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*********************************************** 
DIRECT ENERGY SERVICES, LLC, ET AL.

v. PUBLIC UTILITIES REGULATORY

AUTHORITY

(SC 20643)

Robinson, C. J., and McDonald, D’Auria,

Mullins, Ecker and Alexander, Js.

Syllabus

The plaintiff electric suppliers appealed to the trial court from the final

decision of the defendant, the Public Utilities Regulatory Authority

(PURA), which imposed certain geographic and marketing restrictions

on a renewable energy product known as a voluntary renewable offer

(VRO). Electric suppliers serving Connecticut must demonstrate that a

minimum percentage of the electricity that they supply is generated

by specific types of renewable energy sources. To comply with these

minimum standards, electric suppliers can purchase renewable energy

credits (RECs), which represent renewable energy produced by thirdparty generators. PURA had previously established a program allowing

customers to support the development of renewable energy sources

beyond the minimum standards required. Pursuant to that program,

electric suppliers began to offer their customers VROs, whereby the

supplier would sell electric generation to the customer and promise to

obtain more RECs than are needed to meet the minimum standards,

thus allowing the supplier to market its product as more environmentally

sound and to command higher prices. Thereafter, in 2020, PURA issued

a final decision, establishing the geographic and marketing restrictions

on VROs at issue in the present case. The geographic restriction prohibited VROs from containing RECs sourced outside of a particular, permitted control area, which was comprised of all or part of twenty states

in and to the south and west of New England, as well as the District

of Columbia. This restriction was based on PURA’s finding that air

quality in Connecticut is significantly and adversely affected by fossil

fuel production to the southwest of the New England airshed and that

displacing demand for fossil fuel plants in the permitted control area

would provide environmental benefits to Connecticut, whereas displacing such demand outside of that area would not. The marketing restriction required electric suppliers to provide clear language informing

consumers that a VRO is backed by RECs but is not itself renewable

energy. The trial court upheld PURA’s final decision. In doing so, it

rejected the plaintiffs’ claim that the geographic and marketing restrictions violated the dormant commerce clause of the United States constitution. The trial court relied on a recent case, Allco Finance Ltd. v. Klee

(861 F.3d 82), in which the United States Court of Appeals for the Second

Circuit rejected a dormant commerce clause challenge to PURA’s geographic restriction on the RECs used to satisfy the minimum standards,

and reasoned that the challenge to that marketing restriction failed

because the plaintiffs had not established a common regulatory scheme

sufficient to create a dormant commerce clause issue or that the incidental burdens imposed by the restriction clearly exceeded the local gains.

The trial court further concluded that the plaintiffs had waived their

claims that the marketing restriction violated their constitutional right

to free speech and that PURA’s final decision violated their constitutional

right to freely contract, insofar as the restrictions would disrupt the

expectations and obligations of Connecticut customers and suppliers

who had entered into contracts containing automatic renewal provisions, because the plaintiffs had not raised those claims before PURA

during the administrative proceedings. Finally, the court rejected the

plaintiffs’ claim that PURA had violated the procedural requirements of

the Uniform Administrative Procedure Act (§ 4-166 et seq.) by improperly

relying on certain comments from the Office of Consumer Counsel

and the Department of Energy and Environmental Protection that were

‘‘nonevidence’’ to support its findings and conclusions and by failing to

make the parties aware of the information on which it would rely to
support its final decision. On the plaintiffs’ appeal from the trial court’s

judgment, held:

1. The trial court correctly concluded that the challenged geographic and

marketing restrictions did not violate the dormant commerce clause:

a. The plaintiffs could not prevail on their claim that the geographic

restriction impermissibly discriminated against interstate commerce,

insofar as the restriction burdened renewable generating facilities

located outside of the permitted control area by denying them access

to Connecticut’s voluntary renewable market, while allowing generating

facilities located within that area access to that market:

This court concluded that the standard applicable to the plaintiffs’ claim

was not strict scrutiny but, rather, the deferential balancing test articulated by the United States Supreme Court in Pike v. Bruce Church,

Inc. (397 U.S. 137), for laws that are nondiscriminatory but nonetheless

adversely and incidentally affect interstate commerce, and, under that

test, a law will be sustained unless the burden imposed on interstate

commerce is clearly excessive in relation to the putative local benefits.

In concluding that the Pike balancing test applied, this court utilized the

framework set forth in the Second Circuit’s decision in Allco Finance

Ltd., and this court determined that the geographic restriction did not

facially discriminate against electric generators outside of the permitted

control area because those generators and generators within the permitted control area were not similarly situated for purposes of the commerce

clause, and that the Connecticut market should be given controlling

significance because Connecticut has an important and legitimate interest in promoting increased production of renewable power generation

in the region, which would further the state’s interest in improving the

natural environment and, in turn, would serve to protect the health and

safety of Connecticut residents, whereas RECs generated outside of the

permitted control area would have little to no effect on Connecticut’s

environment.

Moreover, the RECs generated outside of the permitted control area

could still be sold to any Connecticut entity wishing to purchase them

at whatever price the market would bear, contrary to the plaintiffs’

arguments, RECs for the voluntary renewable program could not be

generated anywhere if such credits were to further this state’s clean

energy goals, the voluntary nature of the VRO program did not render

the RECs generated in the permitted control area, which helped to

advance this state’s environmental goals, the same as those generated

outside of that area, which have little to no environmental benefit to

Connecticut, and the determination of whether the geographic restriction

actually advanced the state’s environmental goals was a consideration

better suited for PURA or the legislature than for this court.

b. The plaintiffs could not prevail on their claim that the marketing

restriction imposed a disproportionate burden on interstate commerce

by creating marketing requirements that substantially conflicted with a

common regulatory scheme:

Under Pike, which, as the parties agreed, governed the plaintiffs’ challenge to the marketing restriction, a nondiscriminatory state regulation

might impose a disproportionate burden on interstate commerce, in

violation of the dormant commerce clause, if the regulation is in substantial conflict with a common regulatory scheme in place in other states,

but there must be an actual conflict between the challenged regulation

and those in place in other states, and pointing to a risk of conflicting

regulatory regimes in multiple states, or increased compliance costs for

firms doing business in more than one state, is not enough.

In the present case, even if it was assumed that there existed a common

regulatory scheme comprised of federal and sister state law and that

the marketing restriction differed from the marketing requirements in

other states, as the plaintiffs argued, such a regulatory scheme was not

in substantial conflict with the marketing restriction at issue because,

to the extent necessary, the plaintiffs could comply with both PURA’s

marketing restriction and the relevant federal guidelines, and, even if

PURA’s marketing restriction differed from those of other states, it had

no impact on, and did not actually conflict with the implementation of,

such other marketing restrictions.
Moreover, the plaintiffs did not clearly articulate the purported burden

that the marketing restriction imposed on interstate commerce, they did

not claim that the marketing restriction would prohibit them from doing

business in other states, and the only burden that this court could conceive, namely, that there would be increased costs resulting from the

need to market VROs differently in Connecticut, was not clearly excessive

in relation to the putative local benefits of improving consumer transparency and furthering this state’s clean energy goals.

2. This court declined to consider the merits of the plaintiffs’ claims involving

their constitutional rights to free speech and to freely contract because

they were not raised before PURA during the administrative proceedings

and, accordingly, were not adequately preserved for review:

The exhaustion of administrative remedies doctrine, which implicates

the court’s subject matter jurisdiction, typically applies when a party

has completely bypassed an available administrative process, whereas,

when a party has availed itself of the administrative proceeding but seeks

to raise new claims for the first time on appeal, this court generally applies

the nonjurisdictional, prudential principle that an appellate tribunal is

not required to consider a claim unless it was distinctly raised during

the administrative proceeding.

In the present case, the plaintiffs did not entirely bypass the available

administrative proceedings but, rather, failed to raise their free speech

and contract clause claims before PURA during those proceedings, and,

accordingly, such a failure did not constitute a failure to exhaust administrative remedies.

Nevertheless, the plaintiffs’ failure to raise their claims during the administrative proceeding deprived PURA of the opportunity to consider them

while PURA was developing its final decision and prevented the parties

from developing a record regarding those claims, particularly insofar as

the plaintiffs never introduced any of the contracts between energy

suppliers and consumers that purportedly were infringed by the restrictions, and, thus, those claims were not adequately preserved for appellate review.

Moreover, to the extent the plaintiffs argued that it would have been

futile to raise their claims before PURA because they were constitutional

in nature and PURA did not have the authority to decide such claims,

this court disagreed, concluding that it is not futile to raise a constitutional claim when, as in the present case, the claim challenges the action

of the administrative agency, as the agency has the authority to cure

any potential constitutional defect with its proposed regulations or may

abandon its proposed regulatory changes altogether if those changes

cannot be modified in a manner that would address any potential constitutional defect.

3. The plaintiffs could not prevail on their claims that PURA violated their

procedural rights under the Uniform Administrative Procedure Act and

that their substantial rights were prejudiced:

With respect to the plaintiffs’ contention that PURA violated the Uniform

Administrative Procedure Act by relying on nonevidence to support its

findings and conclusions, namely, the comments from the Office of

Consumer Counsel and the Department of Energy and Environmental

Protection, each comment was submitted prior to the hearing, the plaintiffs failed to raise any objection to the comments at the hearing, and

the plaintiffs could have asked, but did not ask, that those statements

be offered by a witness and could have provided, but did not provide,

evidence to rebut the comments.

With respect to the plaintiffs’ contention that they were not aware of

certain information on which PURA would rely in issuing its final decision, although this court emphasized that PURA should have disclosed

that it intended to take notice of certain scientific facts within its specialized knowledge, this court could not conclude that the plaintiffs satisfied

their burden of demonstrating that PURA had violated their procedural

rights under the Uniform Administrative Procedure Act or that any violation prejudiced their substantial rights, insofar as the plaintiffs had the

opportunity to respond to the testimony of, and to cross-examine, a

witness who testified regarding airflow into Connecticut, and to respond
to PURA’s final decision, which included the challenged factual finding

and which referenced PURA’s earlier decisions in which it reached the

same conclusion.

Argued December 15, 2022—officially released July 4, 2023

Procedural History

Appeal from the decision of the defendant establishing a regulatory framework for a certain renewable

energy product, brought to the Superior Court in the

judicial district of New Britain, where the court, Klau,

J., granted the motions to intervene filed by the Office

of Consumer Counsel et al.; thereafter, the case was

tried to the court, Klau, J.; judgment for the defendant,

from which the plaintiffs appealed. Affirmed.

Linda L. Morkan, with whom were Joey Lee Miranda

and, on the brief, Benjamin C. Jensen, for the appellants (plaintiffs).

Michael K. Skold, deputy solicitor general, with whom

were Seth Hollander, assistant attorney general, and,

on the brief, William Tong, attorney general, and Clare

Kindall, former solicitor general, for the appellee

(defendant).

William E. Dornbos, legal director, with whom, on

the brief, were Andrew W. Minikowski, staff attorney,

and Claire E. Coleman, consumer counsel, for the

appellee (intervenor Office of Consumer Counsel).

Erick M. Sandler, Alexander Judd, Sophia Browning

and Hannah Kalichman filed a brief for Vistra Corporation as amicus curiae.
Opinion

McDONALD, J. This case requires us to decide,

among other things, whether certain regulations

imposed by the defendant, Public Utilities Regulatory

Authority (PURA), on energy suppliers within this state

violate the dormant commerce clause of the United

States constitution.1

In October, 2020, PURA imposed

a series of restrictions on retail electric suppliers who

offer customers of this state voluntary products consisting of renewable energy credits (RECs) bundled

with electric supply. These products are known as voluntary renewable offers (VROs). The two restrictions

relevant to this appeal are the geographic restriction

and the marketing restriction. The geographic restriction prohibits VROs from containing RECs sourced outside of particular geographic regions. The marketing

restriction requires that suppliers provide clear language informing consumers that a VRO backed by RECs

is not ‘‘renewable energy’’ itself but, rather, an energy

product backed by RECs.

