Case Brief
- Style of the Case
Electric Power Supply Association v. Federal Energy Regulatory Agency, pp. 218-239, United States Court of Appeals, District of Columbia Circuit.
- Facts of the Case
Five energy industry associations, including the Electric Power Supply Association, petitioned the United States Courts of Appeals, District of Columbia, asking the court to review a new rule provided by the Federal Energy Regularly Commission (FERC). The rule in question was aimed at incentivizing final consumers to decrease the amount of electricity they utilize when doing so is economically efficient. The petitioners felt that the new rule by FERC was akin to the federal government encroaching on the state’s exclusive duty to control the retail market.
- The Legal Issue
The court was requested to deliberate on whether or not the new rule by FERC that sought to incentivize final electricity consumers amounted to the federal government encouraging on an area in which states had exclusive jurisdiction as far the regulation of the retail market is concerned.
- The Holding
The court agreed with the petitioners, and it ruled that FERC’s new rule went too far by seeking to control the retail market, which is an area where only states have exclusive jurisdiction. Consequently, the court vacated the new rule by FERC and declared it null and void.
- The Court’s Rational
The opinion of the court was read by Judge Brown. To begin with, the court held that Section 201 of the Federal Power Act (FPA) clarifies that FERC only has jurisdiction over the wholesale market. At the same time, the court held that it is required by the Administrative Procedure Act (APA) to declare unlawful and null and void any agency action that is in excess of statutory, authority, jurisdiction, or limitation. As a creation of a statute, FERC has limited jurisdiction unless its mandate is expanded through a piece of legislation enacted by Congress. Also, the court argued that it is required by APA to vacate any orders that it considers capricious, arbitrary, or an abuse of discretion. The order by FERC was akin to it unnecessarily abusing any discretion it may have regarding the regulation of sale and consumption of electricity in the country.
- Dissenting Opinions’ Rational
Judge Edwards held a dissenting opinion regarding the case under review. He argued that much has occurred since the passing of the Federal Power Act that has blurred the line between the wholesale and retail market as the electricity sector is concerned. Also, Judge Edwards believed that order 745 requires the wholesale-marketers administrators to provide compensation for demand response resources only under certain circumstances. Essentially, the demand response resources refer to electricity consumers making the new rule by FERC legal.