*1 NEW YORK v. FEDERAL ENERGY et al.
REGULATORY COMMISSION et al. No. 00-568. Argued October 2001—Decided March 2002* 00-809, Marketing, Enron Power Inc. v. Federal *Together with No. al., Energy Regulatory Commission et also on certiorari to the same court.
Lawrence G. Malone the cause argued and filed briefs for State of New York et al. in No. petitioners 00-568 and a brief for State Public Service respondents Commissions in No. 00-809. With him on the briefs were Jonathan D. Carl F. Patka. Feinberg
Louis R. Cohen the cause and filed briefs for argued peti- in tioner No. 00-809 and a brief for Enron Power respondent in Inc., No. 00-568. With him Marketing, on the briefs were E. Jr., Joseph Frankel, Jonathan Killory, J. I. Jay Palansky, Watkiss, D. R. Jeffrey Hartsoe. Briefs Joseph re- for peti- support spondents Rule 12.6 under Court’s Springer by filed R. were James van tioner No. 00-809 Supply Associa- for the Electric Power L. Miller Steven Electricity by for the Consumers tion; and D. Sckotland Sara respondents under this et Briefs for Resource Council al. support petitioners in No. 00-568 12.6 in Court’s Rule Bogorad, by Cynthia McDiarmid, S. were filed Robert C. Policy Hopkins for Transmission Access and Peter J. Study Action Group; A. Mullett for Citizens and Michael Indiana, Coalition of Inc. argued
Deputy Kneedler the cause Solicitor General respondents for re cases. With him on the brief both Energy Regulatory spondent were Acf- Federal Commission Cyn ing Underwood, Schlick, Solicitor General Austin C. Cole, Marlette, thia A. and Timm L. Abendroth. Charles G. Loughran, A. Comer, Alice E. H. and Barbara Hin- Edward respondent Institute, filed for the Electric din a brief Edison cases.† in both delivered the
Justice Stevens Court. opinion important concerning questions raise These cases two Energy Regulatory of the Federal Commission (FERC Commission) electricity. transmission of public utility if separates First, e., “unbundles”—i. —the cost of transmission from cost electrical when *4 billing may require utility its retail customers, competitors’ electricity transmit its lines on the same utility applies energy terms that the to its own transmis- †Bohdan R. Pankiw A. John Levin filed a for the Pennsylvania brief Public Utility Commission as amicus curiae urging affirmance. Briefs of amici curiae filed were for the State of et by California al. Lockyer, Bill Peter Siggins, General, Attorney Attorney Chief Deputy Frank, General, Beatus, Rick General, Morris Chief Assistant Attorney Cohen, General, Senior Gary M. and William Julian Attorney Assistant II; and for Electrical by Charles J. Cooper. et al. Engineers Second, must sions? that on FERC impose requirement utilities that continue to offer “bundled” retail sales?
In Order No. issued in 1996 888, with the stated purpose of Wholesale Competition Access “Promoting Through Open Transmission Public Utili- Non-Discriminatory by Services ties,”1 answered the first and no yes question the second. It its based answers on of the Fed- provisions (FPA), eral Act Power as added §213, 847, 49 Stat. by seq., et as amended, §824 16 U. C.S. enacted in 1935. Whether or the 1935 foresaw the dramatic Congress in the that have power occurred recent changes industry decades, we are as was the Court of persuaded, Appeals, construed its properly statutory authority.
I In FPA law, when the became most was sold by utilities that had vertically constructed integrated their own lines, transmission and local deliv- power plants, there were systems. some ery Although interconnections utilities, among most local operated separate, monopolies to state or local Their sales were “bun- subject regulation. dled,” that consumers meaning that in- paid single charge cluded both the cost of the and the of cost delivery. utilities Competition among was not prevalent.
Prior
the States
broad
possessed
reg-
utilities,
ulate
but this
was limited
public
our
cases
by
holding
of
impact
Commerce Clause
negative
prohibits
burdens interstate
regulation
directly
commerce.2 When confronted with an attempt by Rhode Is-
&
Preambles,
FERC Stats.
Regs., Regs.
1996, 31,036,
¶
Jan. 1991-June
(1996).
31,632,
p.
61 Fed.
Reg.
Order No. 888 also
with the
deals
recovery
utilities,
“stranded costs”
but this
aspect
the order is
not before us.
2For
example,
cases
involving
interstate
natural
gas, we held that a
State could
direct sales to consumers even
mains,
when the
was
Pennsylvania
Gas Co. v.
gas
drawn from
Public
Serv. Comm’n N.
(1920);
Public Util. Comm’n
land to charged which resold to a Massachusetts company, selling electricity we Massachusetts, Attleboro, to the of the city a “direct bur- because invalidated the regulation imposed Comm’n Public Util. interstate commerce.” den upon of Co., (1927). Elec. I. Attleboro Steam & 83, R. 273 S. 89 U. v. “Attleboro known as gap,” has become what Creating transaction was subject interstate we held that Massachusetts, but Island either Rhode regulation Id., vested in of Congress.” the exercise the power “by at 90. authorized 1935,3 the FPA in Congress
When it enacted reach in areas of electricity beyond federal regulation Attleboro, but it identified as the state such gap power, some areas that also federal coverage previously extended g., id., e. see, at 87-88 (explaining, had been state regulated, affect enactment, to the FPA’s regulations prior if were they interstate transactions permissible ing utility commerce). FPA The interstate did not burden directly (FPC), Power the Federal Commission prede charged “to effective FERC, cessor of federal regulation provide electric business of transmitting selling expanding Co. v. States Util. commerce.” interstate Gulf 201(b) FPC, (1973). §in 747, 758 411 U. S. Specifically, as includ FPC’s FPA, Congress recognized in interstate com “the of electric ing energy in inter- merce” and sale of at wholesale “the Landon, (1919), Kan. v. could not regulate 249 U. S. but that State 236 independent from was sold to producers rate which out-of-state gas ex rel. Bar- consumers, Missouri for resale local distributing companies Co., (1924). rett Gas v. Kansas Natural 265 S. U. Utility II The FPA was enacted Title the Public Act regulated I of Act —not issue Utility Stat. 847. Title the Public here — a large practices holding companies financial controlled public number of utilities. *6 824(b). 16 Furthermore, § §205 commerce.” U. S. C.
