Northern States Power Co. v. Federal Energy Regulatory Commission

Pursuant to its authority under federal law, the Federal Energy Regulatory Commission (FERC) (defendant) issued an order requiring energy providers to treat wholesale customers no differently than retail customers. Under the order, if power companies chose to curtail power output (for example, if there were constraints on the amount of power a company could output), the companies would have to do so proportionally among wholesale customers and retail customers. The FERC had jurisdiction to regulate wholesale power customers, but, as the agency later conceded, it had no authority to affect state regulation of retail power rates. The Northern States Power Company (Northern States) (plaintiff) petitioned the United States Court of Appeals for the Eighth Circuit for review of the FERC’s actions, claiming that the FERC had exceeded its authority. According to Northern States, the order would create issues in the event of a power reduction. This was because wholesale customers, if facing power cuts, could conceivably purchase power from another source or even produce their own power; retail customers could not. Northern States argued that the order in effect meant that the FERC was regulating retail sales of power. The FERC responded that it was not regulating state retail power but was instead making clear that power companies like Northern States could not favor one buyer of electricity over another.