Eleven former FERC commissioners filed a brief with the Supreme Court arguing it should uphold Humphrey’s Executor or carve out an exception for ratemaking agencies.
The court is poised to hear oral arguments in Trump v. Slaughter on Dec. 8, in which former Federal Trade Commissioner Rebecca Kelly Slaughter is arguing President Donald Trump overstepped his authority in firing her in March.
The case comes 90 years after the Supreme Court found that Congress could limit the president’s authority to fire members of regulatory agencies in another case involving an FTC commissioner, which has helped guarantee agency independence since then. In an order overturning an injunction in a related case earlier this year, a majority on the court seemed poised to overturn the precedent but noted it would benefit from briefing on the issues. (See Will the Supreme Court End FERC’s Independence?)
“Overturning Humphrey’s Executor would bulldoze the structural supports that Congress built into ratemaking commissions to protect its price-setting power from abuse,” according to the brief, which was prepared by the Harvard Electricity Law Initiative’s Ari Peskoe.
The amici curiae in the brief are a bipartisan group of former FERC commissioners who were nominated by all but one of the presidents from Ronald Reagan through Trump’s first term: Elizabeth Anne Moler, Donald Santa, Linda Breathitt, Pat Wood III, Nora Mead Brownell, Joseph T. Kelliher, Jon Wellinghoff, John Norris, Cheryl LaFleur, Neil Chatterjee and Richard Glick.
Congress has given ratemaking authority to multimember bipartisan commissions dating back to 1887 and limited the president’s power to fire members only for “inefficiency, neglect of duty or malfeasance in office.”
“By shielding agency action from political control, for-cause removal protections allow ratemaking commissions to sustain stable policies for the long-term benefit of regulated companies and American consumers,” the brief says.
If the court decides to overturn or clarify Humphrey’s Executor, the brief urged it to consider the “special historical status” it has indicated the Federal Reserve has in the Seila Law decision in 2020, in which the court found the president had unchecked authority to fire the director of the Consumer Financial Protection Bureau.
Ratemaking agencies wield “legislative power” to set prices for investor-owned companies, the brief argues, and among all multimember agencies, only the Federal Reserve Board plays such a direct role in the economy, doing so with similar “legislative discretion.”
“Overturning Humphrey’s Executor without acknowledging ratemaking commissions’ special status would greenlight one-party ratemaking bodies and allow presidents to eliminate staggered terms by firing holdover commissioners nominated by a previous president,” the brief says. “Permitting the president to seize control over ratemaking could adversely affect how regulated companies perceive FERC and therefore increase the risk of financing pipelines and power lines. Ultimately, American consumers would pay higher energy prices.”
Eliminating for-cause removal protections risks turning FERC into a partisan political body whose priorities flip every election cycle, and the resulting volatility would conflict with its historic focus on the long-term interests of consumers and the industries it regulates, the brief argues. Congress affords ratemaking commissions with wide discretion as they balance competing interests to find just and reasonable rates, and their bipartisan composition is an antidote against abuse of that discretion, it says.
“For-cause removal protections, staggered terms and partisan limits temper agency discretion by ensuring that decisions are informed by diverse and balanced perspectives,” the brief says.
The Massachusetts legislature was the first body to set up a ratemaking commission in 1869 to regulate what railroads charged in the state, and it was quickly followed by other states. The court upheld their creation in an 1877 decision.
A decade later, after the court found those state ratemaking commissions could not regulate interstate commerce, Congress set up the Interstate Commerce Commission to check the power that railroads exerted over the economy. The ICC had to have five commissioners with no more than three from one party; commissioners served staggered terms, could not hold other jobs, were forbidden from investing in regulated companies and had for-cause removal protections.
The ICC’s structure remained durable and was adopted for other agencies over the years, including when Congress passed the Department of Energy Organization Act in 1977. Congress specifically rejected President Jimmy Carter’s proposal to give DOE the old Federal Power Commission’s ratemaking authority, with members arguing the power should go to a “collegial” body and not the department, where only the president’s policies would guide its decisions.
“The age of the kings expired with the French Revolution,” Rep. John Dingell (D-Mich.) said at the time, according to the Congressional Record. “I plead with this body, do not set up a new king here in Washington.”
Dingell’s “rhetorical flourish focused his colleagues on threats to liberty,” which are a core concern in separation of powers cases, the brief says.
“By seizing ratemaking authority, ‘one of the great functions conferred on Congress by the federal Constitution,’ the president would secure vast direct control over the economy,” the brief says. “Price-setting power would allow the president to increase profits of favored companies at the expense of consumers, who would face higher prices for goods and services. The president could also punish companies that oppose his policies or even raise energy prices in states that support his political rivals.”
Congress wanted ratemaking power to be exercised in the “coldest neutrality” rather than unilaterally by the executive branch, the brief says.
“Elevating executive control over bipartisan deliberation, as petitioners urge, misunderstands Congress’ ratemaking statutes and threatens to destabilize an economic model that has stood the test of time,” the brief says.
The Supreme Court has repeatedly called the commission’s ratemaking authority “legislative,” so the commissioners urged the court, even if it overturns Humphrey’s Executor, not to foreclose the possibility that ratemaking commissions remain immune from direct executive control. Separation of powers ought to allow Congress to create deliberative ratemaking bodies.
“FERC plays a direct role in our economy that, among the multimember agencies, is matched only by the Federal Reserve Board,” the brief says. “Prices set by FERC are essential inputs across the economy that directly affect the cost of living and doing business. Maintaining for-cause removal protections for ratemaking commissions exercising legislative power would appropriately defer to Congress’ powers over interstate commerce.”
The brief also examines FERC’s economic impact. It regulates 200,000 miles of interstate natural gas pipelines, 120,000 miles of high-voltage transmission and 85,000 miles of interstate crude pipelines, which transport more than $1 trillion worth of commodities per year.
That work remains important as artificial intelligence and reshored manufacturing grow the demand for electricity, and the oil and gas industry works to increase shipments of LNG abroad.
“FERC is more important than ever to American energy producers and consumers,” the brief says. “Any change to FERC’s structure should follow careful deliberations in Congress that weigh the potential benefits of reform against the possible harms caused by transforming FERC into a politically partisan body.”
The commission’s authority over energy markets gives it a direct and central role in the economy, like the Federal Reserve. The brief quotes former Federal Reserve Chair Alan Greenspan as saying, “Energy markets will remain central in determining the long-run health of our nation’s economy.”
“Like interest rates set by the Federal Reserve Board, energy prices impact costs across the economy and have material effects on total investment and consumption,” the brief says. “Congress charged FERC and the Federal Reserve with promoting stable prices, which provide households and businesses with confidence to invest.”