of the FPA other prohibited, unreasonable among things, rates and undue discrimination “with trans- respect any mission or sale to the of the subject Commis- sion,” 16 U. S. C. §206 and §§824d(a)-(b), the FPC gave to correct such unlawful power 16 U. S. C. practices, 824e(a). § 1935,
Since in the especially 1970’s and beginning 1980’s, the number of has increased electricity suppliers dra- have matically. advances made it Technological possible generate in different electricity and in efficiently ways smaller In addition, plants.4 unlike the local net- works of the is now delivered over past, electricity three networks, in major the continental United States. “grids,” Two of these “Eastern Interconnect” and the grids —the “Western Interconnect” —are connected to each other. It is in Hawaii and Alaska and only on “Texas Interconnect”— which covers most State —that is distrib- electricity uted within a In entirely State. the rest of the single coun- that enters try, electricity any becomes grid immediately of a vast part that is pool energy constantly moving interstate result, commerce.5 As a it is now possible 888, In Order FERC noted No. that the optimum size of electric gener (with ation plants has shifted from the larger, megawatt plants 10-year time) (with lead smaller, to the past 50-to-150 megawatt plants time) 1-year lead These present. smaller can plants en produce at ergy per kilowatt-hour, a cost of 3-to-5 cents opposed to the older plants’ production cost of 4-to-15 888, cents per kilowatt-hour. Order No. 31,641. Respondent See Brief for years, Over the 4-5. FERC has de scribed the interconnected in a grids number of proceedings. For exam ple, in the FPC considered whether Power Light & Florida Co. (FPL) what utility attached to was then the for the regional grid south —a eastern United energy States —transmitted commerce as result of that attachment. The FPC concluded FPL’s transmissions were in interstate commerce: “[S]ince electric can energy be delivered virtually instantaneously 186,000 when needed a system on at a speed dis- transmit power companies long tances at a low As FERC has “the nature cost. explained, of coordination transactions” have enabled magnitude utilities to substan- more operate efficiently by transferring tial amounts of from in one electricity plant plant area, but also from as market conditions region region, 31,641. fluctuate. Order No. these advances in that have increased
Despite technology the number of made it have electricity providers possible for a “customer Vermont from an [to] purchase *7 in California or a environmentally friendly power producer Transmission Access Oklahoma,” in cogeneration facility Policy Study Group FERC, (CADC v. 225 667, F. 3d 681 2000) (case below), utilities retain public ownership that must lines be used their competitors to deliver electric to wholesale and retail customers. energy The utilities’ control of transmission facilities them the gives either to refuse to deliver com- power energy produced by or to deliver on terms and condi- petitors competitors’ power second, miles per such can be and to energy is transmitted FPL when from needed out-of-state generators, and turn can be and transmitted demands; from FPL to meet help out-of-state . . . there is a cause relationship effect energy electric occurring throughout every genera FPL, tor and point on the Corp, and Southern Georgia, systems which to, constitutes interstate by, transmission of and from (1967). FPL.” In Co., 544, re Florida Power & 37 P. Light F. C. 549 This Court found the FPC’s findings sufficient to establish FPC’s jurisdic (1972). Co., tion. FPC 453, 469 v. Light Florida Power & 404 U. S. As terms, amici explain in less technical “[ejnergy onto a flowing power or network grid energizes the entire grid, and consumers then draw undif- ferentiated energy from that grid.” Brief Electrical et Engineers al. result, amici, Amici 2. Curiae a explain As any activity on the inter- grid affects the rest of the grid. Ibid. Amici dispute the States’ contentions that functions “the electricity water flows way through pipe controlled, blood cells flow through a vein” and “can be directed and be, traced” as these calling substances can metaphors such “inaccurate Id., 2, and highly at misleading.” 5.
9 tions less favorable than those to their own trans- they apply g., missions. E. Order No. 888, 31,643-31,644.6 has addressed these conditions Congress evolving market on two occasions since 1935. primary First, enacted the Public Poli- Congress Utility Regulatory (PURPA), cies §2601 Act 92 Stat. 16 3117, U. S. C. seq., et to of new promote development facili- generating ties and conserve the use of fuels. fossil Because the tra- ditional utilities controlled the were transmission lines and reluctant from power facilities,” “nontraditional purchase PURPA directed rules utili- promulgate requiring ties to from purchase electricity “qualifying cogeneration FERC Missis- and small facilities.” v. power production sippi, §824a-3(a). (1982); 456 U.S. see 16 U.S.C. later,
Over decade enacted the Congress Energy Policy Act of 1992 (EPAct), 106 2776. Stat. This law authorized order individual utilities to provide transmission (i. e., services unaffiliated wholesale to “wheel” generators on a basis. power) §§ See U. S. C. case-by-case 824j-824k. under the Exercising EPAct, FERC ordered a to “wheel” utility for a wholesale complaining compet- itor 12 times, in Order No. separate proceedings. *8 31,646. soon concluded, however, FERC that these individ- ual were too and proceedings time to costly consuming pro- vide an for undue adequate remedy discrimination through- Ibid. out the market.
6In to addition utilities’ policing anticompetitive behavior the through various statutory that provisions explicitly address the electric industry, below, discussed more detail the Government has also used the antitrust laws to this end. For States, in Otter Tail Power Co. v. United example, (1973), U. S. 366 the Court Government permitted the to seek antitrust which, against utility remedies company among other refused to things, sell power at to wholesale some municipalities and refused to transfer Id., competitors’ over its power lines. at 368. The Court concluded that the preclude FPA’s existence did not the of the antitrust applicability laws. Id., at 372. the initiated rulemaking proceed-
Thus, order under the presently to the led adoption ing that would review. a rule “require FERC proposed facilities used controlling utilities and/or owning public commerce in interstate transmission of electric for nondiscriminatory open- on file tariffs have providing Rule- Notice Proposed transmission services.” access 1988-1999, Stats. & Regs., Proposed Regs., making, NPRM). (hereinafter 60 Fed. 32,514, 33,047, Reg. ¶ p. “to rule was encourage The stated proposed purpose an transition orderly lower rates by structuring 33,048. The NPRM to bulk markets.” power competitive NPRM stated: is bulk markets
“The opening key competitive power vital link Transmission is the transmission services. up To achieve benefits between sellers buyers. markets, all wholesale bulk robust, competitive power trans- have access must and sellers equal buyers cannot take efficient trades Otherwise, mission grid. will costs. bear unnecessary place ratepayers transmission Thus, market control of through power Un- impediment single competition. greatest used this market is still being today, questionably, power block used, or can be discriminatorily competition.”7 Id., 33,049. NPRM, § 206 of the FPA authorizes explained Later utili discriminatory and found: “that remedy unduly practices,
FERC to mar controlling possess ties facilities substantial owning or firms, that, have and will continue profit maximizing they ket power; market in order to maintain and increase to exercise that market share, competi will thus their customers access deny wholesale tively unduly discriminatory and that priced generation; these *9 will of lower practices the substantial benefits deny consumers 33,052. prices." NPRM
Rather than its grounding authority legal Congress’ more recent FERC cited electricity legislation, §§205-206 the 1935 FPA —the provisions concerning power to remedy unduly discriminatory practices providing —as for its §§824d- See 16 U. S. authority C. rulemaking. 824e.
In after on NPRM, comments receiving issued No. It Order 888. found that electric utilities were in the “bulk markets,” in discriminating violation of § FPA, 205 of the either inferior access to by providing their transmission networks or no at all access to third-party wholesalers of Order No. 31,682-31,684. In- power. under it §206, voking con- prescribed remedy three that are taining parts relevant. presently First, ordered “functional of whole- unbundling” Id., sale and transmission 31,654. services. generation FERC defined “functional each unbundling” requiring rates for its utility separate wholesale generation, transmission, and services, and to take ancillary of its own wholesale sales and under a purchases single gen- eral tariff and to to itself others. applicable equally
Second, FERC a similar imposed access open requirement on unbundled retail transmissions in interstate commerce. the NPRM had not envisioned Although applying open access transmissions, retail requirements but rather “would have limited eligibility to wholesale transmission cus- tomers,” FERC concluded that was ultimately “irrelevant to the Commission’s whether re- customer the unbundled transmission ceiving service in interstate commerce is a wholesale or retail Id., customer.” at 31,689. Thus, a“if offers public utility voluntarily unbundled retail access,” if State unbundled requires access, “the affected retail customer must obtain its unbundled transmis- *10 tariff transmission under a non-discriminatory sion service Ibid.8 with file the Commission.” on the access that open Third, proposal FERC rejected transmission component “the should apply requirement 31,699. Id., Although at of retail sales.” bundled and transmission of retail that “the unbundling noted be achieving comparabil- . would . . helpful generation not was “necessary” that such unbundling it concluded ity,” that could issues” would raise “difficult jurisdictional in other “more considered” proceedings. be appropriately Ibid. issues, FERC distin-
In its analysis jurisdictional It transmissions sales. explained: between guished of en over electric sales “[Our statutory jurisdiction] However, when to wholesale sales. extends only ergy into that are is broken two a retail transaction products two an different sold suppliers: (perhaps separately we electric and a transmission supplier supplier), energy lines In this situa believe the jurisdictional change. tion, over sale the state retains clearly transmission serv However, unbundled power. ‘transmission inter ice involves provision which, FPA, state commerce’ under the is exclusively Therefore, Commission. within the when bundled retail sale is unbundled and becomes transactions, transmission and sales separate within the Fed transmission transaction falls resulting Id., eral 31,781.9 at sphere regulation.” terms, rates, While it that all unbun concluded “the conditions of dled were to its jurisdiction, transmission service” FERC stated subject it “give regarding would deference to state recommendations” regulation of are transmissions “when state recommendations con 888, 31,689. with open policies.” sistent our access Order No. it did assert to order retail explained “jurisdiction FERC also consumer,” id., 31,781, and that directly an ultimate the service had “authority delivering States In to numerous response petitions rehearing and clarification, FERC issued 888-A, Order No. Preambles, Stats. & July 1996-Dec. Regs., Regs. 31,048, Fed. 30,172,62 ¶ 12274. With to vari- p. Reg. respect ous to its challenges jurisdiction, acknowledged sponte, sua have the order, did not “authority open- *11 access transmission utilities,” services but ex- by public § that of the FPA plained it to rem- explicitly required the undue discrimination that it edy had found. Order §824e(a). 888-A, No. at 30,202; see 16 U. S. C. also its rejected failure assert argument jurisdiction over bundled retail transmissions was inconsistent with its of assertion over unbundled retail jurisdiction transmissions. it did not believe that repeated explanation (i. e., of bundled retail transmissions the “func- regulation transmissions) of tional retail “was unbundling” necessary,” and stated that such again would raise seri- unbundling ous 888-A, 30,225. No. questions. Order at jurisdictional not, however, FERC did state that had no regu- end users. . . regulation . State power production of most virtually all distribution consumption of clearly distinguish- from this able Commission’s to ensure responsibility open and non- discriminatory interstate transmission service. Nothing adopted by the Commission today, including its of interpretation its authority over retail separate transmission or how the distribution and func- tions and assets unbundled, are discerned when retail service is is incon- Id., sistent with traditional state regulatory authority in this area.” at 81,782-31,783.