The plaintiffs, which are all companies that desire to

market and sell VROs to Connecticut electric customers,2 contend that the geographic restriction impermissibly discriminates against RECs created outside of the

permitted geographic regions. The plaintiffs further

contend that the marketing restriction impedes commerce in the national marketplace because it imposes a

regulatory requirement inconsistent with those of other

states. The plaintiffs also raise a number of other constitutional and procedural claims. For its part, PURA contends that the trial court correctly concluded that neither

the geographic restriction nor the marketing restriction

violates the dormant commerce clause because, among

other things, the restrictions help advance this state’s

legitimate environmental policy goals and improve consumer transparency.3 As to the plaintiffs’ remaining

claims, PURA contends that the trial court correctly

concluded that they are either unreviewable or without

merit. We agree with PURA and, accordingly, affirm

the judgment of the trial court.

Before we set forth the relevant facts and procedural

history of this case, we begin with an overview of this

state’s policies and statutes governing the electric supply industry, which is crucial to our understanding of

the plaintiffs’ claims. ‘‘Until relatively recently, most

state energy markets were vertically integrated monopolies—i.e., one entity, often a state utility, controlled

electricity generation, transmission, and sale to retail

consumers. . . . Over the past few decades, however,

many states, including Connecticut, have deregulated

their energy markets. . . . In deregulated markets,

[load-serving entities] purchase electricity at wholesale

from independent power generators. . . . In order [t]o

ensure reliable transmission of electricity from independent generators to [load-serving entities], [the Federal
Energy Regulatory Commission (FERC)] has charged

nonprofit entities, called Regional Transmission Organizations (RTOs) and Independent System Operators

(ISOs), with managing certain segments of the electricity grid. . . . The New England ISO (ISO-NE), [one of]

the transmitter[s] involved in this case, manages the

grid in most of New England, including all of Connecticut.’’ (Citations omitted; internal quotation marks omitted.) Allco Finance Ltd. v. Klee, 861 F.3d 82, 88 (2d Cir.

2017) (Allco), cert. denied, U.S. , 138 S. Ct. 926,

200 L. Ed. 2d 203 (2018).

In deregulating this state’s energy market, the legislature created new entities called electric suppliers,

which provide electric energy ‘‘to end use customers

in the state using the transmission or distribution facilities of an electric distribution company . . . .’’ General

Statutes § 16-1 (a) (24); see also General Statutes (Rev.

to 2019) § 16-245. Electric suppliers generally do not

themselves generate the power that they sell to consumers. See, e.g., Richards v. Direct Energy Services, LLC,

246 F. Supp. 3d 538, 543 (D. Conn. 2017), aff’d, 915 F.3d

(2d Cir. 2019). Rather, they function as a ‘‘ ‘middleman’ ’’

in the electricity market by purchasing energy from

wholesalers and then selling it to consumers under contract. Id. Suppliers that receive the proper licensing may

serve residential, commercial, and industrial customers

throughout the state and are active participants in the

retail competitive markets for electricity. The activities

of electric suppliers are heavily regulated. PURA hears

customer complaints regarding electric suppliers, monitors and takes action to prevent unfair and deceptive

practices, and monitors the state of competition in the

marketplace. See General Statutes §§ 16-245t, 16-245u

and 16-245x.

Among the governing regulations, electric suppliers

must satisfy this state’s mandatory renewable portfolio

standards (RPS). The RPS require electric suppliers to

demonstrate that certain percentages of the electricity

that they supply have been generated by specific types

or classes of renewable energy sources (i.e., solar, wind,

hydroelectric, etc.). See General Statutes §§ 16-243q and

16-245a;4

see also General Statutes § 16-1 (a) (20), (21)

and (38). The policy embodied in the RPS obligations

‘‘creates a financial incentive for [the] development of

renewable energy projects by ensuring a market and

steady stream of revenue for renewable generators.’’

Public Utilities Regulatory Authority, Connecticut Renewable Portfolio Standard (last modified November, 2022),

available at https://portal.ct.gov/PURA/RPS/Renewable-Portfolio-Standards-Overview (last visited June 26,

2023); see General Statutes §§ 16-243q and 16-245a.

Electric suppliers can achieve compliance with these

minimum standards by purchasing RECs. See General

Statutes § 16-245a (b) (1) (A). ‘‘RECs are inventions

of state property law whereby the renewable energy

attributes are unbundled from the energy itself and
sold separately.’’ (Internal quotation marks omitted.)

Wheelabrator Lisbon, Inc. v. Dept. of Public Utility

Control, 531 F.3d 183, 186 (2d Cir. 2008). Each REC

represents one megawatt-hour of renewable energy produced by a third-party generator. See, e.g., United States

Environmental Protection Agency, Renewable Energy

Certificate Monetization (last modified February 15, 2023),

available at https://www.epa.gov/greenpower/renewableenergy-certificate-monetization (last visited June 26,

2023). As the trial court in this case aptly explained,

‘‘RECs are necessary because of a fundamental reality

about the generation and distribution of electricity:

electrons cannot be traced from their generation source

to the end user unless the source is behind the customer’s electricity meter. In all other instances, energy produced at a renewable source, and all other sources,

flows to the grid and its use is untraceable. . . . Thus,

when customers enter into a contract to purchase

renewable energy, they are actually agreeing to purchase [RECs] reflecting the [renewable] attributes for

that energy.’’ (Citation omitted; internal quotation

marks omitted.) Because of the way the power grid

is structured in this country, the only power that can

physically reach Connecticut consumers is energy generated in either the control area covered by ISO-NE

or in an immediately adjacent control area. However,

because RECs can be purchased from renewable energy

generated anywhere in the country, the energy that

suppliers sell to end use consumers in this state is not

necessarily the same energy on which the REC itself

is based.

Electric suppliers must file an annual report with

PURA to demonstrate compliance with the RPS obligations. See Regs., Conn. State Agencies § 16-245a-1 (a)

(2020). These annual reports are based on RECs issued

exclusively by the New England Power Pool Generation

Information System (NEPOOL GIS).5 See General Statutes § 16-245a (b); Regs., Conn. State Agencies § 16-

245a-1 (c) (2020). The geographic footprint of NEPOOL

GIS corresponds to the geographic footprint of ISO-NE.

Two other regional systems are relevant to this appeal:

the New York Generation Attribute Tracking System

(NYGATS), which corresponds to the geographic footprint of the New York Independent System Operator

(NYISO), and the PJM Generation Attribute Tracking

System (PJM-GATS), which corresponds to the geographic footprint of PJM Interconnection—the RTO of

the mid-Atlantic.

Although the RPS are mandatory and set minimum

renewable energy standards for most energy sold in

this state, in 2005, PURA established the Clean Energy

Options Program to enable consumers to support the

development of renewable energy sources above and

beyond the state’s mandatory minimum renewable

energy requirements. Electric suppliers responded by

developing the VRO. A VRO is a bundled product in
which the supplier offers to sell electric generation to

a retail end user and promises to obtain additional RECs

above and beyond what the supplier needs to meet the

state’s minimum mandatory renewable energy requirements

of the RPS. In other words, the difference between the

RPS and the VRO products is that the VRO is backed

by more RECs than the supplier uses to meet the mandatory RPS, enabling the supplier to market its product

to consumers as a more environmentally sound product

that often commands higher prices. As with energy sold

under the RPS, the energy delivered under a VRO

backed by RECs is not necessarily the same renewable

energy that created the REC, and it may not have been

generated from renewable sources at all. For years after

it established the Clean Energy Options Program, PURA

did little to monitor the developing VRO market.

With this background in mind, we turn to the facts

and procedural history specific to this case. In the

decade after the launch of the Clean Energy Options

Program, the VRO market grew significantly. As a result,

in December, 2016, PURA decided to review the Clean

Energy Options Program and to develop new options

regarding VROs. Specifically, PURA opened Docket No.

16-12-29, ‘‘PURA Development of Voluntary Renewable

Options Program.’’ The following month, PURA issued

a notice of proceeding, stating that it had initiated the

proceeding ‘‘to develop options for Connecticut ratepayers to purchase voluntary renewable products and

to establish a new program to replace [the Clean Energy

Options Program].’’ (Internal quotation marks omitted.)

PURA subsequently clarified that the proceeding ‘‘would

establish rules that will govern all [VROs], create new

rules for [the Clean Energy Options Program], and modify a disclosure label [for all general supply and REC

offers].’’ (Internal quotation marks omitted.) PURA

issued formal requests for written comments and then

held a virtual hearing in June, 2020, to discuss the billing

and other clean energy options issues raised by the

electric distribution companies and electric suppliers

in their written comments and responses to interrogatories and any other relevant issues. The parties subsequently submitted briefs and reply briefs.

In September, 2020, PURA issued a proposed decision

and a notice of written exceptions and oral argument.

The plaintiffs and other electric suppliers filed written

exceptions ‘‘identifying several serious errors of law

and fact in the proposed decision.’’ (Internal quotation

marks omitted.) PURA held oral argument and thereafter issued its final decision in October, 2020. In its

decision, PURA, among other things, (1) established a

geographic restriction for RECs used in VROs, and (2)

imposed a marketing restriction for VROs.6

The geographic restriction prohibits VROs from containing RECs sourced outside of particular geographic

regions, specifically the NEPOOL GIS, NYGATS, and
PJM-GATS systems (permitted control area). The permitted control area collectively includes all or part of

twenty states, namely, Connecticut, Delaware, Illinois,

Indiana, Kentucky, Maine, Maryland, Massachusetts,

Michigan, New Hampshire, New Jersey, New York,

North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and West Virginia, as well as

the District of Columbia. The reason for the geographic

restriction lies in the regionalized nature of the adverse

environmental concerns. ‘‘As the VRO market developed [initially], between 2005 and 2016, companies

offering VROs relied on RECs sourced from anywhere

in the country and . . . Canada.’’ Over time, PURA

determined that restricting the geographic regions from

which RECs can be sourced would ‘‘bring Connecticut’s

VROs in line with Connecticut’s goals of reducing local

greenhouse gas emissions and supporting sustainable

local renewable energy sources.’’ (Internal quotation

marks omitted.) This is because ‘‘Connecticut air quality

is significantly and adversely affected by fossil fuel production to the southwest of the New England airshed.

Demand for renewable resources that displaces demand

for fossil fuel plants to the south and west of New

England will provide environmental benefits to Connecticut.’’ (Internal quotation marks omitted.) By contrast, displacement of fossil fuel resources in more

distant states, such as Texas and California, provides

little to no environmental benefits to this state. PURA

also explained that ‘‘[m]any more customers are participating in . . . VROs now than were fifteen years ago.

These customers not only need to fully understand the

products for which they . . . may be paying a premium, but [PURA] must also ensure that these products

are furthering Connecticut’s clean energy goals. [PURA]

notes that current VROs contribute minimally, at best,

to Connecticut’s environmental betterment. . . . [I]n

2016, few VRO products included New England regional

RECs. Instead, the majority of these [VROs] relied on

nationally sourced [RECs] with no demonstrable benefit to Connecticut or New England; further, claims

related to certain nationally sourced RECs may conflict

with the goals that consumers likely intend to achieve

through their premium.’’ (Citation omitted.)

The marketing restriction imposed by the final decision requires that electric suppliers provide clear language informing consumers that a VRO backed by RECs

is not ‘‘renewable energy’’ itself but, rather, is an energy

product backed by RECs. A bit of background information is necessary to understand this marketing restriction. ‘‘In 2008, acting pursuant to its statutory obligation

to provide consumers with certain information’’; see

General Statutes (Rev. to 2007) § 16-245p (b) (3); ‘‘PURA

developed a disclosure label applicable to suppliers

marketing electric generation to Connecticut customers.’’ During the underlying proceeding, PURA learned

that one supplier had provided a disclosure label indi-
cating a renewable energy content of 121 percent. Customers had also expressed confusion about VROs. As

a result, PURA determined that the development of the

VRO market required changes to the disclosure label

requirements. PURA’s decision thus prohibits suppliers

that market VROs from referring to them as containing

renewable energy rather than being backed by RECs.

Specifically, PURA explained: ‘‘Suppliers may not market [REC-based] VROs to mislead consumers [into]

believe[ing] they are purchasing renewable energy

rather than RECs. As noted herein, there is a clear

distinction between certificates and the ownership

interest in, or a [power purchase agreement]7

to provide

energy from, a renewable source. It is reasonable to

display information as representing a renewable source

for an offerif the supplier owns, or has a [power purchase

agreement to provide energy from], these resources

and is using them to supply the electricity for the offer.

It is unreasonable to display this information if the

supplier is merely buying the certificates associated

with the renewable attributes.’’ (Emphasis in original;

footnote added.)

