Federal District Courts Hold State Efforts to Develop New Electric Generation Plants Needed for Reliability Are Preempted

Summary: Two recently decided cases by the US District Courts for the District of Maryland and the District of New Jersey have potentially far reaching implications for state regulatory commissions. The District Courts find that Maryland and New Jersey initiatives to develop new generation facilities to address in-state reliability needs impermissibly regulate in the area of wholesale energy rates, a domain reserved exclusively to the Federal Energy Regulatory Commission (FERC) under the Federal Power Act (FPA), and thus run afoul of the Supremacy Clause of the US Constitution.