With “Commission-jurisdictional respect distinguishing facilities used for transmission in interstate commerce” from “state-jurisdictional local facilities,” id., 31,783, distribution at FERC identified seven relevant fac- id., tors, 31,771,31,783-31,784. at the state Recognizing interest main- taining facilities, control of local distribution FERC further explained that, “in of instances unbundled retail that occurs wheeling as a result of a state retail access we will program, defer to recommendations by state regulatory authorities where concerning jurisdictional to draw line facilities____” under the Commission’s technical test for local distribution Id., 31,783-31,785. at Id., retail sales. of bundled late transmission component that States Rather, reiterated 30,225-30,226. at sale of stated have power, . . . arises result, of that, assertion as a “[o]ur com- in interstate if retail transmission the [unbundled] a occurs or as result merce voluntarily public utility Id., 30,226. retail program.” II , were No. 888 for of Order A review number petitions for Dis- consolidated Court hearing Appeals a host of After objections, trict Columbia. considering of the order. most the Court of upheld provisions Appeals it affirmed FERC’s jurisdictional rulings Specifically, at 681. 3d, F. in the cases. are issue present first that the access The open Court explained Appeals and wholesale both retail in the orders —for requirements *12 find- on individualized transmissions —were “premised but of discrimination transmission providers, by specific ings of problem on a fundamental FERC’s identification systemic Id., held FERC’s factual in the at 683. It industry.” and 206 of §§205 and that determinations were reasonable mar- the FPA authority Commission prescribe gave ketwide for marketwide remedy problem. Interpreting the transmis- cases involving Circuit precedent primarily — g., Distributors v. e. Associated Gas sion of natural gas, FERC, (CADC 1987) of F. 2d Court Appeals —the concluded that even FERC’s general though made “limited,” order access an excep- was statute open 3d, 225 F. tion “where finds undue discrimination.” at 687-688. over
In of “Federal State Jurisdiction discussion Versus Services,” id., of 690-696, the Court Transmission Appeals The also endorsed FERC’s Court Appeals reasoning. com- first of the state addressed the regulatory complaints far” 888 “went too missions that Order No. by going beyond of wholesale transactions and regulation “asserting] ju- Id,, risdiction over all unbundled retail transmissions.” 691,692. The Court of concluded that the lan- Appeals plain §201 of the FPA, which this Court construed guage has broadly,10 supported transmissions regulation commerce that were of unbundled retail part sales, §201 over the gives “transmis- jurisdiction sion of electric in interstate commerce.” U. S. C. 824(b)(1). § if the Even FPA were the Court of ambiguous, that, Appeals explained given technological complexities of the national it would have deferred grids, to the Commis- sion’s of §201 “as interpretation over jurisdiction giving both wholesale and retail transmissions.” 3d, 225 F. at 694.
The Court of next addressed the Appeals complaints transmission-dependent producers wholesalers Id., at 692. Order No. 888 did not far “go enough.” The Court of was not that FERC’s Appeals assertion persuaded over jurisdiction unbundled retail transmission required to assert over jurisdiction bundled retail transmis- Id., sions or to mandate of retail unbundling transmissions. at 694. that the FPA Noting “clearly contemplates ju- risdiction local over distribution facilities and sales,” the Court of held: Appeals
“A
could
construe
regulator
reasonably
transmissions
bundled with
generation
services and sold
delivery
to a consumer for a
as either transmission
single charge
services in interstate commerce or
anas
integral compo-
nent of a retail sale. Yet FERC has
one, while the states have
over the other.
FERC’s decision to characterize bundled transmissions
*13
of
retail sales
part
subject
there-
jurisdiction
fore
represents
statutorily
choice to
permissible policy
[U.
which we must also defer under Chevron
A.S.
Inc.
Co.,
FPC
v. Florida Power & Light
(1972);
See
Jersey
v. Natural
Defense
(1984)].” Id.,
842-843
at 694-695.
837,
granted
importance
proceeding, we
Because of the
(collectively
petition
of
et
the
of the State New York
al.
both
York)
jurisdiction
questioning
of
assertion
FERC’s
New
petition of
the
unbundled retail
transmissions and
(Enron),
Marketing,
questioning FERC’s
Enron Power
Inc.
transmis-
over bundled retail
refusal to assert
(2001).
ques-
two
address these
sions.
