Court Opinion

ID: 9846404
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:40:20.656574+00
Date Added: 2024-06-11T09:19:29.288705
License: Public Domain

WYNN, Judge
dissenting.
FERC regulations under Section 201(a) of the FPA, 16 U.S.C. § 824(a), “extend only to those matters which are not subject to the regulation by the States.” By its terms, the FPA does not govern intrastate generation, production and transmission to retail customers. Thus, the NCUC, in this case, concluded “it has jurisdiction and authority under State law [N.C. Gen. Stat. §§ 62-30 and 62-32] to review, before they are signed, proposed wholesale contracts by a regulated North Carolina public utility granting native load priority to be supplied from the same plant as retail ratepayers and to take appropriate action if necessary to secure and protect reliable service to retail customers in North Carolina.” After reviewing the Commission’s conclusion, the majority held that because “under the FPA, Congress granted FERC exclusive jurisdiction in *210regulating wholesale sales of electric energy in interstate commerce” the “order of the Commission is pre-empted by the FPA and violates the Supremacy Clause of the Constitution of the United States.” While I agree that federal law grants FERC exclusive jurisdiction to regulate wholesale sales of electric energy in interstate commerce, I disagree that federal law preempts the State of North Carolina from having any oversight over proposed contracts to engage in the sale of energy generated in North Carolina to another state. I respectfully dissent.
In reaching its holding, the majority relies upon federal cases in which the courts addressed attempts by a state public utility commission to exercise authority over activities involving existing contracts for the wholesale sales of electric energy in interstate commerce. However, none of the cases cited by the majority address the pre-review of proposed wholesale agreements by a state utility commission. Indeed, in Appalachian Power Co. v. PSC of West Virginia, 812 F.2d 898 (4th Cir. 1987), a case heavily relied upon by the majority, the Public Service Commission of West Virginia sought to undertake a prudence inquiry into interstate energy exchanges after FERC approval. In concluding West Virginia’s jurisdiction was preempted, the Fourth Circuit determined the state commission’s inquiry would duplicate the FERC’s inquiry and would pose the potential for direct conflict with FERC pronouncements and would impede accomplishment of the purposes of the FPA. See 812 F.2d at 903-05.
Unlike PSC of West Virginia, the NCUC attempts to review proposed contracts for the interstate sale of wholesale electricity prior to the execution of the contracts in order to protect the interests of North Carolina electricity retail customers, which is not preempted by federal law. Section 201(a) of the FPA, 16 U.S.C. § 824(a), states federal regulation only extends to those matters not subject to state regulation, which includes the interstate wholesale sale of electricity. However, in this case, the NCUC is attempting to assert jurisdiction over non-executed contracts which contemplate the wholesale sale of electricity from plants that would serve interstate wholesale and intrastate retail customers. Ensuring the reliability of service to intrastate retail customers is within the province of state regulation. See N.C. Gen. Stat. § 62-2(a)(3). Whereas, PSC of West Virginia precludes state review of contracts after FERC approval, the pre-execution review of such contracts has not been prohibited or preempted.
*211Although the majority has rendered a correct recitation of the law governing preemption1, it should also be noted that “a test of whether both federal and state regulations may operate, or the state regulation must give way, is whether both regulations can be enforced without impairing the federal superintendence of the field, not whether they are aimed at similar or different objectives.” Florida Lime & Avocado Growers, Inc. v. Paul, 373; U.S. 132, 142, 83 S.Ct. 1210, 1217, 10 L. Ed.2 d 248, 256-57 (1963). Thus, neither statute nor case law prohibits the NCUC from reviewing contracts prior to its execution to ensure the terms of those contracts provide for adequate, reliable and economic utility service to the citizens and residents of this State. Upon execution of the contract, the FERC can approve or disapprove the agreement or embark upon its own prudence inquiry. Such a procedure neither creates an actual conflict between state and federal law, makes compliance with federal and state law impossible, nor poses an obstacle to the accomplishment of the purposes and objectives of the FPA.

. As the majority correctly states:
The threshold question in any preemption analysis is whether Congress intended federal regulation to supercede State law. Within constitutional limits, Congress may preempt state authority by explicit terms. Absent explicit preemption, Congress’ intent to preempt may also be found from a pervasive scheme of federal regulation to make reasonable the inference that Congress left no room for the States to supplement it. If Congress does not entirely displace state regulation in a specific area, state law is preempted to the extent that it (1) actually conflicts with federal law; (2) makes compliance with both federal and state law impossible; or, (3) where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.
(citations omitted).