NEW YORK et al. v. FEDERAL ENERGY REGULATORY COMMISSION et al.

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CASES ADJUDGED
IN THE
SUPREME COURT OF THE UNITED STATES
AT
OCTOBER TERM, 2001
NEW YORK et al. v. FEDERAL ENERGY
REGULATORY COMMISSION et al.
certiorari to the united states court of appeals for
the district of columbia circuit
No. 00–568. Argued October 3, 2001—Decided March 4, 2002*
When the Federal Power Act (FPA) became law in 1935, most electric
utilities operated as separate, local monopolies subject to state or local
regulation; their sales were “bundled,” meaning that consumers paid a
single charge for both the cost of the electricity and the cost of its deliv-
ery; and there was little competition among utility companies. Section
201(b) of the FPA gave the Federal Power Commission (predecessor to
respondent Federal Energy Regulatory Commission (FERC)) jurisdic-
tion over “the transmission of electric energy in interstate commerce
and the sale of such energy at wholesale in interstate commerce”; § 205
prohibited, among other things, unreasonable rates and undue discrimi-
nation “with respect to any transmission or sale subject to the [Commis-
sion’s] jurisdiction”; and § 206 gave the Commission the power to correct
such unlawful practices. Since 1935, the number of electricity suppliers
has increased dramatically and technological advances have allowed
electricity to be delivered over three major “grids” in the continental
United States. In all but three States, any electricity entering a grid
becomes part of a vast pool of energy moving in interstate commerce.
As a result, power companies can transmit electricity over long dis-
*Together with No. 00–809, Enron Power Marketing, Inc. v. Federal
Energy Regulatory Commission et al., also on certiorari to the same
court.
1

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2 NEW YORK v. FERC
Syllabus
tances at a low cost. However, public utilities retain ownership of the
transmission lines that their competitors must use to deliver electricity
to wholesale and retail customers and thus can refuse to deliver their
competitors’ energy or deliver that power on terms and conditions less
favorable than those they apply to their own transmissions. In Order
No. 888, FERC found such practices discriminatory under § 205. Invok-
ing its § 206 authority, FERC (1) ordered “functional unbundling” of
wholesale generation and transmission services, which means that each
utility must state separate rates for its wholesale generation, transmis-
sion, and ancillary services, and must take transmission of its own
wholesale sales and purchases under a single general tariff applicable
equally to itself and others; (2) imposed a similar open access require-
ment on unbundled retail transmissions in interstate commerce; and
(3) declined to extend the open access requirement to the transmission
component of bundled retail sales, concluding that unbundling such
transmissions was unnecessary and would raise difficult jurisdictional
issues that could be more appropriately considered in other proceedings.
After consolidating a number of review petitions, the District of Colum-
bia Circuit upheld most of Order No. 888. Here, the petition of New
York et al. (collectively New York) questions FERC’s assertion of juris-
diction over unbundled retail transmissions, and the petition of Enron
Power Marketing, Inc. (Enron), questions FERC’s refusal to assert ju-
risdiction over bundled retail transmissions.
Held:
1. FERC did not exceed its jurisdiction by including unbundled retail
transmissions within the scope of Order No. 888’s open access require-
ments. New York insists that retail transactions are subject only to
state regulation, but the electric industry has changed since the FPA
was enacted, at which time the electricity universe was neatly divided
into spheres of retail versus wholesale sales. The FPA’s plain language
readily supports FERC’s jurisdiction claim. Section 201(b) gives
FERC jurisdiction over “electric energy in interstate commerce,” and
the unbundled transmissions that FERC has targeted are made such
transmissions by the national grid’s nature. No statutory language lim-
its FERC’s transmission jurisdiction to the wholesale market, although
the statute does limit FERC’s sales jurisdiction to that market. In the
face of this clear statutory language, New York’s arguments supporting
its contention that the statute draws a bright jurisdictional line between
wholesale and retail transactions are unpersuasive. Its argument that
the Court of Appeals applied an erroneous standard of review because
it ignored the presumption against federal pre-emption of state law fo-
cuses on the wrong legal question. The type of pre-emption at issue

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3 Cite as: 535 U. S. 1 (2002)
Syllabus
here concerns the rule that a federal agency may pre-empt state law
only when it is acting within the scope of congressionally delegated au-
thority. Because the FPA unambiguously gives FERC jurisdiction
over the “transmission of electric energy in interstate commerce,” with-
out regard to whether the transmissions are sold to a reseller or directly
to a consumer, FERC’s exercise of this power is valid. New York’s
attempts to discredit this straightforward statutory analysis by refer-
ence to the FPA’s legislative history are unavailing. And its arguments
that FERC jurisdiction over unbundled retail transmissions will impede
sound energy policy are properly addressed to FERC or to the Con-
gress. Pp. 16–24.
2. FERC’s decision not to regulate bundled retail transmissions was
a statutorily permissible policy choice. Contrary to Enron’s argument,
FERC chose not to assert jurisdiction over such transmissions, but it
did not hold itself powerless to claim jurisdiction. Indeed, FERC ex-
plicitly reserved decision on that jurisdictional issue, and the reasons
FERC supplied for doing so provide valid support for that decision.
Having determined that the remedy it ordered constituted a sufficient
response to the problems it had identified in the wholesale market,
FERC had no § 206 obligation to regulate bundled retail transmissions
or to order universal unbundling. This Court also agrees with FERC’s
conclusion that regulating bundled retail transmissions raises difficult
jurisdictional issues. Pp. 25–28.
225 F. 3d 667, affirmed.
Stevens, J., delivered the opinion of the Court, Parts II and III of
which were unanimous, and Parts I and IV of which were joined by Rehn-
quist, C. J., and O’Connor, Souter, Ginsburg, and Breyer, JJ.
Thomas, J., filed an opinion concurring in part and dissenting in part, in
which Scalia and Kennedy, JJ., joined, post, p. 28.
Lawrence G. Malone argued the cause and filed briefs
for petitioners State of New York et al. in No. 00–568 and
a brief for respondents State Public Service Commissions
in No. 00–809. With him on the briefs were Jonathan D.
Feinberg and Carl F. Patka.
Louis R. Cohen argued the cause and filed briefs for peti-
tioner in No. 00–809 and a brief for respondent Enron Power
Marketing, Inc., in No. 00–568. With him on the briefs were
Joseph E. Killory, Jr., Jonathan J. Frankel, I. Jay Palansky,
Jeffrey D. Watkiss, and Joseph R. Hartsoe. Briefs for re-

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4 NEW YORK v. FERC
Opinion of the Court
spondents under this Court’s Rule 12.6 in support of peti-
tioner in No. 00–809 were filed by James van R. Springer
and Steven L. Miller for the Electric Power Supply Associa-
tion; and by Sara D. Schotland for the Electricity Consumers
Resource Council et al. Briefs for respondents under this
Court’s Rule 12.6 in support of petitioners in No. 00–568
were filed by Robert C. McDiarmid, Cynthia S. Bogorad,
and Peter J. Hopkins for the Transmission Access Policy
Study Group; and by Michael A. Mullett for Citizens Action
Coalition of Indiana, Inc.
Deputy Solicitor General Kneedler argued the cause for
respondents in both cases. With him on the brief for re-
spondent Federal Energy Regulatory Commission were Act-
ing Solicitor General Underwood, Austin C. Schlick, Cyn-
thia A. Marlette, and Timm L. Abendroth. Charles G. Cole,
Alice E. Loughran, Edward H. Comer, and Barbara A. Hin-
din filed a brief for the Edison Electric Institute, respondent
in both cases.†
Justice Stevens delivered the opinion of the Court.
These cases raise two important questions concerning the
jurisdiction of the Federal Energy Regulatory Commission
(FERC or Commission) over the transmission of electricity.
First, if a public utility “unbundles”—i. e., separates—the
cost of transmission from the cost of electrical energy when
billing its retail customers, may FERC require the utility to
transmit competitors’ electricity over its lines on the same
terms that the utility applies to its own energy transmis-
†Bohdan R. Pankiw and John A. Levin filed a brief for the Pennsylvania
Public Utility Commission as amicus curiae urging affirmance.
Briefs of amici curiae were filed for the State of California et al. by
Bill Lockyer, Attorney General, Peter Siggins, Chief Deputy Attorney
General, Rick Frank, Chief Assistant Attorney General, Morris Beatus,
Senior Assistant Attorney General, Gary M. Cohen, and William Julian
II; and for Electrical Engineers et al. by Charles J. Cooper.

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5 Cite as: 535 U. S. 1 (2002)
Opinion of the Court
sions? Second, must FERC impose that requirement on
utilities that continue to offer only “bundled” retail sales?
In Order No. 888, issued in 1996 with the stated purpose
of “Promoting Wholesale Competition Through Open Access
Non-Discriminatory Transmission Services by Public Utili-
ties,” 1 FERC answered yes to the first question and no to
the second. It based its answers on provisions of the Fed-
eral Power Act (FPA), as added by § 213, 49 Stat. 847, and
as amended, 16 U. S. C. § 824 et seq., enacted in 1935.
Whether or not the 1935 Congress foresaw the dramatic
changes in the power industry that have occurred in recent
decades, we are persuaded, as was the Court of Appeals, that
FERC properly construed its statutory authority.
I
In 1935, when the FPA became law, most electricity was
sold by vertically integrated utilities that had constructed
their own power plants, transmission lines, and local deliv-
ery systems. Although there were some interconnections
among utilities, most operated as separate, local monopolies
subject to state or local regulation. Their sales were “bun-
dled,” meaning that consumers paid a single charge that in-
cluded both the cost of the electric energy and the cost of its
delivery. Competition among utilities was not prevalent.
Prior to 1935, the States possessed broad authority to reg-
ulate public utilities, but this power was limited by our cases
holding that the negative impact of the Commerce Clause
prohibits state regulation that directly burdens interstate
commerce.2 When confronted with an attempt by Rhode Is-
1 FERC Stats. & Regs., Regs. Preambles, Jan. 1991–June 1996, ¶ 31,036,
p. 31,632, 61 Fed. Reg. 21540 (1996). Order No. 888 also deals with the
recovery of “stranded costs” by utilities, but this aspect of the order is
not before us.
2 For example, in cases involving the interstate transmission of natural
gas, we held that a State could regulate direct sales to consumers even
when the gas was drawn from interstate mains, Pennsylvania Gas Co. v.
Public Serv. Comm’n of N. Y., 252 U. S. 23 (1920); Public Util. Comm’n of