As the however, Court industry changed of the electric has the enactment of since “neatly the FPA, when the universe was divided spheres into 3d, of retail versus sales.” 225 F. wholesale explained, plain Appeals As the at 691. Court also language readily supports juris- the FPA claim 201(b) diction. of the FPA states that FERC’s Section *14 jurisdiction includes “the energy transmission of electric energy interstate commerce” and “the sale 824(b). § at wholesale in interstate commerce.” U. C.S. targeted by The unbundled transmissions are indeed energy transmissions of “electric in interstate com- merce,” grid. because of the nature of the national There language limiting no is the statute FERC’s transmission jurisdiction to although market, wholesale the statute does limit sale to that at wholesale. ibid.; Light See cf. FPC Co., v. Louisiana Power & U. S. (1972) (interpreting provisions 621, 636 similar Natu- 717(b), § ral Gas juris- Act, 15 U. C. S. mean that FPC “applies 'transportation’ regardless diction to interstate gas transported ultimately of whether the sold retail or wholesale”). statutory
In language, the face of clear New York ad- arguments support vances three of its submission that the jurisdictional bright statute draws a line between wholesale transactions retail transactions. York First, New con- Appeals applied tends that Court an erroneous stand- ignored presumption ard of against review because pre-emption law; federal state second, New York claims statutory language legislative other history shows congressional safeguard intent to pre-existing regula- state delivery tion of the to retail customers; and third, argues York New that FERC over retail impede transmissions would policy. sound These arguments unpersuasive. are Presumption against
The Pre-emption Pre-emption of state law quite federal law can raise two legal questions. different The Court has most often stated against a “presumption pre-emption” controversy when a scope concerned not the of the Federal Government’s author- ity displace given action, state but rather whether a with, displaced by, conflicts and thus has been authority. g., See, e. Government of Federal the existence Laboratories, County Medical Hillsborough Automated v. *15 (1985) cases); Med see also (citing 707, 715 Inc., 471 S.U. (1996); Cipollone 470, 485 Lohr, 518 U. S. tronic, Inc. v. (1992). In such Group, 504, 518 Liggett Inc., U. S. v. 505 assumption “‘start[s] with the situation, a the Court to not be powers were police of the historic States the pur manifest superseded the clear and . that was . . unless ” Hillsborough County, atS., 715 pose Congress.’ 471 U. of (1977)). Packing Co., 519, 525 (quoting 430 U. S. v. Rath Jones question pre the cases, however, are not because These such validity conflicting law state a the of sented does concern regulation. “pre-emption” arises concerns in context which The other agency may pre-empt state law the a rule “that federal congressionally acting scope of and within the when if it literally [for] delegated agency has no authority[,] . an . . validly legisla- power pre-empt the act, to let alone enacted Congress sovereign tion of a and until confers State, unless FCC, power upon 476 it.” Pub. Louisiana Serv. Comm’n v. (1986). we confront This is the of case U. sort S. power. defining proper of the federal Such scope here— against pre-emption,” “presumption a case does not involve a requires argues, to as New but rather us be certain York authority agency. As Congress has conferred on the question— explained, way to we have the best answer such power may in of i. whether be an area e., federal exercised pre-existing regulation to the nature and examine —“is scope granted Congress agency.” of the to the In interpret words, we to de- Ibid. other must statute Congress given termine whether FERC the has way any presumption act do one has, as and we so without or the other. gives jurisdic- above,
As noted the text FPA energy in tion over the “transmission of electric interstate energy in commerce and at wholesale ... sale electric 824(b). § commerce.” U. S. C. The references “transmission” commerce “sale” at wholesale were §201 made when statute it was enacted in part (c) (d) 1935.11 § Subsections of 201 explain, respectively, of the terms “transmission” and “sale electric meaning at wholesale.”12 This text thus energy statutory unambigu- authorizes FERC to assert over two ously sepa- §201 201(a), This found reference is twice in of the FPA. Section 824(a), § codified in 16 U. S. C. states full: “It is declared that the busi- of transmitting ness and selling electric energy ultimate distribution interest, is affected public with public and that Federal regulation of matters relating generation the extent in this provided subchapter III subchapter of this and of that chapter of such business which part consists of the transmission interstate commerce and *16 energy the sale such in wholesale interstate commerce is necessary of interest, however, in public such Federal regulation, only to extend to (Em- subject those matters which are not to regulation by States.” added.) phasis 201(b)(1), 824(b)(1), §
Section as U. codified in 16 S. C. states in full: “The of the transmission provisions this to electric subchapter apply shail of energy in interstate commerce and to the sale electric at whole- energy of commerce, sale in interstate (2) except but as provided in paragraph shall any to apply other sale of energy electric or deprive a State or State commission of its lawful authority now exercised exportation over the of hydroelectric which energy is transmitted across a State line. The Com- jurisdiction mission shall have all over facilities for such transmission or of sale electric but shall not energy, have jurisdiction, except as specifically provided in this subchapter and III of subchapter this chapter, over facili- for ties used the generation of electric or energy over facilities used in local distribution or for only the transmission of electric in intra- energy commerce, state or over for facilities the transmission of electric energy added.) wholly by consumed the transmitter.” (Emphasis 201(c) Section FPA, 824(c), § of the in codified 16 U. S. C. explains that the purpose “[f]or of this subchapter, be energy electric shall held to be transmitted in interstate commerce if transmitted from a State and at any point thereof; consumed outside only but insofar as such transmis- sion place takes §201(d), within the United States.” Finally, as codified 824(d), § in 16 U. S. C. states that the “term ‘sale wholesale’ when subchapter, used this means a sale of electric energy any to person for resale.” that It true rate selling. transmitting activities — the sale has been over specifi- FERC’s power jurisdiction However, FERC’s wholesale market. confined to the cally transmissions no contains such over electricity FPA limitation. Because the authorizes FERC’s juris- to transmissions, diction without interstate regard to whether are sold a reseller the transmissions directly is valid. consumer, to a exercise this Legislative History this discredit straightforward analysis
Attempting to nu York calls our attention New statutory language, that merous statements history indicating legislative to do more than close the 1935 intended no Congress “Attleboro federal regulation gap,” by providing wholesale, transactions the Court in Attle had held to be the reach of state beyond boro, and to S., at 89. To U. argument, support did not intend to demonstrate the 1935 sup Congress New York state-held plant any traditionally jurisdiction, added to the FPA the course points language that evidences a clear intent legislative process preserve 201(a) § over local facilities. For example, is “to those federal extend provides regulation which matters are not the States.” subject regulation 824(a). 201(b) § § And no U. S. C. states that FERC has *17 “over used for of electric facilities the jurisdiction generation or facilities in local over used distribution or energy only commerce, the in transmission of electric intrastate energy con facilities for the transmission of electric energy 824(b). § sumed the transmitter.” S. C. U. wholly by It is FPA in 1935 closed clear the enactment of the “Attleboro in- the federal of by authorizing regulation gap” terstate, wholesale of subject sales electricity precise —the Attleboro. in of matter the the States beyond jurisdiction 201(a) § And from it is true that the language above-quoted with the is consistent States’ reserved concerning powers the view that the FPA no than a gap-closing was more stat- perfectly ute. It original is, however, clear that the FPA good gap did a than close deal more in state identi- fied in The Attleboro. FPA authorized regulation federal not of beyond wholesale sales that had been the reach power, of regulation state but also the of wholesale sales that subject had previously been regulation. g., See, state e. (noting, Attleboro, prior atS., 273 U. 85-86 to the enactment aspects FPA, that States could long regulation directly sales, wholesale as such did commerce). importantly, burden interstate More as dis- cussed regulation above, the FPA authorized federal of in- terstate transmissions as well as of interstate wholesale sales, and such transmissions were not of concern in Attle- catalyzed boro. if Thus, even Attleboro the enactment of the FPA, does not define the Attleboro outer limits the stat- coverage. ute’s 201(a) § portion
Furthermore, cited New York concerning preservation existing actually consistent with Order No. 888, because unbundled energy interstate transmissions of electric have never been 824(a). § “subject regulation by States,” 16 U. C.S. Indeed, unbundled develop- transmissions have been a recent explained, ment. As FERC at the time that the FPA was enacted, transmissions were bundled with the itself, was delivered to both retail wholesale and complete, package. customers as a bundled Order No. 888, at 31,639. Thus, in 1935, there was neither state nor federal regulation of what did not exist.13 in recognized point reaching jurisdictional conclusion: than “Rather claiming jurisdiction, ‘new’ the Commission is applying the same statutory framework to a business environment . which .. sales and transmission service provided separate are transactions. . . . types Because of products these and transactions prevalent were not the past, the jurisdictional issue did before us not arise ... the Com mission be cannot viewed as ‘disturbing’ of state reg prior ulators the Attleboro case.” Order No. 888-A, to and after 30,339-30,340. *18 22 precise state reserved we have described Moreover, ” “ 201(a) § ‘policy mere declaration’ in as a
