The Changing Structure of the Electric Power Industry 2000: An ... - EIA

Major U.S. Supreme Court Cases Affecting the Electric Power Industry (Continued)
FPC v. Conway Corp.
(426 U.S. 271)
FERC v. Mississippi
(456 U.S. 742)
38
Court Case Date Decision
American Paper Institute v.
American Electric Power Service
Corp.
(461 U.S. 402)
Nantahala Power & Light Co. v.
Thornburg
(476 U.S. 953)
Mississippi Power & Light Co. v.
Mississippi b
(487 U.S. 354)
Duquesne Light Co. v. Barasch d
(488 U.S. 299)
1976 The Supreme Court states that FERC, in setting wholesale rates, must
consider allegations that the proposed rates are discriminatory and
anticompetitive in effect.
1982 The Supreme Court upholds the constitutionality of PURPA in regards to its
preemptive effect on the States’ authority.
1983 The Supreme Court upholds the constitutionality of FERC’s cogeneration
rules promoted pursuant to PURPA.
1986 Among other outcomes, the Supreme Court confirms that FERC has
exclusive authority over wholesale electric rates.
1988 The Supreme Court determines that FERC authority is controlling and that a
State commission is obligated to honor a FERC order. The Court stated
“FERC-mandated allocations of power are binding on States, and States
must treat those allocations as fair and reasonable when determining retail
rates.” c
1989 “U.S. Supreme Court held that absent any showing that a State’s ratemaking
methodology results in unreasonable rates that throw into jeopardy
the financial integrity of the utilities or otherwise fail to compensate
shareholders for their risks of investment, no impermissible taking exists.
Further, the Constitution of the United States does not mandate any
particular rate-making methodology for State regulatory commissions.” e
a This inset highlights the major U.S. Supreme Court cases that affect the electric power industry, stating the final decision of
the Court without discussing in detail the contents of the case.
b This case, Mississippi Power & Light Co. v. Mississippi, continues the holding found by the U.S. Supreme Court in the
Nantahala Power & Light Co. v. Thornburg case.
c W. F. Fox, Jr., Regulatory Manual Series: Federal Regulation of Energy (Shepard’s/McGraw-Hill, Inc., 1993), p. 149.
d This case is a final construction work in progress (CWIP) case. FERC issued a CWIP rule effective July 1, 1983. This means
that a utility may include, in its rate base, up to 50 percent of its CWIP costs for ongoing construction projects and for the costs
of nuclear fuel in the process of fuel refinement, conversion, enrichment, and fabrication. In addition, the rule continues to permit
utilities to include all CWIP costs associated with pollution control and fuel conversion facilities. See W. F. Fox, Jr., Regulatory
Manual Series: Federal Regulation of Energy (Shepard’s/McGraw-Hill, Inc., 1993), p. 150.
e W. F. Fox, Jr., Regulatory Manual Series: Federal Regulation of Energy (Shepard’s/McGraw-Hill, Inc., 1993), p. 153.
FERC = Federal Energy Regulatory Commission.
TVA = Tennessee Valley Authority.
PG&E = Pacific Gas & Electric Company.
PURPA = Public Utility Regulatory Policies Act.
PUC = Public Utility Commission.
Source: This inset is based on information compiled by the Office of Coal, Nuclear, Electric and Alternate Fuels from various
documents from the Department of Energy Library. For more information, refer to D. J. Muchow and W. A. Mogel, Energy Law
and Transactions (Matthew Bender, April 1996); and W. F. Fox, Jr., Regulatory Manual Series: Federal Regulation of Energy
(Shepard’s/McGraw-Hill, Inc., 1993).
Energy Information Administration/ The Changing Structure of the Electric Power Industry 2000: An Update