FPA Preemption in the 21st Century

On February 24, the Supreme Court will hear oral argument in Hughes v. Talen Energy Marketing. In deciding this case, the Court must determine whether an effort by the State of Maryland to incentivize the construction of new power plants is field preempted by the Federal Power Act (“FPA”) — that is, whether the Maryland law intrudes on an area that is exclusively the federal government’s to regulate. This Comment urges the Court to evaluate Maryland’s regulation under a conflict-preemption, as opposed to a field-preemption, standard. In particular, the Court should clarify that field preemption — a doctrine that prohibits any state regulation in a particular area of the law — applies only when a State targets the core aspects of federal jurisdiction under the FPA, namely the Federal Energy Regulatory Commission’s (“FERC”) ability to determine whether a wholesale rate is just and reasonable. Conflict preemption — which provides that state laws are preempted only when they interfere with or frustrate the federal regulatory regime — provides a far superior framework for evaluating the type of law at issue in Hughes. It conforms more closely to the FPA’s core objectives, furthers important state policies, and somewhat paradoxically, enhances FERC’s ability to regulate effectively the aspects of the electricity sector under its jurisdiction. Not only is a conflict-preemption approach good policy, it is also entirely consistent with the Court’s FPA preemption jurisprudence. In particular, the Court’s prior decisions can be read to support a less intrusive field-preemption inquiry — a reading which, this Comment argues, should be applied the facts before the Court in Hughes.