The plaintiffs timely appealed from PURA’s final decision to the Superior Court pursuant to General Statutes

§ 4-183 (a), challenging the decision on ‘‘virtually every

. . . possible ground under . . . § 4-183 (j).’’ The trial

court ultimately affirmed PURA’s final decision. Relevant to this appeal, the trial court concluded that the

geographic and marketing restrictions do not violate

the dormant commerce clause. Specifically, the trial

court concluded that the geographic restriction passed

the same test used by the United States Court of Appeals

for the Second Circuit in a recent decision in which the

plaintiff claimed that this state’s geographic restriction

on RECs eligible for the RPS program violated the dormant commerce clause. See Allco Finance Ltd. v. Klee,

supra, 861 F.3d 103, 105–107; see also Pike v. Bruce

Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 25 L. Ed.

2d 174 (1970). The trial court also rejected the plaintiffs’

dormant commerce clause challenge to the marketing

restriction, reasoning that (1) the plaintiffs failed to

establish that a common regulatory scheme sufficient

to create a dormant commerce clause issue existed, and

(2) the plaintiffs failed to establish that the incidental

burdens imposed by the restriction clearly exceeded the

local gains. The court also concluded that the plaintiffs

waived their free speech and contract clause claims

because they failed to raise those claims before the

agency at any point during the contested case. Finally,

the trial court concluded that the administrative proceedings did not violate the Uniform Administrative

Procedure Act (UAPA), General Statutes § 4-166 et seq.

This appeal followed.

On appeal, the plaintiffs contend that (1) the geographic and marketing restrictions contained in PURA’s

final decision violate the dormant commerce clause,
(2) PURA’s final decision violates energy suppliers’ right

to free speech under the state and federal constitutions,

(3) PURA’s final decision violates their right under the

federal constitution to freely contract, and (4) PURA

failed to abide by the procedural requirements of the

UAPA. We address each claim in turn.

At the outset, we set forth the standard of review

applicable to the plaintiffs’ claims. The plaintiffs’ claims

regarding violations of their constitutional rights present questions of law. See, e.g., Tele Tech of Connecticut

Corp. v. Dept. of Public Utility Control, 270 Conn. 778,

787–88, 855 A.2d 174 (2004). Whether the proceedings

before PURA complied with the procedural requirements of the UAPA also presents a question of law.

See, e.g., FairwindCT, Inc. v. Connecticut Siting Council, 313 Conn. 669, 711, 99 A.3d 1038 (2014). Thus, our

review of each of the plaintiffs’ claims is plenary. See,

e.g., Meriden v. Freedom of Information Commission,

338 Conn. 310, 319, 258 A.3d 1 (2021) (‘‘[c]ases that

present pure questions of law . . . invoke a broader

standard of review than is . . . involved in deciding

whether, in light of the evidence, the agency has acted

unreasonably, arbitrarily, illegally or in abuse of its discretion’’ (internal quotation marks omitted)).

I

DORMANT COMMERCE CLAUSE CLAIMS

The plaintiffs contend that the geographic restriction

impermissibly discriminates against RECs created outside of the permitted control area of the NEPOOL GIS,

NYGATS, and PJM-GATS systems. Similarly, the plaintiffs

contend that the marketing restriction impedes commerce in the national marketplace because it imposes a

regulatory requirement inconsistent with those of other

states.8 We conclude that the geographic and marketing

restrictions do not violate the dormant commerce

clause.

The commerce clause provides that ‘‘Congress shall

have Power . . . [t]o regulate Commerce with foreign

Nations, and among the Several States . . . .’’ U.S.

Const., art. I, § 8, cl. 3. The United States Supreme Court

‘‘has adhered strictly to the principle that the right to

engage in interstate commerce is not the gift of a state,

and that a state cannot regulate or restrain it.’’ (Internal

quotation marks omitted.) Hughes v. Alexandria Scrap

Corp., 426 U.S. 794, 808, 96 S. Ct. 2488, 49 L. Ed. 2d

220 (1976). ‘‘This express grant of power to Congress

contains a further, negative command, known as the

dormant [c]ommerce [c]lause . . . which limits the

power of [state and] local governments to enact laws

affecting interstate commerce. . . . The fundamental

objective of the dormant [c]ommerce [c]lause is to preserv[e] a national market for competition undisturbed

by preferential advantages conferred by a [s]tate [on] its

residents or resident competitors.’’ (Citations omitted;
internal quotation marks omitted.) Southold v. East

Hampton, 477 F.3d 38, 47 (2d Cir. 2007). ‘‘[T]he negative

or dormant implication of the [c]ommerce [c]lause prohibits state taxation or regulation that discriminates

against or unduly burdens interstate commerce and

thereby impedes free private trade in the national marketplace.’’ (Internal quotation marks omitted.) Allco

Finance Ltd. v. Klee, supra, 861 F.3d 102. Recently, the

United States Supreme Court reiterated that, at its ‘‘very

core,’’ the dormant commerce clause prohibits ‘‘the

enforcement of state laws driven by . . . economic

protectionism—that is, regulatory measures designed

to benefit in-state economic interests by burdening outof-state competitors.’’ (Internal quotation marks omitted.) National Pork Producers Council v. Ross, U.S.

, 143 S. Ct. 1142, 1153, 215 L. Ed. 2d 336 (2023).

‘‘In analyzing a challenged [state or] local law under

the dormant [c]ommerce [c]lause, we first determine

whether it clearly discriminates against interstate commerce in favor of intrastate commerce, or whether it

regulates evenhandedly with only incidental effects on

interstate commerce.’’ Southold v. East Hampton, supra,

477 F.3d 47.

‘‘We then apply the appropriate level of scrutiny. A

law that clearly discriminates against interstate commerce in favor of intrastate commerce is virtually

invalid per se and will survive only if it is demonstrably

justified by a valid factor unrelated to economic protectionism.’’ (Internal quotation marks omitted.) Id., quoting Wyoming v. Oklahoma, 502 U.S. 437, 454, 112 S.

Ct. 789, 117 L. Ed. 2d 1 (1992). In other words, such a

law is valid ‘‘only if it advances a legitimate local purpose that cannot be adequately served by reasonable

nondiscriminatory alternatives . . . .’’ (Citations omitted; internal quotation marks omitted.) Dept. of Revenue

v. Davis, 553 U.S. 328, 338, 128 S. Ct. 1801, 170 L. Ed.

2d 685 (2008).

If the law is nondiscriminatory, but nonetheless

adversely affects interstate commerce ‘‘incidental[ly],’’

we employ a deferential balancing test known as the

Pike balancing test. See Pike v. Bruce Church, Inc.,

supra, 397 U.S. 142. Such a law will be sustained unless

‘‘the burden imposed on [interstate] commerce is

clearly excessive in relation to the putative local benefits.’’ Id.

In short, relevant to this appeal, the dormant commerce clause prohibits laws that (1) ‘‘clearly [discriminate] against interstate commerce in favor of intrastate

commerce,’’ or (2) violate the Pike balancing test by

‘‘impos[ing] a burden on interstate commerce incommensurate with the local benefits secured.’’ (Internal

quotation marks omitted.) Freedom Holdings, Inc. v.

Spitzer, 357 F.3d 205, 216 (2d Cir. 2004).

A
Geographic Restriction

The plaintiffs contend that the geographic restriction

violates the dormant commerce clause because ‘‘VROs

will be required to use only RECs sourced from the

designated local permitted control [area] and, therefore,

will be unable to access the largest and most commonly

accessed sources of RECs in North America.’’

We must first determine what level of scrutiny applies

to the plaintiffs’ claim. The plaintiffs contend that the

geographic restriction facially discriminates against

interstate commerce because it imposes commercial

barriers on renewable generating facilities located outside of the permitted control area and ‘‘denies generators located outside [of the permitted control area]

access to Connecticut’s voluntary renewable market,

while allowing access to generating facilities located

in those areas, [thus] favoring the local generators.’’

(Emphasis in original.) PURA contends, among other

things, that the trial court correctly concluded that the

plaintiffs’ challenge to the geographic restriction should

be reviewed under the more permissive Pike balancing

test following the framework set forth in the recent

decision of the United States Court of Appeals for the

Second Circuit in Allco Finance Ltd. v. Klee, supra, 861

F.3d 105–106.9

Allco involved issues similar to those of the present

case and arose under similar facts. In Allco, a Georgia

energy generator claimed that Connecticut’s geographic

restriction on RECs used to satisfy the mandatory RPS

requirements treated in-state and out-of-state generators differently and therefore discriminated against

interstate commerce. See id., 102–103. Under this state’s

RPS program, utilities providing electricity in Connecticut can apply only RECs purchased from ISO-NE and

directly adjacent control areas to satisfy their RPS

requirements. See id., 93; see also General Statutes § 16-

245a (b). These adjacent control areas included NYISO,

the Northern Maine Independent System Administrator,

Inc., and the provinces of Quebec and New Brunswick

in Canada. Allco Finance Ltd. v. Klee, supra, 861 F.3d

93. The court explained that, ‘‘[a]lthough Connecticut

utilities are free to purchase RECs that do not meet

these requirements—for example, RECs from generators [that] cannot transmit their energy into the ISONE grid pursuant to [NEPOOL GIS] Rule 2.7 (c)—such

RECs will not count [toward] their requirements under

the RPS.’’ Id.

The court inAllconoted that ‘‘Connecticut has articulated

several reasons for incorporating these geographic limitations into its RPS program. Central among these is

the [s]tate’s interest in encouraging the development

of new renewable energy generation facilities that are

able to transmit their electricity into the ISO-NE grid.

. . . Connecticut argues that increased in-region
renewable energy production would improve air quality

for its citizens and protect them from price and supply

shocks that could result if, for example, there was a

natural gas shortage or a nuclear power plant were to go

[offline]. . . . The state contends that placing regional

limitations on RECs, if they are to satisfy the RPS

requirement, is necessary if the [RPS] program is to

help increase the development of renewable generation

facilities that are capable of effectuating these and similar goals.’’ (Citations omitted.) Id.

Allco owned a solar power facility in Georgia and

could not use RECs associated with that facility to

satisfy this state’s RPS requirements because the facility

was not located in ISO-NE or a directly adjacent control

area. See id., 93–94. Allco argued that the RPS program’s

geographic restriction violated the dormant commerce

clause because the program ‘‘facially discriminate[d]

. . . [and] ha[d] the purpose or the effect of discriminating against Allco’s facility in Georgia . . . .’’ (Internal quotation marks omitted.) Id., 102. The Second

Circuit rejected this claim and noted at the outset of

its analysis that ‘‘any notion of discrimination assumes a

comparison of substantially similar entities’’ and, ‘‘when

the allegedly competing entities provide different products . . . there is a threshold question whether the

companies are indeed similarly situated for constitutional purposes.’’ (Internal quotation marks omitted.)

Id., 103.

To resolve this question and to determine the appropriate level of scrutiny to apply—strict scrutiny or the

Pike balancing test—the court in Allco applied the three

part framework established by the United States

Supreme Court in General Motors Corp. v. Tracy, 519

U.S. 278, 117 S. Ct. 811, 136 L. Ed. 2d 761 (1997), to

determine whether the entities were similarly situated.

See Allco Finance Ltd. v. Klee, supra, 861 F.3d 105–106.

Applying that framework, the Second Circuit first asked

‘‘whether the allegedly competing entities—Allco’s

Georgia generator, on the one hand, and generators

located in ISO-NE and adjacent control areas, on the

other—provide different products, i.e., different RECs.’’

Id., 105. The court concluded that the competing entities

did provide different products, reasoning that ‘‘RECs

are inventions of state property law . . . and Connecticut has invented a class of RECs that differs from [the]

Georgia facility’s RECs . . . . The two products can,

therefore, be treated as different, even though they—

like the unbundled and bundled gas products in Tracy—

also have some underlying similarities.’’ (Citations omitted; internal quotation marks omitted.) Id.

Second, the court in Allco asked ‘‘whether there is a

market that only one of the two entities serves, and

in which competition would not be increased if the

differential treatment of the two entities were removed.’’

Id. The court concluded that there was. Id. The court
noted that ‘‘Connecticut consumers’ need for a more

diversified and renewable energy supply, accessible to

them directly through their regional grid or indirectly

through adjacent control areas, would not be served

by RECs produced by Allco’s facility in Georgia—which

is unable to transmit its electricity into ISO-NE. Further,

this market’s characteristics—most importantly, the boundaries of the electrical grid to which Connecticut has

direct or indirect access—appear to be independent of

any effect attributable to the [s]tate’s RPS program.’’

