America the Sustainable: FERC’s Ability to Support Clean Energy Questioned in the Wake of Shifting Agency Authority

I. Introduction

The overturn of the forty-year-old Chevron doctrine sent shockwaves through the various executive agencies; as the regulatory arm of this country contemplates its future, this Comment analyzes the potential impacts that Chevron’s demise will have on the Federal Energy Regulatory Commission’s (FERC) ability to steer national energy policy towards a more sustainable future. The effects of this decision are still being worked out, and going forward, decisions regarding FERC action will end with the courts, which have “the power to make all manner of scientific and technical judgements.”^[1]

While that is the future that lies ahead for the Commission, there are still countless approaches by which FERC can drive policy towards developing more renewable resources in the United States. This Comment elaborates on a number of those approaches, and the overall goal is to determine what legal mechanisms remain available for the federal government. The question is then: After the overturn of the Chevron doctrine through the Supreme Court’s decision in Loper Bright,^[2] what avenues remain available for FERC to facilitate a movement towards powering homes and businesses in a more sustainable manner?

In the process of determining how FERC can steer policy towards greater energy sustainability, there needs to be a consensus on what sustainability is. There are varying definitions of what constitutes a sustainable resource.^[3] One version of sustainability is encompassed by resources that are renewable. But even considering what constitutes renewability leads to disagreement. Generally, states, either through a Renewable Portfolio Standard, a Clean Energy Portfolio Standard, or other statutes, will define what constitutes clean or renewable energy.^[4] However, the federal government has taken the liberty to define the elusive concept of renewability in the Energy Policy Act of 2005 (EPAct of 2005), stating that renewable energy sources can be “electric energy generated from solar, wind, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity.”^[5] While the definition of sustainable or renewable resources is fluid, the overarching theme remains consistent. That theme is a policy goal to reduce the need to use fossil fuels such as coal, petroleum, and even natural gas to shift the nation’s infrastructure towards meeting consumer demands with renewable sources such as wind, solar, hydroelectric, geothermal, or biomass. Ultimately, FERC has a voice in shaping policy through its promulgation of rules, and it can use its voice and the legal framework to promote a renewable energy-facing policy.^[6]

This Comment will only evaluate the role that FERC fills in steering policy through the process of electricity generation and transmission. In the larger scheme of energy policy, other players like state legislatures, other federal agencies such as the Internal Revenue Service, Congress, and even private actors can influence the shift towards renewable energy.^[7] To create a more sustainable energy future, collaboration by all parties would be necessary, but this Comment is limited to a discussion surrounding what FERC can accomplish through electricity generation and transmission in a post-Chevron world.

This Comment will be broken down into three major parts. To provide critical background, the first part will analyze the history of electricity and the Department of Energy’s (DOE) regulation of electricity in the United States. This part will cover the emergence of a national power grid, the Federal Power Act (FPA),^[8] and the role that vertically integrated utility monopolies play in shaping the nation’s electric grid. This part will also detail the transformations that have been developing regarding electricity transmission over the past forty years.

The second part will evaluate four areas in which FERC has asserted statutory authority to act. Agency authority can only exist where that authority was given to an agency by a law passed in Congress.^[9] Therefore, this part will also discuss the FPA. Furthermore, this part will evaluate the impact of the Energy Policy Act of 1992 (EPAct of 1992).^[10] The final legislation that this part will cover is the EPAct of 2005.^[11] The purpose of this part is to determine which regulations promulgated by FERC were upheld by a federal court. In addition to seeing whether a given regulation was upheld, it is critical to the issue of this Comment to determine if a Chevron analysis was used.

Finally, the third part will analyze the potential impacts that the Chevron doctrine’s demise will have on FERC’s regulatory authority. While the focus is simply to analyze FERC’s prospects moving forward, this part will contain some generalized conclusions about which regulatory measures are most threatened by Loper Bright and which measures remain virtually unchanged. Overall, this part will finish the picture in determining to what extent FERC can steer national policy towards a more sustainable future.

II. Background on Electrification of the United States

Appreciating the impacts of recent Supreme Court decisions on FERC’s ability to steer national policy requires an understanding of how FERC developed authority through the modern electrical grid. This Part will establish the origins of the electric grid, its submission to regulation, and the evolution of FERC’s regulatory authority leading up to 2024.

