Federal Power Commission v. Union Electric Co.
Headline: Federal agency may require licenses for pumped‑storage hydroelectric dams that supply electricity interstate, making it harder to build certain dams on federally controlled tributary streams without approval.
Holding: The Court held that the Federal Power Commission may require a license for a pumped‑storage hydroelectric project on a nonnavigable tributary when the project's generation of electricity will be used in interstate commerce.
- Allows federal licensing of hydro projects that supply electricity across state lines.
- Requires pumped‑storage owners on federally controlled tributaries to seek federal agency approval.
- Shifts more project control from states to federal oversight for interstate power markets.
Summary
Background
A regional electric company proposed building a pumped‑storage hydroelectric plant on a small tributary called the East Fork of the Black River. The Taum Sauk project would store and release water to generate up to 350 megawatts and would supply power into the company’s system serving Missouri, Illinois, and possibly Iowa. The Federal Power Commission required the company to file and decided a license was needed because the project would affect interstate commerce and might affect downstream navigation. A federal appeals court limited the Commission’s power to projects that affect navigation and reversed; the Supreme Court took the case.
Reasoning
The Court examined section 23(b) of the Federal Water Power Act and concluded that the phrase referring to the interests of interstate or foreign commerce is not limited to river navigation. The majority said Congress meant the Commission to consider all commerce effects, including electricity sent across state lines, and that the Act’s purpose was comprehensive control of water resources and hydroelectric power. The Court therefore reversed the appeals court and approved the Commission’s view that a pumped‑storage plant serving interstate markets can require a federal license even if it does not harm navigation.
Real world impact
The ruling means many hydroelectric projects that feed power into interstate grids can fall under federal licensing and oversight. Owners of pumped‑storage and other hydro projects on tributaries subject to federal jurisdiction may need to seek licenses and follow federal conditions before building. This shifts more project control to the federal agency when projects serve interstate power markets.
Dissents or concurrances
Justice Goldberg, joined by two colleagues, dissented, arguing the legislative history showed Congress intended licensing only when navigation on navigable waters was affected and warning that the Court’s reading produces an anomaly between hydroelectric and steam plants.
Opinions in this case:
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