82020 ENVIRONMENTAL LAW REPORTER 50 ELR 10663
ARTICLE
ENERGY EXACTIONS
by Jim Rossi and Christopher Serkin
Jim Rossi is the Judge D.L. Lansden Chair and Associate Dean for Research, Vanderbilt
University Law School. Christopher Serkin is the Elizabeth H. & Granville S. Ridley, Jr. Chair
in Law, and Associate Dean for Academic Affairs, Vanderbilt University Law School.
New residential and commercial developments
often create costs in the form of congestion and
burdens on municipal infrastruct ure. Citizens
typically pay for infra structure e xpansion associated with
growth through their property taxes, but local govern-
ments sometimes use cost-shifting tools to force developers
to pay for—or provide—new infra structure themselves.1
ese tools are forms of “exactions”—demands levied on
developers to force them to pay for the burdens new proj-
ects impose.2
But local governments often ignore an additional cost:
the burdens growth presents for energy infrastructure.
Energy demand grow th requires new supply but e xpand-
ing power generation is costly. It requires land, access to
transmission lines, and presents a range of potential envi-
ronmental harms. Forcing developers to internalize costs
they impose on energy infras tructu re would encou rage
1. See J C J T E. R, L U
P D R L 318-19 (3d ed. 2013).
2. See, e.g., Mark Fenster, Takings Formalism and Regulatory Formulas: Exac-
tions and the Consequences of Clarity, 92 C. L. R. 609, 611 (2004).
them to incorporate greater consideration of the impacts
of energy supply and energy eciency ex ante.
is Article argues that energy exactions are norma-
tively desirable, evaluates how they can help improve land
use and energy regulation, and assesses the legal impli-
cations and limits of their use. We detail two dierent
forms of energy exactions: one that imposes pre-set prices
on anticipated kilowatt energy demand and one that is
focused on how the timing of a development aects energy
infra structure development (often called “concurrency ”).3
I. The Existing Landscape
A. Land Use Exactions
Zoning and land use controls have become important
tools for nancing municipal infrastructure.4 Sophisti-
cated municipalities treat zoning regulations as oppor-
tunities to compel developers to bear some of the public
costs of development through exactions.5
Exactions include fees in lieu of dedications of land as
well as impact fees to upgrade transportation infrastruc-
ture, fund public school expansions, build or nance a n
expansion of emergency services, a nd even pay for beau-
tication. Sometimes they are imposed through ad hoc
dealmaking; other times they are established through
municipal legislation as pre-set “prices” for obtaining per-
mission to build.
Exactions raise complex policy issues because they
shift the costs of inf rastructure improvements from the
jurisdiction’s tax base as a whole to developers who, in
turn, often pass those costs on to consumers of new
housing or new commercial space.6 Nevert heless, e xac-
3. See, e.g., Timothy S. Chapin, Local Governments as Policy Entrepreneurs:
Evaluating Florida’s “Concurrency Experiment,” 42 U. A. R. 505, 507,
519-27 (2007); Robert M. Rhodes, Florida Growth Management: Past, Pres-
ent, Future, 9 F. C L. R. 107, 119 (2007).
4. See, e.g., R C. E E A., L U C 670 (4th ed.
2013).
5. See, e.g., Mark Fenster, Regulating Land Use in a Constitutional Shadow: e
Institutional Contexts of Exactions, 58 H L.J. 729, 730 n.7 (2007).
6. Cf. Molly S. McUsic, Looking Inside Out: Institutional Analysis and the Prob-
lem of Takings, 92 NW. U. L. R. 591, 626 (1998).
Editors’ Note: The full version of this Article was originally
published in the Cornell Law Review, Jim Rossi & Christopher
Serkin, Energy Exactions, 104 CORNELL L. REV. 643 (2019),
and is reprinted with permission.
This Article was discussed via a Zoom conference on April
3, 2020. The following panelists provided comments on the
Article, in addition to Deron Lovaas whose comment is in-
cluded in this issue: Carl Pechman, Director, National Regu-
latory Research Institute, National Association of Regulatory
Utility Commissioners; and Benjamin Wechsler, Attorney,
Yumkas, Vidmar, Sweeney & Mulrenin, LLC. A video record-
ing of the conference is available at https://www.eli.org/
ELPAR-2020.
Authors’ Note: The authors are grateful for feedback from
participants in workshops at Florida State University, North-
western University, and Vanderbilt University law schools,
and give a special thank you to William Boyd, Lincoln Davies,
Dan Farber, Lynne Kiesling, Carl Kitchens, Felix Mormann,
Ricky Revesz, David Spence, Shelley Welton, and Hannah
Wiseman for their insightful comments on earlier drafts.
Copyright © 2020 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
