A federal judge in Tacoma has dismissed a lawsuit filed by PacifiCorp that alleged Washington’s cap-and-trade program is unfair to its shareholders and its 2 million customers in five other states.

U.S. District Judge Tiffany Cartwright rejected the utility’s claim that cap-and-trade violated the dormant Commerce Clause by increasing the cost of electricity in Oregon, Idaho, California, Utah and Wyoming.

Cartwright noted the U.S. Supreme Court last year denied claims by Midwest pork producers that a California law requiring pigs to be raised in larger pens unlawfully interfered with interstate commerce.

The high court cautioned judges to not prevent states from enforcing democratically adopted laws unless the violation is clear, Cartwright wrote in a ruling issued July 15.

PacifiCorp operates in Oregon, Washington and California as Pacific Power and in Idaho, Utah and Wyoming as Rocky Mountain Power.

The lawsuit stemmed from how cap-and-trade taxes impact the cost of electricity generated at PacifiCorp’s 520-megawatt natural gas-fired power plant in Chehalis, about 90 miles south of Seattle.

While some electricity serves Washington customers, 77% of the plant’s output goes to other states. State law exempts the electricity used in Washington from cap-and-trade taxes, but not the electricity sent out of state.

The exemption partially shields Washington ratepayers from cap-and-trade costs. PacifiCorp complained its customers in the five other states are not shielded and are being treated differently.

The investor-owned utility anticipates spending “tens of millions” to comply with cap-and-trade, according to court records. Either shareholders or ratepayers in other states will pay the bill, according to PacifiCorp.

Cartwright ruled that Washington ratepayers aren’t getting a free ride. Another climate law, the Clean Energy Transformation Act, requires Washington utilities to phase out electricity made with natural gas by 2045.

The transition to renewable energy will be expensive for Washington ratepayers, Ecology acknowledged in court filings. Cartwright noted that expense won’t apply to electricity PacifiCorp sends out of state.

If PacifiCorp succeeds in passing Washington’s cap-and-trade costs onto its customers in the other states, it will be because state utility commission’s approved rate hikes, Cartwright wrote.

If shareholders absorb the cost, it’s because they own a power plant in Washington that makes electricity for customers in other states, she wrote.

PacifiCorp filed the lawsuit after utility commissions in Oregon and Wyoming declined to let it raise rates in those state to offset Washington’s cap-and-trade taxes, according to court records.