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Original Articles

Regulation of Electricity Rates in the US: Federal or State Competence?

Pages 105-119 | Published online: 08 Jun 2015

  • See M. Wald, “The Nuclear Industry Tries Again”, The New York Times, November 26, 1989 at f. 2, col. 2.
  • See J. Tomain & J. Hickey, Energy Law & Policy, 389 (1989).
  • See generally, C. Kent, ed., Entrepreneurship and the Privatising of Government, (1987); L. Ruff, “Electric Restructuring in Two Nations: Different Paths to a Competitive Future”, Public Utilities Fortnightly, June 22, 1989, pp. 15–19; J. Lambert, “Privatizing Electricity in Britain: The Role of the National Grid”, Public Utilities Fortnightly, March 30, 1989, pp. 14–18.
  • See Single European Act, February 17, 1986, 25 I.L.M. 503 (1986).
  • 476 U.S. 953 (1986).
  • 108 S.Ct. 2428 (1988).
  • 109 S.Ct. 609 (1989).
  • 109 S.Ct. 2506 (1989).
  • This section is substantially drawn from: Tomain and Hickey, supra n. 2 at 446–52 (1989); J. Hickey, “Mississippi Power & Light Company: A Departure Point for Extension of the ‘Bright Line’ Between Federal and State Regulatory Jurisdiction over Public Utilities”, 10 J. of Energy L. & Pol'y 57, 60–65 (1989); and C. Phillips, The Regulation of Public Utilities 523–73 (1984).
  • See D. Anderson, “State Regulation of Electric Utilities”, in J. Wilson, ed., The Politics of Regulation 5 (1980).
  • The Federal Power Commission (FPC) was replaced by the FERC in 1977 under the Energy Organization Act, 43 U.S.C. § 7172(a) (1982).
  • The Public Utility Holding Company Act of 1935, 515 U.S.C. §§ 79–79z (1982).
  • See generally, Hawes, “Public Utility Holding Company Act of 1935—Fossil or Foil?”, 30 Vand. L. Rev. 605 (1977).
  • See M. Wald, “2 Landmark Utility Laws Stir Debate”, The New York Times, November 11, 1989 at D. 2, col. 6.
  • See, FERC, Power Pooling in the United States (1981).
  • See generally, Tomain & Hickey, supra n. 2 at 389–95.
  • Cogeneration is the use of a single fuel source, like coal, oil or natural gas, to make sequentially two usable forms of energy, usually electricity and heat. Cogeneration was used in the United States in the early part of this century but fell into disuse when inexpensive, large, central station electric service became prevalent. However, with the enactment of President Jimmy Carter's National Energy Plan in the late 1970s, cogeneration was statutorily encouraged primarily by requiring private utilities to buy and sell electricity to and from cogenerators. See Public Utilities Regulatory Policies Act of 1978 (PURPA) (P.L. 95–617 as amended by P.L. 96–294, P.L. 98–620 and P.L. 99–495).
  • Independent power producers (IPPs) are defined as wholesale producers of electricity (1) that are not affiliated with franchised electric utilities in the area in which they are selling power, (2) that do not have significant market power, (3) that do not own transmission facilities that are essential to serve their customers, and (4) that do not sell electricity in any retail service territory in which they have a franchise. The FERC, consistent with its obligations under PURPA, has proposed rules for IPPS in order to increase power supply options in the wholesale electric energy market and allow utility industrial customers to “shop” for their electric needs. See 1988 FERC ¶32,456 (IV Stats. & Reg.).
  • See Hickey, MP&L supra n. 9, 10 J. Energy L. & Pol'y at 59 (n. 8).
  • See generally, Tomain & Hickey supra n. 2 at 159–220.
  • See Smyth v. Ames, 169 U.S. 466 (1898).
  • See, the dissenting opinion of Justice Brandeis in Missouri ex rel. Southwestern Bell Telephone Co. v. Public Serv. Comm'n., 262 U.S. 276, 289 (1923).
  • See, Citizens Action Coalition of Indiana, Inc. v. Northern Indiana Pub. Serv. Ca, 485 N.E. 2d 610 (Ind. 1985).
  • See, In re Boston Edison Company, 46 p.U.R. 4th 431, 471–73 (Mass. Dept. Pub. Utils. 1982).
  • Section 205(a) of the Federal Power Act (FPA), 16 U.S.C. § 842d(a) (1988).
  • Sections 205(b) and 206(a) of the FPA, 16 U.S.C. §§ 824d(b) and 824e(a) (1988).
  • Section 205(b) of the FPA, 16 U.S.C. § 824d(b) (1982).
  • FPC v. Hope Natural Gas Co., 320 U.S. 591 (1944).
  • Public Utilities Commission of Rhode Island et al. v. Attleboro Steam & Electric Company, 273 U.S. 83 (1927).
  • 16 U.S.C. §§ 824 et seq. (1989).
  • See Montana-Dakota Util. Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 251–52 (1951).
  • Article VI, Clause 2, U.S.C. Vol. 1, p. LIII (1982).
  • See, Nantahala Power & Light Ca v. Thornburg, 476 U.S. 953, 962–67 (1986).
  • Article I, Section 8, U.S.C., Vol. 1, p. LI (1982).
  • See, Younger v. Harris, 401 U.S. 37 (1971); Burford v. Sun Oil Co., 319 U.S. 315 (1943).
  • 476 U.S. 953 (1986).
  • 476 U.S. at 972.
  • 108 S. Ct. 2428 (1988). For an in depth analysis of the Mississippi Power & Light Company case, see Hickey, supra n. 9.
  • 108 S. Ct. 2428, 2445 (1988).
  • 109 S. Ct. 609 (1989).
  • Under the Fifth and Fourteenth Amendments of the US Constitution as interpreted by the Supreme Court, if the state rate authority approves a retail rate which is confiscatory or does not afford sufficient compensation, arguably the state authority unconstitutionally has taken the utility's property. See, FPC v. Texaco Inc., 417 U.S. 380, 391–92 (1974); FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 585 (1942); Covington & Lexington Turnpike Road Co. v. Sanford, 164 U.S. 578, 597 (1896).
  • 109 S. Ct. 2506 (1989).

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