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1 1 (April 30, 2025)

handle is hein.crs/fmadteelcym0001 and id is 1 raw text is: Congressional ______ ~tResearch Service Federalism and the Electricity Markets: Balancing National and Local Interests April 30, 2025 The Infrastructure Investment and Jobs Act (IIJA) sought to enable and encourage infrastructure projects throughout the United States. Section 40105 of the IIJA addressed a particular type of infrastructure: the nation's electricity grid. Section 40105 sought to amend and clarify a backstop authority allowing the federal government to permit certain electricity transmission facilities if the relevant state or states decline to do so. Some may be surprised to learn that the federal government has a limited role with respect to electricity transmission infrastructure, but the jurisdictional lines between federal and state agencies in regulating electricity generation, transmission, and distribution have been closely guarded for more than a century. Over time, however, the landscape for generating and delivering electricity has changed. Electricity is now generated by a larger number of sources, and electricity is transmitted across longer distances throughout interconnected grids, rather than within smaller, intrastate markets. The slow expansion of the federal role in regulating the electricity industry reflects the increasing interdependency of the grid and both retail and wholesale electricity markets, as well as greater attention to environmental issues that raise national and global concerns. This Legal Sidebar reviews the history of that expansion and clarifies current federal and state roles in permitting and regulating the electric power industry. The Attleboro Gap and the Federal Power Act In the first few decades after Thomas Edison harnessed the power of electricity, the federal government left it to the states to regulate this new commodity. The traditional understanding of the Commerce Clause of the U.S. Constitution limited federal oversight to foreign and interstate transactions, and the burgeoning electricity markets and infrastructure were largely local in nature. However, as the electricity grid expanded and aspects of the chain of commerce became more interdependent, broader concerns emerged that the states lacked the authority to regulate. In the 1927 case Rhode Island Public Utility Commission v. Attleboro Steam and Electric Co., the Supreme Court heard a challenge to the jurisdiction of the Rhode Island Public Utility Commission (PUC), which had amended a contract between a Rhode Island power generator and a Massachusetts wholesale power purchaser to impose reasonable rates as determined by the PUC. Citing the impact on those rates for Massachusetts-based customers of the purchases, the Court found that the Rhode Island PUC's rate change placed a direct burden on interstate Congressional Research Service https://crsreports.congress.gov LSB11296 CRS Legal Sidebar Prepared for Members and Committees of Congress

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