In the case of First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 1945, the Supreme Court ruled in favor of federal authority over state power when it comes to hydroelectric projects on navigable waters. The court held that a license from the Federal Power Commission (FPC) was necessary for such projects and this requirement could not be bypassed by obtaining permission from a state agency instead. This decision came after First Iowa Hydro-Electric Cooperative had been granted permission by an Iowa agency to construct a dam across Cedar River but was later denied a license by FPC due to concerns about its impact on interstate commerce and navigation. The Supreme Court upheld FPC's denial stating that under the Federal Water Power Act, Congress intended for comprehensive federal regulation of all aspects related to hydroelectric development including licensing regardless of any conflicting state laws or permissions.

The dissenting opinion in the case of First Iowa Hydro-Electric Cooperative v. Federal Power Commission argued that the majority's decision to uphold federal jurisdiction over hydroelectric projects on non-navigable rivers was an overreach of federal power. The dissenters believed that this interpretation went beyond what Congress intended when it passed the Federal Water Power Act, which they felt was meant to apply only to navigable waters. They also expressed concern about potential infringement upon states' rights, arguing that state governments should retain control over their own natural resources unless explicitly stated otherwise by Congress. Furthermore, they disagreed with the majority's assertion that hydroelectric development constituted interstate commerce and thus fell under federal jurisdiction; instead, they saw such projects as primarily local or regional in nature.