Law Commons^™

The New(Clear?) Electricity Federalism: Federal Preemption Of States’ “Zero Emissions Credit” Programs, Joel Eisen

Law Faculty Publications

This Article proposes and applies a “conscious disregard” test for resolving the upcoming appellate litigation that involves the conflict between federal authority over the electric grid and state laws providing subsidies to nuclear power plants in the form of “zero emissions credits” (ZECs). This test draws upon principles of conflict preemption, as elaborated in three recent Supreme Court decisions on the intersection of state and federal jurisdiction over the electric grid under the Federal Power Act. It provides that if a state law explicitly aims to directly affect wholesale electricity market prices, terms or conditions, its subsidy program is impermissible …

Free Trade In Electric Power, Joel Eisen

Law Faculty Publications

This Article develops the core legal framework of a new electricity-trading ecosystem in which anyone, anytime, anywhere, can trade electricity in any amount with anyone else. The proliferation of solar and other distributed energy resources, business model innovation in the sharing economy, and climate change present enormous challenges — and opportunities — for America’s energy economy. But the electricity industry is ill equipped to adapt to and benefit from these transformative forces, with much of its physical infrastructure, regulatory institutions, and business models a relic of the early days of electrification. We suggest a systematic rethinking to usher in a …

Dual Electricity Federalism Is Dead, But How Dead And What Replaces It?, Joel B. Eisen

Law Faculty Publications

The Supreme Court decided three cases in the past year involving the split of jurisdiction between the Federal Energy Regulatory Commission (FERC) and the states in the energy sector: FERC v. Electric Power Supply Association, Hughes v. Talen Energy Marketing and ONEOK v. Learjet. This Article concludes that these watershed decisions herald a new approach to governing the rapid evolution of the modern electric grid. Discussing the decisions, the analysis demonstrates that they mark the end of “dual federalism” in electricity law that treated federal and state regulators as operating within separate and distinct spheres of authority, and proposes that …

Demand Response’S Three Generations: Market Pathways And Challenges In The Modern Electric Grid, Joel Eisen

Law Faculty Publications

Through a historical analysis spanning nearly five decades, this Article provides a comprehensive discussion of how demand response (reductions in electricity consumption in response to grid emergencies or price signals) has become both a growing resource on the electric grid and a policy trailblazer in the grid’s ongoing transformation. The discussion centers on three separate generations of efforts to promote demand-side measures in the electric grid, dating to the 1960s and oriented chronologically around important events in the electric power industry.

Demand response has been a test bed of important regulatory principles like frameworks for interactivity with the grid, the …

Ferc V. Epsa And The Path To A Cleaner Electricity Sector, Joel B. Eisen

Law Faculty Publications

This article analyzes the impact of FERC v. Electric Power Supply Association, in which the Supreme Court upheld FERC’s demand response rule (Order 745) and confirmed FERC’s authority over “practices” “directly affecting” wholesale rates for electricity. It contends that the Supreme Court made a definitive pronouncement on FERC’s authority over end users of electricity who also provide resources back to the electric grid. It also contends that FERC v. EPSA marks the end of “dual federalism” in electricity law that treated federal and state jurisdiction as separate and distinct spheres of authority. Instead, it posits a new era of concurrent …

Ferc’S Expansive Authority To Transform The Electric Grid, Joel B. Eisen

Law Faculty Publications

Using an unprecedented historical analysis of over 100 years of law dating to the Progressive Era, this Article concludes that the Supreme Court’s landmark decision in Federal Energy Regulatory Commission (“FERC”) v. Electric Power Supply Association properly asserted that FERC has ample authority to pursue broad environmental and energy goals in transforming the electric grid. Building on the Court’s finding that FERC may regulate “practices” that “directly affect” rates in wholesale electricity markets, the analysis develops a detailed standard that is consistent with interpretation of regulatory statutes in each of three distinct eras: the Progressive Era, the era of regulation …

Brief For Federal Energy Regulatory Commission As Amici Curiae Of Energy Law Scholars Supporting Petitioners, Joel Eisen

Law Faculty Publications

Amici curiae are law professors who have significant research and teaching experience in the field of energy law, with a particular focus on electric power markets. They are listed in the Appendix to this brief. They are submitting this brief because they believe that the U.S. Court of Appeals for the District of Columbia Circuit made serious errors when it held that the Federal Energy Regulatory Commission (FERC) lacked authority to regulate operators’ rules for demand response (DR) in the wholesale electricity markets.

