In the 1942 case of Jersey Central Power & Light Co. v. Federal Power Commission, the Supreme Court ruled on whether or not the Federal Power Commission (FPC) had jurisdiction over a power company's sale of electricity to another utility for resale in interstate commerce. The court held that such sales were subject to FPC regulation under Section 201(b) of the Federal Power Act, which grants FPC authority over "the transmission of electric energy in interstate commerce and...the sale of electric energy at wholesale in interstate commerce." This decision was significant as it clarified federal regulatory powers over utilities involved in interstate transactions and affirmed that state boundaries do not limit these powers when public interest is at stake.

The dissenting opinion in the case of Jersey Central Power & Light Co. v. Federal Power Commission argued that the majority's decision to uphold the commission's authority was a misinterpretation of legislative intent and an overreach of federal power. The dissenters believed that Congress did not intend for such broad regulatory powers when it passed the Federal Water Power Act, which was designed to promote hydroelectric development rather than regulate all aspects of electric utilities' operations. They also expressed concern about potential negative impacts on private utility companies and state governments, arguing that this could lead to excessive regulation and undermine states' rights to control their own resources. Furthermore, they questioned whether it was appropriate for a federal agency with no direct accountability to voters or elected officials to have such extensive influence over a vital industry like electricity production.