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6 NEW YORK v. FERC
Opinion of the Court
land to regulate the rates charged by a Rhode Island plant
selling electricity to a Massachusetts company, which resold
the electricity to the city of Attleboro, Massachusetts, we
invalidated the regulation because it imposed a “direct bur-
den upon interstate commerce.” Public Util. Comm’n of
R. I. v. Attleboro Steam & Elec. Co., 273 U. S. 83, 89 (1927).
Creating what has become known as the “Attleboro gap,”
we held that this interstate transaction was not subject to
regulation by either Rhode Island or Massachusetts, but only
“by the exercise of the power vested in Congress.” Id.,
at 90.
When it enacted the FPA in 1935,3 Congress authorized
federal regulation of electricity in areas beyond the reach of
state power, such as the gap identified in Attleboro, but it
also extended federal coverage to some areas that previously
had been state regulated, see, e. g., id., at 87–88 (explaining,
prior to the FPA’s enactment, that state regulations affect-
ing interstate utility transactions were permissible if they
did not directly burden interstate commerce). The FPA
charged the Federal Power Commission (FPC), the prede-
cessor of FERC, “to provide effective federal regulation of
the expanding business of transmitting and selling electric
power in interstate commerce.” Gulf States Util. Co. v.
FPC, 411 U. S. 747, 758 (1973). Specifically, in § 201(b) of the
FPA, Congress recognized the FPC’s jurisdiction as includ-
ing “the transmission of electric energy in interstate com-
merce” and “the sale of electric energy at wholesale in inter-
Kan. v. Landon, 249 U. S. 236 (1919), but that a State could not regulate
the rate at which gas from out-of-state producers was sold to independent
distributing companies for resale to local consumers, Missouri ex rel. Bar-
rett v. Kansas Natural Gas Co., 265 U. S. 298, 309 (1924).
3 The FPA was enacted as Title II of the Public Utility Act of 1935, 49
Stat. 847. Title I of the Public Utility Act—not at issue here—regulated
financial practices of interstate holding companies that controlled a large
number of public utilities.

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Opinion of the Court
state commerce.” 16 U. S. C. § 824(b). Furthermore, § 205
of the FPA prohibited, among other things, unreasonable
rates and undue discrimination “with respect to any trans-
mission or sale subject to the jurisdiction of the Commis-
sion,” 16 U. S. C. §§ 824d(a)–(b), and § 206 gave the FPC
the power to correct such unlawful practices, 16 U. S. C.
§ 824e(a).
Since 1935, and especially beginning in the 1970’s and
1980’s, the number of electricity suppliers has increased dra-
matically. Technological advances have made it possible to
generate electricity efficiently in different ways and in
smaller plants.4 In addition, unlike the local power net-
works of the past, electricity is now delivered over three
major networks, or “grids,” in the continental United States.
Two of these grids—the “Eastern Interconnect” and the
“Western Interconnect”—are connected to each other. It is
only in Hawaii and Alaska and on the “Texas Interconnect”—
which covers most of that State—that electricity is distrib-
uted entirely within a single State. In the rest of the coun-
try, any electricity that enters the grid immediately becomes
a part of a vast pool of energy that is constantly moving in
interstate commerce.5 As a result, it is now possible for
4 In Order No. 888, FERC noted that the optimum size of electric gener-
ation plants has shifted from the larger, 500 megawatt plants (with 10-year
lead time) of the past to the smaller, 50-to-150 megawatt plants (with
1-year lead time) of the present. These smaller plants can produce en-
ergy at a cost of 3-to-5 cents per kilowatt-hour, as opposed to the older
plants’ production cost of 4-to-15 cents per kilowatt-hour. Order No. 888,
at 31,641.
5 See Brief for Respondent FERC 4–5. Over the years, FERC has de-
scribed the interconnected grids in a number of proceedings. For exam-
ple, in 1967, the FPC considered whether Florida Power & Light Co.
(FPL)—a utility attached to what was then the regional grid for the south-
eastern United States—transmitted energy in interstate commerce as a
result of that attachment. The FPC concluded that FPL’s transmissions
were in interstate commerce: “[S]ince electric energy can be delivered
virtually instantaneously when needed on a system at a speed of 186,000

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8 NEW YORK v. FERC
Opinion of the Court
power companies to transmit electric energy over long dis-
tances at a low cost. As FERC has explained, “the nature
and magnitude of coordination transactions” have enabled
utilities to operate more efficiently by transferring substan-
tial amounts of electricity not only from plant to plant in one
area, but also from region to region, as market conditions
fluctuate. Order No. 888, at 31,641.
Despite these advances in technology that have increased
the number of electricity providers and have made it possible
for a “customer in Vermont [to] purchase electricity from an
environmentally friendly power producer in California or a
cogeneration facility in Oklahoma,” Transmission Access
Policy Study Group v. FERC, 225 F. 3d 667, 681 (CADC
2000) (case below), public utilities retain ownership of the
transmission lines that must be used by their competitors
to deliver electric energy to wholesale and retail customers.
The utilities’ control of transmission facilities gives them the
power either to refuse to deliver energy produced by com-
petitors or to deliver competitors’ power on terms and condi-
miles per second, such energy can be and is transmitted to FPL when
needed from out-of-state generators, and in turn can be and is transmitted
from FPL to help meet out-of-state demands; . . . there is a cause and
effect relationship in electric energy occurring throughout every genera-
tor and point on the FPL, Corp, Georgia, and Southern systems which
constitutes interstate transmission of electric energy by, to, and from
FPL.” In re Florida Power & Light Co., 37 F. P. C. 544, 549 (1967). This
Court found the FPC’s findings sufficient to establish the FPC’s jurisdic-
tion. FPC v. Florida Power & Light Co., 404 U. S. 453, 469 (1972).
As amici explain in less technical terms, “[e]nergy flowing onto a power
network or grid energizes the entire grid, and consumers then draw undif-
ferentiated energy from that grid.” Brief for Electrical Engineers et al.
as Amici Curiae 2. As a result, explain amici, any activity on the inter-
state grid affects the rest of the grid. Ibid. Amici dispute the States’
contentions that electricity functions “the way water flows through a pipe
or blood cells flow through a vein” and “can be controlled, directed and
traced” as these substances can be, calling such metaphors “inaccurate
and highly misleading.” Id., at 2, 5.

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Opinion of the Court
tions less favorable than those they apply to their own trans-
missions. E. g., Order No. 888, at 31,643–31,644.6
Congress has addressed these evolving conditions in the
electricity market on two primary occasions since 1935.
First, Congress enacted the Public Utility Regulatory Poli-
cies Act of 1978 (PURPA), 92 Stat. 3117, 16 U. S. C. § 2601
et seq., to promote the development of new generating facili-
ties and to conserve the use of fossil fuels. Because the tra-
ditional utilities controlled the transmission lines and were
reluctant to purchase power from “nontraditional facilities,”
PURPA directed FERC to promulgate rules requiring utili-
ties to purchase electricity from “qualifying cogeneration
and small power production facilities.” FERC v. Missis-
sippi, 456 U. S. 742, 751 (1982); see 16 U. S. C. § 824a–3(a).
Over a decade later, Congress enacted the Energy Policy
Act of 1992 (EPAct), 106 Stat. 2776. This law authorized
FERC to order individual utilities to provide transmission
services to unaffiliated wholesale generators (i. e., to “wheel”
power) on a case-by-case basis. See 16 U. S. C. §§ 824j–824k.
Exercising its authority under the EPAct, FERC ordered a
utility to “wheel” power for a complaining wholesale compet-
itor 12 times, in 12 separate proceedings. Order No. 888, at
31,646. FERC soon concluded, however, that these individ-
ual proceedings were too costly and time consuming to pro-
vide an adequate remedy for undue discrimination through-
out the market. Ibid.
6 In addition to policing utilities’ anticompetitive behavior through the
various statutory provisions that explicitly address the electric industry,
discussed in more detail below, the Government has also used the antitrust
laws to this end. For example, in Otter Tail Power Co. v. United States,
410 U. S. 366 (1973), the Court permitted the Government to seek antitrust
remedies against a utility company which, among other things, refused to
sell power at wholesale to some municipalities and refused to transfer
competitors’ power over its lines. Id., at 368. The Court concluded that
the FPA’s existence did not preclude the applicability of the antitrust laws.
Id., at 372.

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10 NEW YORK v. FERC
Opinion of the Court
Thus, in 1995, FERC initiated the rulemaking proceed-
ing that led to the adoption of the order presently under
review. FERC proposed a rule that would “require that
public utilities owning and/or controlling facilities used for
the transmission of electric energy in interstate commerce
have on file tariffs providing for nondiscriminatory open-
access transmission services.” Notice of Proposed Rule-
making, FERC Stats. & Regs., Proposed Regs., 1988–1999,
¶ 32,514, p. 33,047, 60 Fed. Reg. 17662 (hereinafter NPRM).
The stated purpose of the proposed rule was “to encourage
lower electricity rates by structuring an orderly transition
to competitive bulk power markets.” NPRM 33,048. The
NPRM stated:
“The key to competitive bulk power markets is opening
up transmission services. Transmission is the vital link
between sellers and buyers. To achieve the benefits of
robust, competitive bulk power markets, all wholesale
buyers and sellers must have equal access to the trans-
mission grid. Otherwise, efficient trades cannot take
place and ratepayers will bear unnecessary costs.
Thus, market power through control of transmission is
the single greatest impediment to competition. Un-
questionably, this market power is still being used today,
or can be used, discriminatorily to block competition.” 7
Id., at 33,049.
7 Later in the NPRM, FERC explained that § 206 of the FPA authorizes
FERC to remedy unduly discriminatory practices, and found: “that utili-
ties owning or controlling transmission facilities possess substantial mar-
ket power; that, as profit maximizing firms, they have and will continue
to exercise that market power in order to maintain and increase market
share, and will thus deny their wholesale customers access to competi-
tively priced electric generation; and that these unduly discriminatory
practices will deny consumers the substantial benefits of lower electricity
prices.” NPRM 33,052.

