## Facts

- New England Power Company (NEPCO) generated electricity, including from hydroelectric units located in New Hampshire, and sold most of its wholesale power to customers in Massachusetts and Rhode Island.
- The New Hampshire hydro units were licensed under federal law by the Federal Energy Regulatory Commission (FERC).
- A New Hampshire statute required state approval before a water-power electricity generator could transmit electricity out of the state and authorized denial if the power was needed for in-state use.
- For decades, NEPCO or its predecessor received state permission to export power generated in New Hampshire.
- In 1980, after investigation and hearings, the New Hampshire Public Utilities Commission withdrew NEPCO’s export approval and ordered it to stop exporting hydroelectric energy and sell that energy within New Hampshire.
- NEPCO, joined by Massachusetts and the Rhode Island Attorney General, challenged the order in state court on federal preemption and Commerce Clause grounds.
- The New Hampshire Supreme Court upheld the order, interpreting Federal Power Act (FPA) § 201(b)’s “saving clause” as permitting the state to restrict exports of hydroelectric energy.
- The U.S. Supreme Court granted review.

## Issues

1. Whether New Hampshire may prohibit a FERC-licensed utility from exporting privately produced hydroelectric power to reserve it for in-state consumers without violating the Commerce Clause.
2. Whether FPA § 201(b) affirmatively authorizes state export restrictions, thereby insulating them from Commerce Clause limits.

## Decision

- The Supreme Court reversed the judgment of the New Hampshire Supreme Court in a unanimous opinion by Chief Justice Burger.
- The Court held that New Hampshire’s export restriction was an impermissible burden on interstate commerce because it sought to reserve electricity for in-state use at the expense of out-of-state consumers.
- The Court held that FPA § 201(b) did not provide an affirmative grant of authority to impose export restraints; it preserved only whatever lawful state authority otherwise existed.
- The state order directing NEPCO to stop exporting electricity was invalid.

## Legal Principles

- A state may not restrict export of privately produced goods in interstate commerce to confer a local advantage by reserving supply for in-state consumers; such protectionist measures violate the dormant Commerce Clause.
- Electricity transmitted and sold in interstate wholesale markets is part of interstate commerce; state measures that block or condition interstate flow for local preference are suspect and generally invalid.
- A federal statutory saving clause that preserves “lawful authority now exercised” is not an affirmative delegation of power to the states and does not validate state action that violates the Constitution.
- The market-participant doctrine does not apply when a state regulates private commerce rather than acting as a buyer or seller in the market.

## Conclusion

New Hampshire could not use its regulatory authority to bar NEPCO from exporting hydroelectric power in order to reserve that power for local consumption, and the Federal Power Act’s saving clause did not authorize or immunize such a protectionist restraint from Commerce Clause review.


New England Power Co. v. New Hampshire, 455 U.S. 331 (1982)