Notice & Comment

A Potentially Lurking Issue in a Recent Cert. Grant

On May 4, the Supreme Court granted certiorari in FERC v. Electric Power Supply Association (and a companion case). The case raises the question whether FERC exceeded its authority in issuing a regulation that gives retail energy customers incentives to reduce electricity consumption. The Federal Power Act (“FPA”) grants FERC the power to regulate the sale of energy at wholesale, and it leaves to the states the regulation of retail sales of energy. FERC’s rule allows retail customers to choose to consume less energy and sell that unused energy on the wholesale market. A divided panel of the D.C. Circuit said that the rule exceeded FERC’s authority because it regulates the retail market.

Aside from presenting the interesting wholesale/retail issue, the case also has the potential to revive an issue decided several terms ago. The precise question presented is whether FERC “reasonably concluded that it has authority under the FPA” to issue the regulation that it did. Several terms ago, in City of Arlington v. FCC, the Court divided over whether agencies should receive Chevron deference on their interpretations of the scope of their own regulatory authority under a statute. A majority of the Court said yes. Chief Justice Roberts, joined by Justices Kennedy and Alito, dissented. He reasoned that courts defer to agency interpretations only because Congress has said that the agency has authority to render the interpretation, and Congress has not given to agencies the power to determine the scope of their own interpretive authority. In other words, agencies should not get deference on whether they have interpretive authority.

The phrasing of the question presented in Electric Power Supply Association may present the opportunity for this debate to resurface. Of course, one might think that stare decisis resolves the matter. Chief Justice Roberts has certainly extolled the virtues of stare decisis. But some scholars have given reasons to doubt that stare decisis has much sway over those justice who dissented when the issue was decided the first time around. See, e.g., Frederick Schauer, Has Precedent Ever Really Mattered in the Supreme Court?, 24 Ga. St. U. L. Rev. 381 (2007). It will be interesting to see if the Arlington dissenters raise the issue again.

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