Walking the Fuzzy Bright Line

Deck: 

The legality of state ROFR laws under FERC Order 1000.

Fortnightly Magazine - September 2013

Since the 1990s, the Federal Energy Regulatory Commission (FERC) has undertaken several major efforts to restructure the electric industry to encourage development of competitive wholesale markets. Beginning with Order 8881 (open-access transmission), and most recently with Order 10002 (regional transmission planning, regional cost allocation, and competitive processes for grid build-outs), FERC has continually pushed the policy envelope, presuming that markets will foster consumer benefits. Achievement of FERC’s ends, however, has come at the cost of significant effects on areas previously considered to lie within the exclusive jurisdiction of the states. Creating competitive wholesale electricity markets has somewhat expanded FERC’s role in electricity regulation, shifting – to FERC’s benefit – the “bright line” that heretofore has separated state from federal authority.

For the most part, FERC’s actions have been upheld by the federal courts when challenged by entities concerned with FERC’s encroachment on state jurisdiction. The Supreme Court’s last pronouncement on states’ rights regarding interstate transmission was in New York v. FERC, where the Court upheld FERC’s Order 888 actions in the open access transmission context as a necessary shifting of the line in light of the changing use of electricity in this country from local to regional.3 Indeed, some members of the court did not think FERC went far enough with Order 888.4

With Order 1000, which is currently subject to appeal, the question will be whether FERC’s latest efforts have gone too far – in this case imposing on the rights of the states to site transmission – or whether the courts will again view FERC’s efforts as a necessary next step in the evolution of markets. Several states already have enacted retaliatory legislation or have such efforts underway in an attempt to block Order 1000’s mandate to remove from FERC-jurisdictional tariffs and agreements an incumbent utility’s right of first refusal (ROFR) to build new transmission. These new state ROFR laws, which grant a right to construct new transmission lines to the incumbent utility, could be viewed as contradicting FERC’s goals in Order 1000 to create a competitive process for new transmission development. 

If Order 1000 is upheld on appeal, it may be difficult for any state ROFR legislation to survive scrutiny under a Supremacy or Commerce Clause analysis. Nevertheless, the states have a long history of determining who builds transmission within their boundaries. The role of the states in siting and permitting of new lines has always been carved out of federal legislation and has been a fiercely protected police power of the states. Thus, the outcome of the Order 1000 appeal will either lead to a new shifting of the jurisdictional line in favor of FERC or a key turning point for FERC’s future policy decisions in the other direction.

A Mission of Sweeping Reform

The Federal Power Act5 was enacted in 1935 to provide federal regulation of electricity in areas beyond the reach of state power (e.g., to plug the Attleboro gap6) and also to cover areas that may have overlapped with then existing state regulation (e.g., existing state regulation affecting the transmission of electric energy in interstate commerce and the wholesale of electric energy).7 Prior to that time, the only limit on states’ power to regulate utilities was the impact of the regulation on interstate commerce.8 The FPA, however, made sweeping changes “to provide effective federal regulation of the expanding business of transmitting and selling electric power in interstate commerce.”9 Thus, right from the start, the FPA contemplated an electric industry that was increasingly interstate in nature, which required more, not less, federal regulation. 

FERC’s general mission under the FPA is to ensure that the rates, terms and conditions of jurisdictional services are just and reasonable and not unduly discriminatory or preferential.10 Over time, FERC has carried out this mission by enacting sweeping changes to the industry under its power to remedy unduly discriminatory practices, such as requiring open access transmission under Order 888,11 encouraging RTO formation,12 imposing transmission planning requirements on jurisdictional utilities in Order 890, 13 extending certain transmission planning and cost allocation requirements on an intra- and inter-regional basis, and directing the removal of ROFR requirements in federal tariffs and agreements in Order 1000. 

FERC justified each of these reforms as necessary to carry out its mission, given the current state of the industry at the time the reforms were ordered. With each new reform, FERC found that earlier reforms were “inadequate” to ensure just and reasonable rates, given the more regional nature of the electric industry, and that it needed to correct deficiencies in its existing policies to continue to carry out its mission under the FPA.14

In 2005, Congress further expanded on federal regulation of transmission by giving the Secretary of Energy the authority to designate “national interest electric transmission corridors” (NIETC) if the secretary finds that certain areas of the country are experiencing capacity constraints.15 The legislation has been controversial because it gives FERC some authority to issue construction permits within the NIETCs, but only if states fail to act within one year.16 On review, the Fourth Circuit Court of Appeals recognized the purpose behind the new federal legislation: 

