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New England Power Co. v. New Hampshire, 455 U.S. 331, 102 S.Ct. 1096, 71 L.Ed.2d 188, 45 P.U.R.4th 641

Facts

New England Power Co. is a public utility that generates and transmits electricity, primarily selling to Massachusetts and Rhode Island, with less than 6% of its customers in New Hampshire. The company operates hydroelectric units in New Hampshire, licensed by the Federal Energy Regulatory Commission. A New Hampshire statute requires approval from the Public Utilities Commission for any exportation of hydroelectric energy, which the Commission enforced by withdrawing New England Power's exportation rights in 1980, citing the state's energy needs and public good.

Appellant New England Power Co., a public utility generating and transmitting electricity at wholesale, sells most of its power in Massachusetts and Rhode Island; its wholesale customers service less than 6% of New Hampshire's population.

Issue

Whether New Hampshire can constitutionally prohibit the exportation of hydroelectric energy produced within its borders by a federally licensed facility.

These three consolidated appeals present the question whether a state can constitutionally prohibit the exportation of hydroelectric energy produced within its borders by a federally licensed facility, or otherwise reserve for its own citizens the 'economic benefit' of such hydroelectric power.

Rule

The Commerce Clause of the Constitution precludes states from mandating that their residents have a preferred right of access to natural resources over out-of-state consumers, and the Federal Power Act does not provide an affirmative grant of authority to states to impose such restrictions.

Absent authorizing federal legislation, the Commerce Clause precludes a state from mandating that its residents be given a preferred right of access over out-of-state consumers to natural resources located within its borders or to the products derived therefrom.

Analysis

The Supreme Court found that New Hampshire's order to restrict the exportation of hydroelectric power was a form of protectionist regulation that violated the Commerce Clause. The Court emphasized that the Federal Power Act's saving clause did not grant states the authority to impose burdens on interstate commerce that would otherwise be impermissible. The Court concluded that the New Hampshire Commission's order placed substantial burdens on interstate transactions and was inconsistent with the principles established by the Commerce Clause.

The order of the New Hampshire Commission, prohibiting New England Power from selling its hydroelectric energy outside the State of New Hampshire, is precisely the sort of protectionist regulation that the Commerce Clause declares off-limits to the states.

Conclusion

The U.S. Supreme Court reversed the judgment of the New Hampshire Supreme Court, concluding that New Hampshire's restrictions on the exportation of hydroelectric power were unconstitutional under the Commerce Clause and that the Federal Power Act did not authorize such state action.

We conclude, therefore, that New Hampshire has sought to restrict the flow of privately owned and produced electricity in interstate commerce, in a manner inconsistent with the Commerce Clause.

Who won?

New England Power Co. prevailed in the case as the U.S. Supreme Court ruled that New Hampshire's restrictions on the exportation of hydroelectric power violated the Commerce Clause.

New England Power, the Commonwealth of Massachusetts, and the Attorney General of Rhode Island appealed the Commission's order to the New Hampshire Supreme Court, contending that the order was pre-empted by the Federal Power Act and imposed impermissible burdens on interstate commerce.

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