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Opinion of the Court
Rather than grounding its legal authority in Congress’
more recent electricity legislation, FERC cited §§ 205–206
of the 1935 FPA—the provisions concerning FERC’s power
to remedy unduly discriminatory practices—as providing
the authority for its rulemaking. See 16 U. S. C. §§ 824d–
824e.
In 1996, after receiving comments on the NPRM, FERC
issued Order No. 888. It found that electric utilities were
discriminating in the “bulk power markets,” in violation of
§ 205 of the FPA, by providing either inferior access to their
transmission networks or no access at all to third-party
wholesalers of power. Order No. 888, at 31,682–31,684. In-
voking its authority under § 206, it prescribed a remedy con-
taining three parts that are presently relevant.
First, FERC ordered “functional unbundling” of whole-
sale generation and transmission services. Id., at 31,654.
FERC defined “functional unbundling” as requiring each
utility to state separate rates for its wholesale generation,
transmission, and ancillary services, and to take transmission
of its own wholesale sales and purchases under a single gen-
eral tariff applicable equally to itself and to others.
Second, FERC imposed a similar open access requirement
on unbundled retail transmissions in interstate commerce.
Although the NPRM had not envisioned applying the open
access requirements to retail transmissions, but rather
“would have limited eligibility to wholesale transmission cus-
tomers,” FERC ultimately concluded that it was “irrelevant
to the Commission’s jurisdiction whether the customer re-
ceiving the unbundled transmission service in interstate
commerce is a wholesale or retail customer.” Id., at 31,689.
Thus, “if a public utility voluntarily offers unbundled retail
access,” or if a State requires unbundled retail access, “the
affected retail customer must obtain its unbundled transmis-

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12 NEW YORK v. FERC
Opinion of the Court
sion service under a non-discriminatory transmission tariff
on file with the Commission.” Ibid.8
Third, FERC rejected a proposal that the open access
requirement should apply to “the transmission component
of bundled retail sales.” Id., at 31,699. Although FERC
noted that “the unbundling of retail transmission and
generation . . . would be helpful in achieving comparabil-
ity,” it concluded that such unbundling was not “necessary”
and would raise “difficult jurisdictional issues” that could
be “more appropriately considered” in other proceedings.
Ibid.
In its analysis of the jurisdictional issues, FERC distin-
guished between transmissions and sales. It explained:
“[Our statutory jurisdiction] over sales of electric en-
ergy extends only to wholesale sales. However, when
a retail transaction is broken into two products that are
sold separately (perhaps by two different suppliers: an
electric energy supplier and a transmission supplier), we
believe the jurisdictional lines change. In this situa-
tion, the state clearly retains jurisdiction over the sale
of power. However, the unbundled transmission serv-
ice involves only the provision of ‘transmission in inter-
state commerce’ which, under the FPA, is exclusively
within the jurisdiction of the Commission. Therefore,
when a bundled retail sale is unbundled and becomes
separate transmission and power sales transactions, the
resulting transmission transaction falls within the Fed-
eral sphere of regulation.” Id., at 31,781.9
8 While it concluded that “the rates, terms, and conditions of all unbun-
dled transmission service” were subject to its jurisdiction, FERC stated
that it would “give deference to state recommendations” regarding the
regulation of retail transmissions “when state recommendations are con-
sistent with our open access policies.” Order No. 888, at 31,689.
9 FERC also explained that it did not assert “jurisdiction to order retail
transmission directly to an ultimate consumer,” id., at 31,781, and that
States had “authority over the service of delivering electric energy to

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Opinion of the Court
In 1997, in response to numerous petitions for rehearing
and clarification, FERC issued Order No. 888–A, FERC
Stats. & Regs., Regs. Preambles, July 1996–Dec. 2001,
¶ 31,048, p. 30,172, 62 Fed. Reg. 12274. With respect to vari-
ous challenges to its jurisdiction, FERC acknowledged that
it did not have the “authority to order, sua sponte, open-
access transmission services by public utilities,” but ex-
plained that § 206 of the FPA explicitly required it to rem-
edy the undue discrimination that it had found. Order
No. 888–A, at 30,202; see 16 U. S. C. § 824e(a). FERC also
rejected the argument that its failure to assert jurisdiction
over bundled retail transmissions was inconsistent with its
assertion of jurisdiction over unbundled retail transmissions.
FERC repeated its explanation that it did not believe that
regulation of bundled retail transmissions (i. e., the “func-
tional unbundling” of retail transmissions) “was necessary,”
and again stated that such unbundling would raise seri-
ous jurisdictional questions. Order No. 888–A, at 30,225.
FERC did not, however, state that it had no power to regu-
end users. . . . State regulation of most power production and virtually
all distribution and consumption of electric energy is clearly distinguish-
able from this Commission’s responsibility to ensure open and non-
discriminatory interstate transmission service. Nothing adopted by the
Commission today, including its interpretation of its authority over retail
transmission or how the separate distribution and transmission func-
tions and assets are discerned when retail service is unbundled, is incon-
sistent with traditional state regulatory authority in this area.” Id., at
31,782–31,783.
With respect to distinguishing “Commission-jurisdictional facilities used
for transmission in interstate commerce” from “state-jurisdictional local
distribution facilities,” id., at 31,783, FERC identified seven relevant fac-
tors, id., at 31,771, 31,783–31,784. Recognizing the state interest in main-
taining control of local distribution facilities, FERC further explained
that, “in instances of unbundled retail wheeling that occurs as a result of
a state retail access program, we will defer to recommendations by state
regulatory authorities concerning where to draw the jurisdictional line
under the Commission’s technical test for local distribution facilities . . . .”
Id., at 31,783–31,785.

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14 NEW YORK v. FERC
Opinion of the Court
late the transmission component of bundled retail sales. Id.,
at 30,225–30,226. Rather, FERC reiterated that States
have jurisdiction over the retail sale of power, and stated
that, as a result, “[o]ur assertion of jurisdiction . . . arises
only if the [unbundled] retail transmission in interstate com-
merce by a public utility occurs voluntarily or as a result of
a state retail program.” Id., at 30,226.
II
A number of petitions for review of Order No. 888 were
consolidated for hearing in the Court of Appeals for the Dis-
trict of Columbia. After considering a host of objections,
the Court of Appeals upheld most provisions of the order.
Specifically, it affirmed FERC’s jurisdictional rulings that
are at issue in the present cases. 225 F. 3d, at 681.
The Court of Appeals first explained that the open access
requirements in the orders—for both retail and wholesale
transmissions—were “premised not on individualized find-
ings of discrimination by specific transmission providers, but
on FERC’s identification of a fundamental systemic problem
in the industry.” Id., at 683. It held that FERC’s factual
determinations were reasonable and that §§ 205 and 206 of
the FPA gave the Commission authority to prescribe a mar-
ketwide remedy for a marketwide problem. Interpreting
Circuit precedent—primarily cases involving the transmis-
sion of natural gas, e. g., Associated Gas Distributors v.
FERC, 824 F. 2d 981 (CADC 1987)—the Court of Appeals
concluded that even though FERC’s general authority to
order open access was “limited,” the statute made an excep-
tion “where FERC finds undue discrimination.” 225 F. 3d,
at 687–688.
In its discussion of “Federal Versus State Jurisdiction over
Transmission Services,” id., at 690–696, the Court of Appeals
also endorsed FERC’s reasoning. The Court of Appeals
first addressed the complaints of the state regulatory com-
missions that Order No. 888 “went too far” by going beyond

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the regulation of wholesale transactions and “assert[ing] ju-
risdiction over all unbundled retail transmissions.” Id., at
691, 692. The Court of Appeals concluded that the plain lan-
guage of § 201 of the FPA, which this Court has construed
broadly,10 supported FERC’s regulation of transmissions in
interstate commerce that were part of unbundled retail
sales, as § 201 gives FERC jurisdiction over the “transmis-
sion of electric energy in interstate commerce.” 16 U. S. C.
§ 824(b)(1). Even if the FPA were ambiguous, the Court of
Appeals explained that, given the technological complexities
of the national grids, it would have deferred to the Commis-
sion’s interpretation of § 201 “as giving it jurisdiction over
both wholesale and retail transmissions.” 225 F. 3d, at 694.
The Court of Appeals next addressed the complaints of
transmission-dependent producers and wholesalers that
Order No. 888 did not “go far enough.” Id., at 692. The
Court of Appeals was not persuaded that FERC’s assertion
of jurisdiction over unbundled retail transmission required
FERC to assert jurisdiction over bundled retail transmis-
sions or to mandate unbundling of retail transmissions. Id.,
at 694. Noting that the FPA “clearly contemplates state ju-
risdiction over local distribution facilities and retail sales,”
the Court of Appeals held:
“A regulator could reasonably construe transmissions
bundled with generation and delivery services and sold
to a consumer for a single charge as either transmission
services in interstate commerce or as an integral compo-
nent of a retail sale. Yet FERC has jurisdiction over
one, while the states have jurisdiction over the other.
FERC’s decision to characterize bundled transmissions
as part of retail sales subject to state jurisdiction there-
fore represents a statutorily permissible policy choice to
which we must also defer under Chevron [U. S. A. Inc.
10 See FPC v. Florida Power & Light Co., 404 U. S. 453 (1972); Jersey
Central Power & Light Co. v. FPC, 319 U. S. 61 (1943).