“The states have traditionally assumed all jurisdiction to approve or deny permits for the siting and construction of electric transmission facilities. As a result, the nation’s transmission grid is an interconnected patchwork of state-authorized facilities. In recent times increasing concerns have been expressed about the capacity and reliability of the grid. Congress has reacted to those concerns by adding a new section (§ 216) to the FPA when it passed the Energy Policy Act of 2005.”17

Challenges to FERC’s authority to issue NIETC permits were successful in limiting FERC’s authority to issue permits only to the extent a state fails to act within one year and not if a state rejects a project within the one year time frame.18 Thus, FERC’s power to permit NIETC transmission facilities is limited by the traditional state role in transmission permitting, as long as a state acts within a one year time period.19 Importantly, the limits on FERC’s authority in the NIETC context applies only in the permitting of such transmission facilities, in contrast to FERC Orders 888, 890, and 1000, which impose broader competitive requirements on use, planning, and development of interstate transmission as a whole. 

In expanding on the Order 890 reforms it ordered previously, FERC intended with Order 1000, to improve transmission planning processes and cost allocation mechanisms that were “necessary at this time to ensure that the rates for Commission jurisdictional services are just and reasonable in light of changing conditions in the industry.”20 Specifically, FERC found the Order 1000 reforms were needed in response to new industry developments and “to address remaining deficiencies in transmission planning and cost allocation processes so that the transmission grid can better support wholesale power markets …”21 The new industry developments included 1) a DOE study finding that “the electric industry faces a major long-term challenge in ensuring an adequate, affordable and environmentally sensitive energy supply and that an open, transparent, inclusive, and collaborative process for transmission planning is essential to securing this energy supply;”22 and 2) NERC’s conclusions that 39,000 circuit miles would be needed over the next 10 years for long-term reliability of the grid and to integrate variable and renewable generation.23

FERC concluded that the Order 1000 reforms, including the removal of ROFR provisions in federal tariffs and agreements, would help ensure an opportunity for more transmission projects to be considered in the planning process and increase the likelihood that the planned facilities would be built. As a result, FERC found that Order 1000 “will enhance the ability of the transmission grid to support wholesale power markets and, in turn, ensure that Commission-jurisdictional transmission services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or preferential.”24

The State Legislative Response

In Order 1000, FERC ordered certain ROFRs to be removed from jurisdictional agreements and tariffs, thereby allowing nonincumbent transmission developers to compete for the right to construct certain transmission lines on essentially the same basis as incumbents. While FERC’s directive to remove ROFRs from jurisdictional agreements and tariffs was being debated in court, several states (Indiana, Minnesota, North Dakota, South Dakota, and Oklahoma) flexed their traditional authority over the siting and construction of electric transmission facilities and introduced or enacted their own ROFR laws to take the place of the ROFRs that FERC ordered be removed.25 These laws effectively or explicitly limit the right to construct in their state to the incumbent utility, thus precluding independent transmission developers (i.e., nonincumbents) from building transmission lines, even if the nonincumbents were chosen in the FERC jurisdictional transmission development process required by Order  1000. 

For example, the recently enacted Minnesota law, entitled “Federally Approved Transmission Lines; Incumbent Transmission Lineowner Rights,” states that “[a]n incumbent electric transmission owner has the right to construct, own, and maintain an electric transmission line that has been approved for construction in a federally registered planning authority transmission plan and connects to facilities owned by that incumbent electric transmission owner.”26 State ROFR laws like this could have the effect of undermining the competitive development process that Order  1000 requires by restricting transmission construction to incumbents on a state by state basis. 

The viability of these laws will likely depend on a judicial finding that FERC has pushed federal regulation too far over the line that demarcates the boundary with the states. In matters of transmission, that line’s location has always been a bit fuzzy. Under the FPA, the federal regulation of the sale of electric generation and the transmission of electric energy is “affected with a public interest” and federal regulation of such matters “is necessary in the public interest.”27 But the FPA also limits federal regulation “only to those matters which are not subject to regulation by the States.”28 This has been interpreted to mean that anything not specifically enumerated to FERC’s jurisdiction is reserved to the states, including all siting and permitting decisions.29 States have traditionally assumed all jurisdiction to approve or deny permits for the siting and construction of electric transmission facilities, a power derived from its police power to regulate for the betterment of the general welfare of its citizens. In Virginia, for example, no transmission line of 138 kilovolts or greater can be built until the Virginia State Corporation Commission (VSCC) makes a finding, among others, that the corridor the line is to follow “will reasonably minimize adverse impact on the scenic assets, historic districts and environment of the area concerned.”30

