Public Utility District No. 1 of Snohomish County v. Dynegy Power Marketing, Inc.

This litigation arises out of the California Energy Crisis of 2000-01, when shortages of power and high electricity prices caused blackouts and general turmoil in the electricity markets of the west coast. In this case, Public Utility District No. 1 of Snohomish County, Washington (“Snoho-mish”), a utility providing electricity to consumers in Washington state, has sued various generators and traders of wholesale electricity for violations of California state antitrust and consumer protection laws. Snohomish charges that the defendants manipulated the market and restricted electricity supplies in order to cause artificially high prices in the market from which Snohomish purchased power. Snohomish seeks treble damages and in-junctive relief.

The district court held that the claims were preempted by federal law, which authorizes the Federal Energy Regulatory Commission (“FERC”) to set wholesale electricity rates. Snohomish appeals, contending that FERC’s policy of setting rates in accordance with market forces amounts to an abdication of rate making. Because FERC has exclusive jurisdiction over interstate sales of wholesale electricity, and continues to engage in regulatory…