(Internal quotation marks omitted.) Id. Thus, the court

explained, ‘‘there is good reason to assume that any

pricing changes that could result from eliminating the

[differential treatment of Allco’s Georgia generator]

. . . would be inadequate to serve the goals that Connecticut properly is pursuing. . . . This suggests that

competition would not be served by treating the different types of REC producers similarly.’’ (Citation omitted; internal quotation marks omitted.) Id., 106.

Finally, the court in Allco asked ‘‘whether there is

also a separate market in which these two types of

producers compete, and in which competition potentially would be served if Connecticut were prohibited

from treating them disparately.’’ Id. The court answered

this question in the affirmative. Id. The court explained

that PURA conceded that ‘‘there is a national market

for RECs that does not distinguish between RECs on

the basis of their geographic origin. In this market, the

respective sellers . . . apparently do compete and may

compete further. . . . Eliminating Connecticut’s RPS

program’s differential treatment might well intensify

competition . . . for customers in this [national] market. . . . This, of course, cuts in favor of treating the

products as alike.’’ (Citations omitted; footnote omitted;

internal quotation marks omitted.) Id.

As a result of the dilemma created by the existence

of both a market that only one of the two entities serves

and also a separate market in which these two types

of producers compete, the court in Allco—following

the United States Supreme Court’s analysis in Tracy—

asked ‘‘whether the opportunity for increased competition between REC producers in the national market

necessitates treating [REC producers] in Georgia and

New England alike for dormant [c]ommerce [c]lause

purposes, or whether the needs of Connecticut’s local

energy market permits treating the two types of REC

producers differently.’’ Id. This inquiry asks whether a

court should give ‘‘ ‘controlling significance’ ’’ to the

market in which the two types of REC producers compete,

or to the market served only by REC producers that

can connect to Connecticut’s power grid. Id. Applying

this ‘‘controlling significance’’ principle, the court concluded that ‘‘a number of reasons support[ed] a decision

to give greater weight’’ to the generators that satisfy

Connecticut’s RPS requirements for RECs and, therefore, to treat those generators and Allco’s Georgia gener-
ator as dissimilar for purposes of the dormant commerce

clause. (Internal quotation marks omitted.) Id.

Significantly, the court held that the reasons justifying the differential treatment included the environmental, public health and safety similarities between

the claim raised in Allco and the claim raised in Tracy:

‘‘Just as the [court in Tracy] recognized the importance

of Ohio’s interest in protecting the captive natural gas

market from the effects of competition in order to promote public health and safety . . . so must we here

recognize the importance of Connecticut’s interest in

protecting the market for RECs produced within the

ISO-NE or in adjacent areas. Connecticut’s RPS program

serves its legitimate interest in promoting increased

production of renewable power generation in the

region, thereby protecting its citizens’ health, safety,

and reliable access to power.’’ (Citation omitted.) Id.

On this point, the court in Allco reiterated the Supreme

Court’s conclusion in Tracy that ‘‘health and safety

considerations [may] be weighed in the process of

deciding the threshold question whether the conditions

entailing application of the dormant [c]ommerce

[c]lause are present . . . .’’ (Citation omitted; internal

quotation marks omitted.) Id., 107. The court also noted

that ‘‘[t]hese means and ends are well within the scope

of what Congress and FERC have traditionally allowed

the [s]tates to do in the realm of energy regulation.’’

Id., 106.

Moreover, the court in Allco found it significant that

the ‘‘FERC itself . . . has instituted a sort of regionalization of the national electricity market [through the

geographic lines drawn by ISOs and RTOs]. And neither

FERC nor Congress has given any indication that this

structure is unduly harmful to interstate commerce.’’

Id., 107. The court reasoned that FERC and Congress

are better equipped to ‘‘determine the economic wisdom and the health and safety effects of these geographic boundaries that Connecticut has incorporated

into its RPS program. It is they that, in this setting, are

best suited to decide which products ought to be treated

similarly, and which should not.’’ Id.

The court in Allco concluded that ‘‘Connecticut’s regulatory response to the needs of the local energy market

has resulted in a noncompetitive REC product that is

capable of being produced only by in-region generators,

and that this distinguishes such generators from Allco’s

Georgia generator to the point that the enterprises should

not be considered similarly situated for purposes of a

claim of facial discrimination under the [c]ommerce

[c]lause.’’ (Internal quotation marks omitted.) Id. Accordingly, the court applied the Pike balancing test; see

Pike v. Bruce Church, Inc., supra, 397 U.S. 142; and

concluded, ‘‘for the same reasons’’ discussed in the

Tracy analysis, that ‘‘Connecticut’s RPS program is

. . . not clearly excessive in relation to the putative
local benefits, and therefore passes the more permissive

Pike test.’’ (Internal quotation marks omitted.) Allco

Finance Ltd. v. Klee, supra, 861 F.3d 107.

We find the Allco analysis and rationale persuasive

for purposes of analyzing whether PURA’s geographic

restriction on the RECs eligible to back the VRO program violates the dormant commerce clause.10 Accordingly, to determine what level of scrutiny to apply to

the plaintiffs’ claim, we begin our analysis in the present

case by asking whether the allegedly competing entities—renewable energy generating facilities located

outside of the permitted control area, on the one hand,

and renewable energy generating facilities located

within the permitted control area, on the other—provide different products.11 We conclude that they do. As

in the RPS program, RECs used to support the VRO

program are ‘‘inventions of state property law . . . .’’

Wheelabrator Lisbon, Inc. v. Dept. of Public Utility

Control, supra, 531 F.3d 186. PURA has decided to create restrictions on the class of RECs used to satisfy a

VRO product that are distinct from RECs produced

outside of the permitted control area. From the state’s

perspective, RECs created in the permitted control area

differ from RECs created outside of this area because

they displace fossil fuel generation with a more direct

impact on this state’s environment. Although there are

undoubtedly similarities between the two different classes

of RECs, the two classes can be treated differently for

dormant commerce clause purposes.

Second, we must determine whether there is a market

that only one of the two entities serves and in which

competition would not be increased if the differential

treatment of the two entities were removed. We agree

with the trial court that eliminating the differential treatment of RECs based on their geographic source would

be inadequate to serve this state’s VRO program goals.

This is because ‘‘eliminating different treatment of farflung RECs would do little to improve Connecticut’s

chances of reaching its ambitious environmental and

energy goals.’’12 (Internal quotation marks omitted.) The

geographic restriction ‘‘further[s] Connecticut’s energy

policies by reducing local greenhouse gas emissions and

[by] supporting local, sustainable, renewable energy

sources . . . .’’ Balancing the various interests at stake,

PURA determined that the geographic restriction would

‘‘provide environmental benefits to New England, given

prevailing wind patterns, and [the permitted control

area] is large enough to obtain RECs from affordable

clean resources.’’ (Internal quotation marks omitted.)

This militates against treating the different types of REC

producers similarly.

Third, we conclude, as the court did in Allco, that

there is a national market for RECs that does not distinguish between RECs on the basis of their geographic

origin. PURA does not contend otherwise. Eliminating
the VRO program’s differential treatment may intensify

competition between REC generators for customers in

the national market. This militates in favor of treating

the products alike.

Given that there is both a market that only one of

the two entities serves, Connecticut, and also a separate

national market in which these two types of producers

compete, we must decide which market should have

‘‘ ‘controlling significance’ . . . .’’ Allco Finance Ltd.

v. Klee, supra, 861 F.3d 106. For many of the reasons

articulated in Allco, we conclude that controlling significance should be given to the Connecticut market. Specifically, Connecticut has an important and legitimate

interest in promoting increased production of renewable power generation in the region. This interest furthers the state’s interest in improving the natural

environment, which, in turn, will help protect the health

and safety of this state’s residents. RECs generated

outside of the permitted control area have little to no

effect on this state’s environment. Indeed, the administrative record includes testimony from Robert A. Maddox, Jr., a representative of one of the suppliers under

the Clean Energy Options Program, that ‘‘the airflow

into Connecticut tends to come . . . from the west

[toward] Connecticut. We know we’re a tailpipe state,

and most of the pollution coming in the state comes

from downwind. So, when we can support the development of a renewable energy project in Pennsylvania,

that helps clean up Connecticut’s air. I don’t necessarily

know if the development of a renewable energy project

north of Montreal [in Canada] does a lot for Connecticut’s

air.’’ As both the United States Supreme Court and the

Second Circuit have explained, ‘‘health and safety considerations [may] be weighed in the process of deciding

the threshold question whether the conditions entailing

application of the dormant [c]ommerce [c]lause are

present.’’ General Motors Corp. v. Tracy, supra, 519

U.S. 307; accord Allco Finance Ltd. v. Klee, supra, 107.

At least one case has recognized that environmental

goals have health and safety implications for purposes

of a dormant commerce clause claim. See United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Management Authority, 550 U.S. 330, 346–47, 127 S. Ct.

1786, 167 L. Ed. 2d 655 (2007) (plurality opinion)

(county ‘‘flow control’’ ordinances benefited public by

increasing recycling, which confers ‘‘significant health

and environmental benefits’’); see also Huron Portland

Cement Co. v. Detroit, 362 U.S. 440, 442, 80 S. Ct. 813,

4 L. Ed. 2d 852 (1960) (‘‘The ordinance was enacted

for the manifest purpose of promoting the health and

welfare of the city’s inhabitants. Legislation designed

to free from pollution the very air that people breathe

clearly falls within the exercise of even the most traditional concept of what is compendiously known as the

police power.’’). The commerce clause ‘‘does not elevate free trade above all other values’’; (internal quota-
tion marks omitted) United Haulers Assn., Inc. v.

Oneida-Herkimer Solid Waste Management Authority,

supra, 344; and it is not an ‘‘[invitation for courts] to

rigorously scrutinize’’ state regulations designed to protect public health and safety. Id., 347 (plurality opinion).

Moreover, the United States Supreme Court has

emphasized the significant role that states have in regulating the electric utility industry within its borders.

See, e.g., New York v. Federal Energy Regulatory Commission, 535 U.S. 1, 24, 122 S. Ct. 1012, 152 L. Ed. 2d

47 (2002) (‘‘FERC has recognized that the [s]tates retain

significant control over local matters even when retail

transmissions are unbundled’’); Arkansas Electric

Cooperative Corp. v. Arkansas Public Service Commission, 461 U.S. 375, 377, 103 S. Ct. 1905, 76 L. Ed. 2d 1

(1983) (‘‘the regulation of utilities is one of the most

important of the functions traditionally associated with

the police power of the [s]tates’’); see also Entergy

Nuclear Vermont Yankee, LLC v. Shumlin, 733 F.3d

393, 417 (2d Cir. 2013) (‘‘[S]tates have broad powers

under state law to direct the planning and resource

decisions of utilities under their jurisdiction. States

may, for example, order utilities to build renewable

generators themselves, or . . . order utilities to purchase renewable generation.’’ (Internal quotation marks

omitted.)). We find it significant that, in addition to

the important role states play in regulating the electric

utility industry within their borders, the specific restriction at issue is within the scope of what Congress and

FERC have traditionally allowed the states to do in the

area of energy regulation. Similar to the geographic

restriction for the RPS program, the geographic lines

drawn by the restriction in the present case mirror the

geographic lines drawn by FERC.13 See Allco Finance

Ltd. v. Klee, supra, 861 F.3d 107 (‘‘FERC itself . . .

has instituted a sort of regionalization of the national

electricity market [through the geographic lines drawn

by ISOs and RTOs]. And neither FERC nor Congress

has given any indication that this structure is unduly

harmful to interstate commerce.’’). ‘‘It is FERC that has

created the geographic distinctions on which Connecticut’s program is predicated by organizing owners of

transmission lines into [ISOs], such as ISO-NE, and

[RTOs] in order to help manage the grid, ensure system

reliability, and guard against discrimination and the

exercise of market power in the provision of transmission services.’’ (Internal quotation marks omitted.) Id.,

quoting Entergy Nuclear Vermont Yankee, LLC v.

Shumlin, supra, 413. Furthermore, NEPOOL GIS, which

issues and tracks RECs produced in the ISO-NE control

area and imported from adjacent control areas, is governed through a FERC approved committee structure.

