This morning, the Pennsylvania Attorney General (AG) asked the U.S. Court of Appeals for the Third Circuit to reverse a federal district court’s decision that invalidated a Public Utility Commission (PUC) order under the Federal Power Act and the dormant Commerce Clause.  In her opening brief, the AG argues that the PUC’s decision to deny a transmission line permit application was an exercise of “long standing police power, one Congress chose not to preempt.”

As previously summarized, PJM included the project at issue in its 2016 regional transmission plan because it found the project to be an “efficient, cost-effective project to address persistent congestion identified in forward-looking economic studies.” In 2021, the PUC determined that it must “independently assess PJM’s conclusion that the project will be regionally beneficial,” concluded that the project was not “needed” under Pennsylvania’s transmission siting law, and denied the application.

In December, a federal district court found that the PUC’s order “clearly overlapped with PJM’s regional transmission planning analysis” and held it was preempted by the Federal Power Act because it “posed obstacles to FERC’s pursuit of” transmission efficiency. The court also held that the PUC’s denial violates the dormant Commerce Clause because it was “focused on protecting the interests of Pennsylvanians” and “rooted in economic protectionism.”

The Pennsylvania AG’s opening brief emphasizes that “States have traditionally assumed all jurisdiction” over transmission line siting, and that Congress “has consented” to such broad state authority. These two related facts, according to the AG, compel reversal of both the preemption and dormant Commerce Clause holdings.

The AG’s brief reviews Congressional actions about electric transmission regulation and summarizes that “Congress has not disturbed the States’ longstanding historical authority to approve or deny siting permits.” Because transmission permitting is a traditional state power, the AG argues that the district court erred by not applying a presumption against preemption and demanding that the developer demonstrate clear Congressional intent to supersede state law. Since the developer failed to meet ^that burden, its preemption claim must fail.

To refute the lower court’s specific conclusion on preemption, the AG distinguishes between states’ traditional permitting authority and PJM’s federally regulated transmission planning. FERC’s rules dictate PJM’s “process” for evaluating potential transmission solutions and not a “substantive result.” According to the AG, “transmission planning can be thought of as a screening process, and siting as the final decision.” The PUC’s order is not preempted because FERC’s orders on transmission planning repeatedly acknowledge that state permitting supersedes PJM’s plan and, according to the AG, “obviously know that ‘public need’ is a component of a state’s siting determination.”

“Regardless of any impact . . . on interstate commerce,” the AG claims that the PUC’s decision “cannot violate the dormant Commerce Clause” because “Congress has expressed its intent that this authority is reserved to states.” Setting aside this threshold objection to the district court’s dormant Commerce Clause holding, the AG argues that the PUC’s application of the Commonwealth’s “facially neutral” siting laws “did not favor in-state need.”

Finally, the AG argues that the doctrines of issue preclusion and res judicata should have prevented the district court from deciding the developer’s preemption and dormant Commerce Clause claims.