States have not limited their jurisdiction to siting matters. In Virginia, the VSCC must also make a finding that the transmission line is needed. And under the new Minnesota law, the state can overrule the RTO’s finding that a new transmission line is needed. If the incumbent decides that it does not intend to build a line approved through the RTO transmission planning process, the statute requires the incumbent to explain to the Minnesota Public Utilities Commission (MPUC) the basis for its decision. The MPUC then has the discretion to determine if the line is needed, based on cost, efficiency, and reliability. If the MPUC disagrees with the incumbent, the MPUC can require the incumbent to build the line. But if the MPUC agrees that the line is not needed, the process ends and the incumbent does not have to build the line. 

Opponents of Order 1000 argue that the removal of ROFR essentially interferes with a state’s authority to regulate who will build transmission facilities in the state by establishing rights for nonincumbents to develop new transmission facilities within a state’s borders. The conflict between the power of the federal government to order the construction of transmission lines and the power of the state to say no has long been brewing. In 2007, PJM approved the construction of the PATH transmission line to bring energy from the western outreaches of its footprint to the constrained population centers along the Atlantic coast. The transmission developers, who had designed a route that passed through West Virginia, Virginia, and Maryland, faced opposition in all three states and reluctant regulators. The conflict created by a federally mandated transmission line that had no state willing to let the line pass through its borders disappeared when the economic crisis erased the projected demand that supported the need for the project and PJM ultimately rescinded its order to build. 

State ROFR legislation sets up a similar conflict: if a state can control whether a line ordered by an RTO is built within its borders (and the answer to this is not settled), can a state choose who builds the line?

Likely Issues on Appeal

In considering the legality of state ROFR laws, two main considerations arise: 1) whether the FPA (and orders issued thereunder) preempts state ROFR laws that purport to limit transmission development to incumbents; and 2) whether a state law that precludes out of state developers from constructing transmission facilities otherwise violates the Commerce Clause. If Order 1000 is upheld on appeal, state laws purporting to nullify its competitive bidding process may not be valid.

A broader question, however, might ask whether Order 1000’s removal of ROFR provisions can coexist with a state’s right to permit transmission facilities. According to FERC, it never intended to impact a state’s right to site and permit.31 Order 1000 mandates the removal of ROFR provisions in federal tariffs and agreements under limited circumstances and does not require removal for local facilities that are not selected in a regional plan for cost allocation purposes or for upgrades to an incumbent’s existing facilities, among other things.32 Even so, opponents have interpreted the ROFR removal as FERC essentially asserting jurisdiction over who can build, which in some states is part of the siting and permitting authority.33 It remains to be seen whether these conflicting interests can coexist given the changing nature of the electric industry.

This brings us to the argument that the doctrine of federal preemption might bar the states from enacting laws to bypass FERC Order 1000.

According to the Supreme Court’s preemption analysis, “[i]t is common ground that if FERC has jurisdiction over a subject, the States cannot have jurisdiction over the same subject.”34 There are two facets to the analysis of whether federal law (such as Order 1000) preempts state law: 1) whether Order 1000 is found not to impinge on states’ rights, i.e., state ROFR laws are part of the states’ siting authority to determine “who” can build, and do not conflict with FERC’s jurisdiction over interstate transmission planning and development;35 or 2) if Order 1000 impinges on existing state laws or practices, is it justifiable and in a manner consistent with the authority provided in the FPA, i.e., the current state of the electric industry requires that FERC implement the Order 1000 reforms in order to carry out its mandate under the FPA, despite impinging on matters that might have been handled by states to this point.36 The latter point would necessarily represent another shifting of the jurisdictional line in FERC’s favor, while the former would hold the line steady. 