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16 NEW YORK v. FERC
Opinion of the Court
v. Natural Resources Defense Council, Inc., 467 U. S.
837, 842–843 (1984)].” Id., at 694–695.
Because of the importance of the proceeding, we granted
both the petition of the State of New York et al. (collectively
New York) questioning FERC’s assertion of jurisdiction
over unbundled retail transmissions and the petition of
Enron Power Marketing, Inc. (Enron), questioning FERC’s
refusal to assert jurisdiction over bundled retail transmis-
sions. 531 U. S. 1189 (2001). We address these two ques-
tions separately. At the outset, however, we note that no
petitioner questions the validity of the order insofar as it
applies to wholesale transactions: The parties dispute only
the proper scope of FERC’s jurisdiction over retail transmis-
sions. Furthermore, we are not confronted with any factual
issues. Finally, we agree with FERC that transmissions on
the interconnected national grids constitute transmissions in
interstate commerce. See, e. g., FPC v. Florida Power &
Light Co., 404 U. S. 453, 466–467 (1972); n. 5, supra.
III
The first question is whether FERC exceeded its jurisdic-
tion by including unbundled retail transmissions within the
scope of its open access requirements in Order No. 888.
New York argues that FERC overstepped in this regard,
and that such transmissions—because they are part of retail
transactions—are properly the subject of state regulation.
New York insists that the jurisdictional line between the
States and FERC falls between the wholesale and retail
markets.
As the Court of Appeals explained, however, the landscape
of the electric industry has changed since the enactment of
the FPA, when the electricity universe was “neatly divided
into spheres of retail versus wholesale sales.” 225 F. 3d,
at 691. As the Court of Appeals also explained, the plain
language of the FPA readily supports FERC’s claim of juris-
diction. Section 201(b) of the FPA states that FERC’s

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17 Cite as: 535 U. S. 1 (2002)
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jurisdiction includes “the transmission of electric energy
in interstate commerce” and “the sale of electric energy
at wholesale in interstate commerce.” 16 U. S. C. § 824(b).
The unbundled retail transmissions targeted by FERC are
indeed transmissions of “electric energy in interstate com-
merce,” because of the nature of the national grid. There
is no language in the statute limiting FERC’s transmission
jurisdiction to the wholesale market, although the statute
does limit FERC’s sale jurisdiction to that at wholesale.
See ibid.; cf. FPC v. Louisiana Power & Light Co., 406 U. S.
621, 636 (1972) (interpreting similar provisions of the Natu-
ral Gas Act, 15 U. S. C. § 717(b), to mean that FPC juris-
diction “applies to interstate ‘transportation’ regardless
of whether the gas transported is ultimately sold retail or
wholesale”).
In the face of this clear statutory language, New York ad-
vances three arguments in support of its submission that the
statute draws a bright jurisdictional line between wholesale
transactions and retail transactions. First, New York con-
tends that the Court of Appeals applied an erroneous stand-
ard of review because it ignored the presumption against
federal pre-emption of state law; second, New York claims
that other statutory language and legislative history shows
a congressional intent to safeguard pre-existing state regula-
tion of the delivery of electricity to retail customers; and
third, New York argues that FERC jurisdiction over retail
transmissions would impede sound energy policy. These
arguments are unpersuasive.
The Presumption against Pre-emption
Pre-emption of state law by federal law can raise two quite
different legal questions. The Court has most often stated
a “presumption against pre-emption” when a controversy
concerned not the scope of the Federal Government’s author-
ity to displace state action, but rather whether a given state
authority conflicts with, and thus has been displaced by,

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18 NEW YORK v. FERC
Opinion of the Court
the existence of Federal Government authority. See, e. g.,
Hillsborough County v. Automated Medical Laboratories,
Inc., 471 U. S. 707, 715 (1985) (citing cases); see also Med-
tronic, Inc. v. Lohr, 518 U. S. 470, 485 (1996); Cipollone
v. Liggett Group, Inc., 505 U. S. 504, 518 (1992). In such
a situation, the Court “ ‘start[s] with the assumption that
the historic police powers of the States were not to be
superseded . . . unless that was the clear and manifest pur-
pose of Congress.’ ” Hillsborough County, 471 U. S., at 715
(quoting Jones v. Rath Packing Co., 430 U. S. 519, 525 (1977)).
These are not such cases, however, because the question pre-
sented does not concern the validity of a conflicting state law
or regulation.
The other context in which “pre-emption” arises concerns
the rule “that a federal agency may pre-empt state law only
when and if it is acting within the scope of its congressionally
delegated authority[,] . . . [for] an agency literally has no
power to act, let alone pre-empt the validly enacted legisla-
tion of a sovereign State, unless and until Congress confers
power upon it.” Louisiana Pub. Serv. Comm’n v. FCC, 476
U. S. 355, 374 (1986). This is the sort of case we confront
here—defining the proper scope of the federal power. Such
a case does not involve a “presumption against pre-emption,”
as New York argues, but rather requires us to be certain
that Congress has conferred authority on the agency. As
we have explained, the best way to answer such a question—
i. e., whether federal power may be exercised in an area of
pre-existing state regulation—“is to examine the nature and
scope of the authority granted by Congress to the agency.”
Ibid. In other words, we must interpret the statute to de-
termine whether Congress has given FERC the power to
act as it has, and we do so without any presumption one way
or the other.
As noted above, the text of the FPA gives FERC jurisdic-
tion over the “transmission of electric energy in interstate
commerce and . . . the sale of electric energy at wholesale in

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19 Cite as: 535 U. S. 1 (2002)
Opinion of the Court
interstate commerce.” 16 U. S. C. § 824(b). The references
to “transmission” in commerce and “sale” at wholesale were
made part of § 201 of the statute when it was enacted in
1935.11 Subsections (c) and (d) of § 201 explain, respectively,
the meaning of the terms “transmission” and “sale of electric
energy at wholesale.” 12 This statutory text thus unambigu-
ously authorizes FERC to assert jurisdiction over two sepa-
11 This reference is found twice in § 201 of the FPA. Section 201(a), as
codified in 16 U. S. C. § 824(a), states in full: “It is declared that the busi-
ness of transmitting and selling electric energy for ultimate distribution
to the public is affected with a public interest, and that Federal regulation
of matters relating to generation to the extent provided in this subchapter
and subchapter III of this chapter and of that part of such business which
consists of the transmission of electric energy in interstate commerce and
the sale of such energy at wholesale in interstate commerce is necessary
in the public interest, such Federal regulation, however, to extend only to
those matters which are not subject to regulation by the States.” (Em-
phasis added.)
Section 201(b)(1), as codified in 16 U. S. C. § 824(b)(1), states in full: “The
provisions of this subchapter shall apply to the transmission of electric
energy in interstate commerce and to the sale of electric energy at whole-
sale in interstate commerce, but except as provided in paragraph (2) shall
not apply to any other sale of electric energy or deprive a State or State
commission of its lawful authority now exercised over the exportation of
hydroelectric energy which is transmitted across a State line. The Com-
mission shall have jurisdiction over all facilities for such transmission or
sale of electric energy, but shall not have jurisdiction, except as specifically
provided in this subchapter and subchapter III of this chapter, over facili-
ties used for the generation of electric energy or over facilities used in
local distribution or only for the transmission of electric energy in intra-
state commerce, or over facilities for the transmission of electric energy
consumed wholly by the transmitter.” (Emphasis added.)
12 Section 201(c) of the FPA, as codified in 16 U. S. C. § 824(c), explains
that “[f]or the purpose of this subchapter, electric energy shall be held to
be transmitted in interstate commerce if transmitted from a State and
consumed at any point outside thereof; but only insofar as such transmis-
sion takes place within the United States.” Finally, § 201(d), as codified
in 16 U. S. C. § 824(d), states that the “term ‘sale of electric energy at
wholesale’ when used in this subchapter, means a sale of electric energy
to any person for resale.”

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20 NEW YORK v. FERC
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rate activities—transmitting and selling. It is true that
FERC’s jurisdiction over the sale of power has been specifi-
cally confined to the wholesale market. However, FERC’s
jurisdiction over electricity transmissions contains no such
limitation. Because the FPA authorizes FERC’s juris-
diction over interstate transmissions, without regard to
whether the transmissions are sold to a reseller or directly
to a consumer, FERC’s exercise of this power is valid.
Legislative History
Attempting to discredit this straightforward analysis of
the statutory language, New York calls our attention to nu-
merous statements in the legislative history indicating that
the 1935 Congress intended to do no more than close the
“Attleboro gap,” by providing for federal regulation of
wholesale, interstate electricity transactions that the Court
had held to be beyond the reach of state authority in Attle-
boro, 273 U. S., at 89. To support this argument, and to
demonstrate that the 1935 Congress did not intend to sup-
plant any traditionally state-held jurisdiction, New York
points to language added to the FPA in the course of the
legislative process that evidences a clear intent to preserve
state jurisdiction over local facilities. For example, § 201(a)
provides that federal regulation is “to extend only to those
matters which are not subject to regulation by the States.”
16 U. S. C. § 824(a). And § 201(b) states that FERC has no
jurisdiction “over facilities used for the generation of electric
energy or over facilities used in local distribution or only for
the transmission of electric energy in intrastate commerce,
or over facilities for the transmission of electric energy con-
sumed wholly by the transmitter.” 16 U. S. C. § 824(b).
It is clear that the enactment of the FPA in 1935 closed
the “Attleboro gap” by authorizing federal regulation of in-
terstate, wholesale sales of electricity—the precise subject
matter beyond the jurisdiction of the States in Attleboro.
And it is true that the above-quoted language from § 201(a)
concerning the States’ reserved powers is consistent with

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Opinion of the Court
the view that the FPA was no more than a gap-closing stat-
ute. It is, however, perfectly clear that the original FPA
did a good deal more than close the gap in state power identi-
fied in Attleboro. The FPA authorized federal regulation
not only of wholesale sales that had been beyond the reach
of state power, but also the regulation of wholesale sales that
had been previously subject to state regulation. See, e. g.,
Attleboro, 273 U. S., at 85–86 (noting, prior to the enactment
of the FPA, that States could regulate aspects of interstate
wholesale sales, as long as such regulation did not directly
burden interstate commerce). More importantly, as dis-
cussed above, the FPA authorized federal regulation of in-
terstate transmissions as well as of interstate wholesale
sales, and such transmissions were not of concern in Attle-
boro. Thus, even if Attleboro catalyzed the enactment of the
FPA, Attleboro does not define the outer limits of the stat-
ute’s coverage.
Furthermore, the portion of § 201(a) cited by New York
concerning the preservation of existing state jurisdiction is
actually consistent with Order No. 888, because unbundled
interstate transmissions of electric energy have never been
“subject to regulation by the States,” 16 U. S. C. § 824(a).
Indeed, unbundled transmissions have been a recent develop-
ment. As FERC explained, at the time that the FPA was
enacted, transmissions were bundled with the energy itself,
and electricity was delivered to both wholesale and retail
customers as a complete, bundled package. Order No. 888,
at 31,639. Thus, in 1935, there was neither state nor federal
regulation of what did not exist.13
13 FERC recognized this point in reaching its jurisdictional conclusion:
“Rather than claiming ‘new’ jurisdiction, the Commission is applying the
same statutory framework to a business environment in which . . . retail
sales and transmission service are provided in separate transactions. . . .
Because these types of products and transactions were not prevalent in
the past, the jurisdictional issue before us did not arise and . . . the Com-
mission cannot be viewed as ‘disturbing’ the jurisdiction of state reg-
ulators prior to and after the Attleboro case.” Order No. 888–A, at
30,339–30,340.