A. The Origins of Electrification

Thomas Edison built the early forms of electricity-generating power plants, but they were limited to powering areas within a few city blocks from where the electricity was generated.^[12] This inefficiency was cured by the popularized use of alternating current (AC), which enabled electricity to be supplied to an entire urban area.^[13] In the early stages of electricity distribution, electric utilities were vertically integrated; utility companies owned all aspects of the electricity process from generation to retail sale.^[14] The combination of the utility companies’ isolation and small size resulted in regulation taking place at the state level through Public Utility Commissions (PUCs).^[15] Originally, the regulation of electric generation and distribution operated at the local level, but eventually states took over the regulation of privately owned public utilities and enshrined the obligations of and the benefits for those privately owned businesses in state statutes.^[16]

B. The Introduction of Federal Regulation

While states and localities initially took regulatory control over electric utilities, when technologies for the distribution of electricity improved, providers capitalized on the availability of better transmission by interconnecting their transmission lines to reach larger markets with more customers.^[17] The attempt to reach larger markets resulted in the exchange of electricity from one state to another, which gave rise to a situation where a PUC in one state would regulate the rate paid for electricity in a different state.^[18] According to the Supreme Court, this practice constituted a violation of the interstate Commerce Clause, and the Court asserted that any regulation of electricity prices where two different states were involved could “only be attained by the exercise of the power vested in Congress.”^[19]

At the time the Court raised this issue in their Attleboro opinion, Congress had not exercised its regulatory authority. However, seemingly taking the 1927 opinion as an invitation, Congress filled that role in 1935 through the passage of the FPA.^[20] The FPA gave the newly created Federal Power Commission (later replaced by FERC) the authority to regulate electricity where the electricity was “in interstate commerce.”^[21] This move by Congress split the control of electricity generation, transmission, and distribution by giving FERC’s predecessor the sole authority to regulate interstate transmission of electricity and all wholesale sales of electricity that were done in interstate commerce.^[22] Though the Commission was initially granted a great degree of regulatory authority, the states’ PUCs still held onto the authority to regulate retail electricity transactions and the siting of interstate and intrastate transmission lines.^[23]

C. Restructuring of the Electric Grid

Until 1978, the dual regulation by state PUCs and FERC protected electric utilities by granting them a status as “legitimate monopol[ies]” that exercised exclusive control over areas that they serviced.^[24] In 1978, however, the Public Utilities Regulatory Policies Act (PURPA) took the first step in restructuring the nation’s electricity grid by requiring electric utilities to purchase generated energy from “qualifying facilities.”^[25] PURPA showed that “competitive contracting had significant advantages over the status quo” of having vertically integrated electricity utilities control all aspects of the process.^[26] Competition was permitted to flourish under PURPA and subsequent FERC regulation because the Commission was given authority by Congress to mandate that the protected utility monopolies purchase power from qualifying facilities at “avoided cost[s].”^[27] This shift prompted the growth of independent power producers now that the utility companies, who had sole control over transmission lines, were required to purchase independently generated power.^[28]

The next major shift in the electric grid came almost fifteen years later with the passage of the EPAct of 1992.^[29] PURPA demonstrated that opening access to transmission lines fostered competition, so Congress, through the EPAct of 1992, doubled down on this approach by giving FERC the authority to mandate that transmission-owning utilities provide nondiscriminatory access to the use of those lines to transmit electricity to an end consumer.^[30] This Act also had an aim of increasing support for renewable energy sources through tax credits.^[31] FERC acted pursuant to this authority and promulgated Order 888, which, in part, required those utility companies that owned and operated transmission lines to file a tariff with the Commission so that the Commission could regulate the rates charged by the utility company for allowing independent power producers open access to the use of the transmission lines.^[32] Order 888 was not the end of FERC’s regulatory action regarding the EPAct of 1992. Order 888 started the process of deregulation (removing authority over transmission lines from the utility companies), but FERC also promulgated Order 2000, which sought to establish Regional Transmission Organizations (RTOs).^[33] These FERC orders essentially “unbundl[ed]” the process of electricity generation and transmission because electric utilities were expected to relinquish control over their transmission lines and hand that control to an independent RTO.^[34] While the intention behind Order 2000 was to have all regional utility monopolies shift operation of transmission lines to an RTO, FERC maintains that this policy is a “suggested . . . concept” that provides an option “to satisfy the requirement of providing non-discriminatory access to transmission,” so several states have neglected to join an RTO.^[35]

