Hughes v. Talen Energy Marketing

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Administrative Law
  • Date Filed: April 19, 2016
  • Case #: 14-614
  • Judge(s)/Court Below: GINSBURG, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, BREYER, ALITO, SOTOMAYOR, and KAGAN, JJ., joined. SOTOMAYOR, J., filed a concurring opinion. THOMAS, J., filed an opinion concurring in part and concurring in the judgment.
  • Full Text Opinion

States may not implement programs which interfere with FERC's regulatory authority by adjusting wholesale electricity rates.

Under the Federal Power Act ("FPA"), the Federal Energy Regulatory Commission ("FERC") has exclusive jurisdiction over wholesale sales of electricity in the interstate market. States may only regulate retail sales. FERC's two pertinent rules are: (1) the Minimum Offer Price Rule ("MOPR") requires new generators to bid a certain price; and (2) New Entry Price Adjustments ("NEPA") guarantees new generators a stable capacity price for the first three years. Maryland promulgated an order shortly after FERC rejected a proposal that FERC extend the duration of NEPA from three years to ten years. Maryland sought to improve in-state development of electricity generation and enacted its own regulatory program requiring "load serving entities" ("LSE") to enter into a 20-year pricing contract "for differences" which differed from the wholesale rate FERC requires. Maryland's program contravenes the FPA's "regulatory turf" by adjusting the interstate wholesale rate. The Fourth Circuit found Maryland's program to be an impermissible intrusion into FERC's exclusive domain as established by Congress. The Supreme Court agreed and rejected Maryland's program "only because it disregards an interstate wholesale rate required by FERC." The Court left open the possibility of States encouraging new electricity generators through measures which are not tied to wholesale market participation. AFFIRMED.

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