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22 NEW YORK v. FERC
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Moreover, we have described the precise reserved state
powers language in § 201(a) as a mere “ ‘policy declaration’ ”
that “ ‘cannot nullify a clear and specific grant of jurisdiction,
even if the particular grant seems inconsistent with the
broadly expressed purpose.’ ” FPC v. Southern Cal. Edi-
son Co., 376 U. S. 205, 215 (1964) (quoting Connecticut
Light & Power Co. v. FPC, 324 U. S. 515, 527 (1945)); see also
United States v. Public Util. Comm’n of Cal., 345 U. S. 295,
311 (1953). Because the FPA contains such “a clear and
specific grant of jurisdiction” to FERC over interstate trans-
missions, as discussed above, the prefatory language cited
by New York does not undermine FERC’s jurisdiction.
New York is correct to point out that the legislative his-
tory is replete with statements describing Congress’ intent
to preserve state jurisdiction over local facilities. The senti-
ment expressed in those statements is incorporated in the
second sentence of § 201(b) of the FPA, as codified in 16
U. S. C. § 824(b), which provides:
“The Commission shall have jurisdiction over all facili-
ties for such transmission or sale of electric energy, but
shall not have jurisdiction, except as specifically pro-
vided in this subchapter and subchapter III of this chap-
ter, over facilities used for the generation of electric en-
ergy or over facilities used in local distribution or only
for the transmission of electric energy in intrastate com-
merce, or over facilities for the transmission of electric
energy consumed wholly by the transmitter.”
Yet, Order No. 888 does not even arguably affect the States’
jurisdiction over three of these subjects: generation facilities,
transmissions in intrastate commerce, or transmissions con-
sumed by the transmitter. Order No. 888 does discuss local
distribution facilities, and New York argues that, as a result,
FERC has improperly invaded the States’ authority “over
facilities used in local distribution,” 16 U. S. C. § 824(b).
However, FERC has not attempted to control local distri-

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23 Cite as: 535 U. S. 1 (2002)
Opinion of the Court
bution facilities through Order No. 888. To the contrary,
FERC has made clear that it does not have jurisdiction over
such facilities, Order No. 888, at 31,969, and has merely set
forth a seven-factor test for identifying these facilities, with-
out purporting to regulate them, id., at 31,770–31,771.
New York also correctly states that the legislative history
demonstrates Congress’ interest in retaining state juris-
diction over retail sales. But again, FERC has carefully
avoided assuming such jurisdiction, noting repeatedly that
“the FPA does not give the Commission jurisdiction over
sales of electric energy at retail.” Id., at 31,969. Because
federal authority has been asserted only over unbundled
transmissions, New York retains jurisdiction of the ultimate
sale of the energy. And, as discussed below, FERC did not
assert jurisdiction over bundled retail transmissions, leaving
New York with control over even the transmission compo-
nent of bundled retail sales.
Our evaluation of the extensive legislative history re-
viewed in New York’s brief is affected by the importance of
the changes in the electricity industry that have occurred
since the FPA was enacted in 1935. No party to these cases
has presented evidence that Congress foresaw the industry’s
transition from one of local, self-sufficient monopolies to one
of nationwide competition and electricity transmission. Nor
is there evidence that the 1935 Congress foresaw the possi-
bility of unbundling electricity transmissions from sales.
More importantly, there is no evidence that if Congress had
foreseen the developments to which FERC has responded,
Congress would have objected to FERC’s interpretation of
the FPA. Whatever persuasive effect legislative history
may have in other contexts, here it is not particularly helpful
because of the interim developments in the electric industry.
Thus, we are left with the statutory text as the clearest guid-
ance. That text unquestionably supports FERC’s jurisdic-
tion to order unbundling of wholesale transactions (which

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24 NEW YORK v. FERC
Opinion of the Court
none of the parties before us questions), as well as to regu-
late the unbundled transmissions of electricity retailers.
Sound Energy Policy
New York argues that FERC jurisdiction over unbundled
retail transmission will impede sound energy policy. Spe-
cifically, New York cites the States’ interest in overseeing
the maintenance of transmission lines and the siting of new
lines. It is difficult for us to evaluate the force of these ar-
guments because New York has not separately analyzed the
impact of the loss of control over unbundled retail transmis-
sions, as opposed to the loss of control over retail transmis-
sions generally, and FERC has only regulated unbundled
transactions. Moreover, FERC has recognized that the
States retain significant control over local matters even
when retail transmissions are unbundled. See, e. g., Order
No. 888, at 31,782, n. 543 (“Among other things, Congress left
to the States authority to regulate generation and transmis-
sion siting”); id., at 31,782, n. 544 (“This Final Rule will not
affect or encroach upon state authority in such traditional
areas as the authority over local service issues, including re-
liability of local service; administration of integrated re-
source planning and utility buy-side and demand-side deci-
sions, including DSM [demand-side management]; authority
over utility generation and resource portfolios; and authority
to impose nonbypassable distribution or retail stranded cost
charges”). We do note that the Edison Electric Institute,
which is a party to these cases, and which represents that
its members own approximately 70% of the transmission
facilities in the country, does not endorse New York’s objec-
tions to Order No. 888. And, regardless of their persuasive-
ness, the sort of policy arguments forwarded by New York
are properly addressed to the Commission or to the Con-
gress, not to this Court. E. g., Chemehuevi Tribe v. FPC,
420 U. S. 395, 423 (1975).

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IV
Objecting to FERC’s order from the opposite direction,
Enron argues that the FPA gives FERC the power to apply
its open access remedy to bundled retail transmissions of
electricity, and, given FERC’s findings of undue discrimina-
tion, that FERC had a duty to do so. In making this argu-
ment, Enron persistently claims that FERC held that it had
no jurisdiction to grant the relief that Enron seeks.14 That
assumption is incorrect: FERC chose not to assert such ju-
risdiction, but it did not hold itself powerless to claim juris-
diction. Indeed, FERC explicitly reserved decision on the
jurisdictional issue that Enron claims FERC decided. See
Order No. 888, at 31,699 (explaining that Enron’s position
raises “numerous difficult jurisdictional issues that we be-
lieve are more appropriately considered when the Commis-
sion reviews unbundled retail transmission tariffs that may
come before us in the context of a state retail wheeling pro-
gram”). Absent Enron’s flawed assumption, FERC’s ruling
is clearly acceptable.
14 See, e. g., Brief for Petitioner in No. 00–809, p. 12 (“FERC . . . held
itself powerless to address the vast majority of the problem”); id., at 14
(“FERC determined, however, that it did not have authority to extend its
functional unbundling remedy to transmissions for bundled retail sales”);
id., at 18 (“FERC’s decision that it did not have jurisdiction to apply [an
open access transmission tariff] to transmissions for bundled retail sales
was contrary to law”); id., at 20 (“[FERC found] no jurisdiction when the
cost of the transmission is bundled with the cost of power at retail”).
Surprisingly, FERC seemed to agree with Enron’s characterization of
its holding at some places in its own brief. E. g., Brief for Respondent
FERC 44–45 (“The Commission reasonably concluded that Congress has
not authorized federal regulation of the transmission component of bun-
dled retail sales of electric energy” (emphasis added)). Yet, FERC’s brief
also stated more accurately that FERC had decided not to assert jurisdic-
tion, rather than concluded that it lacked the power to do so. E. g., id., at
15 (“[FERC] was not asserting jurisdiction to order utilities to unbundle
their retail services . . .”); id., at 49 (citing “the Commission’s reasonable
decision not to override the States’ historical regulation of transmission
that is bundled with a retail sale of energy”).

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26 NEW YORK v. FERC
Opinion of the Court
As noted above, in both Order No. 888 and rehearing
Order No. 888–A, FERC gave two reasons for refusing to
extend its open access remedy to bundled retail transmis-
sions. First, FERC explained that such relief was not “nec-
essary.” Order No. 888, at 31,699; see also Order No. 888–A,
at 30,225. Second, FERC noted that the regulation of bun-
dled retail transmissions “raises numerous difficult jurisdic-
tional issues” that did not need to be resolved in the present
context. Order No. 888, at 31,699; see also Order No. 888–A,
at 30,225–30,226. Both of these reasons provide valid sup-
port for FERC’s decision not to regulate bundled retail
transmissions.
First, with respect to FERC’s determination that it was
not “necessary” to include bundled retail transmissions in its
remedy, it must be kept in mind exactly what it was that
FERC sought to remedy in the first place: a problem with
the wholesale power market. FERC’s findings, as Enron
itself recognizes, concerned electric utilities’ use of their
market power to “ ‘deny their wholesale customers access to
competitively priced electric generation,’ ” thereby “ ‘deny-
[ing] consumers the substantial benefits of lower electricity
prices.’ ” Brief for Petitioner in No. 00–809, pp. 12–13 (quot-
ing NPRM 33,052) (emphasis added). The title of Order
No. 888 confirms FERC’s focus: “Promoting Wholesale Com-
petition Through Open Access Non-Discriminatory Trans-
mission Services . . . .” Order No. 888, at 31,632 (emphasis
added). Indeed, FERC has, from the outset, identified its
goal as “facilitat[ing] competitive wholesale electric power
markets.” NPRM 33,049 (emphasis added).
To remedy the wholesale discrimination it found, FERC
chose to regulate all wholesale transmissions. It also regu-
lated unbundled retail transmissions, as was within its power
to do. See Part III, supra. However, merely because
FERC believed that those steps were appropriate to remedy
discrimination in the wholesale electricity market does not,
as Enron alleges, lead to the conclusion that the regulation