The idea that implementation of the FPA is a work in progress is not new. The courts have repeatedly upheld new rules and policies that FERC has implemented to ensure that the purpose of the FPA is carried out (i.e., to ensure that the rates, terms and conditions of jurisdictional services are just and reasonable and not unduly discriminatory or preferential) in light of changing industry conditions. The Supreme Court in NY v. FERC found that asserting jurisdiction over unbundled retail transmission service was consistent with the plain language of the FPA.37 Unbundled retail transmission was an area where FERC had not previously asserted its jurisdiction and was arguably an expansion of what was commonly thought of as federal jurisdictional service. Such an expansion was justified given the changes in the electric industry: “Our evaluation of the extensive legislative history reviewed in New York’s brief is affected by the importance of the changes in the electricity industry that have occurred since the FPA was enacted in 1935. No party to these cases has presented evidence that Congress foresaw the industry’s transition from one of local, self-sufficient monopolies to one of nationwide competition and electricity transmission. Nor is there evidence that the 1935 Congress foresaw the possibility of unbundling electricity transmissions from sales. More importantly, there is no evidence that if Congress had foreseen the developments to which FERC has responded, Congress would have objected to FERC’s interpretation of the FPA.”38

More recently, in Illinois Commerce Commission v. FERC, the Court of Appeals for the Seventh Circuit considered the question of whether FERC’s approval of the Midwest Independent Transmission System Operator Inc.’s (MISO’s) multi-value project (MVP) tariff, in which regional planning and development and cost allocation was structured for large regional projects that purportedly provide benefits on a regional basis, was just and reasonable under the FPA.39 Opponents had argued that the MVP tariff would allow MISO to coerce each state utility commission to approve MVP projects to be built in the state in violation of the states’ rights under the Constitution.40  Finding the argument frivolous, the court stated:

“[T]o obtain the benefits of the MVP program each state’s MISO members may have to shoulder costs of some specific projects that they’d prefer not to support. But that’s a far cry from the federal government’s conscripting a state government into federal service. That it may not do. . . . It’s not as if FERC were ordering states to build transmission lines that the federal government wants to use for its own purposes. And to glance ahead a bit, there is nothing to prevent a member of MISO from withdrawing from the association and joining another Regional Transmission Organization.”41

Even with removal of ROFR from federal tariffs and agreements, FERC has argued that states retain their siting and construction authority because they can refuse to site projects that are selected in a competitive bidding process.42 Some groups object to this rationalization as ineffective. They argue that by mandating a regional transmission planning process that will determine which facilities will be included in the plan (and who will construct those facilities, and which projects receive cost allocation), it is FERC, and not the states, that effectively decides whether a project should be built. FERC’s argument that it did not usurp state jurisdiction – because a state could still refuse to site a nonincumbent’s project – may not be sufficient. Consider, for example, the practical and political risks to states who refuse to permit a project that may be needed for reliability purposes.

A few points to observe: First, there is no doubt that states will be under pressure to grant siting and permitting authority to entities chosen in the RTO developer selection process. According to the Seventh Circuit, however, this pressure is not necessarily sufficient to invalidate the federal rule.43 Second, the idea that an RTO process can select a transmission project and assign a developer for the project is not new. It may have had some limitations in some regions due to the existence of ROFR provisions that were previously allowed in FERC-jurisdictional tariffs and agreements. Nevertheless, RTOs have been selecting projects to be built and which receive regional cost allocation for many years. Third, regional planning, which takes a broader view of transmission needs considering the changing needs of the electric industry, has been part of the FERC landscape since RTOs came into existence. Even in areas where no formal RTO exists, there are regional entities that take a big picture view when considering transmission adequacy and reliability. Thus, FERC’s authority to require regional planning is not the real issue in the Order No. 1000 appeal.44 Instead, the issue is the imposition of competition among transmission developers and the potential for non-incumbent transmission developers to have the ability to compete for the right to build new projects.

And what of the Commerce Clause: Does this constitutional rule bar the states from trying to circumvent Order 1000?

In Illinois Commerce Commission v. FERC, the Michigan parties argued, among other things, that Michigan entities would not benefit from MVPs because Michigan state law prevents utilities from counting out-of-state renewable power toward their state renewable power requirements and thus the Michigan parties should not have to pay the cost of MVP projects outside of Michigan.45 The Court found that this argument “trips over an insurmountable constitutional objection” – that the state cannot discriminate against out-of-state renewable energy without violating the commerce clause of Article I of the Constitution.46

Nevertheless, a similar argument could be made against state ROFR laws that prohibit out of state transmission developers from building in a given state, on the ground that states cannot discriminate against out-of-state developers. This is not to say that a state would not have significant authority to regulate the out-of-state developer, for example, as a public utility doing business in the state. An outright ban, however, may encounter Commerce Clause issues, not only in discriminating against out-of-state developers, but also in potentially in restricting interstate commerce by preventing construction of a line that would be used for interstate power sales. 

On reflection, the strength of both the preemption and commerce clause arguments may depend on whether state ROFR laws are themselves found to fit squarely within a state’s siting and permitting authority, or whether they cross the line into federally regulated transmission areas.