U.S. Supreme Court, Amicus Brief Of Interested Energy Law Scholars In Support Of Petitioner, Federal Energy Regulatory Commission V. Electric Power Supply Association, Joel B. Eisen

Law Faculty Publications

Amici curiae are law professors who have significant research and teaching experience in the field of energy law, with a particular focus on electric power markets. They are listed in the Appendix to this brief. They are submitting this brief because they believe that the U.S. Court of Appeals for the District of Columbia Circuit made serious errors when it held that the Federal Energy Regulatory Commission (FERC) lacked authority to regulate operators’ rules for demand response (DR) in the wholesale electricity markets. That holding is contrary to the text, history, and structure of the Federal Power Act (FPA), which …

An Open Access Distribution Tariff: Removing Barriers To Innovation On The Smart Grid, Joel B. Eisen

Law Faculty Publications

This Article proposes that the Federal Energy Regulatory Commission (FERC) consider promulgating an Open Access Distribution Tariff (OADT) to open the nation's electric grid to new products and services at the consumer (distribution) level. Design of the OADT would be comparable to the Open Access Transmission Tariff that the FERC has used previously to open the nation's transmission wires. This Article argues that an OADT is necessary to create a smart electricity network that would be national, multimodal, and interactive. There is no smart electricity network at present, and there are numerous barriers to the development of open networking, such …

Tackling Climate Change: Don't Forget Energy Efficency, Joel B. Eisen

Law Faculty Publications

Todd S. Aagaard and Joel B. Eisen write that one option available for states under the EPA's high-profile Clean Power Plan is relying on greater efficiency in energy usage and other demand-side strategies such as "demand response," which involves programs to reduce consumption at specific times of high electricity demand. However, a federal court recently cast a cloud over demand response's future.

Who Regulates The Smart Grid?: Ferc's Authority Over Demand Response Compensation In Wholesale Electricity Markets., Joel B. Eisen

Law Faculty Publications

This Article argues that Order 745 is both justified under the Federal Power Act (FPA) and important to ensure the transition to a clean energy future. A challenge to Order 745, Electric Power Supply Association v. FERC, is currently pending in the D.C. Circuit. This Article contends that Order 745 should be upheld against this challenge because it fits within FERC's broad authority to regulate the wholesale power markets.

Smart Regulation And Federalism For The Smart Grid, Joel B. Eisen

Law Faculty Publications

This Article examines the “Smart Grid,” a set of concepts, technologies, and operating practices that may transform America’s electric grid as much as the Internet has done, redefining every aspect of electricity generation, distribution, and use. While the Smart Grid’s promise is great, this Article examines numerous key barriers to its development, including early stage resistance, a lack of incentives for consumers, and the adverse impacts of the federal-state tension in energy regulation. Overcoming these barriers requires both new technologies and transformative regulatory change, beginning with the development of a foundation of interoperability standards (rules of the road governing interactions …

Distributed Energy Resources, "Virtual Power Plants," And The Smart Grid, Joel B. Eisen

Law Faculty Publications

The specific focus of this Article is on the "virtual power plant" (VPP) concept, an intriguing idea that involves an aggregation of DERs to provide a "fleet" of resources that can serve as the functional equivalent of a traditional power plant. As the name suggests, this fleet of DERs can add up in the aggregate to the equivalent of a significant resource. Under certain conditions, this resource can be used on the grid (i.e., dispatched) much as a conventional power plant would be. This could reduce demand for fossil fuel-fired plants by enabling a utility to avoid generating electricity or …

The Environmental Responsibility Of The Regionalizing Electric Utility Industry, Joel B. Eisen

Law Faculty Publications

In this Article, I will address environmental issues in the context of our rapidly evolving understanding of "restructuring." The market for electricity is fast becoming a series of regional marketplaces for wholesale transactions, operating on bid-based systems that move power at the lowest cost. There are plenty of states where power is still delivered as it has been for decades: by "bundled" service provided by vertically integrated utilities. However, the trend is toward regionalization, where independent entities control the transmission grid and play a major role in determining how power is delivered. These market participants, confusingly, have been known by …

Regulatory Linearity, Commerce Clause Brinksmanship, And Retrenchment In Electric Utility Deregulation, Joel B. Eisen

Law Faculty Publications

The point of this Article is that if an agency has reached this point in the lifetime of its reinvention efforts by being "linear," then the experiment should end. In the case of restructuring, that is not the case, but two aspects of the situation make it exquisitely difficult to see this: an agency that is trying the same ideas repeatedly (FERC) and a complex set of variables that has hampered restructuring activity. Through this fog, the final point to be made is that if moving beyond the current stasis requires change, this should be contemplated. This industry is famously …