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27 Cite as: 535 U. S. 1 (2002)
Opinion of the Court
of bundled retail transmissions was “necessary” as well.
Because FERC determined that the remedy it ordered con-
stituted a sufficient response to the problems FERC had
identified in the wholesale market, FERC had no § 206 obli-
gation to regulate bundled retail transmissions or to order
universal unbundling.15
Of course, it may be true that FERC’s findings concerning
discrimination in the wholesale electricity market suggest
that such discrimination exists in the retail electricity mar-
ket as well, as Enron alleges. Were FERC to investigate
this alleged discrimination and make findings concerning
undue discrimination in the retail electricity market, § 206 of
the FPA would require FERC to provide a remedy for that
discrimination. See 16 U. S. C. § 824e(a) (upon a finding of
undue discrimination, “the Commission shall determine the
just and reasonable . . . regulation, practice, or contract . . .
and shall fix the same by order”). And such a remedy could
very well involve FERC’s decision to regulate bundled re-
tail transmissions—Enron’s desired outcome. However, be-
cause the scope of the order presently under review did not
concern discrimination in the retail market, Enron is wrong
to argue that § 206 requires FERC to provide a full array of
retail-market remedies.
Second, we can agree with FERC’s conclusion that Enron’s
desired remedy “raises numerous difficult jurisdictional is-
sues,” Order No. 888, at 31,699, without deciding whether
Enron’s ultimate position on those issues is correct. The is-
sues raised by New York concerning FERC’s jurisdiction
over unbundled retail transmissions are themselves serious.
15 Indeed, given FERC’s acknowledgment “that recovery of legitimate
stranded costs is critical to the successful transition of the electric utility
industry from a tightly regulated, cost-of-service utility industry to an
open access, competitively priced power industry,” NPRM 33,052, it was
appropriate for FERC to confine the scope of its remedy to what was
truly “necessary”: the broader the remedy, the more complicated FERC’s
already challenging goal of permitting utilities to recover stranded costs.

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28 NEW YORK v. FERC
Opinion of Thomas, J.
See Part III, supra. It is obvious that a federal order claim-
ing jurisdiction over all retail transmissions would have even
greater implications for the States’ regulation of retail
sales—a state regulatory power recognized by the same stat-
utory provision that authorizes FERC’s transmission juris-
diction. See 16 U. S. C. § 824(b) (giving FERC jurisdiction
over “transmission of electric energy,” but recognizing state
jurisdiction over “any . . . sale of electric energy” other than
“sale of electric energy at wholesale”). But even if we as-
sume, for present purposes, that Enron is correct in its claim
that the FPA gives FERC the authority to regulate the
transmission component of a bundled retail sale, we never-
theless conclude that the agency had discretion to decline to
assert such jurisdiction in this proceeding in part because of
the complicated nature of the jurisdictional issues. Like the
Court of Appeals, we are satisfied that FERC’s choice not
to assert jurisdiction over bundled retail transmissions in a
rulemaking proceeding focusing on the wholesale market
“represents a statutorily permissible policy choice.” 225 F.
3d, at 694–695.
Accordingly, the judgment of the Court of Appeals is
affirmed.
It is so ordered.
Justice Thomas, with whom Justice Scalia and Jus-
tice Kennedy join, concurring in part and dissenting in
part.
Today the Court finds that the Federal Energy Regulatory
Commission (FERC or Commission) properly construed its
statutory authority when it determined that: (1) it may re-
quire a utility that “unbundles” the cost of transmission from
the cost of electric energy to transmit competitors’ electric-
ity over its lines on the same terms that the utility applies
to its own energy transmissions; and (2) it need not impose
that requirement on utilities that continue to offer only “bun-
dled” retail sales. Under the Federal Power Act (FPA), 16

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29 Cite as: 535 U. S. 1 (2002)
Opinion of Thomas, J.
U. S. C. § 824 et seq., FERC has jurisdiction over all inter-
state transmission, regardless of the type of transaction with
which it is associated, and I concur in the Court’s holding
with respect to transmission used for unbundled retail sales
and join Parts II and III of its opinion. I dissent, however,
from the Court’s resolution of the question concerning trans-
mission used for bundled retail sales because I believe that
the Court fails to properly assess both the Commission’s ju-
risdictional analysis and its justification for excluding bun-
dled retail transmission from the Open Access Transmission
Tariff (OATT). FERC’s explanations are inadequate and do
not warrant our deference.
I
While the Court does not foreclose the possibility that
FERC’s jurisdiction extends to transmission associated with
bundled retail sales, the Court defers to FERC’s decision not
to apply the OATT to such transmission on the ground that
the Commission made a permissible policy choice, ante, at 28
(quoting Transmission Access Policy Study Group v. FERC,
225 F. 3d 667, 694–695 (CADC 2000)), and by reference to
FERC’s assertions that: (1) such relief was not “necessary,”
ante, at 26 (citing Order No. 888, FERC Stats. & Regs.,
Regs. Preambles, Jan. 1991–June 1996, ¶ 31,036, p. 31,699;
Order No. 888–A, FERC Stats. & Regs., Regs. Preambles,
July 1996–Dec. 2001, ¶ 31,048, p. 30,225); and (2) “the regula-
tion of bundled retail transmissions ‘raises numerous difficult
jurisdictional issues’ that did not need to be resolved in the
present context.” Ante, at 26 (citing Order No. 888, at
31,699; Order No. 888–A, at 30,225–30,226). The Court con-
cludes that both reasons “provide valid support for FERC’s
decision not to regulate bundled retail transmissions. ”
Ante, at 26.1
1 I note that the “reasons” upon which the Court relies were made only
in the specific context of FERC’s explanation of its decision not to unbun-
dle retail transmission and distribution. Order No. 888, at 31,698–31,699.
The comments were not given as a general explanation for FERC’s

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30 NEW YORK v. FERC
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I disagree. The Court defers to the Court of Appeals’
characterization of FERC’s decision as a “policy choice,”
rather than to any such characterization made by FERC it-
self.2 But a post-hoc rationalization offered by the Court of
Appeals is an insufficient basis for deference. “[A]n agency’s
action must be upheld, if at all, on the basis articulated by
the agency itself.” Motor Vehicle Mfrs. Assn. of United
States, Inc. v. State Farm Mut. Automobile Ins. Co., 463
U. S. 29, 50 (1983) (emphasis added).
Therefore, in order to properly assess FERC’s decision not
to apply the OATT to transmission connected to bundled re-
tail sales, we must carefully evaluate the two justifications
that the Court points to and relies on. Neither is sufficient.
As I discuss below, FERC failed to explain why regulating
such transmission is not “necessary,” and FERC’s inconclu-
sive jurisdictional analysis does not provide a sound basis for
our deference.
A
I cannot support the Court’s reliance on FERC’s explana-
tion that “[a]lthough the unbundling of retail transmission
and generation, as well as wholesale transmission and gener-
ation, would be helpful in achieving comparability, we do not
believe it is necessary.” Order No. 888, at 31,699. Aside
from this conclusory statement, FERC provides no explana-
tion as to why such regulation is unnecessary and attaches
no findings to support this single statement. As such, we
decision not to apply the OATT to transmission associated with bundled
retail sales, and FERC did not rely on the second explanation in Order
No. 888–A. See infra, at 41.
2 Specifically, the Court of Appeals stated that, in light of the fact that
a regulator could reasonably construe the transmission component of bun-
dled retail sales as either part of a retail sale or a transmission service in
interstate commerce, “FERC’s decision to characterize bundled transmis-
sions as part of retail sales subject to state jurisdiction therefore repre-
sents a statutorily permissible policy choice to which we must also defer
under Chevron [U. S. A. Inc. v. Natural Resources Defense Council, Inc.,
467 U. S. 837, 842–843 (1984)].” 225 F. 3d 667, 694–695 (CADC 2000).

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31 Cite as: 535 U. S. 1 (2002)
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have no basis for determining whether FERC’s decision is
justified. A brief review of the electric industry, and the
nature of transmission in particular, further calls into ques-
tion both FERC’s conclusory statement and its logical infer-
ence: That regulation of transmission is not necessary when
used in connection with one type of transaction but is neces-
sary when used for another.
An electric power system consists of three divisions: gen-
eration, transmission, and local distribution. Electricity is
generated at power plants where “a fuel such as coal, gas,
oil, uranium or hydro power is used to spin a turbine which
turns a generator to generate electricity.” Brief for Electri-
cal Engineers et al. as Amici Curiae 12 (hereinafter Brief
for Electrical Engineers). “[G]enerating stations continu-
ously feed electric energy into a web of transmission lines
(loosely referred to as ‘the grid’) at very high voltages.”
P. Fox-Penner, Electric Utility Restructuring: A Guide to
the Competitive Era 5 (1997) (hereinafter Fox-Penner).
The transmission lines in turn feed “substations (essentially
transformers) that reduce voltage and spread the power
from each transmission line to many successively smaller
distribution lines, culminating at the retail user.” Id., at
23.3
Unlike the other electricity components—and with the
exception of transmission in Alaska, Hawaii, and parts of
Texas—transmission is inherently interstate.4 It takes
place over a network or grid, which consists of a configura-
3 At the local distribution centers, “the power flow is split to send power
to a number of primary feeder lines that lead to other transformers that
again step down and feed the power to secondary service lines that in
turn deliver the power to the utility’s customers.” Brief for Electrical
Engineers 13.
4 In the contiguous United States, this system is composed of three
major grids: the Eastern Interconnection, the Western Interconnection,
and the Texas Interconnection. Restructuring of the Electric Power
Industry: A Capsule of Issues and Events, Energy Information Adminis-
tration 6 (DOE/EIA–X037, Jan. 2000).