This framework was revisited when Congress amended the FPA with the EPAct of 2005.^[36] The EPAct of 2005 was an attempt by Congress to increase FERC’s authority over the siting of transmission lines.^[37] The portion of the EPAct of 2005 at issue would work as follows: The Secretary of Energy would have the ability to define corridors known as “national interest electric transmission corridors” (NIETC), and when those corridors are defined, FERC would have authority to give out permits for the “construction or modification” of transmission lines.^[38] FERC interpreted the process embodied in the statute and provided notice and opportunity for public comment regarding its interpretation.^[39] However, in Piedmont, the circuit court rejected that interpretation.^[40] The circuit court decisions limiting the impact of the EPAct of 2005 resulted in the vacating of the only two NIETC designations, and since the decision in California Wilderness, no new NIETCs have been designated as of 2023.^[41]

The DOE and FERC’s potential authority for transmission siting is not dead. Congress breathed new life into that potential with the Infrastructure Investment and Jobs Act of 2021 (IIJA).^[42] In what could be described as a Congressional attempt to override circuit court decisions regarding NIETCs, this federal legislation amended section 216 of the EPAct of 2005 to give FERC the ability to site new transmission lines over a state’s denial.^[43]

D. Electricity Generation and Climate Impacts

To understand the importance of FERC’s ability to steer national renewable energy policy, it is critical to evaluate why a renewable energy policy is important. The need for renewable energy sources can be looked at through a variety of lenses, but arguably, the most important is a recognition of the climate impacts that could be mitigated through applications of renewable technology.

Since the development of electricity for commercial and residential use, fossil fuels have been the dominant source of fuel to generate electricity.^[44] Even though energy sources like coal are becoming less common for power plant production, other combustion-based fossil fuels like petroleum and natural gas still make up the majority of what powers America’s electricity grid.^[45] These energy forms, through their combustion process, are the largest source of carbon emissions in the United States.^[46] Additionally, carbon dioxide, like all greenhouse gases, has the effect of trapping heat in the atmosphere and increasing global temperatures.^[47] Data and statistics behind climate change and its potential adverse effects on humanity do not fully encompass the importance of a grid that supports renewable energy. Even large-scale oil and gas companies and their representatives recognize a variety of reasons for giving support to a burgeoning renewable energy production market.^[48] Beyond climate change, factors like energy security, national values (or home-country factors as explained by Penha), and firm-specific factors can all demonstrate a growing movement towards incorporating renewable energy into the power grid.^[49]

The remainder of this Comment will analyze FERC’s ability to support renewable energy development and the role that the Commission can take in driving renewable energy policy in the wake of a changing landscape for administrative law.

III. Survey of FERC’s Authority to Encourage Renewable Energy Access

This Part will evaluate key instances where FERC’s interpretation of a congressional statute has been challenged. Through the interpretation of a statute, prior to 2024, the Commission could review the language of a statute, and, if it was interpreted reasonably, assert authority for a given action based on that review.^[50] This Part will provide greater context for the analysis of how Chevron’s overruling may affect a potential FERC pro-renewable energy policy moving forward. The distinguishing factor for these interpretations of authority will be whether a federal court has upheld the interpretation. Even more distinguishing for the analysis in this Comment will be whether the affirming court relied on the deceased Chevron two-step process.

A. Deregulation of Transmission Lines for Competition Development

Deregulation is the concept developed through FERC Order 888, which mandated that vertically aligned utility companies provide open and nondiscriminatory access to transmission lines.^[51] Deregulation is critical to the development of renewable energy sources because, without the decoupling of power generators from the transmission lines they operate, renewable energy generators would be left without the means to deliver clean energy to an end consumer.^[52] By opening access to transmission lines, renewable energy generators can avoid paying “[t]he unusually high up-front costs of building the networks of substations, power lines, and other infrastructure needed to reliably distribute electricity to . . . customers.”^[53]

