Electricity Restructuring and the Constitutionality of Retail Reciprocity Requirements

Publication Date: March 2000

Publisher: Library of Congress. Congressional Research Service

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Research Area: Energy

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Abstract:

Retail reciprocity requirements have been included in the electricity restructuring legislation of at least four states. These requirements mandate generally that out-of-state utilities which operate in a state "closed" to retail competition cannot market power to retail consumers in the "open" state. Because state reciprocity requirements enacted without congressional authorization are probably unconstitutional under the Commerce Clause of the U.S. Constitution, Congress would have to include a reciprocity provision in federal electricity restructuring legislation if it wants to support the view that such a provision will increase competition. This report reviews the treatment of state reciprocity requirements by the U.S. Supreme Court and discusses Congress' power under the Commerce Clause.

Seven of the eight comprehensive electricity restructuring bills introduced during the 106 th Congress include reciprocity provisions. The Power Bill, H.R. 667, introduced by Representative Burr, the Electric Utility Restructuring Empowerment and Competitiveness Act of 1999, S. 516, introduced by Senator Thomas, the Electric Energy Empowerment Act of 1999, H.R. 1587, introduced by Representative Stearns, the Comprehensive Electricity Competition Act, H.R. 1828, introduced by Representatives Bliley and Dingell, the Electric ConsumersÕ Power to Choose Act of 1999, H.R. 2050, introduced by Representative Largent, the Electric Consumer Choice Act, S. 1284, introduced by Senator Nickles, and the Electric Power Market Competition and Reliability Act, S. 2098, introduced by Senator Murkowski, each include reciprocity provisions. The Electricity Competition and Reliability Act, H.R. 2944, introduced by Representative Barton, does not include such a provision.

This report will not be updated.