In the case of New York et al. v. Federal Energy Regulatory Commission (FERC) et al., 2001, the U.S Supreme Court ruled in favor of FERC, affirming its authority to regulate retail electricity sales and transmission services under the Federal Power Act. The dispute arose when FERC issued orders promoting competition in wholesale electricity markets by removing barriers to access for independent power producers on utilities' transmission lines. Several states challenged these orders arguing that they infringed upon their jurisdiction over local utility regulation as per the Federal Power Act's "bright line" test which separates federal and state regulatory authority based on whether a transaction is considered interstate commerce or not. However, the court held that while states have control over local distribution facilities, FERC has jurisdiction over both wholesale transactions and transmissions for resale regardless of whether it involves retail customers or not because such activities affect interstate commerce.

In the dissenting opinion for New York et al. v. Federal Energy Regulatory Commission et al., Justice Clarence Thomas, joined by Chief Justice William Rehnquist and Justices Antonin Scalia and Sandra Day O'Connor, argued that the Federal Power Act does not give the Federal Energy Regulatory Commission (FERC) authority to regulate retail electricity sales. They contended that FERC's Order No. 888 exceeded its jurisdiction under the Act as it attempted to regulate transactions beyond wholesale energy sales in interstate commerce - a domain traditionally left to states' regulatory power. The dissenters believed this interpretation of federal law threatened state sovereignty over local utilities regulation without clear congressional intent or authorization.