30. Should the interstate company prevail?

B is correct. When the state participates in the economic marketplace, it may decide with whom it wishes to contract without regard to the restrictions of the Dormant Commerce Clause. Here the state is a market participant because it is selling the rights to exploit a natural gas field that it owns. The usual rules of the Dormant Commerce Clause restricting the power of the state to prefer local economic actors over interstate companies therefore do not apply.

A is incorrect. The state does not need to demonstrate a compelling interest in order to justify its decision to accept the local company's bid because it is acting as a market participant, not a market regulator.

C is incorrect. The commitment by the local company that it would pass along to local customers any savings if it was awarded the contract provided a rational basis for the state's selection of the local company, even though the local company's bid was lower than that of the interstate pipeline company.

D is incorrect. Although the state selected the local company's bid over that of the interstate pipeline company, its action did not violate the Dormant Commerce Clause. As discussed above, when the state participates in the economic marketplace, it may decide with whom it wishes to contract without regard to the restrictions of the Dormant Commerce Clause.