See In re New England Power Pool, 88 FERC ¶ 61079,

¶ 61181 (1999).

Connecticut’s VRO program has resulted in a REC

product that is capable of being produced only by gener-
ators located in the permitted control area because only

RECs produced in this area help advance this state’s

environmental policy goals. This distinguishes such

generators from generators located outside of the permitted control area to the point that the entities should

not be considered similarly situated for purposes of

a claim of facial discrimination under the commerce

clause. It bears emphasizing, however, that the geographic restriction in the present case does not entirely

ban RECs generated outside of the permitted control

area. RECs generated outside of this area can still be

sold to any Connecticut entity wishing to buy them, at

whatever price the market will bear. Such RECs could,

for example, be purchased in this state by a company

wishing to ‘‘ ‘green its image.’ ’’ Allco Finance Ltd. v.

Klee, supra, 861 F.3d 106 n.17. Accordingly, we conclude

that the Pike balancing test is the appropriate test to

apply to the plaintiffs’ claim. See Pike v. Bruce Church,

Inc., supra, 397 U.S. 142. For the same reasons previously discussed, we concluded that Connecticut’s

geographic restriction in the VRO program is not clearly

excessive in relation to the putative local benefits and,

therefore, passes the more permissive Pike test.

The plaintiffs nevertheless contend that the analysis

in Allco is not dispositive in the present case because

Allco dealt with a challenge to this state’s mandatory

RPS program and the plaintiffs challenge the voluntary

VRO program. As we understand it, the plaintiffs argue

that, unlike the mandatory RPS program—in which RPS

compliant RECs can be produced only in certain control

areas; see General Statutes § 16-245a (b)—RECs for the

voluntary, competitive REC market do not need to be

generated from any particular area. Although we agree

that there are differences between this state’s RPS program and this state’s VRO program, we disagree that

this fact mandates a different outcome than in Allco.

PURA’s rationale for imposing a geographic restriction

on VRO RECs is the same that underlies the geographic

restriction for RPS RECs—environmental, health, and

safety considerations. Just as the RECs used in this

state’s RPS program are distinct from other RECs

because they support this state’s clean energy and environmental priorities, so, too, do the RECs that may be

used to back a VRO product. Indeed, in its final decision,

PURA recognized that there were concerns regarding

the geographic restriction: ‘‘[PURA] acknowledges concerns about narrowing the eligible regions for VRO and

REC only products; however, ensuring environmental

benefits support Connecticut’s energy policies continues to be a guiding principle for [PURA’s] actions. In

its first notice of written comments, [PURA] stated that

the purpose of this docket was to ‘bring Connecticut’s

VROs in line with Connecticut’s goals of reducing local

greenhouse gas emissions and supporting sustainable

local renewable energy sources. As illustrated in [PURA’s]

RPS compliance dockets, few current VROs meet these
goals.’ ’’ Thus, contrary to the plaintiffs’ argument, RECs

for the VRO program cannot be generated anywhere

because such RECs would not further this state’s clean

energy goals.

We fail to see, and the plaintiffs do not adequately

explain, how the voluntary nature of the VRO program

renders the RECs generated in the permitted control

area the same as RECs generated outside of the permitted control area, which have little to no environmental

benefit to this state. PURA’s geographic restriction is

a goal designed to improve the state’s environment and,

in turn, the health and safety of Connecticut residents.

Because renewable energy generated from distant

southern and western states has little environmental

benefits to Connecticut, the legislature chose to rely

exclusively on RECs issued by NEPOOL GIS for compliance with the RPS program. General Statutes § 16-245a

(b) (1) (A). A similar rationale supports PURA’s final

decision implementing the geographic restriction for VRO

RECs. We cannot conclude that any burden imposed

by this geographic restriction on interstate commerce,

in furtherance of this legitimate state interest, is ‘‘clearly

excessive in relation to the putative local benefits.’’ Pike

v. Bruce Church, Inc., supra, 397 U.S. 142; see also

United Haulers Assn., Inc. v. Oneida-Herkimer Solid

Waste Management Authority, supra, 550 U.S. 346–47

(plurality opinion) (any incidental burden on interstate

commerce that resulted from application of county

‘‘flow control’’ ordinances was not clearly excessive

in relation to public benefits provided by ordinances,

which increased recycling and conferred ‘‘significant

health and environmental benefits’’). The commerce

clause was ‘‘never intended to cut the [s]tates off from

legislating on all subjects relating to the health, life,

and safety of their citizens, though the legislation might

indirectly affect the commerce of the country.’’ (Internal quotation marks omitted.) General Motors Corp. v.

Tracy, supra, 519 U.S. 306.

Finally, aside from their argument that the geographic

restriction burdens renewable generating facilities outside of the permitted control area, the plaintiffs’

remaining arguments primarily center on whether the

geographic restriction actually advances the state’s

environmental goals and the restriction’s financial

impact on electric suppliers operating in this state. We

note at the outset that United States Supreme Court

Justice Neil M. Gorsuch, writing for himself and two

other members of the court, recently rejected the notion

that the Pike balancing test authorizes ‘‘judges to strike

down duly enacted state laws regulating the in-state

sale of ordinary consumer goods . . . based on nothing more than [a petitioner’s] own assessment of the

relevant law’s costs and benefits.’’ (Internal quotation

marks omitted.) National Pork Producers Council v.

Ross, supra, 143 S. Ct. 1159 (opinion announcing judgment). Moreover, these arguments do not address dispa-
rate burdens because they apply to in-state and out-ofstate suppliers alike. See, e.g., Martorelli v. Dept. of

Transportation, 316 Conn. 538, 555–56, 114 A.3d 912

(2015) (in dormant commerce clause context, ‘‘discrimination simply means differential treatment of in-state

and out-of-state economic interests that benefits the

former and burdens the latter’’ (internal quotation

marks omitted)). These arguments also do not address

a burden on interstate commerce. In fact, the plaintiffs

contend that ‘‘the evidence established that the geographic restriction will . . . reduce consumer interest

in VROs’’ sold in this state and ‘‘cause prices for [VROs

in this state] to significantly rise to levels [at which]

customers simply will not buy them.’’ These burdens

fall squarely on commerce and consumers within this

state. In other words, these burdens are on intrastate

commerce and not interstate commerce. This is not

what the dormant commerce clause prohibits. See, e.g.,

New Energy Co. of Indiana v. Limbach, 486 U.S. 269,

273–74, 108 S. Ct. 1803, 100 L. Ed. 2d 302 (1988) (dormant commerce clause ‘‘prohibits economic protectionism—that is, regulatory measures designed to benefit

in-state economic interests by burdening out-of-state

competitors’’ (emphasis added)). ‘‘The party challenging a law as either clearly discriminatory or violative

of Pike bears the threshold burden of demonstrating

that it has a disparate impact on interstate commerce—

[t]he fact that it may otherwise affect commerce is not

sufficient.’’ (Emphasis added; internal quotation marks

omitted.) Southold v. East Hampton, supra, 477 F.3d

47; see also United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Management Authority, supra, 550

U.S. 345 (‘‘[United States Supreme Court] dormant

[c]ommerce [c]lause cases often find discrimination

when a [s]tate shifts the costs of regulation to other

[s]tates, because when the burden of state regulation

falls on interests outside the state, it is unlikely to be

alleviated by the operation of those political restraints

normally exerted when interests within the state are

affected’’ (internal quotation marks omitted)). Whether

the geographic restriction actually advances the state’s

environmental goals or reduces consumer interests in

VROs, moreover, is a consideration most appropriately

suited for PURA or the legislature, not this court. See,

e.g., Exxon Corp. v. Governor, 437 U.S. 117, 128, 98 S.

Ct. 2207, 57 L. Ed. 2d 91 (1978) (‘‘[i]t may be true that

the consuming public will be injured by [the effect of

the challenged regulation], but . . . that argument

relates to the wisdom of the statute, not to its burden

on commerce’’).

B

Marketing Restriction

The plaintiffs next contend that the marketing restriction violates the dormant commerce clause because it

imposes a disproportionate burden on interstate com-
merce by creating marketing requirements that substantially conflict with a common regulatory scheme. The

plaintiffs correctly note that the marketing restriction

prohibits electric suppliers from marketing VROs as

‘‘ ‘renewable energy’ unless the offer is supported by

an ownership interest in or [a power purchase agreement] for a renewable resource used to serve the contract.’’ A VRO not supported by an ownership interest

in or a power purchase agreement for renewable

resources must be marketed as a product backed REC.

The plaintiffs contend that this blanket prohibition on

a commonly used industry term—renewable energy—

is inconsistent with both federal law and the law of

many sister states, which together comprise a common

regulatory scheme. For its part, PURA contends that,

because the marketing restriction applies equally to

in-state and out-of-state suppliers alike, the plaintiffs

cannot demonstrate that the marketing restriction has

a disparate burden on interstate commerce compared

to intrastate commerce. PURA also argues that any

purported disparate treatment is not a burden on interstate markets because the marketing restriction does

not actually conflict with other states’ regulatory programs such that businesses are prevented from complying with both regulatory schemes. PURA notes that

there is no cognizable burden on interstate commerce

when, as here, the burden is limited to increased compliance costs for firms doing business in more than one

state. Finally, PURA contends that, even if the marketing restriction disparately impacted interstate commerce, like the geographic restriction, it, too, has

benefits that are not illusory.

The parties agree that the Pike balancing test is the

applicable standard to evaluate the plaintiffs’ challenge

to the marketing restriction. As we previously explained,

we employ the Pike balancing test if a law is nondiscriminatory but, nonetheless, adversely, ‘‘incidental[ly]’’

affects interstate commerce. Pike v. Bruce Church, Inc.,

supra, 397 U.S. 142. When ‘‘the statute regulates [evenhandedly] to effectuate a legitimate local public interest, and its effects on interstate commerce are only

incidental, it will be upheld unless the burden imposed

on such commerce is clearly excessive in relation to

the putative local benefits. . . . If a legitimate local

purpose is found, then the question becomes one of

degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local

interest involved, and on whether it could be promoted

as well with a lesser impact on interstate activities.’’

(Citation omitted.) Id. ‘‘For a state statute to run afoul

of the Pike standard, the statute, at a minimum, must

impose a burden on interstate commerce that is qualitatively or quantitatively different from that imposed on

intrastate commerce. . . . Under Pike, if no such

unequal burden [was] shown, a reviewing court need not

proceed further.’’ (Citations omitted.) National Electrical
Manufacturers Assn. v. Sorrell, 272 F.3d 104, 109 (2d

Cir. 2001), cert. denied, 536 U.S. 905, 122 S. Ct. 2358,

153 L. Ed. 2d 180 (2002).

Although several types of burdens on interstate commerce may qualify as ‘‘disparate’’ so as to trigger the

Pike balancing test, the plaintiffs’ dormant commerce

clause claim regarding the marketing restriction centers

around the fact that, according to the plaintiffs, PURA

has imposed regulatory requirements that are inconsistent with those of other states and the federal government. Regulations that fall within this category may be

said to create interstate regulatory conflicts. ‘‘A state

regulation might impose a disproportionate burden on

interstate commerce if the regulation is in substantial

conflict with a common regulatory scheme in place in

other states.’’ Id., 112; see also, e.g., Raymond Motor

Transportation, Inc. v. Rice, 434 U.S. 429, 445, 98 S.

Ct. 787, 54 L. Ed. 2d 664 (1978); Bibb v. Navajo Freight

Lines, Inc., 359 U.S. 520, 529–30, 79 S. Ct. 962, 3 L. Ed.

2d 1003 (1959). ‘‘It is not enough to point to a risk of

conflicting regulatory regimes in multiple states; there

must be an actual conflict between the challenged regulation and those in place in other states.’’ National

Electrical Manufacturers Assn. v. Sorrell, supra, 272

F.3d 112; see also, e.g., Procter & Gamble Co. v.Chicago,

509 F.2d 69, 77 (7th Cir.) (‘‘[t]he [United States] Supreme

Court has indicated that in a case involving environmental legislation it is actual conflict, not potential conflict,

that is relevant’’), cert. denied, 421 U.S. 978, 95 S. Ct.

