Transource Pennsylvania, LLC v. STEVEN M. DEFRANK, Chair, Pennsylvania Public Utility Commission, KIMBERLY M.…

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 24-1045
_____________
TRANSOURCE PENNSYLVANIA, LLC
v.
STEVEN M. DEFRANK, Chair, Pennsylvania Public Utility
Commission, KIMBERLY M. BARROW, Vice Chair,
Pennsylvania Public Utility Commission, JOHN F.
COLEMAN, JR., RALPH V. YANORA, and KATHRYN L.
ZERFUSS, Commissioners, Pennsylvania Public Utility
Commission, all in their official capacities, and the
PENNSYLVANIA PUBLIC UTILITY COMMISSION,
Appellants
_____________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. No. 1:21-cv-01101)
District Judge: Honorable Jennifer P. Wilson
_______________
Argued December 5, 2024
Before: SHWARTZ, MATEY, and McKEE, Circuit Judges

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(Opinion filed: September 5, 2025)
_______________
Kriss E. Brown
Joseph P. Cardinale, Jr.
Christopher F. Van de Verg
Pennsylvania Public Utility Commission
400 North Street
Harrisburg, PA 17120
Michael J. Scarinci [ARGUED]
Mary Katherine M. Yarish
Office of the Attorney General of Pennsylvania
Strawberry Square 15th Floor
Harrisburg, PA 17120
Counsel for Appellants Steven M. DeFrank,
Kimberly M. Barrow, John F. Coleman, Jr.,
Ralph V. Yanora, Kathryn L. Zerfuss, and
Pennsylvania Public Utility Commission
Melanie J. El Atieh
Darryl A. Lawrence
Office of Consumer Advocate
555 Walnut Street
5th Floor, Forum Place
Harrisburg, PA 17101
Counsel for Amicus Curiae Pennsylvania Office
of Consumer Advocate, Delaware Division of
Public Advocate, Citizens Utility Board of
Wisconsin, and Wyoming Office of Consumer
Advocate in Support of Appellants
James B. Ramsay

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National Association of Regulatory Utility Commissioners
1101 Vermont Avenue NW
Suite 400
Washington, DC 20005
Counsel for Amicus Curiae National Association
of Regulatory Utility Commissioners in Support
of Appellants
Shannon A. Sollenberger
Senate of Pennsylvania
Main Capitol
Harrisburg, PA 17120
Counsel for Amicus Curiae Select Members of
the Pennsylvania General Assembly in Support
of Appellants
Benjamin C. Dunlap, Jr.
Cohen Seglias Pallas Greenhall & Furman
240 N Third Street
7th Floor
Harrisburg, PA 17101
Counsel for Amicus Curiae Stop Transource
Franklin County in Support of Appellants
Zachary B. Cohen
Matthew Price [ARGUED]
Jenner & Block
1099 New York Avenue NW
 Matthew Price, Esq. was granted leave to withdraw his
appearance on December 17, 2024.

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Suite 900
Washington, DC 20001
Allison N. Douglis
Jenner & Block
1155 6th Avenue
New York, NY 10036
Precious S. Jacobs-Perry
Jenner & Block
353 N Clark Street
Suite 4500
Chicago, IL 60654
Anthony D. Kanagy
Erin R. Kawa
James J. Kutz
Post & Schell
17 N 2nd Street
12th Floor
Harrisburg, PA 17101
Counsel for Appellee Transource Pennsylvania
LLC
Lauren F. Dayton
MoloLamken
430 Park Avenue
Floor 6
New York, NY 10022
Lucas M. Walker
MoloLamken
600 New Hampshire Avenue NW

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The Watergate, Suite 500
Washington, DC 20037
Counsel for Amicus Curiae PJM Interconnection
LLC in Support of Appellee
_______________
OPINION OF THE COURT
_______________
McKEE, Circuit Judge.
This appeal arises from an order of the Pennsylvania
Public Utility Company denying plaintiff-appellee Transource
Pennsylvania LLC’s applications to build electricity-
transmission lines in Pennsylvania. Transource’s applications
were part of a project selected through a federal process aimed
at identifying and relieving regional congestion. The District
Court held that the PUC order was invalid under the
Supremacy Clause of the U.S. Constitution, because it posed
an obstacle to federal objectives. The court also held the
application invalid under the dormant Commerce Clause,
because it was driven by economic protectionism and because
it impermissibly burdened interstate commerce. Defendants-
appellants the PUC, its Chairman, Vice Chairman, and
Commissioners appeal those decisions. They also argue that
Transource was precluded from raising its federal
constitutional arguments before the District Court.
For the reasons that follow, we will affirm the District
Court’s order. Because we hold that the PUC’s actions clearly
violate the Supremacy Clause, we need not reach the issues
raised under the dormant Commerce Clause.

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I. Background1
As is usually the case, context is helpful. Accordingly,
we begin with the evolution of the electricity-transmission
industry. In the early twentieth century, “most electricity was
sold by vertically integrated utilities that had constructed their
own power plants, transmission lines, and local delivery
systems.”2 These utility systems operated primarily as “local
monopolies” within the states.3 “States possessed broad
authority to regulate public utilities,” subject to the dormant
Commerce Clause’s limitation on regulations burdening
interstate commerce.4 Short of such Commerce Clause
concerns, however, states exercised general police powers over
electricity generation, transmission, and distribution.5
In 1927, the Supreme Court invalidated a Rhode Island
utility commission’s order purporting to set rates for electricity
sold from a Rhode Island plant to a Massachusetts supplier (the
Attleboro Steam & Electric Company).6 The Rhode Island
1 Because our discussion necessarily involves numerous
acronyms for various agencies and organizations, a glossary of
terms is included at the end of this opinion for the convenience
of the reader.
2 New York v. FERC, 535 U.S. 1, 5 (2002).
3 Id.
4 Id.
5 See FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 265–
66 (2016).
6 Pub. Util. Comm’n v. Attleboro Steam & Elec. Co., 273 U.S.
83 (1927), overruled in part by Ark. Elec. Co-op. Corp. v. Ark.
Pub. Serv. Comm’n, 461 U.S. 375, 391–93 (1983).

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commission’s order would have overridden the parties’
contractual rate, which the commission found to be inadequate
and therefore unreasonable.7 “The Attleboro Company was . .
. the only customer of the [Massachusetts supplier] to which
this new schedule would [have applied].”8 The Rhode Island
utility’s rate impacted an interstate rate, thus “plac[ing] a direct
burden upon interstate commerce.”9 The Court observed that
this type of interstate transmission could only be regulated
through “the power vested in Congress.”10 In reaching this
conclusion, the Court identified a regulatory vacuum that came
to be known as the “Attleboro gap.”11 The Court explained:
[T]he paramount interest in the interstate
business carried on between the two companies
is not local to either state, but is essentially
national in character. The rate is therefore not
subject to regulation by either of the two states in
the guise of protection to their respective local
interests; but, if such regulation is required it can
only be attained by the exercise of the power
vested in Congress.12
A. Federal Power Act
7 Id. at 85–86.
8 Id. at 85.
9 Id. at 89.
10 Id. at 90.
11 New York, 535 U.S. at 6.
12 Attleboro, 273 U.S. at 90.

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In 1935, Congress enacted the Federal Power Act
(FPA).13 In 1938, it enacted similar legislation concerning
natural gas, the Natural Gas Act (NGA).14 “Congress adopted
the FPA . . . and the NGA . . . to close the regulatory gaps the
Constitution imposed on states regulating interstate energy
markets beyond their borders.”15 The NGA is not germane to
our discussion as it is concerned with regulation and
transmission of natural gas. We mention it only because it is
part of the regulatory history of the interstate regulation and
transmission of energy and was part of the congressional
attempt to fill the Attleboro gap.
The FPA was aimed at regulating transmission of
electricity and electricity sales in interstate commerce.16 The
FPA “declared that the business of transmitting and selling
electric energy for ultimate distribution to the public is affected
with a public interest,” and that federal regulation of that
business “is necessary in the public interest.”17
The FPA empowered the Federal Power Commission,
the predecessor to the Federal Energy Regulatory Commission
(FERC), with new authority and responsibility over interstate
13 See Ch. 687, §§ 201–13, 49 Stat. 803, 847–63 (1935)
(codified as amended at 16 U.S.C. § 791a, et seq.).
14 Ch. 556, 52 Stat. 821 (1938) (codified as amended at 15
U.S.C. § 717 et seq.).
15 Jim Rossi, The Brave New Path of Energy Federalism, 95
Tex. L. Rev. 399, 407 (2016).
16 See Federal Power Act § 201(a) (codified at 16 U.S.C. §
824(a)).
17 Id.

