FERC v. EPSA and the Path to a Cleaner Electricity Sector

This article analyzes the impact of FERC v. Electric Power Supply Association, in which the Supreme Court upheld FERC’s demand response rule (Order 745) and confirmed FERC’s authority over “practices” “directly affecting” wholesale rates for electricity. It contends that the Supreme Court made a definitive pronouncement on FERC’s authority over end users of electricity who also provide resources back to the electric grid. It also contends that FERC v. EPSA marks the end of “dual federalism” in electricity law that treated federal and state jurisdiction as separate and distinct spheres of authority. Instead, it posits a new era of concurrent regulatory jurisdiction over the grid in which both FERC and the states can simultaneously take actions impacting the wholesale markets. Praising the “directly affecting” standard, and the Court’s application of it to Order 745, as a cogently articulated interpretation of the FPA, the Article notes that FERC has ample authority to innovate and pursue broad policy goals — such as promoting clean and renewable energy — in the wholesale markets, as long as its initiatives may be construed as “practices” that “directly affect” wholesale electricity rates. The Article concludes by identifying significant issues remaining with respect to the decision’s scope, particularly with respect to the allocation of jurisdictional responsibility between FERC and the states. Finally, it introduces the remaining articles in the Harvard Environmental Law Review special issue, dedicated to analysis of FERC v. EPSA