Abstract

Recent decisions by the US Supreme Court have prompted a shift toward limiting the authority of US federal administrative agencies, including the Federal Energy Regulatory Commission (FERC), the agency that oversees the nation’s wholesale electricity markets. This Article explores the impact of several of the Court’s major decisions on rules and administrative orders by FERC that govern the wholesale markets. These include decisions empowering judges to overturn agency regulations, enabling challengers to agency enforcement to force agencies to pursue cases in federal courts, and allowing lawsuits to challenge agency rules long after their issuance. These decisions promise to have significant relevance to the continued proper functioning of the wholesale markets. In particular, challengers have requested that courts overturn recent FERC rules and orders, citing these decisions. In this new regulatory environment, the outcomes of these and other anticipated lawsuits are uncertain. But in general, the impacts of the Supreme Court decisions may be less adverse than possibly anticipated, due to factors such as FERC’s long-standing demonstrated expertise and a series of judicial decisions over the past several decades (including several by the Supreme Court itself) that confirm FERC’s authority over the electricity wholesale markets.

This paper was prepared for the OGEL Special Issue on "Electricity Market Design". More information here www.ogel.org/news.asp?key=775