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transmission and wholesale sales.18 The Commission was
instructed “to divide the country into regional districts for the
voluntary interconnection and coordination of facilities for the
generation, transmission, and sale of electric energy” and “to
promote and encourage such interconnection and
coordination.”19 In addition, the Commission became
responsible for ensuring that rates for electricity transmissions
or sales within the Commission’s jurisdiction, as well as rules
and practices pertaining to such rates, be “just and
reasonable.”20 To that end, the FPA prohibited public utilities
from granting “any undue prejudice or disadvantage” or
“maintain[ing] any unreasonable difference in rates, charges,
18 See id. § 201(b) (codified at 16 U.S.C. § 824(b)); Metro.
Edison Co. v. Pa. Pub. Util. Comm’n, 767 F.3d 335, 341 n.2
(3d Cir. 2014).
19 Federal Power Act § 202(a) (codified at 16 U.S.C. §
824a(a)).
20 Id. § 205(a) (codified at 16 U.S.C. § 824d(a)) (“All rates and
charges made, demanded, or received by any public utility for
or in connection with the transmission or sale of electric energy
subject to the jurisdiction of the Commission, and all rules and
regulations affecting or pertaining to such rates or charges shall
be just and reasonable[.]”); see also id. § 206(a) (codified at 16
U.S.C. § 824e(a)) (“Whenever the Commission . . . shall find
that any rate, charge, or classification . . . [or] any rule,
regulation, practice, or contract affecting such rate, charge, or
classification is unjust, unreasonable, unduly discriminatory or
preferential, the Commission shall determine the just and
reasonable rate, charge, classification, rule, regulation,
practice, or contract to be thereafter observed and in force, and
shall fix the same by order.”).

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service, facilities, or in any other respect, either as between
localities or as between classes of service.”21
Congress noted that this new federal authority would
extend “only to those matters which are not subject to
regulation by the States.”22 Notwithstanding this provision—
which the Supreme Court later described as “a mere policy
declaration”23—the FPA did reach areas that had historically
been the province of state regulation. States previously could
regulate aspects of interstate wholesale sales that did not
directly burden interstate commerce.24 The FPA authorized
FERC to regulate precisely such wholesale sales “that had been
previously subject to state regulation.”25 The Supreme Court
subsequently resolved any tension between states’ historical
authority to regulate certain local matters and FERC’s apparent
grant of authority to FERC to regulate intrastate sales. The
Court explained, the “policy declaration” in the FPA “cannot
nullify a clear and specific grant of jurisdiction [to FERC].”26
The FPA also authorized FERC to regulate interstate
transmission, which was not at issue in Attleboro.27 The law
therefore did much more than fill the Attleboro gap. It marked
a significant shift in the balance of state and federal authority.
21 Id. § 205(b) (codified at 16 U.S.C. § 824d(b)).
22 Id. § 201(a) (codified at 16 U.S.C. § 824(a)).
23 New York, 535 U.S. at 22 (quotation marks omitted).
24 See id. at 21 (discussing Attleboro, 273 U.S. at 85–86).
25 Id.
26 Id. at 22 (quotation marks omitted).
27 See id. at 20, 22.

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B. The Evolution of the Electricity Industry
and FERC’s Responses
In the decades following the enactment of the FPA,
technological advancements transformed the production and
transmission of electricity. Electricity came to be “delivered
over three major networks, or ‘grids,’ in the continental United
States.”28 As a result, “any electricity that enters the grid
immediately becomes a part of a vast pool of energy that is
constantly moving in interstate commerce.”29 Accordingly, “it
is now possible for power companies to transmit electric
energy over long distances at a low cost.”30 By the mid-1990s,
“long-distance transmission had become increasingly
economical, and smaller, lower-cost plants had begun to
emerge as competitors to the vertically integrated utilities.”31
Yet the state utilities retained control over much of the
transmission infrastructure, including “transmission lines that
must be used by their competitors to deliver electric energy to
wholesale and retail customers.”32 FERC became concerned
that state utilities’ economic interest lay in “denying
28 Id. at 7.
29 Id.
30 Id. at 7–8.
31 S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 49–50 (D.C.
Cir. 2014) (per curiam) (citing Order No. 888, Promoting
Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities, 61
Fed. Reg. 21540, 21543–46 (May 10, 1996) (codified at 18
C.F.R. pts. 35, 385)).
32 New York, 535 U.S. at 8.

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transmission or offering it only on inferior terms to emerging
competitors.”33
FERC responded by issuing a series of orders aimed at
checking state utilities’ promotion of their own self-interest.
The FERC orders promoted transparency and regional
coordination. In 1996, Order No. 88834 required each
transmission provider to “file an open-access transmission
tariff . . . containing minimum terms of non-discriminatory
transmission service.”35 In other words, this order compelled
utilities to offer transmission services to other market actors at
the same rates as would be charged to the utilities themselves.36
In addition, “[t]o promote development of competitive
markets, [FERC] encouraged the formation of regional
transmission organizations (‘RTOs’) . . . to coordinate
transmission planning, operation, and use on a regional and
interregional basis.”37 We explain the role of RTOs in greater
detail in the following section.
33 S.C. Pub. Serv. Auth., 762 F.3d at 50 (paraphrasing Order
No. 888, 61 Fed. Reg. at 21567).
34 61 Fed. Reg. 21540.
35 S.C. Pub. Serv. Auth., 762 F.3d at 50 (citing Order No. 888,
61 Fed. Reg. at 21541, 21551–52).
36 See Order No. 888, 61 Fed. Reg. at 21541; see also Metro.
Edison Co., 767 F.3d at 342 (“Each electric utility must apply
the same rate for wholesale transmission services to itself and
others so as to provide open access to transmission services.”).
37 S.C. Pub. Serv. Auth., 762 F.3d at 50 (citing Order No. 888,
61 Fed. Reg. at 21552, 21666–67).

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FERC built on these reforms in 2007 with Order No.
890.38 Opining once again on the anticompetitive tendencies
of the transmission market, FERC explained that “vertically-
integrated utilities do not have an incentive to expand the grid
to accommodate new entries or to facilitate the dispatch of
more efficient competitors.”39 At the same time, there was a
“critical need for new transmission infrastructure,” as existing
systems could not support the increase in consumer demand.40
To this end, Order No. 890 called for “an open, transparent,
and coordinated transmission planning process,”41 and
required providers “to open their transmission planning
process to customers, coordinate with customers regarding
future system plans, and share necessary planning information
with customers.”42
Order No. 890 also responded to FERC’s growing
concern that grid congestion imposed “significant cost impacts
on consumers.”43 “Congestion” refers to limits on the
electricity grid’s ability to carry traffic, which restricts the flow
of energy from where it is generated to where it is needed.44
38 Order No. 890, Preventing Undue Discrimination and
Preference in Transmission Service, 72 Fed. Reg. 12266 (Mar.
15, 2007) (codified at 18 C.F.R. pts. 35, 37).
39 Id. at 12275.
40 Id.
41 Id. at 12267.
42 Id.
43 Id. at 12276.
44 See Transource Penn., L.L.C. v. DeFrank, 705 F. Supp. 3d
266, 274 (M.D. Pa. 2023) (“Congestion occurs when the least

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When congestion exists downstream of cheap power
generation, it can force consumers to purchase from a more
expensive power source.45 Order No. 890, responding to
“increasing transmission congestion,” sought to develop a
planning process that would prevent and deter “undue
discrimination” that arises from congestion.46
Notwithstanding Order No. 890’s reforms, concerns
persisted about the capacity of the nationwide grid to reliably
meet rising demand for electricity.47 In 2011, FERC issued
Order No. 1000,48 which built upon Order No. 890 by requiring
that: (1) each transmission provider participate in a regional
transmission planning process that would identify “regional
solutions to regional needs,”49 and “produce[] a regional
transmission plan”50; (2) neighboring regions establish
interregional coordination procedures for transmission
costly resources that are available to serve load in a given
region cannot be dispatched because transmission facility
limits constrain power flow on the system.”) (quotation marks
omitted).
45 See Order No. 890, 72 Fed. Reg. at 12276 (discussing studies
showing that “[t]ransmission congestion has created fairly
small local load pockets” and “can have significant cost
impacts on consumers”).
46 Id.
47 See S.C. Pub. Serv. Auth., 762 F.3d at 51–52.
48 Order No. 1000, Transmission Planning and Cost Allocation
by Transmission Owning and Operating Public Utilities, 76
Fed. Reg. 49842 (Aug. 11, 2011) (codified at 18 C.F.R. pt. 35).
49 Id. at 49897.
50 Id. at 49854.