In this sense, the recent Seventh Circuit case is important for several reasons: First, MISO’s MVP proposal was the type of regional cost allocation that FERC was pressing for in Order 1000. The court’s decision in that case bodes well for a similar analysis to uphold Order 1000, including the ROFR elimination provisions, when that appeal is decided by the D.C. Circuit. Second, without much explanation or analysis, the Seventh Circuit concluded that discrimination against out-of-state renewables was a violation of the Commerce Clause. A similar argument could be made that state ROFR laws discriminate against out-of-state transmission developers. 

It remains to be seen how solid the ground is for state ROFR laws until we see whether FERC’s Order 1000 is upheld. If so, to the extent a state ROFR law precludes a nonincumbent developer selected in a federally approved competitive bidding process from developing in that state, that state ROFR law would itself be ripe for direct challenge – on grounds that it is preempted or otherwise in violation of the Commerce Clause. 

Endnotes:

1. Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ¶ 31,036, at 31,642 (1996), order on reh’g, Order No. 888-A, 62 FR 12274 (Mar. 14, 1997), FERC Stats. & Regs. ¶ 31,048, order on reh’g, Order No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC ¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002).

2. Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, 76 FR 49842 (Aug. 11, 2011), FERC Stats. & Regs. ¶ 31,323 (2011), order on reh’g, Order No. 1000-A, 139 FERC ¶ 61,132 (2012), order on reh’g and clarification, Order No. 1000-B, 141 FERC ¶ 61,044 (2012).

EES North America

3. 535 U.S. 1, 23 (2002).

4. 535 U.S. at 30 (Justice Thomas, JusticeScalia, and Justice Kennedy concurring in part and dissenting in part: “in order to properly assess FERC’s decision not to apply the OATT to transmission connected to bundled retail sales, we must carefully evaluate the two justifications that the Court points to and relies on. Neither is sufficient.”)

5. 16 U.S.C. § 824 et al.

6. Pub. Util. Comm’n of Rhode Island v. Attleboro Steam & Electric Co., 273 U.S. 83, 89-90 (1927) (invalidating a Rhode Island law that regulated a power sale to a Massachusetts utility on ground that the interstate transaction was to be governed by federal, not state regulation).

7. New York v. FERC, 535 U.S. at 6.

8. Id.

9. Id. at 6, citing Gulf States v. FPC, 411 US 747, 758 (1973)

10. FPA §§ 205, 206, 16 U.S.C. §§ 824d, 824e.

11. In Order No. 888, FERC concluded that discriminatory and anticompetitive practices existed in the energy industry because it was in the economic interest of transmission providers to deny transmission service or offer it on an inferior basis. FERC found that Section 206 of the FPA explicitly required it to remedy undue discrimination that it had found. Order No. 888-A at 30,202. The Order No. 888 reforms implemented open access to transmission facilities owned or operated by public utilities and imposed minimum transmission planning requirements to address needs of network customers on the same basis as the transmission provider addressed the needs of its own native load. “The only way to effectuate competitive markets and remedy discrimination is through readily available, non-discriminatory transmission access.” Order No. 888-A at 30,176.

12. Regional Transmission Organizations, Order No. 2000, 89 FERC ¶ 61,285 (1999).

13. Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, 72 FR 12266 (Mar. 15, 2007), FERC Stats. & Regs. ¶ 31,241, order on reh’g, Order No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & Regs. ¶ 31,261 (2007), order on reh’g and clarification, Order No. 890-B, 73 FR 39092 (July 8, 2008), 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 74 FR 12540 (Mar. 25, 2009), 126 FERC ¶ 61,228 (2009), order on clarification, Order No. 890-D, 74 FR 61511 (Nov. 25 2009), 129 FERC ¶ 61,126 (2009).

14. See, e.g., Order No. 1000 at p. 3 (stating “We conclude that the existing requirements of Order No. 890 are inadequate.”); Order No. 888-A at 30,176 (“our authorities under the FPA not only permit us to adopt to changing economic realities in the electric industry, but also require us to do so as necessary to eliminate undue discrimination and protect electricity customers.”).

15. EPACT 2005, 16 USC § 216(a).

16. Id.

17. Piedmont Environmental Council v. FERC, 558 F.3d 304 at 310 (4th Cir. 2009) (Piedmont).

18. In Piedmont, the court rejected FERC’s interpretation of the legislation as allowing FERC to issue permits if the state fails to act or does not approve the project within a year. 558 F.3d at 315.

