This Insights piece is excerpted from the article, Dual Electricity Federalism Is Dead: But How Dead And What Replaces It?, in the George Washington Journal of Energy and Environmental Law.
In a remarkable burst of activity, the U.S. Supreme Court decided three cases in the past year involving the split of jurisdiction between the Federal Energy Regulatory Commission (FERC) and the states in the energy sector. FERC v. Electric Power Supply Association and Hughes v. Talen Energy Marketing dealt with the relationship between FERC and the states in governing the electric grid under the Federal Power Act (FPA). ONEOK v. Learjet involved regulation of natural gas pipelines under the Natural Gas Act (NGA), which, being nearly identical to the FPA, also serves as precedent for decisions involving the electric grid.
The impacts of these decisions will reverberate for years to come. They mark the end of “dual federalism” in electricity law that treated federal and state regulators as operating within separate and distinct spheres of authority, recognizing instead that state and federal initiatives frequently overlap. The Court has provided standards to govern the interaction between FERC and the states going forward, but has also left considerable uncertainty. Thus, these watershed decisions herald a new legal approach to governing the rapid evolution of the modern electric grid, but one in which the precise contours will not be known for some time.
Joel B. Eisen, The Supreme Court's New Electricity Federalism, Daily Environment Report, May 20, 2016, at B-1.