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planning;51 (3) transmission providers relinquish rights of first
refusal for incumbent transmission developers to construct new
facilities included in regional transmission plans;52 and (4)
regional planning processes set qualification criteria for
developers and use a selection process that is transparent and
not unduly discriminatory.53 The preemption issue in this
appeal arises from this federally mandated regional planning
process.
C. RTOs and the Regional Planning Process
RTOs, or regional transmission organizations,
supervise interstate transmission and planning of electricity.
FERC encouraged the formation of RTOs by requiring utilities
to report their progress towards developing and participating in
RTOs to FERC.54 FERC explained that its objective was “for
all transmission-owning entities in the Nation, including non-
public utility entities, to place their transmission facilities
under the control of appropriate RTOs in a timely manner.”55
The purposes of RTOs include “promoting efficiency
and reliability in the operation and planning of the electric
transmission grid and ensuring non-discrimination in the
51 Id. at 49846, 49907.
52 Id. at 49846, 49895–96.
53 Id. at 49846, 49897–99; see also S.C. Public Serv. Auth., 762
F.3d at 52–53 (summarizing key provisions of Order No.
1000).
54 See Order No. 2000, Regional Transmission Organizations,
65 Fed. Reg. 810, 811 (Jan. 6, 2000) (codified at 18 C.F.R. pt.
35).
55 Id. at 811.

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provision of electric transmission services.”56 To that end,
FERC regulations require that each RTO have “operational
authority for all transmission facilities under its control”57 and
“exclusive authority for maintaining the short-term reliability
of the grid that it operates.”58 FERC further has mandated that
RTOs (1) administer transmission tariffs,59 (2) “ensure the
development and operation of market mechanisms to manage
transmission congestion,”60 (3) provide for objective market-
monitoring to ensure “reliable, efficient and not unduly
discriminatory transmission service,”61 and (4) “be responsible
for planning, and for directing or arranging, necessary
transmission expansions, additions, and upgrades that will
enable [provision of] efficient, reliable and non-discriminatory
transmission service.”62
56 18 C.F.R. § 35.34(a) (2025).
57 Id. § 35.34(j)(3).
58 Id. § 35.34(j)(4).
59 Id. § 35.34(k)(1). In this context, a tariff is a published rule
concerning the provision of electric service “offered on a
generally applicable basis,” and the rates, charges,
classifications, practices, rules, or regulations relating to that
service. Id. § 35.2(c)(1); see also N.J. Bd. of Pub. Utils. v.
FERC, 744 F.3d 74, 83 (3d Cir. 2014) (noting that a tariff is
“the term of art used to refer to the classifications, practices,
and regulations a public utility uses to establish electricity
rates”) (internal quotation marks omitted).
60 18 C.F.R. § 35.34(k)(2).
61 Id. § 35.34(k)(6).
62 Id. § 35.34(k)(7).

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PJM Interconnection, LLC, is the RTO responsible for
maintaining the bulk electricity transmission system of a 13-
state region that includes most of Pennsylvania.63 Pursuant to
the FERC-mandated regional planning process, PJM produces
an annual Regional Transmission Expansion Plan (RTEP) that
identifies areas of congestion and proposes solutions to reduce
that congestion.64
In 2007, FERC directed PJM to submit a proposal for
evaluating the benefits and costs of congestion-mitigation
projects for inclusion in the RTEP.65 Such projects are also
known as “market-efficiency projects.”66 PJM proposed that
market-efficiency projects could be considered cost-justified if
the benefit-cost ratio over a 15-year span exceeded 1.25 to
1.0.67 PJM proposed to calculate the benefit of a project by
63 See PJM Interconnection, L.L.C., 101 FERC ¶ 61345,
62444–45 (2002) (FERC order granting PJM status as an
RTO).
64 See PJM Interconnection L.L.C, Amended and Restated
Operating Agreement of PJM Interconnection, L.L.C., sched.
6, §§ 1.1, 1.5 (2025) [hereinafter PJM Operating Agreement],
https://perma.cc/S3GD-3D44; Order No. 1000, 76 Fed. Reg. at
49842 (requiring utilities to “participate in a regional
transmission planning process that produces a regional
transmission plan”).
65 PJM Interconnection, L.L.C., 119 FERC ¶ 61265, 62488
(2007).
66 PJM Operating Agreement, sched. 6, § 1.5.7(b)–(c).
67 See PJM Interconnection, L.L.C., 123 FERC ¶ 61051,
61409–10 (2008). The parties do not dispute that this
methodology applies to the project at issue in this litigation.

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accounting for the decreases in wholesale electricity costs in
regions previously experiencing congestion—that is, regions
downstream of the congestion.68 But PJM’s methodology
would exclude from the calculation price increases in regions
that previously enjoyed low prices as a result of congestion—
that is, regions on the same side of the congestion as the cheap
electricity.69 FERC approved this approach in 2008, deeming
it reasonable to exclude price-increases in regions that
previously benefited from congestion because those regions
would not have to shoulder the costs of constructing the new
facilities.70 PJM accordingly has continued to apply this
methodology in the intervening years, and FERC has rejected
requests to revisit the methodology.71
68 Id. at 61409–10, 61416.
69 Id.
70 Id. at 61416.
71 See PJM Interconnection, L.L.C., 173 FERC ¶ 61258, 62725
(2020) (FERC declining intervenor’s request to revisit
methodology on the basis that it “ignore[s] the increased zonal
load costs that a project may create”). Amicus the
Pennsylvania Office of Consumer Advocate (OCA) asserts that
FERC did not, in fact, approve this methodology. For support,
OCA notes that in 2014, PJM submitted a letter to FERC
proposing revision of the market-efficiency calculation for
Regional Facilities and Necessary Lower Voltage Facilities to
account only for zones where customer load payments were
projected to decrease. According to OCA, while FERC
accepted this letter for filing, it never expressly approved it.
But OCA does not provide support for its premise that the
project at the heart of this dispute falls into the category of

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D. State Siting Authority
Even though FERC has come to exercise increasingly
broad authority over interstate aspects of electricity
transmission, especially regional transmission planning and
expansion, state regulators retain spheres of authority over
intrastate aspects of the industry. In particular, the states
historically have held exclusive authority over siting,72
permitting, and construction of transmission lines.73
The FPA as originally enacted did not authorize FERC
to exercise any siting authority. In 2005, Congress amended
projects covered by this 2014 filing. Instead, the parties agree
that the methodology approved in 2008 applied to
Transource’s project and was unaffected by the 2014 filing.
PJM Interconnection, L.L.C., 123 FERC at 614416).
72 “[S]iting” is not clearly defined in relevant law. We use that
term to refer to the decision to approve building transmission
facilities in a particular place, consistent with how FERC uses
the term. See, e.g., Order No. 1000, 76 Fed. Reg. at 49885
n.231 (referring to state regulation of “construction of
transmission facilities, including but not limited to authority
over siting or permitting of transmission facilities”).
73 See Order No. 1000, 76 Fed. Reg. at 49861 (noting that
“there is longstanding state authority over . . . matters relevant
to siting, permitting, and construction”); id. at 49880
(“[N]othing in this Final Rule is intended to limit, preempt, or
otherwise affect state or local laws or regulations with respect
to construction of transmission facilities, including but not
limited to authority over siting or permitting of transmission
facilities.”).

