Federal/State Jurisdictional Split: Implications for Emerging Electricity Technologies

The first Administration-wide Quadrennial Energy Review (QER), released in April 2015, found that the “interacting and overlapping” division of authority between “federal, regional and state institutions and regulatory structures” for the electricity sector could “impede development of the grid of the future [and] . . . the development of markets that efficiently integrate” new and emerging technologies. While “technology is indifferent to state-Federal boundaries and jurisdictions,” the QER explained, “technology users cannot be.” The report concluded that “[b]oth Federal and state governments need to play constructive and collaborative roles in the future to ensure that consumers and industry are able to maximize the value of new technologies.”

The QER recommended that the Department of Energy (“DOE”) facilitate such collaboration by playing a “convening role” to bring together state and federal regulators and other stakeholders to consider these issues. This paper provides background and analysis on these jurisdictional issues and the impact they may have on adoption of emerging energy technologies and coordination of markets for those technologies, in support of future dialogs on these subjects.

In particular, this paper reviews the structure of the Federal Power Act (“FPA”), and compares the division of authority between the federal and state governments adopted there with other federal energy and energy-related statutes. It then goes on to review some of the key decisions from the Supreme Court that further shaped this jurisdictional split, and some recent and current jurisdictional disputes that are bringing the FPA’s division of authority back into focus.