Pierce's account of the political effects of the effects of judicial review on the Federal Energy Regulatory Commission (FERC). Much of the political effect literature is quick to condemn judicial review as costly, unpredictable, and anti-majority.
FERC's restructuring rules in the natural gas context initially fared well under appellate court applications of the hard look doctrine. 636, which, according to FERC, complete[d] the evolution toward competition in the natural gas industry.” 57 Fed.
Pierce's Prediction of the Effects of Judicial Review on Electric Utility Industry Restructuring
THE CONSTRAINTS OF SUBSTANTIVE LAW
Pierce claims that the “hard look” doctrine, as applied by the courts, is one of the causes of FERC's inability to restructure the electric power industry toward competition. The changing structure of the electricity sector To start with, some industrial background is in order.
However, as this Part shows, statutes limited FERC's discretion to effect significant pro-competitive reforms for the electric utility industry when Pierce wrote his article.'. In most of these cases, unlike the electric utility industry, the original justification for regulation was not natural monopoly.
Statutory Constraints on FERC's Discretion to Increase Competition in Bulk Power Generation
Prior to this time, FERC did not have the clear and comprehensive authority to level the playing field in bulk power markets or require "open access" to the electric grid. Prior to the passage of the Energy Policy Act, FERC did not have the statutory authority to establish a comprehensive set of incentives for NUGs to compete with traditional public utilities in the provision of bulk electricity.
Statutory Constraints on FERC's Discretion to Require "Open Access"
34;lacking clear authority" under the FPA to require utilities to transmit power to others, Congress amended the FPA to require FERC to order the dismissal of the petition where "it is in the public interest, system reliability and serves one or more additional purposes—including the promotion of wholesale competition, conservation, efficiency, and prevention of discriminatory practices The Energy Policy Act significantly expanded section 211, allowing FERC to grant requests pro- competitive wholesale wheelers that meet the FPA's traditional public interest standard and additional procedural requirements." The FPA's Role in Limiting FERC's Discretion In 1988, FERC initiated a series of regulations in electric power.
ELECTRIC UTILITY RESTRUCTURING AT FERC: PRECEDENTIAL DECISIONMAKING IN ADJUDICATIVE PROCEEDINGS
In its strongest form, the political effect thesis suggests that application of the hard look doctrine will cause regulatory paralysis at FERC. Pierce predicts that without competitive regulatory reforms, "[T]he country is virtually certain to face severe power shortages in the 1990s."1 In this article, I will not dispute this draconian power outage prediction, but instead focus on claim , both explicitly and implicitly in Pierce's analysis, application of the hard-view doctrine will hinder. Regulatory developments at FERC over the past few years do not support the strong version of the political effect thesis.
In addition, FERC made further reforms in both following the passage of the Energy Policy Act. The potential for power shortages varies widely from area to area, depending on capacity and demand forecasts.
The Development of Transmission Access Policy
In the Energy Policy Act, Congress removed many of the statutory limitations on FERC's authority in sections 211 and 212 of the FPA. The legislative history of the Energy Policy Act also raises ambiguity regarding the "Utah Hammer." 147. Since the enactment of the Energy Policy Act, at least nine requests for wholesale transmission services have been filed with FERC." Despite spirited opposition from the utility industry, FERC's initial processing of these requests removed any remaining doubt that it would, in certain circumstances , use its new authority under Section 211 to push the industry toward open access and increased competition.49.
In a watershed decision in October 1993, FERC voted unanimously to require Florida Power & Light (FP&L) to provide network transmission services to members of the Florida Municipal Power Agency. the American Electric Power Company, Inc. system); Wisconsin Elec.
Competition-Enhancing Bulk Power Reforms
34;public utility" within the meaning of section 201(e) of the FPA.12 In Bechtel Power Corp., for example, FERC exempted an engineering firm involved in the day-to-day operations of a 633 megawatt IPP from FERC regulation as a " public utility" pursuant to section 201(e) of the FPA, including rate, cost of service, and reporting requirements. As grounds that Bechtel, which coordinated the day-to-day operation and maintenance of the facility pursuant to an agreement with the owner, did not “owned or operated.” FERC has also, in limited, case-by-case circumstances, temporarily waived PURPA regulations for QFs.11 In Kramer Junction Co., the Commission granted solar-powered QFs a temporary waiver of a regulation that limited the use of fossil fuels in small electric generating facilities to twenty-five percent to allow the QFs to increase their use of natural gas-fired generation during a 120-day period in 1992.167 In a series of decisions, FERC began to standardize its criteria to grant CHP plants temporary waivers to operating and efficiency regulations during initial start-up and testing.”u FERC granted waivers.
The statutory term "public services" induces jurisdiction over many claims under Part II of the FPA. Due in part to FERC's development of legal and policy-oriented incentives in a judicial context, the presence of NUGs has increased dramatically in recent years.17 NUGs now account for more than half of all planned generating capacity." The growth of the NUG industry presents a large layer of competition for wholesale electricity supply, giving up the monopoly of traditional utilities on power generation.
Revisiting the Policy-Effect Theses
REDEEMING JUDICIAL REVIEW: CONGRESS, AGENCIES, THE COURTS-AND THE AFFIRMATION OF DELIBERATIVE DEMOCRATIC
Although limited in scope, the Supreme Court's decisions in two recent cases have imposed some limitations on judicial review. Notably, the Court did not limit judicial review of PBGC's implementation of ERISA separately from other laws. This section argues that Pierce makes this recommendation without considering two important aspects of the hard view doctrine: (1) interagency effects beyond the agency, particularly incentives for policy choice; and (2) the affirmation of well-considered democratic values.
