The CCA’s purpose of working in tandem with CETA’s requirements, rather than just benefiting in-state customers, is reinforced by the statute phasing out the no- cost allowances by 2045, the same year that CETA’s decarbonization mandate will be in full effect. See Wash. Rev. Code § 70A.65.120(2)(d) (“Under no circumstances may utilities receive any free allowance after 2045.”). In sum, CETA requires electric utilities like PacifiCorp, that provide electricity to Washington customers to decarbonize their power generation, while emissions resulting from electricity produced for export to out-of-state customers are not covered by CETA. These categories of emissions regulated in Washington are not substantially similar under the Dormant Commerce Clause, particularly as “[g]ranting PacifiCorp its requested relief would mean that the emissions it generates in Chehalis, but uses to export electricity, would be exempt from both CETA’s decarbonization mandate and the CCA’s requirement of purchasing emissions allowances.” Moreover, elimination of cost allowances for Washington customers and the allowances that PacifiCorp must purchase for its exported electricity “would not serve the dormant Commerce Clause’s fundamental objective of preserving a national market for competition undisturbed by preferential advantages conferred by a State upon its residents or resident competitors.” General Motors, 519 U.S. at 299. Indeed, PacifiCorp’s exported power is not similarly situated to utilities providing in-state power under CETA “for the  PACIFICORP V. SIXKILLER 19 simple reason that . . . the different entities serve different markets, and would continue to do so even if the supposedly discriminatory burden were removed.” Id. Thus, Washington’s “categorical distinction between” its regulatory treatment of emissions from entities providing in- state power under CETA and the lack of no-cost allowances in the CCA for emissions resulting from exported power produced by entities not providing in-state power under CETA is not “wholly illusory.” Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 586 (1997). Although PacifiCorp purports that it would face higher costs for its exported power, particularly as other states impose their own set of carbon emissions requirements, we have “rejected arguments that state laws treating out-of-state and in-state entities similarly, but which prevent them from structuring or operating their business as they prefer, reflect improper discrimination in favor of in state interests.” Flynt, 131 F.4th at 927 (citations omitted). The Dormant Commerce Clause does not “protect the particular structure or methods of operation in a retail market.” Id. at 928 (citation and alteration omitted). Moreover, “the dormant Commerce Clause does not impose a least burdensome requirement for state laws.” Association des Éleveurs de Canards et d’Oies du Québec v. Bonta, 33 F.4th 1107, 1119 (9th Cir. 2022) (citation and internal quotation marks omitted). Washington imposes different regulatory mandates for carbon emissions from electricity that is produced by PacifiCorp for use within the state, and carbon emissions from electricity produced for export. PacifiCorp’s reliance on cases involving taxes imposed on out-of-state entities or the denial of tax exemptions for out-of-state entities is 20 PACIFICORP V. SIXKILLER misplaced. In Camps Newfound/Owatonna, the Supreme Court considered “whether an otherwise generally applicable state property tax violate[d] the Commerce Clause . . . because its exemption for property owned by charitable institutions excludes organizations operated principally for the benefit of nonresidents.” 520 U.S. at 567. The petitioner in that case “operate[d] a summer camp for the benefit of children of the Christian Science faith,” and “[ab]out 95 percent of the campers [were] not residents of Maine.” Id. Maine “provide[d] a general exemption from real estate and personal property taxes for benevolent and charitable institutions incorporated in the State.” Id. at 568 (internal quotation marks omitted). “With respect to institutions that [were] in fact conducted or operated principally for the benefit of persons who [were] not residents of Maine, however, a charity [was able to] qualify for a more limited tax benefit, and then only if the weekly charge for services provided d[id] not exceed $30 per person.” Id. (citation, footnote reference, and internal quotation marks omitted). The Supreme Court framed the issue as “the disparate real estate tax treatment of a nonprofit service provider based on the residence of the consumers that it serves.” Id. at 572. No issue was raised regarding whether the in-state and out- of-state entities were similarly situated under the Dormant Commerce Clause. See id. at 587. It is not surprising that there was no question of substantial similarity raised. The only difference between the entities being considered for differing taxation treatment was whether the entity serviced in-state campers or out-of-state campers. See id. at 575. In contrast, the entities here are not similarly situated because they are subject to entirely different statutory schemes. Thus, the Supreme Court’s decision in Campus  PACIFICORP V. SIXKILLER 21 Newfound/Owatonna does not control the outcome of this case.3 Neither does the Supreme Court’s decision in Oregon Waste Sys., support PacifiCorp’s contentions that emissions from in-state entities regulated by CETA and emissions from exported power that is not regulated by CETA are similarly situated under the Dormant Commerce Clause. In that case, the Supreme Court considered “whether Oregon’s purportedly cost-based surcharge on the in-state disposal of solid waste generated in other States violate[d] the Commerce Clause.” 