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the FPA by enacting the Energy Policy Act,74 which for the
first time authorized FERC to exercise limited authority over
transmission-line siting. This Act directed the Department of
Energy to designate transmission-constrained or congested
areas of the country as National Interest Electric Transmission
Corridors (NIETCs).75 Within NIETCs, FERC could issue
permits to construct or modify electricity transmission
facilities, but only under specified conditions, such as if the
state in question withheld approval for more than a year after
the filing of a permit application.76 This is sometimes referred
to as FERC’s “backstop siting authority.” An NIETC may be
designated based on a finding that a geographic area
experiences or is expected to experience “electric energy
transmission capacity constraints or congestion that adversely
affects consumers.”77 In other words, the Energy Policy Act
carved out a unique circumstance wherein FERC could
supersede the states’ traditional authority over siting decisions.
Outside of NIETCs, however, siting remains the
province of the states. The PUC reviews and rules upon the
application of any public utility to construct high-voltage
electricity transmission lines in Pennsylvania.78 State law
74 Energy Policy Act, Pub. L. No. 109–58, 119 Stat. 594
(2005).
75 Id. § 1221(a) (codified at 16 U.S.C. § 824p(a)).
76 Id. § 1221(b)(1)(C)(i) (codified at 16 U.S.C. §
824p(b)(1)(C)(i)).
77 Id. § 1221(a)(2) (codified as amended at 16 U.S.C. §
824p(a)(2)(i)–(ii)).
78 52 Pa. Code §§ 57.71–76.

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requires the PUC to hold a hearing79 and make the following
findings before approving the construction of any such line:
(1) That there is a need for it.
(2) That it will not create an
unreasonable risk of danger to
the health and safety of the
public.
(3) That it is in compliance with
applicable statutes and
regulations providing for the
protection of the natural
resources of [Pennsylvania].
(4) That it will have minimum
adverse environmental impact,
considering the electric power
needs of the public, the state of
available technology and the
available alternatives.80
E. Summary of Regulatory Scheme
The aforementioned evolution of electricity regulation
can thus be summed up as follows: The federal government,
through FERC, regulates interstate electricity transmission and
interstate wholesale sales. FERC has directed RTOs to manage
regional transmission planning and develop regional plans to
reduce congestion and ensure grid reliability. Concomitantly,
79 Id. § 57.75.
80 Id. § 57.76(a).

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with the limited exception of NIETCs, states retain authority
over transmission-line siting, permitting, and construction, and
apply state law in reviewing transmission-line applications.
II. Factual and Procedural History81
A. Project 9A
PJM conducted studies that identified “persistent
congestion” along the Pennsylvania-Maryland border affecting
a subregion called the AP South Reactive Interface (APSRI).82
APSRI is “a set of four 500 kV transmission lines that originate
in West Virginia and terminate in Maryland.”83 PJM assessed
that this congestion had “imposed economic transmission
constraint costs totaling approximately $800 million from 2012
through 2016.”84 PJM further determined that the costs of
congestion were “borne by residents, commercial businesses
and industrial customers” in the eastern part of PJM’s region.85
As explained in the report of Transource’s expert witness:
The fundamental problem on the
AP South reactive interface is how
to avoid having too much energy
flowing across the lines that make
up the interface, which would
81 The parties largely do not dispute the ALJ’s factual findings,
with very limited exceptions not relevant to the facts recounted
here.
82 JA 681 (PJM 2018 white paper).
83 Id. at 84 ¶ 7.
84 Id. at 681.
85 Id.

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result in unacceptable low voltages
. . . . If [flows] are low enough,
lower-cost generation may be
dispatched from Pennsylvania or
states to the West to serve a need
for power in Maryland, Virginia,
and the District of Columbia. If
the anticipated flow across the
interface is too high, however,
PJM operators will direct
increased higher-cost generation
from Maryland and Virginia, and
will limit lower-cost generation
output from Pennsylvania and
elsewhere to prevent the flow
across the interface from
exceeding the voltage-based
limits. In other words, lower-cost
power is “trapped” and cannot get
to where there is a demand for that
power in other portions of the PJM
region, due to the constraints on
the AP South reactive interface.86
Relieving this congestion would reduce electricity costs in
Maryland, Virginia, West Virginia, and the District of
Columbia. It would, however, increase the cost of electricity
in areas, such as Pennsylvania, currently benefiting from this
congestion in the form of lower electricity costs.
86 Id. at 580 (expert report of Steven R. Herling).

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In October 2014, as part of its RTEP process, PJM
solicited proposals for “technical solutions” to alleviate this
congestion.87 PJM selected a proposal submitted by
Transource Energy, L.L.C., to build, among other things, two
new transmission lines spanning the Pennsylvania-Maryland
border.88 The Transource proposal is known as Project 9A.
The Pennsylvania-specific portions of the proposal are known
as the Independence Energy Connection Project, comprising
the IEC East Project, which would connect to a proposed
substation in York County, Pennsylvania, and the IEC West
Project, which would connect to a proposed substation in
Franklin County, Pennsylvania. PJM evaluated Project 9A
according to its FERC-approved benefit-cost methodology,
described supra in Section I.C. PJM concluded that Project 9A
would be expected to provide economic benefits that exceed
the 1.25 threshold over the 15-year horizon. Although the
precise figures have shifted as the project is periodically
reevaluated, PJM estimates that the project could lower
wholesale electricity costs in congestion-constrained regions
by as much as $845 million over 15 years. At the same time,
the cost of constructing the project would be roughly $509–528
million. PJM’s periodic reevaluations of the project
87 Id. at 681.
88 Transource Energy, L.L.C. is the parent company to
Transource Pennsylvania, L.L.C., the plaintiff-appellee in this
litigation. Transource Pennsylvania, L.L.C. is an electricity
transmission company and public utility that was established
for the purpose of building Project 9A. This opinion refers to
Transource Pennsylvania, L.L.C. as “Transource.”

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consistently have yielded a benefit-cost ratio greater than 1.25
to 1.89 PJM initially calculated the ratio at 2.48.
It is undisputed that Project 9A also would yield higher
wholesale electricity costs for customers currently benefiting
from the congestion that the project seeks to alleviate. In
practice, this would mean that customers in regions including
central and eastern Pennsylvania, where low-cost electricity
has been trapped, would see their costs increase by as much as
$812 million over 15 years. As explained above, PJM’s
FERC-approved methodology for evaluating benefits and costs
does not account for this increase in costs to Pennsylvania
consumers.
PJM’s Board approved Project 9A “as the more
efficient, cost-effective project to address persistent congestion
identified in forward-looking economic studies on the AP-
South Interface.”90 In January 2017, FERC approved the
89 Periodic reevaluations have yielded ratios of 1.30, 1.32, 1.42,
1.40, 2.17, and 2.10. But, as will be discussed infra, the
Administrative Law Judge who reviewed Transource’s siting
applications emphasized that congestion costs may have
declined by as much as $400 million without Project 9A being
built. In addition, Defendants contend in their reply that PJM’s
most recent evaluation—conducted after the District Court
ruled in this case—fell below the 1.25 threshold.
90 JA 683.

