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Jurisdictional Gridlock: A Pathway Out of Darkness

Fortnightly Magazine - January 1 1996

excited about a landmark case known as In re Elm St. to Main St. to Juniper St. 69-kV Connector (em even though I suspect that a case with similar precedential import is lurking on the horizon. It just doesn't quite have the same ring to it.

I sympathize with what the FERC was trying to do. But I am not sure, at least on this issue, that the old system was "broke." Since the passage of the Federal Power Act (FPA) there has been a clear delineation of jurisdiction (em FERC has authority over sales for resale, and the states have authority over sales to ultimate customers. This tautology was enshrined in our teaching from our earliest studies in this field, and has formed a guiding principle of jurisdiction since the 1930s. But the Mega-NOPR goes further. Now, for the first time, the FERC asserts authority over the transmission piece of retail unbundled transactions. Of course, one is compelled to ask why: If the FERC "always" had this authority over retail transmission, why does unbundling change things? If the FERC always had jurisdiction over all transmission, then any state rate-setting over the years that involved transmission service was an ultra vires act. In fact, some have argued that the states should immediately take transmission out of rate base and begin massive proceedings for refunds, since obviously all those state decisions lacked any legal foundation!

The FERC has not explained why unbundling changes the nature and exercise of its jurisdiction. Moreover, the FERC has not come to grips with the full implications of its decision to grab what clearly were retail transactions. Where does the FERC's new-found jurisdiction end? And how will it be administered? Right now, the states adjudicate claims over transmission matters related to items such as the effect of electromagnetic fields and stray voltage on the milk production of dairy herds. Do I now send the citizens groups and irate farmers with cows in tow down to North Capitol St. because only the FERC has jurisdiction over transmission service? And if a major industrial customer in a retail wheeling environment experiences a power surge or voltage problem, do I now send them to the FERC for resolution? I don't think the FERC really wants these cases, nor do I think that the federalization of these purely state and local issues are what Congress has in mind. Yet these are the implications of the FERC's policy.

The Ohio Alternative

In its comments on the Mega-NOPR, the Ohio PUC proposed a much simpler alternative model for jurisdiction. The Ohio model is in keeping with the FPA and supported by ample legal authority in our comments. Basically, our model is no different from the system that has served us well for over 60 years. Our proposed division of responsibility is transactional rather than purely functional (em the FERC has jurisdiction over sales for resale, and the states have jurisdiction over sales to ultimate customers. In a retail wheeling environment the model assigns "wheeling out" of a utility's service territory or "wheeling through" that