powers language “ jurisdiction, nullify specificgrant of a clear and ‘cannot with the grant particular seems inconsistent if the even v. Cal. Edi- broadly expressed purpose.’” FPC Southern (1964) (quoting 215 Co., Connecticut U. S. son (1945));see also Light FPC, 515,527 Co.v. 324 U. S. & Power Cal., 345 U. S. Util. States v. Public Comm’n United (1953). such “a clear the FPA contains Because trans- grant jurisdiction” specific FERC over prefatory language cited missions, above, the as discussed jurisdiction. does not undermine by New York point legislative his- out that the York is correct New Congress’ describing intent tory replete with statements The senti-. jurisdiction preserve local facilities. over expressed incorporated in the in those statements is ment 201(b) § in 16 FPA, as codified sentence of second §824(b), provides: S. C. which U. all facili-
“The shall have Commission energy, ties sale of electric but for such transmission or except pro- jurisdiction, specifically have shall not subchapter chap- subchapter vided in III this generation en- ter, of electric over facilities used for ergy or or over facilities used local distribution energy in intrastate com- of electric the transmission for the of electric merce, or over facilities wholly by the transmitter.” consumed arguably the States’ Yet, No. 888 not even affect Order does subjects: generation facilities, of these over three commerce, con- transmissions intrastate transmissions by No. does discuss local sumed transmitter. Order argues that, result, New York as a facilities, distribution improperly “over FERC has invaded States’ 824(b). § distribution,” S. facilities used local 16 U. C. attempted However, to control local distri- has *19 bution facilities No. Order 888. To the through contrary, has made clear that it does not have over jurisdiction such No. facilities, Order at 31,969, has set merely forth seven-factor test for facilities, these with- identifying id., out them, at 31,770-31,771. purporting New York also states that the correctly legislative history demonstrates interest Congress’ retaining juris- diction over retail But sales. FERC has again, carefully such avoided jurisdiction, assuming noting repeatedly “the not FPA does the Commission give jurisdiction Id., of 31,969. sales retail.” Because federal has been asserted over unbundled transmissions, New York retains of the ultimate energy. of And, sale the as below, discussed FERC did assert over bundled retail transmissions, leaving New York with control over even the transmission compo- nent of bundled retail sales. of
Our evaluation the extensive re- legislative history viewed in New York’s brief is affected importance in the that have changes electricity industry occurred since the FPA was enacted in 1935. No to these cases party has evidence presented foresaw the Congress industry’s transition from of local, one self-sufficient to one monopolies of nationwide transmission. competition Nor is there evidence that the 1935 foresaw the Congress possi- bility transmissions unbundling electricity from sales. More there no evidence if had importantly, Congress foreseen the to which has developments responded, would have Congress objected FERC’s interpretation the FPA. Whatever effect persuasive legislative history have other contexts, may here is not particularly helpful because of the interim in the electric developments industry. Thus, we are left with the text clearest statutory guid- ance. That text unquestionably supports jurisdic- tion to order (which of wholesale unbundling transactions regu- as to questions), as well us parties before none electricity retailers. transmissions late the unbundled Policy Energy Sound argues jurisdiction over unbundled York that FERC
New Spe- energy policy. impede will sound retail transmission overseeing interest in cifically, New York cites States’ siting of new lines and the maintenance ar- force of these It is for us to evaluate the lines. difficult analyzed separately guments has not because New York *20 transmis- impact control over unbundled the loss of opposed transmis- loss of control over retail sions, as to the only regulated unbundled generally, sions and FERC has recognized that Moreover, has transactions. even significant over matters control local States retain g., See, e. Order when retail are unbundled. transmissions Congress (“Among things, left 888, No. at 543 other 31,782,n. authority generation transmis- to the to States (“This siting”); will not Final Rule id., 31,782, sion at n. authority upon affect or in such traditional encroach authority including issues, re- areas over local service integrated liability service; administration of re- local utility buy-side planning and demand-side deci- source authority [demand-side management]; including sions, DSM portfolios; utility generation and resource impose nonbypassable to cost distribution retail stranded charges”). Institute, We do note that the Edison Electric party represents cases, which is to these and which approximately its members own 70% of the transmission country, objec- facilities in does not endorse New York’s persuasive- regardless their And, tions Order No. 888. policy arguments ness, New York the sort of forwarded properly to the Con- are addressed to the Commission or gress, g., FPC, this E. Tribe v. Chemehuevi Court. (1975). 420 S.U.
IV to FERC’s order from the direction, Objecting opposite the FPA Enron FERC the argues gives apply access to bundled retail remedy transmissions open and, given FERC’s of undue discrimina- electricity, findings tion, FERC had a so. In do duty making argu- Enron claims ment, that FERC held that it had persistently no the relief that Enron seeks.14 That grant is incorrect: FERC chose not assumption to assert such ju- risdiction, but it did not hold itself to claim powerless juris- Indeed, diction. reserved decision on the explicitly issue that Enron jurisdictional See FERC decided. claims Order No. 31,699 that Enron’s (explaining position raises “numerous difficult issues that we be- jurisdictional are lieve more considered when the appropriately Commis- sion reviews unbundled retail transmission tariffs that may come in the before us context of a state retail wheeling pro- Absent Enron’s flawed gram”). assumption, ruling is clearly acceptable.
14See, e. g., (“FERC 00-809, Brief Petitioner No. 12p. . . . held id,, itself powerless majority to address vast problem”); (“FERC determined, however, that it did not have authority to extend its *21 unbundling functional remedy sales”); to for transmissions bundled retail (“FERC’s id., at 18 decision it did have jurisdiction not to apply [an open access to transmission for tariff] transmissions bundled retail sales (“[FERC law”); id., was contrary to at 20 found] no when retail”). cost of the transmission is bundled with the cost of at power agree FERC to
Surprisingly,
seemed
with Enron’s
characterization
E.
its
at
in
own
g.,
holding
places
some
its
for
brief.
Brief
Respondent
(“The
As to for two reasons 888-A, refusing No. FERC Order gave transmis- retail to bundled its access extend remedy open not “nec- relief was that such FERC First, sions. explained 888-A, at see also Order No. 888, 31,699; No. Order essary.” of bun- that the Second, FERC noted 30,225. regulation at difficult jurisdic- numerous “raises transmissions dled in the be not need to resolved present issues” that did tional 888-A, Order No. 31,699; No. at see also context. Order valid of these reasons 30,225-30,226. sup- Both provide bundled retail to FERC’s decision regulate port transmissions. it that was to determination
First, with respect bundled retail transmissions to include not “necessary” it was that what mind must be remedy, kept exactly with in the first FERC place: problem sought remedy wholesale as Enron market. FERC’s findings, power of their concerned electric utilities’ use itself recognizes, their wholesale access customers market “‘deny power “‘deny- electric thereby competitively priced generation,’” lower consumers the substantial benefits of ing] ” 12-13 00-809, Brief for Petitioner No. pp. prices.’ (quot- added). 33,052) NPRM The title Order (emphasis ing Wholesale Com- 888 confirms No. FERC’s focus: “Promoting petition Trans- Access Non-Biscriminatory Through Open 31,632 . . . No. mission Services .” Order (emphasis added). Indeed, outset, from the identified its has, wholesale as power goal competitive “facilitat[ing] added). 33,049 markets.” NPRM (emphasis it found, To wholesale discrimination remedy chose all wholesale transmissions. It also regu- transmissions, lated unbundled retail was within its supra. to do. See Part because III, However, merely those believed that were steps appropriate remedy *22 not, discrimination market does wholesale electricity Enron lead to the conclusion that as regulation alleges, of bundled was transmissions as well. “necessary” Because determined it that the ordered con- remedy stituted a sufficient to the FERC had response problems identified in the wholesale market, § FERC had no 206 obli- to bundled retail regulate transmissions or to order gation universal unbundling.15 course,
Of be true that FERC’s may findings concerning discrimination the wholesale market electricity suggest that such discrimination exists the retail mar- electricity ket well, as Enron Were to alleges. investigate discrimination and make alleged findings concerning undue discrimination in the retail market, §206 of the FPA would a for that require provide remedy 824e(a) § discrimination. See 16 U. C.S. a (upon finding discrimination, undue “the Commission shall determine the and reasonable . . just . or contract . . regulation, practice, . order”). and shall fix the same And such a by could remedy well involve decision very FERC’s bundled re- tail transmissions —Enron’s desired outcome. However, be- cause the of the order under scope review did not presently concern discrimination in the retail market, Enron is wrong §206 requires FERC full argue provide array retail-market remedies.