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26
project, determining that it would “reduce the cost of delivered
power by reducing transmission congestion.”91
B. Administrative Proceeding
Transource applied to the PUC for all necessary
certificates and approvals to construct Project 9A. Transource
obtained a provisional “certificate of public convenience,”
which would confer status as a public utility and enable it to
file siting applications.92 Transource proceeded to file siting
applications for the East Portion and West Portion of Project
9A. Transource also filed eminent-domain applications for the
property that would need to be condemned to construct Project
9A. Numerous private organizations and individuals obtained
intervenor status in the proceeding and filed objections to
Transource’s applications.
An ALJ received written submissions and presided over
an evidentiary hearing concerning Transource’s applications.
Thereafter, the ALJ issued a recommended decision advising
the PUC to deny Transource’s applications. The ALJ’s
analysis focused on the first of the four elements that the PUC
would need to consider under Pennsylvania law before
approving the siting applications: the need for the project.93
91 Transource, 705 F. Supp. 3d at 275 (citation omitted); see
also PJM Interconnection, L.L.C., 158 FERC ¶ 61089, 2017
WL 444174, at *5 (Jan. 31, 2017).
92 JA 73, 227.
93 As noted, Pennsylvania law provides that the PUC may
approve an application if it finds: “(1) That there is a need for
it. (2) That it will not create an unreasonable risk of danger to

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The ALJ framed the need inquiry as “broad,” noting that while
the PUC “may consider regional needs,” a primary focus is on
“impacts to Pennsylvania.”94
First, the ALJ rejected the premise that congestion was
a problem in the APSRI, finding that “[a]ctual congestion
costs” had decreased since PJM approved Project 9A.95
Specifically, the ALJ found that while congestion costs on the
APSRI totaled $486.8 million in 2014, in subsequent years,
these costs hovered between $14.5–21.6 million. According to
the ALJ, at the time of the administrative proceeding, “there
[wa]s no longer significant congestion for the IEC Project to
resolve on the AP South Interface.”96 The ALJ also rejected
the notion that the purported congestion caused discriminatory
prices, characterizing congestion as “an appropriate market-
based response to the wholesale power market.”97
Next, the ALJ explained that even if congestion were an
issue in the region, “those concerns would be weighed against
the health and safety of the public. (3) That it is in compliance
with applicable statutes and regulations providing for the
protection of the natural resources of [Pennsylvania]. (4) That
it will have minimum adverse environmental impact,
considering the electric power needs of the public, the state of
available technology and the available alternatives.” 52 Pa.
Code. § 57.76(a).
94 JA 153.
95 Id. at 154.
96 Id. at 155; see also id. at 162 (“[T]he IEC Project is no longer
needed for the purpose for which it was designed in 2016.”).
97 Id. at 163.

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the detrimental impacts” of the project within Pennsylvania.98
Whereas PJM had selected Transource’s project based on its
FERC-approved benefit-cost methodology, the ALJ
characterized that methodology as “deficient when measured
against the constitutional, statutory, and regulatory standards
of Pennsylvania law.”99 The ALJ thus rejected PJM’s
approach of comparing the cost of building the project to the
benefits only in regions that would pay for the project.
According to the ALJ, the $812 million in increased costs to
Pennsylvania consumers—which would result from relieving
the congestion—should be considered as a counterweight to
the $845 million in efficiency gains in other states. The ALJ
therefore assessed the benefit of the project to be only $32.5
million over 15 years, against a cost of at least $509 million to
build.100 Thus, the ALJ wrote, “[t]his is a costly project to
Pennsylvania compared to the net benefit to address vague
constraints.”101
The ALJ recommended denying the applications
because “no need has been proven.”102 The ALJ also found
that Transource failed to establish two of the other elements
required under Pennsylvania law for approval of the siting
applications: protection of natural resources and minimal
environmental impact.
98 Id. at 166.
99 Id. at 169.
100 This number is reached by subtracting the $812.5 million in
increased costs from the $845 million in savings from relieving
the congestion.
101 Id. at 168.
102 Id. at 195.

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Transource filed exceptions to the ALJ’s recommended
decision before the PUC. The PUC subsequently issued an
order denying Transource’s siting applications and adopting
and incorporating the ALJ’s ruling. This denial turned on
Transource’s “fail[ure] to establish . . . the need for the
proposed HV transmission lines.”103 The PUC held that
Pennsylvania law authorizes and requires the PUC to conduct
its own need analysis, which is not necessarily coterminous
with PJM’s benefit-cost determination. The PUC wrote:
The premise underlying
Transource’s arguments that the
element of need has been satisfied
under the Pennsylvania standards
is Transource’s assertion that the
factors relied upon by PJM and the
methodology and process for PJM-
approval of a project should be the
only criteria relevant to this
Commission’s review and such
criteria is not subject to critical
analysis. However, Transource’s
argument is flawed in a material
respect: need, established under
the applicable federal standards
imposed by FERC and
implemented by PJM, do[es] not
necessarily satisfy the requirement
for “need” as that element is
103 Id. at 224.

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30
examined and weighed under
[Pennsylvania law].104
The PUC—like the ALJ—evaluated the issue of “need”
by focusing primarily on “[t]he potential negative and practical
impact on the citizens and consumers of Pennsylvania.”105
Despite acknowledging that PJM’s planning may not account
for the most current data, particularly when a project is tied up
in years of litigation, the PUC deemed it appropriate to
consider purported declines in congestion levels since PJM
selected Project 9A because “[Pennsylvania] is expected to
suffer serious consequences” if the project is built.106 The PUC
therefore adopted the ALJ’s recommended conclusion that
Transource had failed to establish the requisite “need” for
Project 9A, explaining,
[W]e find that the ALJ properly
construed the state versus federal
roles regarding regional
transmission planning in the
analysis and application of the
relevant statutory authority,
applicable regulations, and case
law to the present case . . . . [W]e
conclude that in the present
circumstances Transource fails to
carry the burden of persuasion by a
preponderance of the evidence to
establish need for the proposed
104 Id. at 276.
105 Id. at 281.
106 Id. at 282.

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31
siting Applications, pursuant to . .
. 52 Pa. Code Section
57.76(a)(1).107
Relying on this conclusion, the PUC denied Transource’s
siting applications, as well as the accompanying petitions for
zoning exemptions and eminent domain. The PUC also
rescinded Transource’s provisional certificate of public
convenience.
C. Federal and State Court Proceedings
Transource responded by suing the PUC, along with its
Chairman, Vice Chairman, and Commissioners in federal
district court. Transource’s complaint asserted that the PUC
decision violated the Supremacy Clause and the dormant
Commerce Clause of the U.S. Constitution. It pled causes of
action pursuant to 28 U.S.C. § 2201 and 42 U.S.C. § 1983. The
complaint asked the District Court to declare the PUC’s need
determination unlawful, and to enjoin enforcement of the PUC
order.
The day after filing its federal-court complaint,
Transource filed a petition for review of the agency
determination in the Pennsylvania Commonwealth Court.
Transource sought reversal on the grounds that the ruling
contained errors of law, was not supported by substantial
evidence, and constituted an abuse of agency discretion.
Transource’s submissions to the Commonwealth Court
expressly reserved Transource’s Supremacy Clause and
dormant Commerce Clause claims and explained that
107 Id. at 285.

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32
Transource intended to litigate those issues in federal court if
it did not prevail before the Commonwealth Court.
The District Court stayed the federal proceeding
pending resolution of the state proceeding. Several months
later, the Commonwealth Court affirmed the PUC decision.
Accordingly, the federal District Court lifted the stay, denied
Defendants’ motion to dismiss, and authorized limited
discovery. Upon completion of discovery, both sides moved
for summary judgment.
D. District Court Summary Judgment Ruling
The District Court entered summary judgment for
Transource. The District Court began its analysis in a very
thorough and well-reasoned opinion, by rejecting Defendants’
arguments that preclusion doctrines prevented it from reaching
the merits of the dispute. First, the District Court held that,
consistent with the Supreme Court’s opinion in England v.
Louisiana State Board of Medical Examiners,108 Transource
had avoided claim preclusion in state court by informing the
Pennsylvania court that it was reserving its constitutional
claims for adjudication in federal court. Second, the District
Court declined to reach the merits of Defendants’ issue-
preclusion argument, concluding that argument had not been
properly raised as it was presented only in a footnote in
Defendants’ summary-judgment brief.
In analyzing the Supremacy Clause claim, the District
Court explained that the FPA grants FERC “the power to
108 375 U.S. 411 (1964).