Even though Order 888 was issued shortly after the passage of the EPAct of 1992, FERC’s order asserted authority to unbundle the transmission pricing from the electricity generation pricing under the FPA.^[54] FERC rationalized its authority under the FPA by claiming that a utility company’s denial to provide reasonable prices for the use of its transmission lines was discriminatory.^[55] Ultimately, the Supreme Court determined that FERC has the authority to regulate unbundled retail transmissions under the FPA.^[56] The Supreme Court was affirming the D.C. Circuit Court opinion, which focused on the “plain meaning” of the FPA giving broad authority to FERC “over all interstate transmissions.”^[57] More important for the issue present in this Comment is that the Supreme Court, in analyzing whether FERC was acting pursuant to its authority in the FPA, did not resort to the Chevron analysis.^[58] In fact, the Chevron analysis was only mentioned once in the majority opinion—when Justice Stevens quoted the ruling the Court ultimately affirmed, which came from the D.C. Circuit.^[59] There was a second mention of Chevron analysis, which was relegated to a footnote in the dissent.^[60] The minority questioned the position that FERC’s interpretation of the FPA was a reasonable interpretation under Chevron, but no elaboration was given as to the steps in that process.^[61] The dissent mentioned Chevron another time, and here, its conclusion was that Order 888 would fail to be a reasonable construction of the statute.^[62]

B. Promulgating Wholesale Demand Response Strategies

The FPA grants FERC the authority to regulate wholesale sales of electricity in interstate commerce, but the FPA explicitly reserves to the states and their PUCs the authority to regulate retail sales of electricity.^[63] While the distinction appears simple, according to Justice Kagan, “the wholesale and retail markets in electricity are inextricably linked,” which can frequently lead to jurisdictional disputes between FERC and state PUCs.^[64] The meaning behind that quote relates to a niche authority FERC assumes to possess through interpretation of the FPA known as demand response, but before analyzing the Court’s determination, understanding demand response is critical. Demand response is a strategy where, instead of seeking to ramp up electricity production during times of high demand, the supplier of electricity will incentivize consumers to reduce their power usage.^[65] This aids electricity suppliers by not having to bear the marginal cost of producing electricity with diminishing returns, but it also benefits the consumer in the form of incentives or reduced rates.^[66]

Demand response is a strategy that, albeit indirectly, creates opportunities for further renewable energy development. By reducing high energy use and implementing more efficient energy use, demand side response strategies can account for intermittency constraints that generally plague renewable energy sources.^[67] Demand response at the wholesale level influences the retail level, so when Justice Kagan said that those markets are linked, the key question in FERC v. EPSA was whether initiating demand response strategies at the wholesale level was within the authority of FERC per the FPA.^[68] At the circuit level, it was determined that this action was outside the authority granted to FERC in the FPA.^[69] However, on appeal, the Supreme Court emphatically overturned the D.C. court’s decision.^[70] In fact, the Supreme Court determined that demand response was squarely within the authority of FERC through its interpretation of the FPA.^[71] Justice Kagan, in her majority opinion, stated that there was no need to evaluate this based on Chevron because the plain language of the statute was not ambiguous at all.^[72]

C. Siting New Transmission Lines in Areas of National Need

The electric grid needs to be modernized if renewable energy sources are going to be available for use on the national grid.^[73] For renewable energy projects such as wind farms, the development of new transmission lines is crucial to connect the windy rural areas (where the electricity is generated) to the densely populated urban areas (where the electricity is consumed).^[74] One way to improve renewable power generators’ access to the end consumer would be to allow FERC to override state interference and site new transmission lines; this would help renewable development because, without the necessary transmission, the sustainable generation of electricity is a moot point.^[75] The question, then, is: How can FERC facilitate the construction of additional transmission lines to assist in the development of renewable energy generation?

Congress answered that question in 2005 with EPAct of 2005 when they addressed “siting of interstate electric transmission facilities” in section 1221 of the Act.^[76] This portion of the Act took a step towards granting the federal government the power of eminent domain by vesting authority in the Secretary of Energy to create NIETCs.^[77] However, the law initially did not grant the eminent domain authority to the Commission because of a Fourth Circuit decision in Piedmont Environmental Council and a Ninth Circuit decision in California Wilderness Coalition.^[78]

In Piedmont, while challenging FERC’s authority, the plaintiff claimed the Commission did not adhere to the requirements of the EPAct of 2005 when permitting an electricity transmission line in an NIETC.^[79] The controversy, at its core, was conflicting interpretations of the EPAct of 2005 and, most precisely, two words within the legislation.^[80] The clause at issue in the Act stated that FERC has authority to site a transmission line if “a [s]tate commission or other entity that has authority to approve the siting of the facilities has . . . withheld approval for more than 1 year.”^[81] FERC interpreted the phrase “withheld approval” to include a scenario where a state has denied its approval to site a new transmission line.^[82] To determine what Congress meant by “withheld approval,” the court resorted to an interpretation of the statute and FERC action through the Chevron doctrine.^[83] This led the court to determine that “withheld approval,” from a plain meaning perspective, does not allow FERC to site transmission lines over the denial of a state.^[84] As a result, state PUCs hoping to avoid FERC jurisdiction to site electricity transmission lines only needed to officially deny FERC’s ability to do so.^[85]