19. Piedmont, 558 F.3d at 314 (“Indeed, if Congress had intended to take the monumental step of preempting state jurisdiction every time a state commission denies a permit in a national interest corridor, it would surely have said so directly.”)

20. Order No. 1000 at p. 1 (“[t]he transmission planning activities that are the subject of Order No. 1000 have “a direct and discernible effect on rates.”
Id. at p. 112.

21. Id. at p 31.

22. Id. at p. 28.

23. Id. at p. 29.

24. Id. at p. 42.

25. 2013 Ind. Legis. Serv. P.L. 174-2013; Minn. Stat. § 216B.246 (2012); N.D. Cent Code § 49-03-02; S.D. Codified Laws § 49-32-20; 2013 Okla. Sess. Law Serv. Ch. 355 (H.B. 1932). Similar legislation was introduced in New Mexico in 2013 but did not pass. One of the bill’s proponents argued that the bill was necessary to protect utility customers both from rates set by FERC and from non-utilities, which have no obligation to serve.

26. Minn. Stat. § 216B.246.

27. FPA § 201(a), 16 U.S.C. § 824(a)

28. Id.

29. New York v. FERC, 535 U.S. at 18; Piedmont, 558 F.3d at 310.

30. Va. Code § 56-46.1

31. “We acknowledge that there is longstanding state authority over certain matters that are relevant to transmission planning and expansion, such as matters relevant to siting, permitting, and construction. However, nothing in this Final Rule involves an exercise of siting, permitting and construction.” Order No. 1000 at p. 107; see also Order 1000 at p. 402; Order No. 1000-A at 105, 186-191.

32. Order No. 1000 at p. 226.

33. Indeed, in a recent Order 1000 compliance filing, FERC rejected an RTO’s attempt to exclude from competitive bidding proposed new transmission projects that would be located in states with a ROFR.  FERC held that despite the existence of a state ROFR law, Order 1000 “does not permit a public utility transmission provider to add a federal right of first refusal for a new transmission facility based on state law.” Southwest Power Pool, Inc., 144 FERC ¶ 059 at p. 178 (2013).

34. Mississippi Power & Light Co. v. Mississippi Ex Rel Moore, 487 U.S. 354, 377 (1988) (Justice Scalia, concurring, citing Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 962-967 (1986)). The presumption against preemption does not apply when Congress has conferred authority on a federal agency to act in an area of previously existing state regulation. The question turns to the scope of the federal authority. See Piedmont, 558 F.3d at 312 (citing New York v. FERC 535 U.S. at 17-18).

35. This was articulated in New York v. FERC as a controversy concerning “not the scope of the Federal Government’s authority to displace state action, but rather whether a given state authority conflicts with, and thus has been displaced by the existence of Federal Government authority.” 535 U.S. at 17-18.

36. This was articulated in New York v. FERC as the rule “that a federal agency may pre-empt state law only when and if it is acting within the scope of its congressionally delegated authority. . . for an agency literally has no power to act, let alone pre-empt the validly enacted legislation of a sovereign State, unless and until Congress confers power upon it.” 535 U.S. at 18.

37. 535 U.S. at 16-17.

38. Id. at 23. Interesting analogies could also be made to the line of power allocation preemption cases decided by the Supreme Court in the late 1980s. Nantahala Power and Light Co. v. Thornburg, 476 U.S. 953 (1986) (FERC’s order reallocating shares of two affiliated companies’ entitlements to low cost power preempted the state’s proceeding to determine whether the costs were prudently incurred despite the fact that prudency determinations were typically within the states’ retail rate jurisdiction); Mississippi Power and Light Co. v. Mississippi Ex Rel. Moore, 487 U.S. 354 (1988) (FERC’s order approving the allocation of costs of a new nuclear plant preempted a state prudence inquiry into the management decisions that led to the resulting higher retail rates).

39. ___ F.3d ___ (7th Cir. 2013); 2013 WL 2451766 (C.A. 7).

40. Id.  (slip op. at 8).

41. Id.  (slip op. at 9).

42. Order No. 1000-A at p. 191.

43. Illinois Commerce Commission v. FERC, ___ F.3d at __ (slip op. at 9).

44. Indeed, the Order 1000 reforms build on the transmission planning requirements in Order No. 890 and no one sought judicial review of Order 890. Order No. 1000 at 99.

45. Illinois Commerce Commission v. FERC, ___ F.3d at at 14-15.

46. Id. (slip op. at 15)