FERC v. Mississippi
456 U.S. 742 (1982)

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U.S. Supreme Court

FERC v. Mississippi, 456 U.S. 742 (1982)

FERC v. Mississippi

No. 80-1749

Argued January 19, 1982

Decided June 1, 1982

456 U.S. 742

Syllabus

The Public Utility Regulatory Policies Act of 1978 (PURPA) was enacted as part of a legislative package designed to combat the nationwide energy crisis. To further this effort, Titles I and III of PURPA direct state utility regulatory commissions and nonregulated utilities to "consider" the adoption and implementation of specific "rate design" and regulatory standards, and require state commissions to follow certain notice and comment procedures when acting on proposed federal standards. Section 210 of PURPA's Title II seeks to encourage the development of cogeneration and small power facilities, and directs the Federal Energy Regulatory Commission (FERC), in consultation with state regulatory authorities, to promulgate rules to carry out this goal. Section 210 then requires the state authorities, after notice and hearing, to implement such rules, and authorizes the FERC to exempt cogeneration and small power facilities from certain state and federal regulations. The State of Mississippi and the Mississippi Public Service Commission (appellees) brought an action in Federal District Court against the FERC and the Secretary of Energy (appellants), seeking a declaratory judgment that Titles I and III and § 210 are unconstitutional because they exceed congressional power under the Commerce Clause and constitute an invasion of state sovereignty in violation of the Tenth Amendment. The District Court so held and pronounced the challenged provisions void.

Held:

1. The challenged provisions are within Congress' power under the Commerce Clause. Pp. 456 U. S. 753-758.

(a) To assert that PURPA is facially unconstitutional because it does not regulate "commerce," or because it does not have "a substantial effect" on such activity, disregards the specific congressional finding in § 2 of PURPA that the regulated activities do have an immediate effect on interstate commerce. Pp. 456 U. S. 754-755.

(b) The legislative history amply supports the congressional conclusion that limited federal regulation of retail sales of electricity and natural gas, and of the relationships between cogenerators and electric utilities, was essential to protect interstate commerce and the Nation's economy. Pp. 456 U. S. 756-758.

Page 456 U. S. 743

2. The challenged provisions do not trench on state sovereignty in violation of the Tenth Amendment. Pp. 456 U. S. 758-771.

(a) Insofar as § 210 authorizes the FERC to exempt qualified power facilities from state laws and regulations, it does nothing more than preempt conflicting state enactments in the traditional way. Because of the substantial interstate effect of such activity, Congress may preempt the States completely in the regulation of retail sales by electric and gas utilities and of transactions between such utilities and cogenerators. With respect to § 210's requirement that state authorities implement FERC's rules, the statute and its implementing regulations simply require state commissions to settle disputes arising under the statute, the very type of adjudicatory activity customarily engaged in by the Mississippi Public Service Commission. Testa v. Katt,330 U. S. 386. Pp. 456 U. S. 759-761.

(b) The "mandatory consideration" provisions of Titles I and III do not involve the compelled exercise of Mississippi's sovereign powers or set a mandatory agenda to be considered in all events by state legislative or administrative decisionmakers, but simply establish requirements for continued state activity in an otherwise preemptible field. Cf. Hodel v. Virginia Surface Mining & Reclamation Assn., Inc.,452 U. S. 264. Pp. 456 U. S. 761-770.

(c) Similarly, the procedural requirements of Titles I and III do not compel the exercise of a State's sovereign power or purport to set standards to be followed in all areas of the state commission's endeavors. If Congress may require a state administrative body to consider proposed federal regulations as a condition to its continued involvement in a preemptible field, it may require the use of certain procedural minima during that body's deliberations on the subject. Pp. 456 U. S. 770-771.

Reversed.

BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, and STEVENS, JJ., joined. POWELL, J., filed an opinion concurring in part and dissenting in part, post, p. 456 U. S. 771. O'CONNOR, J., filed an opinion concurring in the judgment in part and dissenting in part, in which BURGER, C.J., and REHNQUIST, J., joined, post, p. 456 U. S. 775.

Page 456 U. S. 745

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