Pacific Gas & Electric Company, et al. v. Federal Energy Regulatory Commission

Regional transmission organizations (“RTOs”) operate the interstate electricity grid independently. Congress in the Federal Power Act (“FPA”) mandated that the Federal Energy Regulatory Commission (“FERC”) “shall have jurisdiction over all facilities for [interstate] transmission,” 16 U.S.C. § 824(b)(1), and that RTO membership remain “voluntary,” 2d. § 824a(a). Congress also directed FERC to provide incentives “to each ... utility that joins” an RTO. Id. § 824s(c). Here, after Petitioners joined an RTO and FERC awarded them incentives, California enacted a statute that FERC interpreted to mandate membership. The Ninth Circuit held California could do so. And it denied Petitioners an incentive by reading into the federal statute a nontextual exclusion for utilities subject to state RTO mandates. The questions presented are:

1. Whether the Ninth Circuit correctly held that the FPA does not preempt California’s RTO mandate, where the grounds for its decision—that FERC lacks exclusive jurisdiction over interstate transmission facilities, and that California’s law mandating who operates interstate transmission facilities somehow regulates “intrastate wholesale markets and retail sales”—accord with a recent decision of the Sixth Circuit but conflict with decisions by the Third, Fifth, Eighth, and D.C. Circuits recognizing that FERC’s jurisdiction is exclusive and with settled law that transmission facilities operating on the interstate grid (as Petitioners’ facilities do) are interstate transmission.

2. Whether RTO mandates render utilities ineligible for incentives under 16 U.S.C. § 824s(c).