Federal Energy Regulatory Commission v. Mississippi

No. 80-1749 (U.S. June 1, 1982)

ELR Digest

The Supreme Court upholds the constitutionality of several provisions of the Public Utility Regulatory Policies Act (PURPA) under the Commerce Clause and the Tenth Amendment. The Court reverses a district court decision finding unconstitutional Titles I and III and § 210 of Title II of PURPA. Titles I and III direct state utility commissions and unregulated utilities to consider specified regulatory rate design standards intended to encourage energy conservation, enhance the efficiency of electric power generation, and lead to more equitable rates. Section 210 of Title II directs the Federal Energy Regulatory Commission (FERC) to develop rules to encourage cogeneration and small power production by, among other things, requiring utilities to buy and sell power from and to such nontraditional energy producers and requiring state utility commissions to implement the FERC rules.

The majority first determines that the provisions fall clearly within Congress' power under the Commerce Clause. The Court notes that legislation enacted under the Commerce Clause must be upheld if there is any rational basis for finding that the regulated activity affects interstate commerce and there is any reasonable connection between the means employed by Congress and the ends they are to serve. The Court finds that electric energy is, without question, an element of interstate commerce and that there is a rational basis for Congress' conclusion, clearly stated in PURPA, that even the intrastate activities of the utilities regulated by state public service commissions affect interstate commerce. Nor was Congress irrational in selecting the measures enacted in PURPA to protect inerstate commerce.

Next, the Court holds that PURPA, as applied to state utility commissions, does not infringe on state sovereignty in violation of the Tenth Amendment. Section 210 is a straightforward exercise of federal preemption under the Commerce Clause. The requirement that state agencies enforce FERC rules is valid since it requires the Mississippi Commission to do no more than resolve conflicts between cogeneration and small power facilities and the utilities, a function that it customarily performs.

The Court next rules that the requirements in Titles I and III of PURPA that states consider certain regulatory standards does not infringe on state sovereignty in violation of the Tenth Amendment. They do not compel the exercise of the state's sovereign powers, but simply establish conditions on continued state regulation in an area subject to complete federal preemption under the Commerce Clause. The same analysis supports the requirement that states follow specified procedures in considering the regulatory standards.

Justice Powell dissents from that portion of the majority opinion imposing mandatory procedures on the states in their consideration of the federal standards, arguing that the power of a state to prescribe the administrative procedures by which its agencies operate is an essential component of its sovereignty.

Justice O'Connor, joined by Justice Rehnquist and Chief Justice Burger, dissents from those portions of the majority opinion upholding the mandatory consideration and procedural components of PURPA, finding that those provisions regulate "states as states" and address essential "attributes of state sovereignty" and thus violate the Tenth Amendment.

The full text of this opinion is available from ELR (56 pp. $7.50, ELR Order No. C-1284).

Counsel for Appellants
Rex E. Lee, Solicitor General; Louis F. Claiborne, Kathryn A. Oberly, Susan V. Cook
Department of Justice, Washington DC 20530
(202) 633-2201

Charles A. Moore, General Counsel; Jerome M. Feit, Joanne Leveque
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 357-8000

Counsel for Appellees
William A. Allain, Attorney General; Bennett E. Smith
P.O. Box 220, Jackson MS 39205
(601) 354-7130

Alex A. Alston Jr., James T. McCafferty III
Thomas, Price, Alston, Jones & Davis
P.O. Drawer 1532, Jackson MS 39205
(601) 948-6882

Blackmun, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL, SOURCE]