1980, 44 L. Ed. 2d 470 (1975). On the other hand, there

is generally no burden on interstate commerce sufficient to trigger a violation of the dormant commerce

clause when the burden is limited to increased compliance costs for firms doing business in more than one

state. See, e.g., Procter & Gamble Co. v. Chicago, supra,

76–77; see also National Pork Producers Council v.

Ross, supra, 143 S. Ct. 1169 (Roberts, C. J., concurring

in part and dissenting in part) (‘‘[o]ur precedents have

long distinguished the costs of complying with a given

state regulation from other economic harms to the interstate market’’). This is because the commerce clause

is concerned with a law’s impact on markets and ‘‘the

interstate flow of goods’’ and not its impact on individual interstate firms or their profits. See Pharmaceutical

Research & Manufacturers of America v. Alameda, 768

F.3d 1037, 1044–45 (9th Cir. 2014), cert. denied, 575 U.S.

1034, 135 S. Ct. 2348, 192 L. Ed. 2d 160 (2015).

Here, assuming there is a common regulatory scheme,14

to the extent that the marketing restriction results in

disparate treatment, we conclude that the restriction

is not in ‘‘substantial conflict’’ with the common regulatory scheme. To establish this common regulatory

scheme, the plaintiffs point to a Federal Trade Commission guideline, which provides in relevant part that ‘‘[a]

marketer should not make unqualified renewable

energy claims, directly or by implication, if fossil fuel,
or electricity derived from fossil fuel, is used to manufacture any part of the advertised item or is used to

power any part of the advertised service, unless the

marketer has matched such non-renewable energy use

with renewable energy certificates.’’ (Emphasis added.)

16 C.F.R. § 260.15 (a) (2022); see also United States

Environmental Protection Agency, supra. Although not

referenced by the plaintiffs, the first sentence of subsection (a) of 16 C.F.R. § 260.15 provides that ‘‘[i]t is deceptive to misrepresent, directly or by implication, that a

product or package is made with renewable energy or

that a service uses renewable energy.’’ Thus, although

it is deceptive to misrepresent that a product contains

renewable energy and that RECs may be used to support

a claim that a product contains ‘‘renewable energy,’’

there is nothing in this guidance that would prohibit a

state from requiring more stringent marketing guidelines on what constitutes ‘‘renewable energy.’’ Requiring that a VRO product be supported by an ownership

interest in or a power purchase agreement for a renewable resource to qualify as ‘‘renewable energy’’ does

not substantially conflict with 16 C.F.R. § 260.15 (a)

because nothing in that section forbids a state from

enacting more rigorous marketing requirements. In

other words, to the extent necessary, the plaintiffs can

comply with both the Federal Trade Commission’s

guideline and the marketing restriction. Thus, there is

no ‘‘actual conflict’’ with this guideline. National Electrical Manufacturers Assn. v. Sorrell, supra, 272 F.3d

112.

The plaintiffs also rely on Vermont regulatory guidance that provides that RECs are ‘‘what make solar a

green or renewable energy resource—they are . . . the

legal attribute of renewable energy. . . . The system

of tracking attributes via RECs is the only legal way of

characterizing the renewability of different sources of

electricity. . . . Whoever buys the RECs has paid an

extra cost to bring renewable energy to the grid and

has the only legal claim that their energy is renewable.’’15

(Internal quotation marks omitted.) Office of the Attorney General, State of Vermont, Guidance for Third-Party

Solar Projects, p. 1, available at https://ago.vermont.gov/

sites/ago/files/wp-content/uploads/2018/01/Guidanceon-Solar-Marketing.pdf (last visited June 26, 2023). This

guidance, however, applies only to third-party solar

project installers. There is nothing to indicate a similar

guidance for electric suppliers. See id., pp. 1–5. Indeed,

because Vermont is the only New England state that

did not restructure its electricity market, it does not

allow retail competition. See United States Energy

Information Administration, Vermont State Profile and

Energy Estimates (last modified October 20, 2022),

available at https://www.eia.gov/state/analysis.php?sid=VT

(last visited June 26, 2023). As a result, Vermont does

not even have a retail energy market or electric suppliers, and the guidance provided to third-party solar proj-
ect installers cannot conflict with PURA’s marketing

restriction for electric suppliers. Moreover, even if

PURA’s marketing restriction differs from this guidance, the plaintiffs are still able to conduct business in

Connecticut and Vermont. The plaintiffs concede as

much. PURA’s marketing restriction applies only to

marketing material within this state; electric suppliers

are free to market their REC backed VRO products as

‘‘renewable energy’’ to the extent permitted in Vermont,

or any other jurisdiction. Thus, as with the Federal

Trade Commission’s guideline, we conclude that there

is no ‘‘actual conflict’’ with this guidance. See National

Electrical Manufacturers Assn. v. Sorrell, supra, 272

F.3d 112.

In sum, even if the marketing restriction differs from

marketing requirements in other states, it does not violate the Pike balancing test because it has no impact

on other states’ marketing regulations and does not

actually conflict with the implementation of other

states’ regulations. The dormant aspect of the commerce clause does not require that all states treat regulations uniformly, even when there is a common

regulatory scheme. Cf. id., 113 (‘‘[t]he idea that there

is a general interest in [regulatory] uniformity is inconsistent with our [society’s] decision to have separate

states with separate legislative competencies, including

separate competences to regulate commerce’’ (internal

quotation marks omitted)).

We also conclude that any burden imposed by the

marketing restriction on interstate commerce is not

‘‘clearly excessive in relation to the putative local benefits.’’ Pike v. Bruce Church, Inc., supra, 397 U.S. 142.

In its final decision, PURA explained the marketing

restriction’s local benefits—namely, to improve consumer transparency and further this state’s clean energy

goals. Specifically, PURA explained: ‘‘[PURA] is well

aware from its years of customer education and interactions that customers do not understand the concept of

a REC. When customers are told they are purchasing

renewable energy, they think they are purchasing

renewable energy. They are not. They are purchasing

a certificate, which purchase provides additional revenue to facilities providing renewable generation, both

incentivizing more construction of renewable sources

and providing financial assistance to those sources.

This is a complex transaction that is being oversimplified by stating that the customer is purchasing renewable energy. . . . It is inconceivable to [PURA] that

the [electric suppliers] are arguing that they should

continue perpetuating the inaccuracy. The suppliers’

arguments equate to saying, if [PURA] explains the process to customers, then customers will not understand

it. [PURA] does not believe this is true. Customers not

only can understand what they are purchasing, but they

must. If Connecticut is going to meet its clean energy

goals, then customers have the right to understand that
their purchase[s] of local RECs now subsidize those

renewable generation sources and support Connecticut’s clean energy goals.’’ These goals are similar to

those that animated PURA’s initial development of the

disclosure label in 2008. See General Statutes (Rev. to

2019) § 16-245o; General Statutes § 16-245p. The Office

of Consumer Counsel shares PURA’s position on the

need for the marketing restriction. Namely, it argues

that ‘‘Connecticut has a substantial interest in ensuring

that consumers understand RECs and how locally

sourced RECs foment forward momentum in achieving

the state’s goals related to renewable energy deployment and carbon reduction.’’

Apart from asserting that the marketing restriction

is inconsistent with the aforementioned regulations, the

plaintiffs do not clearly articulate the purported burden

it imposes on interstate commerce. Rather, they assert

that ‘‘[t]here is no genuine dispute that the burden is

high.’’ Without explication from the plaintiffs on this

point, the only burden this court can conceive of is an

increased financial burden to market their VRO products differently in Connecticut.16 This was the plaintiffs’

argument before the trial court—that the marketing

restriction would require them to ‘‘bear some additional

costs when they market their VRO products in Connecticut because their marketing materials will have to be

modified relative to what other New England states

require.’’ The plaintiffs do not claim that the marketing

restriction would prohibit them from doing business in

other states. We cannot conclude that whatever incidental expense electric suppliers may incur as a result of

the need for different marketing materials outweighs

the putative benefits of increased consumer transparency and furthering this state’s clean energy goals. See,

e.g., National Pork Producers Council v. Ross, supra,

143 S. Ct. 1154 (rejecting argument that California’s

Proposition 12 is per se violation of dormant commerce

clause because law ‘‘will impose substantial new costs

on out-of-state pork producers who wish to sell their

products in California’’); Procter & Gamble Co. v. Chicago, supra, 509 F.2d 77 (noting that ordinance was

‘‘not a burden on interstate commerce . . . but [was]

merely a ‘burden’ on a company [that] happens to have

interstate distribution facilities’’). Accordingly, we conclude that the marketing restriction passes constitutional muster under the more permissive Pike balancing

test. See National Electrical Manufacturers Assn. v.

Sorrell, supra, 272 F.3d 112 (rejecting argument that

state’s labeling requirement unduly burdened ‘‘interstate commerce by exposing [certain manufacturers]

to the possibility of multiple, inconsistent labeling requirements imposed by other states’’ because ‘‘[i]t is not

enough to point to a risk of conflicting regulatory

regimes in multiple states; there must be an actual conflict between the challenged regulation and those in

place in other states’’).
II

FREE SPEECH AND CONTRACT CLAUSE CLAIMS

The plaintiffs raise two additional constitutional claims.

First, they contend that the marketing restriction, which

prohibits electric suppliers from marketing REC only

VROs as containing ‘‘renewable energy,’’ violates their

right to free speech under the United States constitution

and the Connecticut constitution. Second, they claim

that the final decision violates their right to freely contract as guaranteed by the United States constitution

because some of the contracts they have with Connecticut consumers include automatic renewal provisions

and the restrictions will disrupt the current expectations and obligations of both customers and suppliers

under these contracts. PURA contends that the plaintiffs both waived and failed to exhaust their administrative remedies with respect to their free speech and

contract clause claims. Specifically, PURA contends

that, because the plaintiffs had every opportunity to

participate in the contested case and chose not to raise

these claims at that time, the plaintiffs failed to exhaust

their administrative remedies, and the trial court thus

lacked jurisdiction over the claims. Alternatively, PURA

contends that the trial court correctly concluded that

the plaintiffs waived their free speech and contract

clause claims for the same reason. Finally, PURA contends that the plaintiffs’ claims would fail on the merits.

The trial court correctly noted that the plaintiffs did

not raise their free speech or contract clause claims

during the administrative proceedings before PURA.

The court went on to consider whether the plaintiffs’

failure to raise a particular argument before PURA constituted a failure to exhaust administrative remedies or

was more akin to a failure to preserve an issue for

appellate review. The former is jurisdictional, whereas

the latter is prudential. The trial court surveyed various

cases from this court and the Appellate Court and concluded that, although no case squarely addressed the

question, the cases ‘‘strongly imply that a failure to

assert a particular argument before an administrative

tribunal implicates the waiver doctrine, not the exhaustion of administrative remedies doctrine.’’17 The court

next considered whether it would have been futile for

the plaintiffs to raise their claims before PURA. If so, it

would follow that they did not waive their constitutional

claims by failing to assert them during the administrative proceeding. The court ultimately concluded that it

would not have been futile for the plaintiffs to raise

their free speech and contract clause claims before

PURA, and, thus, the plaintiffs waived these claims.

Because the exhaustion of administrative remedies

doctrine implicates this court’s subject matter jurisdiction, we must first decide whether the failure to raise

a claim before an administrative agency implicates the
exhaustion doctrine. See, e.g., Stepney, LLC v. Fairfield, 263 Conn. 558, 563, 821 A.2d 725 (2003). ‘‘The

doctrine of exhaustion of administrative remedies is

well established in the jurisprudence of administrative

law. . . . Under that doctrine, a trial court lacks subject matter jurisdiction over an action that seeks a remedy that could be provided through an administrative

proceeding, unless and until that remedy has been

sought in the administrative forum. . . . In the absence

of exhaustion of that remedy, the action must be dismissed.’’ (Citation omitted; internal quotation marks

omitted.) Piteau v. Board of Education, 300 Conn. 667,

678, 15 A.3d 1067 (2011).

‘‘A primary purpose of the doctrine is to foster an

orderly process of administrative adjudication and judicial review, offering a reviewing court the benefit of

the agency’s findings and conclusions. It relieves courts

of the burden of prematurely deciding questions that,

entrusted to an agency, may receive a satisfactory

administrative disposition and avoid the need for judicial review. . . . Moreover, the exhaustion doctrine

recognizes the notion, grounded in deference to [the

legislature’s] delegation of authority to coordinate branches

of [g]overnment, that agencies, not the courts, ought

to have primary responsibility for the programs that

[the legislature] has charged them to administer. . . .