511 U.S. at 95. The Supreme Court held that “[b]ecause [Oregon] offered no legitimate reason to subject waste generated in other States to a discriminatory surcharge approximately three times as high as that imposed on waste generated in Oregon, the surcharge [was] facially invalid under the negative Commerce Clause.” Id. at 108. 3 In its letter filed under Federal Rule of Appellate Procedure 28(j), PacifiCorp raised a potential issue under the Tax Injunction Act (TIA), 28 U.S.C. §1341. “The TIA precludes suits in federal court where the requested relief would to some degree stop the assessment or collection of a state tax. . . .” Online Merchants Guild v. Maduros, 52 F.4th 1048, 1051-52 (9th Cir. 2022) (citation and internal quotation marks omitted). PacifiCorp has pursued contradictory positions as to whether the costs imposed under the CCA and CETA qualify as taxes. For the first time in its reply brief, PacifiCorp asserts that it could amend its complaint to allege that the CCA’s no-cost allowances are taxes on electricity that discriminate against out-of-state customers in violation of 15 U.S.C. §391. However, in its 28(j) letter, PacifiCorp maintains that the TIA should not apply “because the purpose of [the] allowances is to modify behavior (reduce emissions), not to raise revenue.” Based on PacifiCorp’s concession that the CCA imposes regulatory fees and costs to promote decarbonization efforts, as opposed to a state tax for revenue collection, the TIA does not apply, and any amendment premised on violation of 15 U.S.C. §391 would be futile. 22 PACIFICORP V. SIXKILLER Washington’s decarbonization regime does not tax or impose a surcharge on electricity generated in other states and sold to Washington customers. Instead, Washington imposes different regulatory requirements for carbon emissions produced from electricity generated for in-state consumption and emissions produced from electricity generated for export. Thus, Washington’s provision of no- cost allowances for carbon emissions produced by in-state entities covered under CETA, and its denial of no-cost allowances for entities that export power and are not subject to regulation under CETA do not involve “substantially similar entities.” General Motors, 519 U.S. at 298. We are persuaded by the Seventh Circuit’s reasoning in Electric Power Supply Association, 904 F.3d 518. In that case, the Seventh Circuit considered a Dormant Commerce Clause challenge to legislation enacted in the State of Illinois to subsidize some of the state’s nuclear generation facilities in the form of “zero emission credits.” Id. at 521, 524. In affirming the district court’s entry of summary judgment in favor of the State, the Seventh Circuit recounted the purpose of the Commerce Clause and its application to regulation of electricity by the several States. See id. at 524-25. In doing so the Seventh Circuit observed: “The commerce power belongs to Congress; the Supreme Court treats silence by Congress as preventing discriminatory state legislation.” Id. at 525. The Seventh Circuit then clarified that Congress has not remained silent when it comes to regulation of electricity by the States. Rather, Congress specifically provided in the Federal Power Act, 16 U.S.C. § 824(b)(1) that States “may regulate local generation” of electric power. Id. Based on that rationale, the Seventh Circuit concluded that zero emission credits were not discriminatory under the  PACIFICORP V. SIXKILLER 23 Commerce Clause. See id. Rather, they were a reflection of “the rule that a state must regulate within its borders.” Id. The same is true in this case. Legislators in the State of Washington promulgated a comprehensive statutory scheme to achieve its goal of reducing carbon emissions in the state. See Wash. Rev. Code §19.405.010. Washington’s no-cost allowances are analogous to the zero emission credits considered by the Seventh Circuit in Electric Power Supply Association. Similarly to the rationale of the Seventh Circuit, limiting the no-cost allowances to providers that are subject to the requirements of the 2019 CETA requirements did not result in a violation of the Dormant Commerce Clause. See id.4 Finally, PacifiCorp’s contention that the district court erred in dismissing its complaint without leave to amend is unpersuasive. PacifiCorp maintains that, even though it did not seek leave to amend in the district court, it could amend its complaint to allege that “(1) CETA’s portfolio requirements, of which the Washington-allocated portion of Chehalis is a part, do not go into effect until 2030, and (2) other states have laws similar to CETA that apply to 4 Reduced to its essence, the dissent is predicated on the notion that PacifiCorp, which exports po