Second, we can with FERC’s conclusion that agree Enron’s desired “raises numerous difficult remedy is- jurisdictional sues,” No. 31,699, Order without whether deciding on Enron’s ultimate those issues is correct. The is- position sues raised New York concerning over unbundled retail transmissions are themselves serious.
15Indeed, given FERC’s “that acknowledgment recovery legitimate stranded costs is critical to the successful transition of utility the electric industry from tightly regulated, utility cost-of-service industry to an open access, competitively priced 33,052, power industry,” NPRM it was appropriate FERC to scope confine the of its remedy what was truly “necessary”: broader the remedy, more complicated FERC's already challenging goal permitting utilities to recover stranded costs. *23 supra. claim that a federal order It is obvious III, Part See all have even would retail transmissions over jurisdiction ing retail of for the States’ regulation implications greater stat the same recognized sales —a state regulatory power transmission juris authorizes FERC’s that utory provision 824(b) § FERC jurisdiction S. C. diction. See U. (giving state of electric but recognizing over energy,”- “transmission other than sale of over ... energy” “any jurisdiction wholesale”). if we as But even “sale of electric energy Enron is correct in its claim that sume, for purposes, present the the the FPA that gives never sale, we a bundled retail transmission component had discretion decline that the theless conclude agency because in this assert such proceeding part jurisdiction Like the issues. the nature jurisdictional complicated choice not that we are satisfied Court Appeals, in a transmissions to assert over bundled wholesale market on the proceeding focusing rulemaking 225 F. choice.” permissible policy “represents statutorily 3d, 694-695. of the Court of the Appeals
Accordingly, judgment affirmed.
It is so ordered. Thomas, and Jus- with whom Justice Scalia Justice Kennedy tice concurring dissenting join, part part. the finds that Federal Court the
Today Energy Regulatory (FERC Commission) construed its Commission properly (1) re- when it determined that: may statutory authority that the from “unbundles” cost of transmission utility quire cost electric- of electric to transmit competitors’ energy lines on over its the same terms applies ity utility (2) transmissions; to its own it need impose to offer “bun- on utilities that continue requirement (FPA), Act Power dled” retail sales. Under the Federal seq., et §824 U. C. has S. all inter- transmission, with of transaction regardless type associated, it is which and I concur in Court’s holding with to transmission used for unbundled retail sales respect II and III however, Parts of its dissent, I join opinion. from Court’s resolution trans- question concerning mission for bundled used retail sales I because believe *24 the Court fails to both assess the Commission’s properly ju- risdictional and its for bun- analysis justification excluding dled retail transmission from the Access Transmission Open (OATT). Tariff FERC’s are do explanations inadequate not warrant our deference.
I
While the Court does not foreclose the
possibility
extends to
with
associated
sales,
bundled retail
the Court defers to FERC’s decision not
to
the OATT to such transmission on the
apply
ground
made a
choice,
Commission
at
ante,
permissible policy
Policy Study Group FERC,
Transmission Access
(quoting
v.
(CADC
1 I note that the “reasons” upon which the Court relies were made specific context FERC’s explanation of decision not to unbun- dle retail transmission and 31,698-31,699. distribution. Order No. The comments were not given general explanation for FERC’s Appeals’ the Court defers disagree. The Court
I choice,” “policy as a decision of FERC’s characterization by its made any characterization such rather than by the Court offered post-hoc rationalization But a elf.2 “[A]nagency’s for deference. basis Appeals is an insufficient articulated on the basis upheld, all, if at must be action Assn. United agency Vehicle Motor Mfrs. itself.” Co., Ins. Automobile Farm Mut. States, Inc. v. State added). (1983)(emphasis 29, 50 U. S. not properly FERC’s decision assess in order
Therefore, bundled re- connected apply to transmission the OATT justifications carefully the two evaluate sales, we must tail is sufficient. on. Neither points to and relies Court regulating explain why failed to I below, As discuss “necessary,” inconclu- and FERC’s transmission is not such basis provide jurisdictional analysis a sound does sive our deference.
A explana- on FERC’s support reliance 1 cannot the Court’s *25 unbundling “[although of retail transmission that tion gener- and generation, transmission as as wholesale well achieving comparability, do not helpful we in ation, would be necessary.” 31,699. Aside 888, No. at believe it is Order explana- conclusory provides statement, no this from unnecessary why is and attaches regulation tion as to such findings support single such, As we no statement. with bundled to transmission decision not to the OATT associated apply sales, in Order rely explanation did not on the second infra, No. See at 41. 888-A. 2 that, fact in light the Court of stated Specifically, Appeals of bun component a construe the transmission regulator reasonably could in a service part dled retail as either of a retail sale or transmission sales commerce, bundled transmis “FERC’s decision characterize repre to state therefore subject sions as of retail sales part which must also defer choice to we statutorily permissible policy sents Inc., Council, A. Inc. v. Natural Resources [U. Chevron S. under Defense 2000). (CADC (1984)].” 225 F. 3d 694-695 U. S. 842-843 determining have no for basis whether FERC’s is decision justified. industry, A brief review the electric and the particular, nature of transmission in ques- further calls into conclusory logical tion both FERC’s statement and infer- regulation ence: That necessary of transmission is not when type used connection with one but transaction is neces- sary when used another. power system
An electric gen- consists of three divisions: eration, transmission, and local Electricity distribution. generated power plants at “a where fuel gas, such coal, hydro power spin oil, uranium or is used to a turbine which generator generate electricity.” turns Brief for Electri- (hereinafter Engineers cal et al. as Amici Curiae Brief Engineers). “[Generating for Electrical stations continu- ously feed electric into a web of transmission lines (loosely grid’) very high referred to as ‘the at voltages.” Utility Fox-Penner, Restructuring: R Electric A Guide (1997) (hereinafter Fox-Penner). Competitive Era 5 (essentially The transformers) turn transmission lines in feed “substations voltage spread power reduce many from each successively transmission line to smaller culminating lines, distribution Id., the retail user.” 23.3 electricity components other Unlike the with the —and
exception parts Alaska, Hawaii, and inherently Texas—transmission is interstate.4 It takes place grid, eonfigura- a network or which consists of a centers, At the local distribution “the flow is power split send power to a number of feeder lines that primary lead to other transformers step feed again power down and to secondary service lines that turn deliver utility’s to the *26 Brief customers.” for Electrical Engineers 13. 4 States, In the United contiguous system composed this is of three major grids: Interconnection, Interconnection, the Eastern the Western and the Texas Interconnection. Restructuring of the Electric Power A Industry: Events, Capsule Issues and Energy Information Adminis 2000). (DOE/EIA-X037, tration 6 Jan. tion of lines that cross state interconnected transmission These lines are Brief for Electrical 13. lines. Engineers in- and the Nation’s utilities. No owned by larger operated “ however, dividual has ‘control over the actual trans- utility, fers of electric and electric with power any particular Id., with which it interconnected.’” at 15 system (quot- (1967)). Co., Power Florida & 37 F. P. Light C. ing flows at across net- Electricity extremely high voltages work in directed uncontrollable cannot be ways easily from a to a con- particular through path specific generator The Fox-Penner 26-27. sumer. “[transfer electricity from over all will, extent, one another some flow point interconnection, transmission lines in the those just the direct of the transfer.” Van Nostrand’s Scientific path (D. 1995). Considine 8th The ed., ed. en- Encyclopedia (demand flow on “where the ergy load for electric- depends moment, are at with the ity) en- generation any given (or ergy always of least resistance.” path following paths) Brief for Electrical 13. however, The Engineers paths, moment moment.” Fox-Penner 27. And “change “[t]ry- the flow of akin ing predict electrons is a drop putting of ink into a water into a and then flowing pipe pool, trying how the ink will predict diffuse into the drop pool, which combination of outflow will pipes contain eventually Ibid. ink.”