Therefore, exhaustion of remedies serves dual functions: it protects the courts from becoming unnecessarily burdened with administrative appeals and it ensures

the integrity of the agency’s role in administering its

statutory responsibilities.’’ (Citations omitted; internal

quotation marks omitted.) Stepney, LLC v. Fairfield,

supra, 263 Conn. 564–65.

Typically, courts apply the exhaustion of administrative remedies doctrine when a party has completely

bypassed an available administrative process. See, e.g.,

id., 559, 561–63 (direct action against town challenging

enforcement of health ordinance was dismissed because

plaintiff failed to exhaust administrative remedy before

state board of health). On the other hand, when a party

has availed itself of the administrative proceeding but

seeks to raise new claims for the first time on appeal,

this court generally applies the nonjurisdictional principle that an appellate tribunal is not required to consider

a claim unless it was distinctly raised during the administrative proceeding. See, e.g., Ferraro v. Ridgefield

European Motors, Inc., 313 Conn. 735, 759, 99 A.3d

1114 (2014); Dragan v. Connecticut Medical Examining Board, 223 Conn. 618, 632, 613 A.2d 739 (1992). We

recently explained the distinction between the exhaustion doctrine and the failure to preserve in the context

of an administrative appeal. In Board of Education v.

Commission on Human Rights & Opportunities, 344

Conn. 603, 280 A.3d 424 (2022), we explained that ‘‘there

is a difference between bypassing an administrative

procedure on the ground that the agency has no jurisdic-
tion over the matter, which raises an exhaustion issue,

and failing, within the context of an administrative proceeding, to preserve for review a claim that the agency

has no jurisdiction. When a party has failed to preserve

a claim before an administrative agency, the exhaustion doctrine does not apply; instead, we apply the

ordinary rules governing appellate review of unpreserved claims.’’ (Emphasis added.) Id., 622–23.

Here, the plaintiffs did not entirely bypass the administrative proceedings before PURA; rather, they failed

to raise their free speech and contract clause claims

before the agency. Accordingly, we conclude that the

plaintiffs’ failure to raise these claims during the administrative proceedings before PURA does not constitute

a failure to exhaust administrative remedies. Nevertheless, we must determine, as a prudential consideration,

whether we should decline to address these claims on

the merits because they were not adequately preserved

for appellate review.

Practice Book § 60-5 provides in relevant part that

‘‘[t]he court shall not be bound to consider a claim

unless it was distinctly raised at the trial or arose subsequent to the trial.’’ ‘‘Indeed, it is the appellant’s responsibility to present such a claim clearly to the trial court

so that the trial court may consider it and, if it is meritorious, take appropriate action. That is the basis for the

requirement that ordinarily [the appellant] must raise

in the trial court the issues that he intends to raise on

appeal. . . . This rule applies to appeals from administrative proceedings as well.’’ (Citation omitted; internal

quotation marks omitted.) Ferraro v. Ridgefield European Motors, Inc., supra, 313 Conn. 759. ‘‘A party to an

administrative proceeding cannot be allowed to participate fully at hearings and then, on appeal, raise claims

that were not asserted before the board [or agency].’’

Dragan v. Connecticut Medical Examining Board,

supra, 223 Conn. 632. ‘‘[T]o allow a court to set aside

an agency’s determination [on] a ground not theretofore

presented . . . deprives the [agency] of an opportunity

to consider the matter, make its ruling, and state the

reasons for its action.’’ (Internal quotation marks omitted.)Burnham v. Administrator, Unemployment Compensation Act, 184 Conn. 317, 323, 439 A.2d 1008 (1981).

Although the plaintiffs raised their dormant commerce clause claims before PURA, they failed to raise

their free speech and contract clause claims before the

agency. The plaintiffs’ failure deprived PURA of the

opportunity to consider the claims while developing its

final decision. PURA is a sophisticated state agency

with technical expertise in energy regulations. Had the

plaintiffs raised these claims before PURA, the agency

may have decided not to adopt the proposed rules or

to change the proposed rules to account for any objection it concluded was meritorious. It may not have. But

PURA was not afforded the opportunity to consider its
proposed final decision in light of these claims. Moreover, because these claims were not raised during the

administrative proceedings, the parties were unable to

develop a record regarding these claims. In particular,

there is no record regarding the contracts between the

energy suppliers and customers, which the plaintiffs

contend were infringed by the restrictions. No such

contracts were entered into the record. Accordingly,

we decline to consider the merits of these claims.

The plaintiffs argue, however, that we should review

their claims because they are constitutional in nature

and PURA did not have the authority to decide the

claims.18 We are not persuaded. Although, as we previously explained, the plaintiffs’ failure to raise these

claims before PURA does not implicate the exhaustion

of administrative remedies doctrine, we find the case

law surrounding an exception to the exhaustion doctrine instructive in this context. Relevant to this case,

there is an exception to the requirement that a party

exhaust its administrative remedies when ‘‘recourse to

the administrative remedy would be futile or inadequate.’’ (Internal quotation marks omitted.) Stepney,

LLC v. Fairfield, supra, 263 Conn. 565. The plaintiffs

essentially argue that it would have been futile to raise

these claims before PURA because they are constitutional in nature. We have explained that ‘‘[t]he mere

allegation of a constitutional violation’’ is not enough to

excuse a plaintiff from raising the alleged constitutional

violation before an administrative agency. (Internal

quotation marks omitted.) Id., 570. Litigants are excused

from raising constitutional claims when it ‘‘would be

futile because the administrative agency . . . lacks the

authority to grant adequate relief.’’ Id.; see also, e.g.,

Payne v. Fairfield Hills Hospital, 215 Conn. 675, 680

n.3, 578 A.2d 1025 (1990). If the agency can afford adequate relief, ‘‘constitutional and statutory rights . . .

can be waived if not asserted in a timely fashion’’ before

the agency in the administrative proceeding. Dragan

v. Connecticut Medical Examining Board, supra, 223

Conn. 629. The futility exception is typically satisfied

when the case ‘‘involves a challenge to the constitutionality of the statute or regulation under which an agency

operates,’’ because administrative agencies do not have

the authority to declare statutes unconstitutional. (Internal

quotation marks omitted.) Stepney, LLC v. Fairfield,

supra, 570. It is not futile to raise a constitutional claim,

however, when, as here, the case challenges ‘‘the

actions of the board or agency.’’ (Internal quotation

marks omitted.) Id. This is because the agency has the

authority to cure any potential constitutional defect

with its proposed regulations or, in response to those

claims, to abandon the proposed regulatory changes

altogether if they cannot be modified to address the

potential constitutional defect. Thus, we are not persuaded that it would have been futile for the plaintiffs

to raise these claims before PURA.
III

UAPA CLAIM

Finally, we turn to the plaintiffs’ contention that

PURA failed to satisfy the procedural requirements of

the UAPA. More specifically, the plaintiffs contend that

PURA violated the UAPA by (1) relying on ‘‘nonevidence’’ to support its findings and conclusions, and (2)

failing to make the parties aware of the information on

which it would rely to support its final decision. As to

the first asserted violation, the plaintiffs argue that

PURA improperly relied on comments from the Office

of Consumer Counsel, which stated that its ‘‘past interaction with consumers reveals that many have expressed confusion about the VRO program,’’ and on

comments submitted by the Department of Energy and

Environmental Protection (DEEP), which stated that

‘‘the majority of VRO RECs offered in Connecticut are

sourced from outside New England, and their purchase

by Connecticut customers does not effectively further

Connecticut’s public policy goals and may not align

with customers’ intent when choosing electric supply

options beyond the RPS.’’ (Internal quotation marks

omitted.) The plaintiffs argue that it was improper for

PURA to have relied on these comments because no

witness testified in support of these comments, and,

therefore, the electric suppliers had no opportunity to

cross-examine their veracity and accuracy, as required

by the UAPA. As to the second asserted violation, the

plaintiffs argue that PURA based its geographic restriction on information about prevailing wind patterns and

a University of Connecticut climate overview. The plaintiffs argue that this information was not admitted into

the evidentiary record and, as with the unsworn comments, therefore was not subject to challenge.

PURA disagrees and contends that the plaintiffs

received full due process under the UAPA. Specifically,

PURA emphasizes that it issued three notices requesting

written comment, admitted sixty-five entities as parties

to the proceeding, gathered data by way of interrogatories to the electric distribution companies and electric

suppliers, held both a technical meeting and an evidentiary hearing that the plaintiffs did not attend, received

written exceptions, and conducted oral argument. As

to the plaintiffs’ specific claims, PURA contends that

the geographic restriction did not arise from DEEP’s

comments or the University of Connecticut climate

overview. Rather, it was initially proposed by three

parties to the contested case in response to PURA’s

first request for written comments. PURA thereafter

incorporated the joint proposal into a straw man proposal in its second notice of request for written comments. At a subsequent hearing, a witness on behalf of

two of the entities who proposed the restriction testified

in support of the proposal. The witness testified that

Connecticut is a tailpipe state, that Connecticut is sub-
ject to pollution coming downwind from the west, and

that supporting renewable projects in Pennsylvania

does more to clean up Connecticut’s air than far-flung

renewable projects such as those in Canada. As a result,

PURA contends that the geographic restriction ‘‘developed in plain sight.’’ PURA also notes that Connecticut’s

status as a tailpipe state was not newly established in

this proceeding; rather, PURA had previously reached

this conclusion one decade earlier in a separate, contested case. PURA contends that it may properly rely

on facts known to it even if they are not presented at the

hearing. Finally, PURA rejects the plaintiffs’ argument

regarding the comments from the Office of Consumer

Counsel because (1) PURA did not have to establish

that consumer confusion existed in order to modify

the disclosure label, (2) even if evidence of consumer

confusion was required, it existed in the record on the

basis of PURA’s review of the disclosure labels used

by electric suppliers, and (3) the plaintiffs cannot argue

that they were unable to cross-examine a witness at the

hearing because the plaintiffs did not attend the hearing.

Relevant to this appeal, the UAPA provides: ‘‘(a) In

a contested case, each party and the agency conducting

the proceeding shall be afforded the opportunity (1) to

inspect and copy relevant and material records, papers

and documents not in the possession of the party or

such agency, except as otherwise provided by federal

law or any other provision of the general statutes, and

(2) at a hearing, to respond, to cross-examine other

parties, intervenors, and witnesses, and to present evidence and argument on all issues involved.

‘‘(b) Persons not named as parties or intervenors

may, in the discretion of the presiding officer, be given

an opportunity to present oral or written statements.

The presiding officer may require any such statement

to be given under oath or affirmation.’’ General Statutes

§ 4-177c.

Additionally, we have explained that the conduct of

an administrative hearing ‘‘shall not violate the fundamentals of natural justice. . . . Fundamentals of natural justice require that there . . . be due notice of the

hearing, and at the hearing no one may be deprived

of the right to produce relevant evidence or to crossexamine witnesses produced by his adversary . . . .

Put differently, [d]ue process of law requires that the

parties involved have an opportunity to know the facts

on which the commission is asked to act . . . and to

offer rebuttal evidence. . . . The purpose of administrative notice requirements is to allow parties to prepare

intelligently for the hearing.’’ (Citations omitted; internal quotation marks omitted.) Grimes v. Conservation

Commission, 243 Conn. 266, 273–74, 703 A.2d 101

(1997). ‘‘[Section 4-183 (j)] permits modification or

reversal of an agency’s decision if substantial rights of

the appellant have been prejudiced because the admin-
istrative findings, inferences, conclusions, or decisions

are: (1) [i]n violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the

agency; (3) made upon unlawful procedure; (4) affected

by other error or law; (5) clearly erroneous in view of

the reliable, probative, and substantial evidence on the

whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted

exercise of discretion.’’ (Internal quotation marks omitted.) Tele Tech of Connecticut Corp. v. Dept. of Public

Utility Control, supra, 270 Conn. 787; accord General

Statutes § 4-183 (j). We have stated, however, that ‘‘not

all procedural irregularities require a reviewing court

to set aside an administrative decision . . . .’’ (Internal

quotation marks omitted.) Jutkowitz v. Dept. of Health

Services, 220 Conn. 86, 97, 596 A.2d 374 (1991). ‘‘The

complaining party has the burden of demonstrating that

its substantial rights were prejudiced by the error.’’ Tele

Tech of Connecticut Corp. v. Dept. of Public Utility

Control, supra, 788.

