Electricity Federalism Flashcards
Attleboro
A state may not regulate interstate wholesale-electricity rates.
Attleboro Gap
(1) No one can regulate prices charged across state lines.
(2) Lasted until 1935
Response to Attleboro Gap
Congress enacted FPA, creating FERC (FPC). FERC sets the prices for interstate wholesale and transmission (line use) transactions.
- Often creates a “bundled rate” wholesale + line charge, regulated by FERC.
Economics Testing the People
(1) Chicago School of Economics – Milton Friedman
(2) Natural Monopoly doesn’t really exist here
Macro-Phenomena
Capture Theory – agency capture; regulation more corrupt than previously thought.
Micro-Phenomena
Energy specific – Generation, transmission, distribution – generation is not really a natural monopoly.
There can be competition between generators.
Thus, the more expensive plants should only come on when we need them to.
Dispatch Order
In response to lack of natural monopoly in generation, decided that the first to run is the cheapest, the last one most expensive.
Massive Change
Deregulation
FERC handed over authority to voluntary, private, regional transmission operators (RTOs) that run wholesale and transmission markets.
- FERC is saying that they will only approve rates if the form RTOs & dispatch systems.
- Turns the energy universe upside down.
Rate Trapping
When a state, essentially telling FERC what rate they want.
States set the rate at X, thus making the utility goes into FERC and says, can you please set the rate at X. pg. 331.
And somewhat vice-versa
Demand Response
Where a utility or third party reduces customers’ energy use when prices are high and then pays customers for not using the saved electricity.
- A “power plant” just pays people off, and then resells the saved energy at the highest price in the dispatch scheme.
- Orders 719 & 745 approving of this scheme. Bottom of 331.
FERC v. Elec. Power Supply Ass’n
The Federal Energy Regulatory Commission may regulate demand-response or energy-conservation programs if such programs directly affect wholesale electricity rates.
State of N.D. v. Heydinger
A state regulation violates the Dormant Commerce Clause if the practical effect of the regulation is to control conduct that takes place wholly outside the boundaries of the state.
* Banning electricity created via coal from coming into Minnesota.
* Literally just J. Loken’s opinion, plurality panel
Gorsuch Opinion pg 345
Huber likes this one, compare with J. Loken
Extraterratoriality doctrine is probably dead Pork Producers