Nonetheless, and sellers buyers do negotiate particular contract paths, “routefs] an nominally specified agree ment to have transmitted between two points.” T. (1996) Brennan, added).5 to the Shock System (emphasis
5FERC notes that whether transmission is in interstate commerce “does not turn on whether the contract path a particular lines, transmission sale crosses state but follows the rather flow physical of electricity.” G, 31,968. Order No. Appendix FERC states that “[bjecause of the highly integrated nature of the electric system, re sults in most 'in energy being com merce.’” Ibid. *27 practice, quite possible
In however, it is most of the power negotiated will never flow over the transmission lines. arrangements, The transactional bear little therefore, resem- physical blance to the behavior of on transmitted impossible grid utility and, a such, as it is for either or distinguish isolate or FERC to between the transmission used for bundled or unbundled wholesale or retail sales. impossible identify utility’s to
Given that is lines which any given are transmission, used for to FERC’s decision ex- particular clude is transmission because it associated awith type appears of transaction make little to And this sense. may statutory reg- decision conflict with FERC’s to mandate unjust, unduly ulate when it finds unreasonable, discrimina- tory, respect any preferential or with treatment to transmis- subject jurisdiction. §§824d, sion See 16 C. U. S. clearly recognizes 824e.6 FERC mandate, statute’s stat- ing in No. Order 888-A that “our the FPA authorities under only permit adapt changing us to economic realities industry, require so, but also us to do neces- sary to eliminate undue protect discrimination and eleetric- 824d(b), Section for example, provides: shall, utility “No with or public respect any subject sale (1) Commission, to the make or undue grant any prefer- advantage any person subject ence or or any person any undue preju- (2) dice or or disadvantage, any rates, maintain unreasonable difference service, facilities, charges, or in any respect, other either as between locali- ties or as between classes of service.” 824e(a) FERC,
Section further provides that whenever after conducting rate, demanded, classification, finds that or hearing, “any charge, ob- served, or by any public utility collected charged, any transmission or Commission, rule, subject any sale to the or regula- tion, rate, or contract such practice, affect[ing] charge, classification unreasonable, Commis- unjust, unduly discriminatory or preferential, sion rate, shall determine classification,... just charge, reasonable force, practice, or contract to be observed and in and shall fix thereafter added.) the same order.” (Emphasis it is cer- 30,176.7 And 888-A, No. customers.” Order ity on lines that own or control that utilities tainly possible that seek to use their entities discriminate grid against *28 them- the utilities whether transmission lines regardless The fact that their transactions.8 selves bundle or unbundle to transmis- found undue discrimination with FERC respect sion used in connection with both bundled and unbundled indicates that wholesale sales and unbundled retail sales the trans- such exists of whether discrimination regardless in or unbundled sales. Without mission used bundled of re- that more, FERC’s statement “unbundling conclusory lends little tail transmission” is not support “necessary” And it sim- its decision not to such transmission. 31,634, “legal FERC likewise in Order No. at that states is to undue discrimination policy remedy cornerstone of these rules control whether access to the owned transmission wires that monopoly and to whom be interstate commerce.” electricity transported can mandate, also statute’s it “must comply that to with the recognized eliminate the of closed and trans- remaining patchwork open jurisdictional mission those systems including and ensure that all these systems, access, form of use already provide monopoly power some cannot open Id., 31,635. over transmission others.” unduly against discriminate 8 For example, Supply explains the Electric Power Association transmission that seek owning may against utilities discriminate entities to use their thereby preventing transmission the entities from systems, (1) lines, their in the available trans- using following ways: They may block capacity fer of the network to facili- capability physical transmission —the tate over and trans- activity by overscheduling above its committed uses — mission for paths; their own retail loads across “valuable” transmission (2) they be may improperly avoid certain costs that other entities would (3) to; subject they may fail to make accurate disclosure of available transfer capability, causing “serious difficulties for suppliers attempting schedule sales their Brief for across transmission facilities.” Respondent Electric Power Association 7-9. Supply Similarly, petitioner explains Enron that a “utility can reserve transmission superior capacity sales, for its own bundled retail closing times even its facilities to other transmissions . . . forcing competitors utility to scramble for less direct, less predictable options.” and more transmission Brief expensive 00-809, for Petitioner in No. 41-42. pp. cannot be the case that the nature of the commercial
ply controls the transaction FERC’s scope jurisdiction. FERC must I whether sure, To be would not prejudge transmission used for bundled retail sales be require minimum, access tariff. At a FERC’s how- subject open ever, should have determined whether regulating used in connection with bundled retail sales to eliminate undue discrimination and was fact “necessary Ibid. customers.” FERC’s protect electricity conclusory statement instills little confidence that it either made this or that it with determination dic- complied unambiguous statute; tates of the While the Court essentially ignores statute’s mandatory prescription approving decision as a choice,” the FPA permissible “policy simply does not discretion to base decision not to give *29 discrimination on a undue choice.” remedy “policy itself to find for con- The Court FERC’s struggles support it not to clusion that was bundled retail “necessary” regulate in First, transmission order to discrimination. remedy the fact Court to that FERC’s concerned elec- points findings tric utilities’ use of their market their power “‘deny wholesale customers access to electric competitively priced consumers the substantial generation,’ thereby ‘denying] ” Ante, benefits of lower at 26 electricity prices.’ (quoting 12-13). 00-809, Brief for Petitioner in No. Second, the pp. Court notes that the title of No. Order 888 confirms FERC’s it references focus because wholesale promoting competition. Ante, at 26. the Court relies on the fact that FERC Finally, “ whole- has identified its goal ‘facilitating] competitive ” Ibid, sale markets.’ Notice of Pro- power (quoting FERC Stats. & posed Rulemaking, Regs., Proposed Regs., 1988-1999, 17662). 32,514, 33,049; ¶ Fed. p. Reg.
I fail to understand how these statements FERC’s support determination that it was not bun- “necessary” regulate dled retail transmission. Utilities that bundle use their may market discriminate those access against seeking or wholesale with either retail in connection to the lines likely, perhaps that certainly possible, even sales. It is open remedy ensure way discrimination and only undue that utilities is to all services access to transmission just use those that operate facilities, and transmission or con- purpose sales of wholesale own lines for the their does not retail transactions. nection with unbundled discriminatory engage suggest that that the entities facilities use their transmission are behavior those relying And on or unbundled retail sales. wholesale sales sense markets makes little wholesale reference to FERC’s retail sales regulates connected to when FERC unbundles long is in a so as the transmission State voluntarily utility unbundles. See infra, sales or where the at 41-42. frequently agency an must co- reiterated that
“We have given explain why gently exercised its discretion has Assn., S., manner Motor Vehicle 463 U. 48. . . . .” Mfrs. evaluating prevents Here, so us from failure to do FERC’s agency engaged decision- in reasoned whether not the. “necessary” making when it determined that it was not regulate bundled retail transmission.
B explanation The on Court also relies prospect unbundling generation retail transmission and jurisdictional “raises numerous difficult be- issues that we appropriately *30 lieve are more considered when the Commis- may sion reviews unbundled retail transmission that tariffs wheeling come before us context of in the a state retail program.” provides 31,699. No. at Order The Court following explanation rely the for its decision to on this statement: present purposes, assume,
“But even if we that gives in Enron is correct its claim that the FPA regulate component the the transmission sale, a bundled retail we nevertheless conclude that the had discretion decline to assert such agency jurisdic- in tion in because of the proceeding part compli- Ante, cated nature of issues.” jurisdictional 28. This is both because explanation wholly unsatisfying, on Court’s reliance FERC’s statement fails to into take ac- count the of the statute and unambiguous because language has various inconsistent of its given explanations jurisdiction.