On the basis of our examination of the record and

the briefs, and our consideration of the arguments of the

parties, we conclude that the plaintiffs cannot prevail

on their procedural claims. Specifically, as to the comments from the Office of Consumer Counsel and DEEP,

we agree with the trial court that, given that each statement was submitted prior to the hearing, the plaintiffs

could have asked, but did not ask, that those statements

be offered by a witness at the hearing. The plaintiffs

also failed to raise any objection regarding these comments at the hearing. Additionally, the plaintiffs could

have provided evidence to rebut these statements at

the hearing but did not do so. As to the plaintiffs’ contention that they were not aware of certain information

on which PURA would rely, we emphasize that PURA

should have disclosed that it intended to take notice

of scientific facts within the agency’s specialized knowledge. See General Statutes § 4-178 (7). However, we

agree with the trial court that, in addition to the University of Connecticut climate overview, PURA also relied

on the testimony of Maddox, who testified that Connecticut is a tailpipe state and as to the implications of that

fact. PURA also relied on its own decisions in prior

cases, which also established that Connecticut is a tailpipe state. We find it significant that the plaintiffs had

the opportunity to respond to Maddox’ testimony and

to cross-examine him. We also find it significant that

the plaintiffs had the opportunity to respond to PURA’s

final decision, which included the challenged factual

finding and which referenced PURA’s earlier decisions

in which it reached the same conclusion. Accordingly,

we agree with the trial court that, under these circumstances, we ‘‘cannot conclude that the plaintiffs have

satisfied their burden of showing that PURA violated

their procedural rights under the UAPA or the common

law. Nor can [we] conclude that any violation caused
. . . prejudice [to the plaintiffs’ substantial rights].’’

CONCLUSION

The trial court correctly determined that the geographic and marketing restrictions do not violate the

dormant commerce clause. Specifically, as to the geographic restriction, analyzed under the framework set

forth in the Second Circuit’s Allco decision, we conclude

that the Connecticut market should be given controlling

significance. We also conclude that any burden imposed

by either the geographic restriction or the marketing

restriction is not ‘‘clearly excessive in relation to the

putative local benefits’’ and, therefore, passes the more

permissive Pike test. See Pike v. Bruce Church, Inc.,

supra, 397 U.S. 142. We also decline to consider the

plaintiffs’ free speech and contract clause claims because they were not raised before PURA during the

administrative proceedings. Finally, we conclude that

the plaintiffs failed to satisfy their burden of showing

that PURA violated their procedural rights under the

UAPA or that any violation caused prejudice to their

substantial rights.

The judgment is affirmed.

In this opinion the other justices concurred.

1 The Office of Consumer Counsel and the Department of Energy and

Environmental Protection each filed a motion to intervene as a defendant,

which the trial court granted.

2 Specifically, the plaintiffs consist of several retail electric suppliers currently licensed to do business in this state: Direct Energy Services, LLC;

Direct Energy Business, LLC; Direct Energy Business Marketing, LLC; and

CleanChoice Energy, Inc. An electric supplier trade group, the Retail Energy

Supply Association, also participated in the administrative appeal but did

not participate in this appeal.

3 The Office of Consumer Counsel filed a brief in this appeal and largely

makes the same arguments and takes the same position as PURA. The Office

of Consumer Counsel is an independent government agency designated by

statute as the advocate for all consumers of the state’s regulated electric,

natural gas, water, and telecommunications utilities, as well as the customers

of electric suppliers. See General Statutes § 16-2a (a). The Office of Consumer Counsel is an automatically designated statutory party to any contested case initiated by PURA, and it participates in contested cases to

advocate for the interests of Connecticut consumers. See General Statutes

§ 16-2a (a).

4 Although § 16-245a has been amended since the events at issue in this

appeal; see Public Acts 2022, No. 22-118, § 163; those amendments have no

bearing on the merits of this appeal. In the interest of simplicity, we refer

to the current revision of § 16-245a.

5 NEPOOL GIS ‘‘issues and tracks [RECs] for all [megawatt-hours] of

generation and load produced in the [ISO-NE] control area, as well as

imported [megawatt-hours] from adjacent control areas. In addition to the

generation, the NEPOOL GIS provides emissions labeling for the New

England load-serving entities by tracking the emissions attributes for generators in the region. In recent years the NEPOOL GIS has adapted to the

various state RPS laws to track combined heat and power, demand response

and conservation and load management certificates.’’ NEPOOL Generation

Information System, available at https://nepoolgis.com (last visited June

26, 2023).

6

In its decision, PURA also imposed other requirements for VRO products,

including a resource type restriction, which imposed restrictions on the

types of renewable energy sources that suppliers could rely on when selling

VROs in this state. These other requirements, however, are not at issue in

this appeal.

7

‘‘A power purchase agreement is a long-term agreement to buy power

from a company that produces electricity.’’ (Internal quotation marks omit-
ted.) E. Rietmann, Comment, ‘‘Alternative Solutions to Power Oversupply

in the Pacific Northwest,’’ 45 Envtl. L. 207, 228 n.191 (2015).

8 Vistra Corporation, the parent company for certain Connecticut licensed

electric suppliers, filed an amicus curiae brief in support of the plaintiffs’

dormant commerce clause claims. It generally agrees with the arguments

raised by the plaintiffs and emphasizes that ‘‘the marketing restriction and

geographic restriction will harm Connecticut customers and the state’s

renewable energy goals by driving up prices, increasing customer confusion,

and lowering demand without incentivizing new development.’’

9 PURA also contends that the plaintiffs’ dormant commerce clause claims

fail as a facial challenge because the plaintiffs have not identified any instate suppliers with which they compete, the geographic restriction does

not treat out-of-state suppliers differently, and the geographic restriction

does not reflect economic protectionism. Because we conclude that the Pike

balancing test is the proper analysis, we need not address these contentions.

10 The trial court similarly concluded that the Allco analysis ‘‘point[ed] the

court in the direction of the Pike test.’’ Exhibiting commendable candor,

the court acknowledged ‘‘that it . . . reached that conclusion without the

highest level of confidence’’ given that ‘‘[t]he answer is hardly obvious, the

relevant case law is less than a model of clarity, and the deeply technical

nature of this case adds its own challenges.’’ The trial court’s uncertainty

in this area reflects the fact that ‘‘the United States Supreme Court’s dormant

commerce clause jurisprudence is less than a model of clarity . . . .’’ MERSCORP Holdings, Inc. v. Malloy, 320 Conn. 448, 472, 131 A.3d 220, cert.

denied, 580 U.S. 959, 137 S. Ct. 372, 196 L. Ed. 2d 291 (2016); see also

Comptroller of the Treasury v. Wynne, 575 U.S. 542, 574, 135 S. Ct. 1787,

191 L. Ed. 2d 813 (2015) (Scalia, J., dissenting) (‘‘One glaring defect of the

negative [c]ommerce [c]lause is its lack of governing principle. Neither the

[c]onstitution nor our legal traditions offer guidance about how to separate

improper state interference with commerce from permissible state taxation

or regulation of commerce. So we must make the rules up as we go along.

That is how we ended up with the bestiary of ad hoc tests and ad hoc

exceptions that we apply nowadays . . . .’’ (Citations omitted.)). Indeed,

the United States Supreme Court’s recent case addressing the dormant

commerce clause—which is comprised of five separate opinions—only adds

to the murky state of the law. See National Pork Producers Council v. Ross,

supra, 143 S. Ct. 1142.

11 PURA contends that the plaintiffs have not identified any in-state suppliers with which they compete, and, therefore, their dormant commerce clause

claim fails. The plaintiffs contend that the geographic restriction constitutes

facial discrimination because electric suppliers are denied access to RECs

from generators outside of the permitted control area to serve their Connecticut customers. As we explained, because we conclude that the plaintiffs’

claim fails even applying the Pike balancing test, we need not address this

contention. See footnote 9 of this opinion.

12 PURA noted in its final decision that ‘‘[General Statutes] § 22a-200a

requires Connecticut to reduce statewide greenhouse gas emissions to 80

percent below 2001 levels by 2050. Additionally, in Executive Order No.

3, Governor [Ned] Lamont has directed [the Department of Energy and

Environmental Protection], in consultation with PURA, to analyze and recommend strategies for achieving a 100 [percent] zero carbon target for the

electric sector by 2040. . . . These are ambitious goals and meeting them

requires [PURA] to revisit its policies surrounding . . . VROs to ensure

these offerings contribute to the goals.’’ (Citation omitted; internal quotation

marks omitted.)

13 We note that the geographic restriction for the RPS is more restrictive

than the geographic restriction for the VRO program. RECs for the RPS

must be sourced from either ISO-NE or an immediately adjacent control

area; see Allco Finance Ltd. v. Klee, supra, 861 F.3d 93; accord General

Statutes § 16-245a (b); whereas RECs for the VRO program may be sourced

from ISO-NE, NYISO, or PJM.

14 The trial court concluded that there was no such common regulatory

scheme sufficient to create a dormant commerce clause issue. The court

reasoned that to accept the plaintiffs’ argument ‘‘would mean that, if just

a few states adopt a particular marketing requirement for a product, any

state that subsequently decides to adopt a different marketing requirement

for the product may not do so lest it violate the dormant commerce clause.’’

The Office of Consumer Counsel agrees that the plaintiffs failed to demonstrate that a common regulatory scheme exists.

15 The plaintiffs also point to Maine and New Hampshire as allowing RECs
to be used to substantiate renewable energy marketing claims. See N.H.

Rev. Stat. Ann. § 374-F:3 (V) (f) (4) (Cum. Supp. 2019); 65-407-305 Me. Code

R. § 4 (A) (7) (2022). It is true that these states allow for the use of RECs

to satisfy renewable energy backed programs. The New Hampshire statute,

however, does not relate to the marketing of such products. Moreover, to

the extent PURA’s marketing restriction differs from those of Maine and New

Hampshire, the plaintiffs are still able to conduct business in Connecticut

and Maine and New Hampshire. That the suppliers may incur some marginal

additional cost in creating different marketing materials does not rise to

the level of a dormant commerce clause violation. See, e.g., Procter &

Gamble Co. v. Chicago, supra, 509 F.2d 77.

16 The amicus argues that the marketing restriction will burden electric

suppliers because they will be forced to ‘‘either own or enter into a [power

purchase agreement] with a renewable generator to be allowed to market

a ‘renewable energy’ product.’’ The amicus argues that power purchase

agreements are not suitable in the supplier context because ‘‘hedges and

internal efficiencies allow suppliers to gain a competitive edge over utilities

as they serve . . . customer contracts [that are much shorter in duration,

typically six to twenty-four months]. . . . A supplier entering into a [power

purchase agreement] would need to raise its prices to hedge against the

risks of a long-term contract.’’ There is nothing in the record, and the amicus

does not explain, precisely what increased financial burden this would place

on electric suppliers. Moreover, electric suppliers do not necessarily have

to enter into a power purchase agreement; they may choose to market their

[REC only] VRO products in conformity with the marketing restriction.

Accordingly, we cannot conclude that this burden is ‘‘clearly excessive in

relation to the putative local benefits.’’ Pike v. Bruce Church, Inc., supra,

397 U.S. 142.

17 The trial court noted that two Superior Court decisions have addressed

this issue and that one determined that the waiver rule applied and the other

determined that the exhaustion doctrine applied. See Aronow v. Freedom

of Information Commission, Docket No. HHB-CV-15-5017072-S, 2018 WL

650381, *3 (Conn. Super. January 5, 2018) (party’s failure to raise particular

claim before Freedom of Information Commission constituted failure to

exhaust administrative remedy, requiring dismissal of that claim), rev’d in

part on other grounds, 189 Conn. App. 842, 209 A.3d 695 (2019), cert. denied,

332 Conn. 910, 210 A.3d 566 (2019); Gerlt v. South Windsor Planning &

Zoning Commission, Superior Court, judicial district of New Britain, Complex Litigation Docket, Docket No. X03-HHB-CV-03-0522911-S (April 6, 2005)

(39 Conn. L. Rptr. 61, 63) (rejecting argument that failure to raise claim

before planning and zoning commission constituted failure to exhaust administrative remedies).

18 We note that the plaintiffs did, however, raise their constitutional dormant commerce clause claims before PURA.