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33
regulate regional transmission planning.”109 The District Court
declined to rule on whether the PUC order created a direct
conflict with federal law. Instead, the District Court concluded
that the PUC order must fall under the doctrine of implied
conflict preemption because it erected an obstacle to federal
objectives. As the District Court explained, a core goal of
federal regulation in the area of interstate electricity
transmission is for RTOs such as PJM to analyze, select, and
ultimately build “congestion-reducing projects with benefits
that exceed their costs by the required ratio,” subject to local
permitting constraints.110 The District Court reasoned that “by
disagreeing with PJM’s FERC-approved benefit-cost
methodology,” the PUC “undercut the foundational goal of
congestion-alleviating projects.”111 The court concluded,
“[b]ecause the PUC’s decision presents an obstacle to
achieving federal objectives, it is conflict preempted and
violates the Supremacy Clause.”112
The District Court also held that “the PUC’s decision
was a per se violation of the dormant Commerce Clause driven
by economic protectionism.”113 The court explained that the
purpose of Project 9A is “to better facilitate commerce across
regional and state boundaries,” whereas the PUC’s opposition
was rooted in maintaining Pennsylvania’s “access to low-
priced electricity” resulting from congestion.114 Yet the PUC
109 Transource, 705 F. Supp. 3d at 285.
110 Id. at 288.
111 Id. at 288–89.
112 Id. at 289.
113 Id. at 296.
114 Id.

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34
failed to show, as it must under the dormant Commerce Clause,
that this discriminatory policy was narrowly tailored to
advance a legitimate state purpose.115 The District Court also
concluded that the PUC decision would violate the dormant
Commerce Clause pursuant to the balancing test described in
Pike v. Bruce Church, Inc.,116 noting that “if other states
adopted a regime similar to the PUC, it would eviscerate
FERC’s attempts to reduce congestion.”117
The District Court therefore granted Transource’s
motion for summary judgment and entered final judgment in
favor of Transource. Defendants now appeal that order.118
115 Id. at 296–97.
116 397 U.S. 137 (1970).
117 Transource, 705 F. Supp. 3d at 297.
118 In addition to the issues addressed in Section III, Defendants
in their reply contend that Transource’s theory in this litigation
violates the major questions doctrine. “As a general matter, the
courts of appeals will not consider arguments raised on appeal
for the first time in a reply brief.” Hoxworth v. Blinder,
Robinson & Co., Inc., 903 F.2d 186, 204 n.29 (3d Cir. 1990).
We see no “exceptional circumstances,” id., that would justify
deviating from that standard default rule here. Defendants
offer no explanation for raising this issue late. Nor can we
readily discern such a reason, as their arguments concerning
the major questions doctrine rely upon case law decided before
they filed their opening brief. See id. This issue also does not
appear to have been raised before the District Court, making it
even more inappropriate for appellate consideration. See
Harris v. City of Philadelphia, 35 F.3d 840, 845 (3d Cir. 1994).
We therefore do not address the major questions doctrine.

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III. Discussion119
A. Preclusion
We first address Defendants’ contention that issue
preclusion bars Transource from raising its preemption
argument.120 The District Court declined to consider issue
preclusion because the argument was raised only in a footnote
in Defendants’ summary judgment briefing. Defendants offer
no basis for concluding that the argument is not now forfeited,
and this is reason enough for us to reject it.121
119 The District Court exercised jurisdiction over Transource’s
claims pursuant to 28 U.S.C. § 1331. We have appellate
jurisdiction over the District Court’s final order pursuant to 28
U.S.C. § 1291. We review a grant of summary judgment de
novo, applying the same standard as a district court. Levy v.
Sterling Holding Co., L.L.C., 544 F.3d 493, 501 (3d Cir. 2008).
Summary judgment is appropriate when there is no genuine
dispute of material fact and the movant is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(a).
120 Defendants also argue that claim preclusion bars
consideration of Transource’s dormant Commerce Clause
claim because Transource could have raised this argument in
the agency proceeding before the PUC but failed to do so.
Because we do not reach the dormant Commerce Clause issue,
we need not analyze this preclusion argument.
121 See In re Niaspan Antitrust Litig., 67 F.4th 118, 135–36 (3d
Cir. 2023) (declining to consider argument presented to the
district court in a footnote and therefore forfeited); Higgins v.
Bayada Home Health Care Inc., 62 F.4th 755, 763 (3d Cir.
2023) (same).

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36
However, even if the argument had been preserved, it
would not succeed. Issue preclusion bars relitigation of
previously decided issues where, among other requirements,
“there was a final adjudication on the merits,” and the issue
was “essential to the judgment.”122 The PUC did not address
federal preemption. The PUC did use the word “preempted”
in “reject[ing] any argument that the authority [to resolve siting
applications] is preempted.”123 However, the PUC never
analyzed the Supremacy Clause or federal preemption case-
law. It is not clear that such authorities were even presented to
the PUC, as Defendants’ description of Transource’s argument
in the administrative proceeding conspicuously omits mention
of the Supremacy Clause.
Moreover, the PUC order was not a “final
adjudication.”124 The PUC is not a tribunal of last resort, and
Transource pursued review of the PUC decision in the
Commonwealth Court. We have held that a federal court
“should grant preclusive effect to a state court decision
upholding” an agency’s determination when that state-court
122 Metro. Edison Co., 767 F.3d at 351 (explaining that
Pennsylvania law governs the issue-preclusive effect of a state-
court decision reviewing a PUC order, and summarizing
requirements under Pennsylvania law) (quoting Off.
Disciplinary Counsel v. Kiesewetter, 889 A.2d 47, 50–51 (Pa.
2005)).
123 JA 278.
124 Metro. Edison Co., 767 F.3d at 351.

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37
decision would have preclusive effect in state court.125 But the
Commonwealth Court never reviewed the PUC decision
through the lens of federal preemption. Instead, Transource
filed an England reservation, preserving its federal-law
arguments for review in federal court. Pursuant to England, a
party required to litigate in state court may reserve parallel
federal claims for resolution in federal court so long as the
party “inform[s] those [state] courts what his federal claims
are, so that the state statute may be construed in light of those
claims.”126 Because Transource made a proper England
reservation, “the traditional rules of res judicata and collateral
estoppel . . . do not apply to [the] state proceeding[]” with
respect to those federal claims.127
Defendants do not question the validity of Transource’s
England reservation. Instead, their argument seems to be that
to the extent the PUC order touched at all on preemption, the
PUC order is preclusive, despite the fact that the
Commonwealth Court never reached the issue. Defendants
write that “Transource could have challenged the PUC’s
decision [on preemption] in the Commonwealth Court, but did
not.”128 This is irreconcilable with England, which made clear
that a party who properly invokes federal-court jurisdiction
may not be compelled to forego the federal forum even if his
125 Dici v. Pennsylvania, 91 F.3d 542, 547 (3d Cir. 1996)
(emphasis added).
126 375 U.S. at 420 (quotation marks omitted).
127 Instructional Sys., Inc. v. Comput. Curriculum Corp., 35
F.3d 813, 822 (3d Cir. 1994).
128 Appellants Br. 56.

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38
claims require parallel state proceedings.129 Defendants
identify no authority to support issue preclusion applying
where the state agency’s decision has been challenged but not
affirmed on the at-issue grounds, and the cases they rely upon
are readily distinguishable.130
129 See England, 375 U.S. at 415 (“There are fundamental
objections to any conclusion that a litigant who has properly
invoked the jurisdiction of a Federal District Court to consider
federal constitutional claims can be compelled, without his
consent and through no fault of his own, to accept instead a
state court’s determination of those claims.”).
130 See City of McKeesport v. Pa. Pub. Util. Comm’n, 442 A.2d
30, 31 (Pa. Commw. Ct. 1982) (explaining that a PUC decision
that was never appealed could have claim-preclusive effect in
the Commonwealth Court, where the issue had been briefed,
considered, and decided by an ALJ and adopted by the PUC
and “the reasons for the uses of the rule in court proceedings
are present in full force”); Phil. Elec. Co. v. Pa. Pub. Util.
Comm’n, 433 A.2d 620, 625–26 (Pa. Commw. Ct. 1981)
(concluding that, in the particular case, “the desirability of
giving finality to decisions and preventing the relitigation of
issues involving precisely the same facts as those in finished
litigation . . . apply”) (emphasis added); Crossroads
Cogeneration Corp. v. Orange & Rockland Utilities, Inc., 159
F.3d 129, 135 (3d Cir. 1998) (concluding that a decision by a
New York agency concerning the terms of a purchase
agreement held preclusive effect because of the “substantial
role given state utility agencies by Congress in enacting [their
enabling statute]”); Edmundson v. Borough of Kennett Square,
4 F.3d 186, 193 (3d Cir. 1993) (holding state civil service

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39
Defendants therefore fail to establish that issue
preclusion poses a bar to our review of Transource’s
preemption argument.
B. Preemption
The District Court held that the PUC order denying
Transource’s siting applications was preempted because it
posed an obstacle to federal objectives by “undercut[ting] the
foundational goal of congestion-alleviating projects.”131
Defendants challenge this determination on appeal, arguing
that the PUC order was an exercise of Pennsylvania’s siting
authority, which is distinct from regional planning and over
which the federal government lacks jurisdiction.
1. The Supremacy Clause
The Supremacy Clause of the U.S. Constitution
provides:
This Constitution, and the Laws of
the United States which shall be
made in Pursuance thereof; and all
Treaties made, or which shall be
made, under the Authority of the
United States, shall be the supreme
commission’s resolution of a First Amendment issue did not
have preclusive effect because the agency lacked “the expertise
to issue binding pronouncements in the area of federal
constitutional law”).
131 Transource, 705 F. Supp. 3d at 288–89.

