Subject: court weighs u . s . power over utilities
the us supreme court has decided to hear arguments over the native load exception - one of our key policy questions . while the answer is still many months away , this is a critical decision for enron .
we will keep everyone apprised of developments .
jim
- - - - - forwarded by james d steffes / na / enron on 02 / 26 / 2001 12 : 26 pm - - - - -
" ronald carroll " 02 / 26 / 2001 12 : 02 pm to : , , , , , , , , , , , , , , , , , , , , , , cc : subject : fwd : court weighs u . s . power over utilities
- - - - - message from " tracey bradley " on mon , 26 feb 2001 13 : 37 : 22 - 0600 - - - - -
to : , , " deanna king " , , , , " justin long " , , " minh - tu nguyen " , " nancy pickover " , , , , , ,
subject : court weighs u . s . power over utilities
court weighs u . s . power over utilities
( february 26 , 2001 )
washington , feb 26 , 2001 ( united press international via comtex ) - - in a case that could prove pivotal for energy competition , the supreme court said monday it would hear argument next term on whether the federal energy regulatory commission can regulate the transmission of electricity within a state .
at issue is whether ferc regulations can foster competition in the local electricity marketplace . but the case also tests whether the supreme court will continue enhancing state power at the expense of the federal government , as it has in a number of decisions in recent years .
and far from being a dusty exercise in legal maneuvering , the case is also just one more example of how the actions of the supreme court can affect the average american .
the financial stakes are huge for the suppliers and distributors of electricity , but the dispute also could have a direct influence on how much consumers pay for electricity . though california is not a party in the case , the energy crisis in that state and its ramifications in neighboring states have brought concern over electric utilities to the forefront .
the federal power act of 1935 gave the federal government the authority to regulate interstate transmission of energy , but largely left an individual state in charge when it came to the energy transmission within that state ' s borders . in 1935 , " most electric facilities were intrastate facilities " operating within a particular state ' s borders , new york told the supreme court in a petition .
in 1998 , however , " ferc pre - empted state regulation of both the delivery of electricity from a generator to a retail consumer in the same state and the use of local distribution facilities to deliver electricity that is resold , " new york representatives said . " ferc envisioned the introduction of competition , not only in its jurisdictional ( wholesale ) market . . . but also in the state jurisdictional retail market , and concluded that competition allowed it to expand its jurisdiction in three areas . "
first , ferc asserted its jurisdiction over retail transactions when states " unbundled , " or separated , retail rates into charges for delivery and electricity . second , " ferc decided that if a seller of unbundled wholesale energy made use of a local distribution system , ferc - - not the states - - would set the rates that the seller would pay for the use of those . . . facilities , " new york said .
third , ferc pre - empted the state ' s authority to set rates to recoup the costs " incurred by utilities to serve retail customers , that may be ' stranded ' ( unrecoverable by utilities ) due to competition , " the state said .
the u . s . court of appeals for the d . c . circuit consolidated scores of challenges to the new regulations , including those from nine state commissions , and last june upheld all of ferc ' s actions .
several losing parties , including new york , then asked the supreme court for a review . monday , the justices combined the new york case with one brought by energy giant enron power marketing and agreed to hear the case sometime next term .
in its own brief to the supreme court on behalf of ferc , the justice department said a section of the federal energy act " explicitly gives ferc jurisdiction over ' all transmission of electric energy in interstate commerce ' and ' all facilities for such transmission ' regardless of whether the transmission is part of a wholesale or retail transaction . "
besides , the department argued , a distinction between interstate and intrastate energy may be meaningless .
in a 1972 ruling , fpc vs . florida light and 00 - 809 , enron vs . ferc )
by michael kirkland , upi legal affairs correspondent
copyright 2001 by united press international .
subject code : 02000000