Will the CFTC move Into FERC's house?
Bob McDiarmid is a partner in the Washington, D.C., law firm of Spiegel & McDiarmid. The opinions expressed are those solely of the author, and not of his firm, clients, or friends. The author reserves the right to change his mind.
Most of us in the energy industry have long thought that the "transmission of electric energy in interstate commerce" falls within the exclusive jurisdiction of the Federal Energy Regulatory Commission (FERC). The same goes for electric sales at wholesale, if also conducted in interstate commerce. We know that because the law1 and the courts tell us so. And natural gas is much the same.2
We learned all of this at least a half-century ago, as the courts began to develop what we now know as the "filed rate doctrine"-that FERC has exclusive power to set wholesale rates, and that such power extends also to allocations of power that affect wholesale rates.
The U.S. Supreme Court confirmed in 1988 — in Missssippi Power & Light Co. v. Mississippi ex rel. Moore (487 U.S. 354) — that courts cannot invade the commission's province to determine, in its opinion, that a given rate is the only or the more reasonable one. This principle binds both state and federal courts and is mandated, in the former respect, by the Supremacy Clause. Indeed, the whole framework is built upon the inherent assumption that FERC is the only entity that can resolve questions as to rates, terms, and conditions. And where it cannot, there will be no change in rates at all!