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Judge Cudahy and the Deference Tension in U.S. Energy Law

In this contribution to a Yale Journal on Regulation tribute issue honoring Seventh Circuit Judge Richard Cudahy’s distinguished career, we explore his energy law opinions. His opinions addressing energy issues elaborate on two recurring themes in U.S. energy law: judicial humility and deference for state innovation. At some level these themes present a deference tension: Where federal regulators disapprove of state regulatory policies, courts may confront a conflict between deference to regulators and encouraging subnational energy policy innovations. We argue that in such cases, Judge Cudahy’s decisions point towards favoring the outcome that best supports the system-wide welfare of the electrical grid – a principle that has important implications for contemporary energy policy in the U.S.