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40
Law of the Land; and the Judges in
every State shall be bound thereby,
any Thing in the Constitution or
Laws of any State to the Contrary
notwithstanding.132
This means that “any state law, however clearly within a
State’s acknowledged power, which interferes with or is
contrary to federal law, must yield.”133 Federal law may
preempt state law either expressly—by declaring an intent to
displace state law—or implicitly.134 Implied preemption
occurs either when Congress legislates so as to “foreclose any
state regulation in the area,” known as field preemption, or
when federal law conflicts with state law, known as conflict
preemption.135 Conflict preemption, at issue in this appeal,
“exists where ‘compliance with both state and federal law is
impossible,’ or where ‘the state law stands as an obstacle to the
accomplishment and execution of the full purposes and
objectives of Congress.’”136 Where such conflict exists,
“federal law must prevail.”137
132 U.S. Const. art. VI, cl. 2.
133 Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 108
(1992) (quoting Felder v. Casey, 487 U.S. 131, 138 (1988)).
134 See Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 376–77
(2015).
135 Id. at 377 (emphasis omitted) (quoting Arizona v. United
States, 567 U.S. 387, 401 (2012)).
136 Id. (quoting California v. ARC Am. Corp., 490 U.S. 93, 100,
101 (1989)).
137 Id.

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41
We have identified “two principles” that guide our
analysis “[i]n every preemption case.”138 “First, the intent of
Congress is the ‘ultimate touchstone’ of preemption
analysis.”139 Congress’s purpose may be apparent from the
face of a statute. We also may consider the “structure and
purpose of the statute as a whole,” analyzing “the way in which
Congress intended the statute and its surrounding regulatory
scheme to affect business, consumers, and the law.”140 To this
end, we have observed that “regulatory situations in which an
agency is required to strike a balance between competing
statutory objectives lend themselves to a finding of conflict
preemption.”141 In such situations, Congress “intends the
agency to use its reasoned judgment to weigh the relevant
considerations and determine how best to prioritize between
these objectives.”142 Permitting state authorities to “impose a
different standard” would undermine this congressional intent
by “re-balancing” the considerations already weighed by the
agency.143
138 Farina v. Nokia Inc., 625 F.3d 97, 115 (3d Cir. 2010).
139 Id. (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485
(1996)); see also Deweese v. Nat’l R.R. Passenger Corp.
(Amtrak), 590 F.3d 239, 246 (3d Cir. 2009) (“In analyzing a
potential conflict between federal and state law, we must be
‘guided . . . by the rule that the purpose of Congress is the
ultimate touchstone in every preemption case.’”) (quoting Holk
v. Snapple Beverage Corp., 575 F.3d 329, 334 (3d. Cir. 2009)).
140 Farina, 625 F.3d at 115 (quoting Medtronic, 518 U.S. at
486).
141 Id. at 123.
142 Id.
143 Id.

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42
The second guiding principle is “the basic assumption
that Congress did not intend to displace state law.”144 This
presumption against preemption does not apply in all cases,
however. It does not apply “where state regulation has
traditionally been absent.”145 And the presumption is
“overcome where . . . the existence of a conflict is clear and
manifest.”146
2. Federal Electricity-Industry
Objectives
To determine whether the PUC order stands as an
obstacle to federal objectives, we first must distill the federal
objectives in regulating the electricity industry, as revealed
through acts of Congress and FERC rulemaking.147 As
explained supra in Section I, the FPA directed FERC to (1)
exert “jurisdiction over all facilities for such [interstate]
transmission or [wholesale] sale of electric energy”148; (2)
“divide the country into regional districts” and “promote and
144 Id. at 116.
145 Id.
146 Id. at 117 (quoting Fellner v. Tri-Union Seafoods, L.L.C.,
539 F.3d 237, 249 (3d Cir. 2008) (quotation marks omitted).
147 See Holk, 575 F.3d at 339 (“Both federal statutes and
regulations have the force of law and can preempt contrary
state law.”); Fellner, 539 F.3d at 243–44 (discussing
circumstances in which federal agency actions have
preemptive effect, which include but are not limited to the
formal, notice-and-comment rulemaking at issue in this
appeal).
148 16 U.S.C. § 824(b)(1).

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43
encourage [regional] interconnection and coordination”149; (3)
ensure “just and reasonable” rates for transmission and sales
subject to FERC’s jurisdiction,150 and (4) prevent any undue
preferences or advantages in connection with such rates.151
With the Energy Policy Act, Congress instructed FERC to
“facilitate[] the planning and expansion of transmission
facilities to meet the reasonable needs of load-serving
entities.”152
FERC’s orders pursuant to this legislation explain that
carrying out these mandates entails counteracting state
utilities’ naturally anticompetitive tendencies. With the
evolution of the transmission industry, FERC “concluded that
the economic self-interest of electric transmission monopolists
lay in denying transmission or offering it only on inferior terms
to emerging competitors.”153 FERC construed its mandate of
ensuring just and reasonable rates as requiring it to foster a
competitive, interconnected marketplace.154
The regional planning process is one tool that FERC
developed to support competition and deter preferential
practices. FERC has explained that it “encouraged the creation
of RTOs to address important operational and reliability issues
and eliminate any residual discrimination in transmission
149 Id. § 824a(a).
150 Id. § 824d(a).
151 Id. § 824d(b); see also id. § 824e(a).
152 Id. § 824q(b)(4).
153 S.C. Pub. Serv. Auth., 762 F.3d at 50 (citing Order No. 888,
61 Fed. Reg. at 21567).
154 See id.

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44
services that can occur when the operation of the transmission
system remains in the control of a vertically integrated
utility.”155 As for the objective of reducing congestion, FERC
noted that “the ability and incentive to discriminate increases
as the transmission system becomes more congested.”156
These priorities serve the purpose of “ensur[ing] that
transmission infrastructure is constructed on a
nondiscriminatory basis and is otherwise sufficient to support
reliable and economic service to all eligible customers.”157 In
other words, the regional planning process developed as a
counterweight to state interests, and precisely because FERC
determined that it could not depend on the states to address
regional concerns such as congestion and grid reliability.
FERC acted in furtherance of these considerations when
it directed PJM to propose a benefit-cost ratio for evaluating
market-efficiency projects that reduce congestion.158 FERC
insisted that PJM come up with a fixed, “bright-line” formula
for evaluating the economics of a project, explaining that such
a formula was necessary to provide fairness and certainty to
investors and to avoid relitigating each project approved by
155 Order No. 890, 72 Fed. Reg. at 12270 (emphasis added).
156 Id. at 12275.
157 Id.; see also Order No. 1000, 76 Fed. Reg. at 49845
(explaining FERC’s purpose in building on Order No. 890 with
Order No. 1000 “to ensure that rates for [FERC]-jurisdictional
service are just and reasonable in light of changing conditions
in the industry” and to “address opportunities for undue
discrimination by public utility transmission providers”).
158 See PJM Interconnection, L.L.C., 119 FERC at ¶ 62488.