In California Wilderness, the court reviewed the DOE’s attempt, pursuant to assumed authority granted in the EPAct of 2005, to designate two NIETCs.^[86] The question presented to the court was one of statutory construction and interpretation—more specifically, the plaintiffs believed that the statute meant one thing, while the DOE believed it to mean another.^[87] Because the question involved an agency interpretation of a Congressional statute, the court evaluated the action based on the Chevron doctrine.^[88] However, even after applying a standard that is “highly deferential” to the agency, the court determined that the DOE had not adhered to the language in the EPAct of 2005.^[89] California Wilderness is a prime example of how the Chevron doctrine was used to evaluate an energy-related determination.

Both cases set the stage for Congress to try another time to create an eminent domain authority for the FERC because the first attempt was stymied by the federal courts. This attempt from Congress came in 2021 with the passage of the IIJA.^[90] A portion of the IIJA amended the language from the EPAct of 2005 to give FERC authority to site transmission lines over the denial of states.^[91] The only question that remains regarding siting authority is whether the DOE will attempt to create another NIETC, giving FERC another chance to site new transmission facilities.

D. Requiring Wholesale Energy Storage Development

On their own, renewable energy generators like wind and solar struggle to meet the baseload requirements to make them a more effective energy source than coal or natural gas.^[92] Baseload forms of energy are larger power plants that provide a consistent amount of energy twenty-four hours a day, which most renewable energy sources are not capable of doing.^[93] But if energy storage were more available on the national grid, the storage capacity combined with the availability of renewable energy generators would be sufficient to replace fossil fuel baseloads.^[94] For purposes of this Comment, the question is: How could FERC facilitate a movement towards the creation of more energy storage?

FERC, per the FPA, only has the authority to regulate prices for electricity in the wholesale market or prices for electricity that is in interstate commerce.^[95] With that being the consensus for FERC authority in regulation, FERC issued a final rule, which amended the Code of Federal Regulations to mandate that all Regional Transmission Operators and Independent System Operators “provid[e] a participation model for electric storage resources.”^[96] The result of this order, and the reason the order was challenged as a violation of the FPA’s authority granted to FERC, was that barriers for energy storage development were removed, and state utility commissions were no longer able to deny space for energy storage technology.^[97] In NARUC v. FERC, the D.C. Circuit determined that FERC’s interpretation of the FPA was correct and that FERC indeed had the authority to issue the final rule in Order 841.^[98] While the final determination is important, what is more critical to the scope of this Comment is the standard the court applied in reaching its conclusion. Two standards were used to evaluate FERC’s action in this case: the first was a standard that was espoused in EPSA v. FERC,^[99] and the second was the “arbitrary and capricious” standard, which originates from the Administrative Procedure Act.^[100] The D.C. Circuit in NARUC v. FERC used the evaluation process from EPSA v. FERC, which required the court to determine (1) whether the challenged order “directly affect[s] wholesale rates”; (2) “whether the Commission has regulated state-regulated facilities”; and (3) whether the action is contrary to the FPA’s core purposes of “curb[ing] prices and enhanc[ing] reliability in the wholesale electricity market.”^[101] This was arguably a determination about whether or not FERC acted in accordance with the authority granted to the Commission by the FPA, which, in the context of reviewing administrative decisions prior to 2024, would have implicated the Chevron doctrine.^[102] Here, however, the D.C. Circuit forewent the Chevron analysis and relied on more recent case law that was engaging with the same statutory concept.^[103]

IV. FERC’s Prospects for Renewable Energy Development in a Post-Chevron World

The Chevron doctrine was arguably one of the most influential doctrines dealing with agency and administrative law in the United States. When Chevron was decided more than forty years ago, it was “relatively noncontroversial,” but within the last few years, conservatives in the judiciary have made calls for its retirement.^[104] Before Chevron was ultimately overruled, it was “cited by federal courts more than 18,000 times.”^[105] However, before the Supreme Court’s decision to overrule Chevron in Loper Bright,^[106] Chevron analysis had been avoided by the Supreme Court for “several years.”^[107]

