## Facts

- After enactment of the Public Utility Regulatory Policies Act of 1978 (PURPA), Metropolitan Dade County planned a cogeneration facility for its Miami Downtown Government Center.
- TEC and related entities developed and contracted to construct and operate the facility, with the expectation that excess electricity could be sold to other county facilities, including a nearby hospital.
- Florida Power & Light (FPL), an investor-owned electric utility, owned and controlled most generating capacity in its service area and the transmission grid needed for off-site delivery.
- When the facility began operating, TEC sought to deliver excess power to other county facilities using FPL’s transmission system (“wheeling”).
- FPL refused wheeling, asserting the arrangement violated state regulatory requirements concerning the identity of the generator and the end user for service across territories.
- The cogenerators alleged FPL engaged in anticompetitive conduct involving (1) wheeling access, (2) backup/avoided-cost/interruptible rates, and (3) interconnection terms.
- The Florida Public Service Commission (PSC) conducted multiple contested proceedings; after an extended administrative process, the PSC approved FPL’s denial of the wheeling request and regulated rates and interconnection terms.
- The cogenerators sued under the Sherman Act; FPL asserted state-action (Parker) immunity and Noerr–Pennington immunity for petitioning county government.

## Issues

1. Whether FPL’s challenged conduct concerning wheeling, rates, and interconnection was immune from federal antitrust liability under the state-action doctrine.
2. Whether FPL’s lobbying of a county legislative body was immune from antitrust liability under the Noerr–Pennington doctrine.

## Decision

- The Eleventh Circuit reversed the district court’s denial of summary judgment for FPL.
- The court held FPL was entitled to state-action immunity for conduct involving wheeling, rates, and interconnection because Florida had a clearly articulated policy displacing competition in electric service and the PSC actively supervised the challenged conduct.
- The court held FPL’s lobbying of county government was protected petitioning activity under Noerr–Pennington and could not support antitrust liability.
- On rehearing, the court modified part of its active-supervision discussion but left the result unchanged.

## Legal Principles

- A private actor asserting state-action immunity must show (1) a clearly articulated and affirmatively expressed state policy to displace competition and (2) active state supervision of the challenged conduct.
- Active supervision may be shown where a state commission conducts contested proceedings and exercises independent judgment over market-affecting decisions, including approvals/denials and the setting of rates and interconnection terms.
- In heavily regulated utility markets where the state substitutes regulation for competition, antitrust liability is generally barred for conduct carried out within the scope of the state’s policy and supervision.
- Petitioning a governmental body, including lobbying a legislative entity, is generally immune from antitrust liability under Noerr–Pennington absent a valid exception (such as sham petitioning).

## Conclusion

The court held that Florida’s regulatory scheme for electric utilities, implemented through active PSC oversight, immunized FPL from Sherman Act claims arising from disputes over wheeling access, regulated rates, and interconnection, and that FPL’s county-level lobbying was protected governmental petitioning.


TEC Cogeneration, Inc. v. Fla. Power & Light Co., 76 F.3d 1560 (11th Cir. 1996)