Editors' Summary: On May 21, 1990, the U.S. Supreme Court ruled in California v. Federal Energy Regulatory Commission that the Federal Power Act provides FERC with the exclusive authority to determine minimum instream flow rates for hydroelectric power projects. In so doing, the Court refused to upset the longstanding line of cases, beginning with First Iowa Hydro-Electric Cooperative v. Federal Power Commission, which established the tenuous balance in favor of federal authority over hydropower regulation. With more than 2,000 hydroelectric projects operating under FERC licenses, and many eligible for relicensing between now and the year 2000, the Court's recent decision will directly impact how FERC addresses the legal and environmental standards applicable to relicensing hydropower projects. The authors review the historical application of federal preemption of state water laws under the Federal Power Act and attendant case law. Using a case study of irrigation and power-generation projects on the Platte River in Nebraska, the authors explore implications of California v. FERC for the future of state regulation of water. Although the case law prior to California v. FERC provided for the perpetuation of a constructive tension between state and federal regulation of hydropower projects, the new decision has the potential to tilt the scales in favor of exclusive federal regulation, absent congressional interdiction.