In the case of Federal Power Commission v. Louisiana Power & Light Co., 1971, the U.S Supreme Court was tasked with determining whether or not the Federal Power Commission (FPC) had jurisdiction over sales for resale of natural gas produced in federal offshore areas and sold directly to industrial users. The FPC claimed it did have such authority under Section 1(b) of Natural Gas Act as these transactions affected interstate commerce. However, Louisiana Power & Light Co., along with other respondents, argued that this interpretation exceeded statutory limits set by Congress and intruded on state regulatory power. In a unanimous decision, the court ruled in favor of FPC stating that its jurisdiction extended to all sales for resale in interstate commerce regardless if they were direct industrial sales or not.

In the dissenting opinion for Federal Power Commission v. Louisiana Power & Light Co., Justice Blackmun argued that the majority's decision to uphold federal jurisdiction over wholesale electricity rates, even when both buyer and seller are in the same state, was an unwarranted expansion of federal power. He contended that this interpretation went beyond what Congress intended with the Federal Power Act. According to him, it is not enough for a transaction to affect interstate commerce; it must be part of such commerce itself. The fact that excess energy might flow into an interconnected grid does not make every sale on that grid interstate in nature. Furthermore, he expressed concern about potential negative impacts on states' rights and their ability to regulate local utilities effectively.