The US Supreme Court [official website] ruled [opinion, PDF] unanimously Tuesday that state plans by Maryland and New Jersey impeded upon the Federal Energy Regulatory Commission’s (FERC) [official website] authority under the Federal Power Act [text, PDF]. The states were subsidizing their in-state energy companies to build new electricity capacity in return for the option for those companies to market the energy through auctions. The court found [SCOTUSBlog report] that the effect of these auctions caused the regional prices of electricity in the Atlantic market to fall below what the FERC had concluded was necessary to assure the continued supply of adequate generation. The court consolidated Hughes v. Talen Energy Marketing and CPV Maryland, LLC v. Talen Energy Marketing [SCOTUSblog materials] and heard oral arguments [JURIST report] on the matter in February.

Collectively, recent federal legislation and technological innovation reduced barriers to entry in the electricity supply market leading to new developments such as demand response [JTLP student note], which triggered new legal challenges over the jurisdictional divide between the federal government and the states in US power markets. In January the Supreme Court ruled in favor [JURIST report] of the FERC over wholesale demand response. The court heard oral argument [JURIST report] in FERC v. EPSA on October 14. On behalf of FERC, the Solicitor General argued that Order 745 is a strong example of cooperative federalism, and the policy brings about billions of dollars in consumer benefits by lowering wholesale rates [SCOTUSblog op-ed]. The Electric Power Supply Association (EPSA) [official website] argued that Order 745 lures retail electricity consumers to participate in the wholesale market, which is prohibited by the FPA. The court granted certiorari in this case [JURIST report] and consolidated the dispute with another challenge from the EPSA, EnerNOC, Inc. v. EPSA [SCOTUSblog materials], in May.