Failure to consider these aspects of judicial review has led policy effect critics to generally adopt too narrow an understanding of judicial review's benefits. A fuller version, I believe, can relieve judicial review of the myopic, anti-democratic role that many of these critics have ascribed to it.
Inter-Institutional Effects: Congressional Choice
Reviewing judicial applications of the hard look doctrine may have had an effect on the choice of Congress by playing an agenda-setting role and helping to drive passage of the Energy Policy Act. For a good study of the history and substance of the Energy Policy Act, see Jeffrey D. Courts' applications of the doctrine of strict scrutiny presented uncertainty and a high risk of reversal, and thus may have prevented FERC from following the decisions of his fragmented. of the opposition.
The presence of the hard look doctrine may have prevented FERC from further pursuing the proposed rulemaking with competitive bidding. In looking at the interagency effects of the doctrine of strict scrutiny, I do not mean to suggest that critical judicial review is the only reason the Energy Policy Act won congressional support.
Deliberative Democracy and Judicial Review
THE INADEQUACY OF CONGRESSIONAL AND EXECUTIVE CONTROL
34;myriad of political bargains and compromises." 211 Thus, even if these processes could be described as "deliberative," the influence of private interest groups taints the process. Pierce argued that a fatal flaw in the non-delegation argument is that the judiciary is “institutionally incapable of creating and applying a delegation doctrine.” Richard J. Seidenfeld has since abandoned the “civic republican” ideal for “deliberative democracy.” See Mark Seidenfeld, A Syncopated Chevron: Emphasizing Reasoned Decisionmaking in Reviewing Agency Interpretation of Statutes, 73 TEX.
If courts were to examine whether the legislative process withstands deliberative democratic scrutiny, which itself could prove a herculean task in examining legislative history, this would subject all congressional decisions to the threat of an irreversible judicial veto. To implement deliberative democratic review, Congress could reintroduce the same statute, or a new statute, after more deliberation. It is recognized that "the outcome of a legislative effort to correct an act of non-compliance by an agency will generally not reproduce the policy outcome sought by the winning coalition, even if the preferences of the members of the legislative body remain unchanged. -regulate decision-making in Congress.
- COMPETITIVE RESTRUCTURING IS NOT A PARETO IMPROVEMENT-EVEN FOR CONSUMERS
- THE HARD LOOK DOCTRINE AND AFFIRMATION OF DELIBERATIVE DEMOCRATIC VALUES
- JUDICIAL DISCRETION AND THE HARD LOOK DOCTRINE
- REFORMS TO RULEMAKING AND ADJUDICATION
Application of the hard-look doctrine by reviewing courts ensures that their objections are heard and adequately considered. Although the doctrine is indefinite, this should not be a reason to reject its use in judicial review.
Application of the hard look doctrine must be concerned with the adequacy of the agency's reasons, not their results. The anomaly of the AGA should not lead us to reject or limit the application of the doctrine of strong scrutiny in the context of energy restructuring.
Why Not Presumptive Rulemaking?
Perhaps, in light of political criticism of the adverse effects of judicial review on rulemaking, the time has come to reconsider this decision. K]a licensing statute contains a broad standard of "unprofessional conduct" not fully defined in the statute itself, as well as the authority to make rules for the practice of a regulated profession, the legislative intent is to provide. Ely is concerned with strengthening democratic representation by adding greater realism to judicial interpretation of laws." Gunther argues that "protecting the structure of the political process is recognized as a primary judicial obligation.
Bonfield, State Law in the Teaching of Administrative Law: A Critical Analysis of the Status Quo, 61 TEx. JOHN HART ELY, DEMOCRACY AND IMTRUST argues that a representation-enhancing approach to judicial review supports the underlying premises of American democracy and involves tasks for which judges are particularly suited); id.
Increasing the Accountability and Deliberation of Adjudication It would be preferrable that we focus on reforming adjudication
CODA
In this article, I described certain inaccuracies with the policy effect account of judicial review's effect on the FERC. Overall, evidence of judicial review's effects on FERC's policy choices is ambiguous at best. This article also sought to rescue judicial review as a protector of deliberative democratic values from the myopic anti-majoritarian role its critics had given it.
Although it is difficult to isolate the effects of judicial review on any agency's policy choices, in the FERC context there is some indirect evidence that judicial review may have caused FERC to exhaust many of its resources in remedial proceedings, rather than to make generic policy through rulemaking. , as a weak version of the policy-effect thesis would suggest. This alone should not lead us to limit judicial review, I have argued, because reforms to adjudication can work to enhance deliberative democratic values in ways compatible with judicial review.
Where Congress has delegated decision-making discretion to administrative agencies, judicial review is better able to protect these values than controls such as legislative or executive oversight. A second objection is that one might characterize the democratic consultative defense of judicial review as "court-based," trivializing the roles of the legislature and the executive. The account of judicial review that I have presented differs in several respects from the classical administrative law approach, which attempts to understand the role of judicial review as merely a check on agency policymaking discretion.
In a recent book, Professor Christopher Edley presents a theory of judicial review designed to promote "sound governance," a shift from the prevailing "control with discretion" paradigm in administrative law. 1994:763 Redeeming Judicial Review 837 practices, problems and virtues may support the attack with political effect on judicial review, but they may just as well have a sober effect on them.