A. The Chevron Doctrine

1. The Doctrine Prior to 2024

The doctrine, as applied in its heyday, was practically simple. The analysis posed two questions to determine whether an agency appropriately constructed a statute: (1) whether Congress has directly spoken to the precise question at issue, and if it had not, then (2) whether the agency’s answer to the precise question is a permissible construction.^[108] These questions had the effect of giving the agencies deference in statutory interpretation, as the court would not submit its own interpretation and would defer to the agency as long as its construction was reasonable.^[109]

2. The Doctrine After 2024

The Chevron doctrine (otherwise referred to as Chevron deference) was officially reversed in 2024 when the Supreme Court decided Loper Bright Enterprises v. Raimondo.^[110] The majority opinion, authored by Chief Justice Roberts, rested its decision to overturn Chevron on the doctrine’s incompatibility with Article III judicial review, contradiction of the Administrative Procedure Act, and its long history of contradiction and confusion.^[111] Roberts emphatically stated that the authority to interpret and construct a law passed by Congress belonged to the federal courts, and that the Chevron doctrine robbed the courts of that authority by delivering it to federal agencies.^[112] While emphatic, Loper Bright leaves a sliver of light where agencies like FERC may still be justified in taking action pursuant to statutory authority.

First, Chief Justice Roberts affirms some level of deference by encouraging courts to “seek aid from the interpretations of those responsible for implementing particular statutes.”^[113] Second, the majority recognized Congress’s ability to pass a statute that “empower[s] an agency to decide how a broad statutory term applie[s] to specific facts found by the agency.”^[114] Finally, the majority notes that a statute can still grant an agency discretion for interpretation, which “authoriz[es the agency] to exercise a degree of discretion.”^[115]

One more safeguard exists in Loper Bright’s majority ruling, which is arguably the most important for the current analysis. At the end of the majority opinion, Chief Justice Roberts emphasizes that cases in the past that relied on Chevron, including the Court’s holding in the Chevron case itself, “are still subject to statutory stare decisis despite [the Court’s] change in interpretive methodology.”^[116] The dissent is not inveigled by this argument, but instead, Justice Kagan claims all that would be required to revisit an unpopular precedent resting on a Chevron ruling is a “special justification”; Kagan seems to imply that this justification represents more of a molehill than a mountain.^[117]

B. Reexamining FERC’s Authority Regarding Deregulation

As stated previously, FERC’s deregulation authority is best described in its attempt, through Order 888, to remove control of interstate electricity transmission lines from the utilities, with a goal of providing equal, nondiscriminatory access to those lines to all electricity generators.^[118] To accomplish this goal—the promulgation of Order 888—FERC grounded its authority in the 1935 version of the FPA instead of its newly commissioned authority in the EPAct of 1992.^[119] Specifically, FERC would forego its approach of making individual rulings on instances of discriminatory action involving transmission lines, and instead, it would require the filing of open access tariffs to demonstrate that transmission line administrators were consistently providing equal and nondiscriminatory access.^[120] FERC asserted its basis for this authority as arising from section 206 of the FPA, which, as FERC claimed, grants the Commission broad authority to remedy discriminatory and non-equal practices engaged in by transmission line operators.^[121] Section 206 explains that

“[w]henever the Commission . . . shall find that any rate . . . collected by any public utility for any transmission or sale subject to the jurisdiction of the Commission . . . [is] unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable rate . . . and shall fix the same by order.”^[122]

Based upon that statutory authority, the Court in New York v. FERC affirmed Order 888 and asserted that it was “a statutorily permissible policy choice.”^[123]

With the foundation of FERC’s action regarding the unbundling of interstate electricity transmission, the primary question for this Section remains. That is: Does the action remain a permissible policy choice in a post-Chevron world? Based upon the rationale in Loper Bright, the following subsections reveal that Order 888 and FERC’s attempts at unbundling will be largely unaffected by the change in interpretive methods promulgated by Loper Bright.

