UCLA Journal of Environmental Law and Policy

This Article compares the pattern of fundamental change, legal and regulatory response, and judicial adaptation underlying the electricity sector’s twentieth century beginnings to its current and ongoing rapid transition.  This comparison is then used as a basis to examine and contextualize the collaborative federalism jurisdictional framework that the Supreme Court employs when adjudicating modern-day jurisdictional disputes in the sector.

The early 1900s saw a period of rapid industry expansion, with the electricity sector progressing from small intrastate utilities to a sprawling interstate grid.  The expanding grid rapidly outgrew the state-led regulatory framework that had organically developed.  In turn, Congress responded by passing the Federal Power Act to fill what is now known as the Attleboro gap.  Courts in turn needed to resolve consequent jurisdictional tensions that arose under the new federal and state balance of authority.  The courts employed a bright-line jurisdictional framework that divided authority on the basis of location, adjudicating disputes by determining where the contested action took place.  This line-drawing split federal authority on one side of the juridical line—such as wholesale sales and interstate activities—and state authority on the other, such as retail sales and intrastate activities.

Just as the interstate expansion of the grid disrupted industry and regulatory structure in the 1900s, modern rapid change is once again creating new benefits and interests through foundational sector disruption.  This disruption has similarly placed pressure upon the electricity sector and its regulation.  This Article analyzes three foundational changes to the electricity sector that are spurring energy transition and grid modernization: opening the industry to competitive market forces; technological advances making a multidirectional grid possible; and evolving state policy preferences and priorities that seek to combat climate change.

The foundational change underway in the electricity sector has spurred a legal and regulatory response in order to create new connections between longstanding statutory mandate and sector change.  Congress, the Federal Energy Regulatory Commission (FERC), and states have responded with laws and regulations that acknowledge a sector that now resists simple, bright-line jurisdictional division.  These responses have invited increasingly frequent court review.  In adjudicating disputes in the electricity sector, the courts have turned to and fully embraced a functionalist, ‘collaborative federalism’ jurisdictional framework.  This jurisdictional framework considers an issue’s intent, target, and effect rather than an issue’s location.  It best enables courts to adjudicate disputes in the context of changes occurring within the modern electricity sector.