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32 NEW YORK v. FERC
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tion of interconnected transmission lines that cross state
lines. Brief for Electrical Engineers 13. These lines are
owned and operated by the Nation’s larger utilities. No in-
dividual utility, however, has “ ‘control over the actual trans-
fers of electric power and energy with any particular electric
system with which it is interconnected.’ ” Id., at 15 (quot-
ing Florida Power & Light Co., 37 F. P. C. 544, 549 (1967)).
Electricity flows at extremely high voltages across the net-
work in uncontrollable ways and cannot be easily directed
through a particular path from a specific generator to a con-
sumer. Fox-Penner 26–27. The “[t]ransfer of electricity
from one point to another will, to some extent, flow over all
transmission lines in the interconnection, not just those in
the direct path of the transfer.” Van Nostrand’s Scientific
Encyclopedia 1096 (D. Considine ed., 8th ed. 1995). The en-
ergy flow depends on “where the load (demand for electric-
ity) and generation are at any given moment, with the en-
ergy always following the path (or paths) of least resistance.”
Brief for Electrical Engineers 13. The paths, however,
“change moment by moment.” Fox-Penner 27. And “[t]ry-
ing to predict the flow of electrons is akin to putting a drop
of ink into a water pipe flowing into a pool, and then trying
to predict how the ink drop will diffuse into the pool, and
which combination of outflow pipes will eventually contain
ink.” Ibid.
Nonetheless, buyers and sellers do negotiate particular
contract paths, “route[s] nominally specified in an agree-
ment to have electricity transmitted between two points.”
T. Brennan, Shock to the System 76 (1996) (emphasis added).5
5 FERC notes that whether transmission is in interstate commerce
“does not turn on whether the contract path for a particular power or
transmission sale crosses state lines, but rather follows the physical flow
of electricity.” Order No. 888, Appendix G, at 31,968. FERC states that
“[b]ecause of the highly integrated nature of the electric system, this re-
sults in most transmission of electric energy being ‘in interstate com-
merce.’ ” Ibid.

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33 Cite as: 535 U. S. 1 (2002)
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In practice, however, it is quite possible that most of the
power will never flow over the negotiated transmission lines.
The transactional arrangements, therefore, bear little resem-
blance to the physical behavior of electricity transmitted on
a power grid and, as such, it is impossible for either a utility
or FERC to isolate or distinguish between the transmission
used for bundled or unbundled wholesale or retail sales.
Given that it is impossible to identify which utility’s lines
are used for any given transmission, FERC’s decision to ex-
clude transmission because it is associated with a particular
type of transaction appears to make little sense. And this
decision may conflict with FERC’s statutory mandate to reg-
ulate when it finds unjust, unreasonable, unduly discrimina-
tory, or preferential treatment with respect to any transmis-
sion subject to its jurisdiction. See 16 U. S. C. §§ 824d,
824e.6 FERC clearly recognizes the statute’s mandate, stat-
ing in Order No. 888–A that “our authorities under the FPA
not only permit us to adapt to changing economic realities in
the electric industry, but also require us to do so, as neces-
sary to eliminate undue discrimination and protect electric-
6 Section 824d(b), for example, provides:
“No public utility shall, with respect to any transmission or sale subject
to the jurisdiction of the Commission, (1) make or grant any undue prefer-
ence or advantage to any person or subject any person to any undue preju-
dice or disadvantage, or (2) maintain any unreasonable difference in rates,
charges, service, facilities, or in any other respect, either as between locali-
ties or as between classes of service.”
Section 824e(a) further provides that whenever FERC, after conducting
a hearing, finds that “any rate, charge, or classification, demanded, ob-
served, charged, or collected by any public utility for any transmission or
sale subject to the jurisdiction of the Commission, or that any rule, regula-
tion, practice, or contract affect[ing] such rate, charge, or classification is
unjust, unreasonable, unduly discriminatory or preferential, the Commis-
sion shall determine the just and reasonable rate, charge, classification, . . .
practice, or contract to be thereafter observed and in force, and shall fix
the same by order.” (Emphasis added.)

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34 NEW YORK v. FERC
Opinion of Thomas, J.
ity customers.” Order No. 888–A, at 30,176.7 And it is cer-
tainly possible that utilities that own or control lines on the
grid discriminate against entities that seek to use their
transmission lines regardless of whether the utilities them-
selves bundle or unbundle their transactions.8 The fact that
FERC found undue discrimination with respect to transmis-
sion used in connection with both bundled and unbundled
wholesale sales and unbundled retail sales indicates that
such discrimination exists regardless of whether the trans-
mission is used in bundled or unbundled sales. Without
more, FERC’s conclusory statement that “unbundling of re-
tail transmission” is not “necessary” lends little support to
its decision not to regulate such transmission. And it sim-
7 FERC likewise states in Order No. 888, at 31,634, that the “legal and
policy cornerstone of these rules is to remedy undue discrimination in
access to the monopoly owned transmission wires that control whether
and to whom electricity can be transported in interstate commerce.”
FERC also recognized that to comply with the statute’s mandate, it “must
eliminate the remaining patchwork of closed and open jurisdictional trans-
mission systems and ensure that all these systems, including those that
already provide some form of open access, cannot use monopoly power
over transmission to unduly discriminate against others.” Id., at 31,635.
8 For example, the Electric Power Supply Association explains that
transmission owning utilities may discriminate against entities that seek
to use their transmission systems, thereby preventing the entities from
using their lines, in the following ways: (1) They may block available trans-
fer capacity—the capability of the physical transmission network to facili-
tate activity over and above its committed uses—by overscheduling trans-
mission for their own retail loads across “valuable” transmission paths;
(2) they may improperly avoid certain costs that other entities would be
subject to; or (3) they may fail to make accurate disclosure of available
transfer capability, causing “serious difficulties for suppliers attempting to
schedule electricity sales across their transmission facilities.” Brief for
Respondent Electric Power Supply Association 7–9. Similarly, petitioner
Enron explains that a “utility can reserve superior transmission capacity
for its own bundled retail sales, at times even closing its facilities to other
transmissions . . . forcing competitors of the utility to scramble for less
direct, less predictable and more expensive transmission options.” Brief
for Petitioner in No. 00–809, pp. 41–42.

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35 Cite as: 535 U. S. 1 (2002)
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ply cannot be the case that the nature of the commercial
transaction controls the scope of FERC’s jurisdiction.
To be sure, I would not prejudge whether FERC must
require that transmission used for bundled retail sales be
subject to FERC’s open access tariff. At a minimum, how-
ever, FERC should have determined whether regulating
transmission used in connection with bundled retail sales
was in fact “necessary to eliminate undue discrimination and
protect electricity customers.” Ibid. FERC’s conclusory
statement instills little confidence that it either made this
determination or that it complied with the unambiguous dic-
tates of the statute. While the Court essentially ignores the
statute’s mandatory prescription by approving of FERC’s
decision as a permissible “policy choice,” the FPA simply
does not give FERC discretion to base its decision not to
remedy undue discrimination on a “policy choice.”
The Court itself struggles to find support for FERC’s con-
clusion that it was not “necessary” to regulate bundled retail
transmission in order to remedy discrimination. First, the
Court points to the fact that FERC’s findings concerned elec-
tric utilities’ use of their market power to “ ‘deny their
wholesale customers access to competitively priced electric
generation,’ thereby ‘deny[ing] consumers the substantial
benefits of lower electricity prices.’ ” Ante, at 26 (quoting
Brief for Petitioner in No. 00–809, pp. 12–13). Second, the
Court notes that the title of Order No. 888 confirms FERC’s
focus because it references promoting wholesale competition.
Ante, at 26. Finally, the Court relies on the fact that FERC
has identified its goal as “ ‘facilitat[ing] competitive whole-
sale electric power markets.’ ” Ibid. (quoting Notice of Pro-
posed Rulemaking, FERC Stats. & Regs., Proposed Regs.,
1988–1999, ¶ 32,514, p. 33,049; 60 Fed. Reg. 17662).
I fail to understand how these statements support FERC’s
determination that it was not “necessary” to regulate bun-
dled retail transmission. Utilities that bundle may use their
market power to discriminate against those seeking access

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36 NEW YORK v. FERC
Opinion of Thomas, J.
to the lines in connection with either retail or wholesale
sales. It is certainly possible, perhaps even likely, that the
only way to remedy undue discrimination and ensure open
access to transmission services is to regulate all utilities that
operate transmission facilities, and not just those that use
their own lines for the purpose of wholesale sales or in con-
nection with unbundled retail transactions. FERC does not
suggest that the only entities that engage in discriminatory
behavior are those that use their transmission facilities for
wholesale sales or unbundled retail sales. And relying on
FERC’s reference to wholesale markets makes little sense
when FERC regulates transmission connected to retail sales
so long as the transmission is in a State that unbundles retail
sales or where the utility voluntarily unbundles. See infra,
at 41–42.
“We have frequently reiterated that an agency must co-
gently explain why it has exercised its discretion in a given
manner . . . .” Motor Vehicle Mfrs. Assn., 463 U. S., at 48.
Here, FERC’s failure to do so prevents us from evaluating
whether or not the agency engaged in reasoned decision-
making when it determined that it was not “necessary” to
regulate bundled retail transmission.
B
The Court also relies on FERC’s explanation that the
prospect of unbundling retail transmission and generation
“raises numerous difficult jurisdictional issues that we be-
lieve are more appropriately considered when the Commis-
sion reviews unbundled retail transmission tariffs that may
come before us in the context of a state retail wheeling
program.” Order No. 888, at 31,699. The Court provides
the following explanation for its decision to rely on this
statement:
“But even if we assume, for present purposes, that
Enron is correct in its claim that the FPA gives FERC
the authority to regulate the transmission component of

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37 Cite as: 535 U. S. 1 (2002)
Opinion of Thomas, J.
a bundled retail sale, we nevertheless conclude that the
agency had discretion to decline to assert such jurisdic-
tion in this proceeding in part because of the compli-
cated nature of the jurisdictional issues.” Ante, at 28.
This explanation is wholly unsatisfying, both because the
Court’s reliance on FERC’s statement fails to take into ac-
count the unambiguous language of the statute and because
FERC has given various inconsistent explanations of its
jurisdiction.
1
FERC’s statement implies that its decision not to regulate
was based, at least in part, both on a determination that
the statute is ambiguous and on a determination that certain
interstate transmission may fall outside of its jurisdiction.
The FPA, however, unambiguously grants FERC jurisdic-
tion over the interstate transmission of electric energy in
interstate commerce. 16 U. S. C. § 824(b)(1). As the Court
notes, “[t]here is no language in the statute limiting FERC’s
transmission jurisdiction to the wholesale market.” Ante,
at 17. The Court correctly recognizes that “the FPA au-
thorizes FERC’s jurisdiction over interstate transmissions,
without regard to whether the transmissions are sold to a
reseller or directly to a consumer.” Ante, at 20.
Similarly, although FERC draws a jurisdictional line be-
tween transmission used in connection with bundled and un-
bundled retail sales, the statute makes no such distinction.
The terms “bundled” and “unbundled” are not found in the
statute.9 The only jurisdictional line that the statute draws
with regard to transmission is between interstate and intra-
state. See § 824(b)(1). Congress does not qualify its grant
9 The difference between the two types of sales is that with an unbun-
dled retail sale, a utility, either voluntarily or pursuant to state law, pre-
sents separate charges for the electricity, the transmission service, and
the delivery service. In a bundled sale, all components are combined as
one charge. See Brief for Petitioner in No. 00–809, at 4–5.