1. New York v. FERC Does Not Rely on Chevron

The majority in this case only mentioned Chevron one time, and that sole mention only exists in the opinion because the majority was quoting the decision of the appellate court that they would ultimately affirm.^[124] Instead of resorting to a Chevron analysis, the Court was able to determine that the statute was unambiguous in its conferral of this type of authority on the Commission.^[125] Viewing this from the perspective of Loper Bright’s dissent,^[126] only a decision and acquiescence of authority to a federal agency that does not rely on the Chevron doctrine is safe from reversal after the expiration of that doctrine.

2. New York v. FERC Recognizes Discretionary Authority Conferred on FERC

The majority in this case acknowledges that the statutory scheme grants FERC a degree of discretion.^[127] Even with the changes to judicial statutory interpretation in Loper Bright, explicit discretion, within constitutional limits, can be granted to an executive agency; exercise of that discretion would still be permissible under the framework presented by Chief Justice Roberts in Loper Bright.^[128]

C. Reexamining FERC’s Authority Regarding Wholesale Demand Response

When FERC asserted its authority to promulgate wholesale demand response as an energy policy, the Supreme Court acknowledged this policy’s interference with retail markets, but nonetheless, the Court determined that this was squarely within FERC’s statutory authority.^[129] FERC asserted the jurisdiction to engage in demand response strategies through its Final Order 745.^[130] To demonstrate that FERC had jurisdiction to steer policy towards demand response, the Commission relied on sections 201, 205, and 206 of the FPA.^[131] This assertion of authority was subject to the Chevron doctrine when Order 745 was challenged in the D.C. Circuit Court, and ultimately, the majority vacated Order 745, holding that the Commission’s action failed Chevron step one.^[132] On appeal to the Supreme Court, the Court detailed the Commission’s position relating to Order 745 as permissible under the FPA.^[133] The Supreme Court agreed, in an opposite manner from the D.C. Circuit, claiming that the FPA unambiguously gives FERC authority to regulate wholesale demand response because it is “a practice directly affecting wholesale electricity rates.”^[134] Beyond that, the majority opinion further corrected the D.C. Circuit opinion when it explained that there was no need to analyze FERC’s authority under the Chevron doctrine because “FERC’s authority [is] clear.”^[135]

Based on the reasoning provided by the majority in EPSA, with the changes in interpretive method from Loper Bright, FERC’s authority to engage in demand response is unlikely to be restricted in the future. This is based on the following reasons.

1. EPSA v. FERC Did Not Rely on a Chevron Analysis

Much like the conclusion relating to FERC’s deregulation authority affirmed in New York v. FERC,^[136] the majority opinion in FERC v. EPSA did not rely on a Chevron analysis.^[137] Any concerns that the dissent had regarding the revisiting of prior Chevron-based decisions are alleviated because demand response power was not subject to the Chevron doctrine.^[138] Beyond the aversion to a Chevron analysis, the Court appears to take a new approach to FERC’s construction of the FPA; instead of determining whether the construction is reasonable (as a court normally would under Chevron step two), the Court in EPSA focused on whether FERC’s action “directly affects wholesale rates.”^[139]

2. EPSA v. FERC Affirms FERC Authority per the Meaning of the FPA

The majority in Loper Bright made it clear that prior decisions of statutory interpretation would stand as a matter of stare decisis.^[140] The Court’s analysis of the FPA in its decision regarding wholesale demand response relies on statutory interpretation rather than deference given to an agency after the fact.^[141] By deciding EPSA v. FERC on the basis of statutory interpretation, the Supreme Court has strengthened demand response policy within the authority of FERC because statutory interpretation receives a specific classification as “super-strong stare decisis.”^[142]

D. Reexamining FERC’s Authority Regarding Siting Interstate Transmission

FERC’s authority regarding the siting of interstate transmission is distinguishable, from a judicial perspective, from the Commission’s authority in demand response and deregulation. In both deregulation and demand response, the Court had the final say in a matter of statutory interpretation,^[143] but regarding the siting of interstate transmission lines, Congress spoke the last word.^[144] It was only after the decision in California Wilderness that Congress responded to the unfavorable ruling by amending the EPAct of 2005 with the IIJA of 2021.^[145] Before California Wilderness, the Fourth Circuit applied the Chevron doctrine to conclude that the EPAct of 2005 did not confer upon FERC the authority to permit interstate transmission lines over the denial of a state.^[146] California Wilderness, also resorting to a Chevron analysis, determined that the DOE had failed to reasonably comply with the same statutory language to properly designate NIETCs.^[147] The result of these two opinions was the cessation, at least for the foreseeable future, of FERC’s authority to site interstate transmission lines.^[148] Had the courts’ decisions in California Wilderness and Piedmont been decisions of constitutional interpretation, Congress likely would not have had the ability to respond.^[149] However, in cases of statutory interpretation, Congress can “respond to agency and court constructions with amendments to the statute.”^[150] This is exactly what Congress did when it amended the EPAct of 2005, through the IIJA of 2021. Congress extended FERC’s authority by granting FERC the authority to site transmission lines over the “denial” of a state.^[151]

