In a matter of great interest to owners of renewable generating facilities throughout the West, the California Public Utility Commission (CPUC) has finally responded to the constitutional challenge raised by Cowlitz PUD against the CPUC’s renewable portfolio standard (RPS) rules.  In a decision issued on November 1, two and one-half years after Cowlitz raised the challenge, the CPUC rejected Cowlitz’s argument that the rules violate the Commerce Clause of the U.S. Constitution because they discriminate against out-of-state generation. Cowlitz essentially argued that since the CPUC required direct interconnection with a California balancing authority, or the dynamic equivalent, in order for power producers to obtain the most favored treatment under California’s RPS regime, few out-of-state power transactions would qualify for the most favored treatment, while most in-state facilities would qualify.  In response, the CPUC flatly denied that any such discrimination exists, stating that: “Out-of-state generators are not precluded from participating in transactions that would qualify under the [most favored category]….No preference or benefit is given to California generators.” Cowlitz now has 30 days within which to appeal the decision to state court.