FERC's statement its that decision not to implies based, was at least both on determination part, the statute is and on a determination that certain ambiguous interstate transmission fall outside its may jurisdiction. FPA, however, The unambiguously grants jurisdic- tion over the interstate transmission of electric 824(b)(1). § interstate commerce. U. S. C. As Court notes, no in the “[t]here statute language limiting Ante, to the wholesale market.” at 17. The Court FPA correctly “the au- recognizes thorizes FERC’s transmissions, without to whether the transmissions sold to a regard are Ante, or reseller ato consumer.” directly 20. FERC draws a
Similarly, although line be- jurisdictional tween transmission used connection with bundled and un- sales, bundled retail the statute makes no such distinction. The terms “bundled” and “unbundled” are not found in the statute.9 The line only jurisdictional statute draws with to transmission is between regard interstate and intra- 824(b)(1). § state. See does not Congress qualify grant 9The difference between two sales is types that with an unbun sale, dled retail a utility, law, either voluntarily pursuant to state pre separate sents charges electricity, for the service, the transmission delivery sale, service. In a bundled all components are combined as charge. one 00-809, See Brief for Petitioner in No. at 4-5.
38 Nor transmission. FERC of
to jurisdiction FERC how the statute juris- grants the Court does explain transmission, is ambiguous yet over unbundled diction transmission. of bundled retail to the with respect question did is FERC I statute that the ambiguous, Even if agreed in the to resolve an passage upon not ambiguity purport to resolve Instead, relies. FERC which the Court refused be- a statutory part it considered to be ambiguity, what too dif- this was that it determined resolving question cause Natural S. A. Inc. v. under Chevron U. Thus, while ficult. Council, 842-843 Inc., 467 837, U. S. Resources Defense reasonable inter- to an will defer (1984), agency’s Court statute, this does pro- of an passage pretation ambiguous to which the can defer. vide an Court interpretation of its more does explicit interpretations provide however, to isolate It is difficult, elsewhere. dif- this matter on because FERC presents position ar- orders, brief, ferent in its its and at oral interpretations At certain states affirmatively points, gument. transmission; at other it lacks The reliance is Court’s times, FERC noncommittal. heavy on one therefore, And statement, while misplaced. made in a footnote conflicting Court recognizes ante, 14, see n. to defer representations, deciding the fact the Court fails on any agency place weight inconsistent See positions. presented agency (“The (2001) States United v. Mead U. Corp., S. fair measure of to an its deference own agency administering has been with circumstances, statute understood vary care, courts have of the looked the degree agency’s relative to the consistency, formality, expertness, ...”). These incon- persuasiveness agency’s position alone, sistencies me that the Court should however, convince neither defer to of FERC’s the aforementioned statement *32 nor on other rely any explanation provided by FERC.
For
its brief FERC
that because the
example,
argues
statute
the Court of
deferred
ambiguous,
Appeals properly
under Chevron to FERC’s reasonable decision not to regu-
late. Brief for
10FERC rejected earlier the proposed public curtailment of a provisions federal OATT that utility’s utility’s favored the bundled retail customers that, over its wholesale transmission customers. It in compli asserted OATT, ance with Order No. 888 and in order to enforce the it regu could late transmission in a curtailment manner that had an indirect effect upon utility’s services Respondent retail customers. Brief for FERC, 48; (CA8 see Northern Co. v. States Power 176 F. 3d 1999). Circuit, The United States Court of Appeals the Eighth noting that “FERC that it has no whatsoever over concede[d] activities,” regulation state’s utility’s] [the bundled retail sales held that Id., FERC exceeded its under FPA. 1096. I While do not endorse the court’s conclusion respect jurisdiction, with to FERC’s I that pointed note the Court of to the Appeals inconsistencies in FERC’s position, that explaining “FERC’s observation no inherent conflict exists between its mandates and practical application through is viewed Id., an adversarial bias.” at 1094. sale. 42-43. explained retail Tr. Oral Arg. long as “as the transmission it lacks jurisdiction has not sale], hasn’t utility [the unbundled State author- whatever has not exercised and FERC it, unbundled Id., at 50 unbundle it.” (emphasis would have to ity added). of its still more views jurisdiction.
FERC’s orders present FERC should whether noted, As when already considering asserts unbundle retail generation, numerous difficult juris- “raises particular question at a later considered dictional issues” more appropriately FERC, at other 31,699. time. Order No. points, *33 is a belief however, jurisdictional makes clear its that there retail transmission. between unbundled and bundled line it has exclusive ju- determination” that its “legal Explaining in interstate unbundled retail transmission risdiction over fact the commerce, notes that it found FERC “compelling on its face, FPA, section 201 the the Commis- that of gives commerce in interstate sion over transmission jurisdiction Id., at utilities) 31,781. without public (by qualification.” attaches “its Nonetheless, when addressing why unbundled, bundled, but not transmission only “we commerce,” FERC states that affirmatively at believe that is sold retail as when transmission part the the delivered called parcel product energy, at retail” and that transaction a sale of electric is energy over sales FPA, the the Commission’s jurisdiction “[u]nder Ibid. wholesale of electric extends sales.” only into when the transaction broken contrast, “retail By the two are sold FERC “believe[s] that products separately,” Ibid. FERC lines change.” explains: jurisdictional “In retains situation, this the state clearly jurisdiction However, the unbundled over the sale of power. only involves transmission service provision which, under in interstate commerce’ ‘transmission the Com- FPA, within the is exclusively mission. Therefore, when bundled retail sale is un- bundled and becomes transmission separate and transactions, sales transmission trans- resulting action falls within the Federal sphere regulation.” Ibid. the act
FERC here concludes that unbundling itself lines. jurisdictional changes notes, Unbundling, (1) occur in one of may two ways: voluntarily by public (2) aas result of a state retail utility access program Ibid. Either action orders unbundling. the trans- brings mission within the of FERC’s scope jurisdiction. in Order No. 888-A,
Subsequently, responded its earlier rehearing requests conclusion by supplanting “the matter raises numerous difficult issues” jurisdictional with the explanation above from Order quoted No. 31,781. See 888-A, 30,225. Order No. It is possible, therefore, that FERC abandoned its “difficult jurisdictional issues” Thus, explanation while is true altogether. FERC, at one evades the point, jurisdictional question by it too resolve, “difficult” to more often than deeming concludes that it in fact affirmatively does not have at issue here. From of FERC’s I survey can positions, conclude that *34 Court’s reliance on one the statement is singular misguided. to the extent
Finally, FERC has concluded that it lacks transmission connected to re- bundled sales, tail it the clear ignores mandate. refus- statutory By to the ing transmission regulate associated with retail sales in States that have chosen not to unbundle retail sales, FERC has set (a) under which: up system each State’s internal decisions policy whether to un- concerning require controls the (b) nature of federal bundling a util- jurisdiction; decision to ity’s voluntary unbundle determines whether (c) FERC has jurisdiction; utilities that are allowed to against companies may other bundling discriminate continue nei- The statute lines. attempting their transmission to use jurisdic- provides the nor distinctions ther draws these States, the on actions taken lines shift based tional Congress understood public utilities, itself. or FERC While necessary component all that transmission is a trans- granted over all sales, qualification. distinctions mission, such, As these without statutory belie text.
II foregoing disagree demonstrates, I the defer- with As gives ence to FERC’s decision not the Court Because connected to bundled retail sales. all unambiguously jurisdiction over in- grants FERC statute §824e rem- that FERC transmission and mandates terstate edy respect with to all transmission undue discrimination required jurisdiction, within its minimum the at a statute was whether there discrimination consider marketplace warranting application of either the OATT remedy. some other compel requests,
I petitioner not, would Enron apply I would OATT bundled retail transmissions. Appeals’judgment require vacate the Court of FERC on engage remand to in reasoned to determine decisionmaking respect whether there is undue discrimination with trans- if so, what sales, mission retail bundled associated with remedy appropriate. respectfully reasons,
For all I dissent from Part of these opinion. IV the Court’s