Because of this foundation, FERC’s authority to site interstate transmission lines cannot be subject to the same inquiry in Loper Bright because the amended statutory authority granted to the DOE and FERC has neither been acted on by federal agencies nor has it been challenged in the courts.^[152] As this authority is utilized in the future, its hypothetical review will be subject to the Court’s statutory interpretation of the IIJA and whether a permissible degree of discretionary authority was granted the Commission and the DOE by Congress.^[153]

E. Reexamining FERC’s Authority Regarding Energy Storage Requirements

Of all the examples of FERC orders and their subsequent challenge in federal courts discussed in this Comment, Order 841 and its litigation in NARUC v. FERC stand out as the most recent.^[154] Here, FERC’s authority, exercised in Order 841, to mandate open access for energy storage resources, was affirmed by the D.C. Circuit as proper authority under the FPA.^[155] In reaching its decision, the D.C. Circuit followed suit with precedent set in EPSA v. FERC; the court reiterated that applying a Chevron analysis was unnecessary because the language of the FPA “is unambiguous.”^[156] In lieu of the Chevron analysis, the D.C. Circuit rested its conclusion that Order 841 was in compliance with the FPA by applying the EPSA v. FERC standard that questions whether the order “directly affects wholesale rates.”^[157] One question thus remains: Is the D.C. Circuit’s decision subject to being revisited in light of the Supreme Court’s decision in Loper Bright? As will be shown, the answer is most likely no.

1. NARUC v. FERC Does Not Rely on a Chevron Analysis

The only reference to a Chevron analysis in NARUC v. FERC is relegated to a footnote in which the D.C. Circuit explains that Chevron analysis is not warranted.^[158] Any issue that Chief Justice Roberts takes with the Chevron doctrine, primarily its usurpation of Article III authority, will not be implicated when a decision does not rely on an overturned doctrine.^[159] This analysis is most analogous to FERC’s demand response authority in EPSA v. FERC; there is no reason to believe that a decision will be revisited, on the basis of Chevron’s demise, when that decision is based solely on matters of statutory interpretation.^[160]

2. NARUC v. FERC Follows Suit with EPSA v. FERC, Solidifying FERC’s Plain Authority Under the FPA

The FPA gives authority to FERC to regulate “the transmission of electric energy in interstate commerce and . . . the sale of electric energy at wholesale in interstate commerce.”^[161] The meaning of those words, as interpreted by the D.C. Circuit and the U.S. Supreme Court, is that FERC has regulatory authority over those activities that “directly affect” wholesale rates.^[162] This interpretation was arrived at by two courts with appellate jurisdiction without a Chevron analysis.^[163] Chief Justice Roberts, quoting Alexander Hamilton, said “The Framers . . . envisioned that the final ‘interpretation of the laws’ would be ‘the proper and peculiar province of the courts.’”^[164] The Court has interpreted the law, the Court has acted within its province, and the Court has spoken the final word.

V. Conclusion

Two things must be said at the conclusion of this Comment. First, regarding the authority that FERC does or does not have, this Comment is about what FERC can do; it is not about what they will do. As a federal agency in the Executive Branch, the Commission is situated to execute the laws of the United States, and where authority exists, it may not use its authority to advance policy that reflects a movement towards cleaner energy. However, this Comment stands to recognize that the Commission can promulgate renewable and clean energy-facing rules. Second, while determinations can be made about the future of agency discretion, the decision in Loper Bright “will cause a massive shock to the legal system, ‘cast[ing] doubt on many settled constructions’ of statutes and threatening the interests of many parties.”^[165]

Regardless of those two points above, it is likely that FERC will be able to exercise a degree of authority moving forward. FERC’s authority to deregulate vertically integrated transmission operators, initiate demand response policies, site new interstate transmission lines, and mandate that space be given to energy storage resources will continue, whether the Commission acts or not.

George Buckley