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38 NEW YORK v. FERC
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to FERC of jurisdiction over interstate transmission. Nor
does the Court explain how the statute grants FERC juris-
diction over unbundled retail transmission, yet is ambiguous
with respect to the question of bundled retail transmission.
Even if I agreed that the statute is ambiguous, FERC did
not purport to resolve an ambiguity in the passage upon
which the Court relies. Instead, FERC refused to resolve
what it considered to be a statutory ambiguity, in part be-
cause it determined that resolving this question was too dif-
ficult. Thus, while under Chevron U. S. A. Inc. v. Natural
Resources Defense Council, Inc., 467 U. S. 837, 842–843
(1984), the Court will defer to an agency’s reasonable inter-
pretation of an ambiguous statute, this passage does not pro-
vide an interpretation to which the Court can defer.
2
FERC does provide more explicit interpretations of its
jurisdiction elsewhere. It is difficult, however, to isolate
FERC’s position on this matter because FERC presents dif-
ferent interpretations in its orders, its brief, and at oral ar-
gument. At certain points, FERC affirmatively states that
it lacks jurisdiction to regulate this transmission; at other
times, FERC is noncommittal. The Court’s heavy reliance
on one statement, therefore, is misplaced. And while the
Court recognizes in a footnote that FERC made conflicting
representations, see ante, at 25, n. 14, in deciding to defer to
the agency the Court fails to place any weight on the fact
that the agency presented inconsistent positions. See
United States v. Mead Corp., 533 U. S. 218, 228 (2001) (“The
fair measure of deference to an agency administering its own
statute has been understood to vary with circumstances, and
courts have looked to the degree of the agency’s care, its
consistency, formality, and relative expertness, and to the
persuasiveness of the agency’s position . . .”). These incon-
sistencies alone, however, convince me that the Court should
neither defer to the aforementioned statement of FERC’s

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39 Cite as: 535 U. S. 1 (2002)
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jurisdiction nor rely on any other explanation provided by
FERC.
For example, in its brief FERC argues that because the
statute is ambiguous, the Court of Appeals properly deferred
under Chevron to FERC’s reasonable decision not to regu-
late. Brief for Respondent FERC 49. FERC then con-
tends that it made a reasonable finding that it lacked juris-
diction over the transmission component of bundled retail
sales and that it was therefore not required to regulate the
transmission component. Id., at 49–50; see also id., at 44
(“The Commission reasonably concluded that Congress has
not authorized federal regulation of the transmission compo-
nent of bundled retail sales of electric energy”). The brief
also notes, however, that FERC has attempted to regulate
transmission connected to retail bundled sales and maintains
that it continues to believe that it has authority to require
public utilities to treat customers of unbundled interstate
transmission in a manner comparable to the treatment af-
forded bundled transmission users. Id., at 48. 10
At oral argument, FERC proposed a different explanation.
It stated that the agency was not disclaiming its authority
to order the unbundling of the transmission component of a
10 FERC earlier rejected the proposed curtailment provisions of a public
utility’s federal OATT that favored the utility’s bundled retail customers
over its wholesale transmission customers. It asserted that, in compli-
ance with Order No. 888 and in order to enforce the OATT, it could regu-
late transmission curtailment in a manner that had an indirect effect upon
the utility’s services to its retail customers. Brief for Respondent FERC
48; see Northern States Power Co. v. FERC, 176 F. 3d 1090, 1095 (CA8
1999). The United States Court of Appeals for the Eighth Circuit, noting
that “FERC concede[d] that it has no jurisdiction whatsoever over the
state’s regulation of [the utility’s] bundled retail sales activities,” held that
FERC exceeded its authority under the FPA. Id., at 1096. While I do
not endorse the court’s conclusion with respect to FERC’s jurisdiction,
I note that the Court of Appeals pointed to the inconsistencies in FERC’s
position, explaining that “FERC’s observation that no inherent conflict
exists between its mandates and practical application is viewed through
an adversarial bias.” Id., at 1094.

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40 NEW YORK v. FERC
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retail sale. Tr. of Oral Arg. 42–43. FERC explained that
it lacks jurisdiction over the transmission “as long as the
State hasn’t unbundled [the retail sale], the utility has not
unbundled it, and FERC has not exercised whatever author-
ity it would have to unbundle it.” Id., at 50 (emphasis
added).
FERC’s orders present still more views of its jurisdiction.
As already noted, when considering whether FERC should
unbundle retail transmission and generation, FERC asserts
that this particular question “raises numerous difficult juris-
dictional issues” more appropriately considered at a later
time. Order No. 888, at 31,699. FERC, at other points,
however, makes clear its belief that there is a jurisdictional
line between unbundled and bundled retail transmission.
Explaining its “legal determination” that it has exclusive ju-
risdiction over unbundled retail transmission in interstate
commerce, FERC notes that it found “compelling the fact
that section 201 of the FPA, on its face, gives the Commis-
sion jurisdiction over transmission in interstate commerce
(by public utilities) without qualification.” Id., at 31,781.
Nonetheless, when addressing why “its authority attaches
only to unbundled, but not bundled, retail transmission in
interstate commerce,” FERC affirmatively states that “we
believe that when transmission is sold at retail as part and
parcel of the delivered product called electric energy, the
transaction is a sale of electric energy at retail” and that
“[u]nder the FPA, the Commission’s jurisdiction over sales
of electric energy extends only to wholesale sales.” Ibid.
By contrast, when the “retail transaction is broken into
two products that are sold separately,” FERC “believe[s] the
jurisdictional lines change.” Ibid. FERC explains:
“In this situation, the state clearly retains jurisdiction
over the sale of the power. However, the unbundled
transmission service involves only the provision of
‘transmission in interstate commerce’ which, under the
FPA, is exclusively within the jurisdiction of the Com-

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41 Cite as: 535 U. S. 1 (2002)
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mission. Therefore, when a bundled retail sale is un-
bundled and becomes separate transmission and power
sales transactions, the resulting transmission trans-
action falls within the Federal sphere of regulation.”
Ibid.
FERC here concludes that the act of unbundling itself
changes its jurisdictional lines. Unbundling, FERC notes,
may occur in one of two ways: (1) voluntarily by a public
utility or (2) as a result of a state retail access program that
orders unbundling. Ibid. Either action brings the trans-
mission within the scope of FERC’s jurisdiction.
Subsequently, in Order No. 888–A, FERC responded to
rehearing requests by supplanting its earlier conclusion that
“the matter raises numerous difficult jurisdictional issues”
with the explanation quoted above from Order No. 888, at
31,781. See Order No. 888–A, at 30,225. It is possible,
therefore, that FERC abandoned its “difficult jurisdictional
issues” explanation altogether. Thus, while it is true that
FERC, at one point, evades the jurisdictional question by
deeming it too “difficult” to resolve, more often than not
FERC affirmatively concludes that it in fact does not have
jurisdiction over the transmission at issue here. From this
survey of FERC’s positions, I can only conclude that the
Court’s singular reliance on the one statement is misguided.
3
Finally, to the extent that FERC has concluded that it
lacks jurisdiction over transmission connected to bundled re-
tail sales, it ignores the clear statutory mandate. By refus-
ing to regulate the transmission associated with retail sales
in States that have chosen not to unbundle retail sales,
FERC has set up a system under which: (a) each State’s
internal policy decisions concerning whether to require un-
bundling controls the nature of federal jurisdiction; (b) a util-
ity’s voluntary decision to unbundle determines whether
FERC has jurisdiction; and (c) utilities that are allowed to

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42 NEW YORK v. FERC
Opinion of Thomas, J.
continue bundling may discriminate against other companies
attempting to use their transmission lines. The statute nei-
ther draws these distinctions nor provides that the jurisdic-
tional lines shift based on actions taken by the States, the
public utilities, or FERC itself. While Congress understood
that transmission is a necessary component of all energy
sales, it granted FERC jurisdiction over all interstate trans-
mission, without qualification. As such, these distinctions
belie the statutory text.
II
As the foregoing demonstrates, I disagree with the defer-
ence the Court gives to FERC’s decision not to regulate
transmission connected to bundled retail sales. Because the
statute unambiguously grants FERC jurisdiction over all in-
terstate transmission and § 824e mandates that FERC rem-
edy undue discrimination with respect to all transmission
within its jurisdiction, at a minimum the statute required
FERC to consider whether there was discrimination in the
marketplace warranting application of either the OATT or
some other remedy.
I would not, as petitioner Enron requests, compel FERC
to apply the OATT to bundled retail transmissions. I would
vacate the Court of Appeals’ judgment and require FERC on
remand to engage in reasoned decisionmaking to determine
whether there is undue discrimination with respect to trans-
mission associated with retail bundled sales, and if so, what
remedy is appropriate.
For all of these reasons, I respectfully dissent from Part
IV of the Court’s opinion.