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PJM.159 FERC explained in approving the benefit-cost
methodology that it provided the requisite certainty and was
“consistent with the FPA because it promotes an economically
efficient transmission system, and is not unduly
discriminatory.”160
Carrying out these objectives requires FERC to balance
competing policy considerations. FERC is tasked on the one
hand with ensuring just and reasonable rates and facilitating
regional interconnection, while on the other hand regulating
“only . . . those matters which are not subject to regulation by
the States.”161 FERC repeatedly has articulated its intent not to
impinge the authority of state utilities and regulators over
certain predominantly intra-state aspects of the electricity-
transmission industry, including siting.162 At the same time,
159 Id. at ¶ 62492–93.
160 PJM Interconnection, L.L.C., 123 FERC at ¶ 61412.
161 16 U.S.C. § 824(a).
162 See Order No. 1000, 76 Fed. Reg. at 49861 (“We
acknowledge that there is longstanding state authority over
certain matters that are relevant to transmission planning and
expansion, such as matters relevant to siting, permitting, and
construction. However, nothing in this Final Rule involves an
exercise of siting, permitting, and construction authority.”);
Order No. 1000-A, Transmission Planning and Cost Allocation
by Transmission Owning and Operating Public Utilities, 77
Fed. Reg. 32184, 32215 (May 31, 2012) (affirming that
“[FERC] may undertake Order No. 1000’s reforms without
intruding on state jurisdiction,” including the states’ role in
“siting, permitting, and construction of transmission

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FERC considers one of its core objectives to be countering
state utilities’ economic self-interest, which it repeatedly has
characterized as a force that undermines the goal of
nondiscriminatory rates and practices.163 Thus, the Supreme
Court has observed that FERC is entitled to “great deference”
in effectuating “[t]he statutory requirement that rates be ‘just
facilities”); Order No. 2000, 65 Fed. Reg. at 910 (“Currently,
state and local governments . . . have exclusive authority over
the siting process. Therefore, an RTO’s planning and
expansion process must be designed to be consistent with these
state and local responsibilities.”); Order No. 890, 72 Fed. Reg.
at 12328 (describing “State siting issues” as an area “over
which [FERC] does not have jurisdiction”); id. at 12336
(noting that states “have primary transmission siting
authority”).
163 See Order No. 888, 61 Fed. Reg. at 21567 (identifying
FERC’s objective to correct “unduly discriminatory and
anticompetitive practices” resulting from “the economic self-
interest of transmission monopolists . . . to deny transmission
or to offer transmission on a basis that is inferior to that which
they provide themselves”); Order No. 890, 72 Fed. Reg. at
12318 (explaining that FERC needed to build on the provisions
of Order No. 888 because “[w]e cannot rely on the self-interest
of transmission providers to expand the grid in a
nondiscriminatory manner”); Order No. 1000, 76 Fed. Reg. at
49886 (identifying a need to eliminate incumbent rights of first
refusal because “it is not in the economic self-interest of
incumbent transmission providers to permit new entrants to
develop transmission facilities”).

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and reasonable,’” for that phrase entails judgment calls and
policy considerations “incapable of precise definition.”164
To summarize, Congress intended to establish a system
of federal supervision over interstate electricity transmission
and wholesale sales to ensure just, reasonable, and
nondiscriminatory rates and practices, while promoting
regional interconnection. FERC reasonably construed its
mandate to comprise facilitating competitive transmission and
wholesale markets, in part by checking the inherent economic
self-interest of state utilities, while reducing regional
congestion and ensuring grid reliability.
3. The Conflict Between the PUC
Ruling and Federal Objectives
The conflict between the PUC order at issue here and
the foregoing federal objectives is clear. As described herein,
PJM, acting pursuant to its mandate to “ensure the
development and operation of market mechanisms to manage
transmission congestion,”165 identified the need to reduce
congestion in the APSRI region. PJM evaluated Transource’s
proposal, Project 9A, according to the FERC-mandated
benefit-cost methodology. PJM selected Transource’s
proposal because it “provided the most benefits” by reducing
congestion while complying with the approved benefit-cost
ratio.166 The PUC applied a different benefit-cost analysis—
explicitly departing from the methodology FERC had directed
164 Morgan Stanley Cap. Grp. Inc. v. Pub. Util. Dist. No. 1, 554
U.S. 527, 532 (2008).
165 18 C.F.R. § 35.34(k)(2).
166 JA 688 (PJM 2016 white paper).

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PJM to apply. It concluded that there was no “need” for the
project. Based on this determination, the PUC declined to
issue Transource a permit for the project, foreclosing
construction of the IEC lines in Pennsylvania.
The problem with the PUC’s denial is that it is the result
of second-guessing the FERC-approved benefit-cost
methodology. FERC’s methodology serves the broader
purpose of reducing regional congestion to ensure just,
reasonable, and nondiscriminatory rates. The PUC, however,
disagreed with PJM’s evaluations of regional congestion and
with FERC’s determination of how the consequences of that
congestion should be weighed. No party disputes—and the
PUC expressly acknowledged—that the congestion at issue
here results in lower rates for Pennsylvania customers at the
expense of out-of-state customers. It thus contributes to a
regional rate disparity that Project 9A seeks to remedy.
However, this objective is thwarted by the PUC order based
upon an impermissible “re-balancing of those
considerations”167 that FERC has already weighed in
mandating the regional-planning process and approving PJM’s
benefit-cost methodology. Moreover, FERC has considered—
but declined to adopt—the very approach that the PUC applied
by treating price increases from relieving congestion as a
“cost” of the project.168 Thus, FERC’s ability to fulfill its
167 Farina, 625 F.3d at 123.
168 See PJM Interconnection, L.L.C., 123 FERC at ¶ 61416
(considering but rejecting objections to the exclusion of “the
expected energy payment increases, if any,” in zones that
would not pay for the project); PJM Interconnection, L.L.C.,

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mandates would be fatally undermined if state agencies could
veto congestion-reducing projects based on a disagreement
with the federal actors’ reasons for selecting or approving a
project. The PUC order therefore “poses an obstacle to the full
achievement of federal purposes.”169
In a different but instructive context, the Supreme Court
has consistently found “the States’ attempts to second-guess
the reasonableness” of FERC tariffs preempted pursuant to the
filed-rate doctrine.170 That doctrine provides “‘that interstate
power rates filed with FERC or fixed by FERC must be given
binding effect by state utility commissions determining
intrastate rates’ . . . as a matter of federal pre-emption through
173 FERC at ¶ 62725 (declining intervenor’s request to revisit
methodology because it “ignore[s] the increased zonal load
costs that a project may create”).
169 MD Mall Assocs. v. CSX Transp., Inc., 715 F.3d 479, 495
(3d Cir. 2013).
170 Hughes v. Talen Energy Mktg., 578 U.S. 150, 165 (2016);
see id. at 163 (holding preempted a Maryland program that
effectively set an interstate wholesale rate because it
“invade[d] FERC’s regulatory turf”); see also Miss. Power &
Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 369–74
(1988) (holding preempted a Mississippi agency’s “prudence
inquiry” into nuclear power plant expenses that FERC had
ordered utilities to purchase); Nantahala Power & Light Co.,
476 U.S. 953 (1986) (holding preempted North Carolina
agency’s order allocating power between power plant
operators in manner that differed from FERC’s allocation).

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the Supremacy Clause.”171 Once FERC determines that a rate
is “reasonable,” state utilities cannot impose any inconsistent
rate—even when acting in an area of exclusive state
jurisdiction.172 Thus, in Nantahala Power and Light Co. v.
Thornburg, a state utility was preempted from reallocating
power between plant operators based on the utility’s belief
“that [one of the operators] should have obtained more of the
low-cost, FERC-regulated power than [it was] in fact entitled
to claim under FERC’s order.”173 FERC had issued a tariff
setting the allocation of power between the operators.174
Because the state utility’s order rested on a premise “directly
counter to FERC’s order,” it “c[ould ]not withstand the
preemptive force of FERC’s decision.”175
Similarly, in Mississippi Power & Light Co. v.
Mississippi ex rel. Moore, FERC had allocated the costs of
constructing a power plant among several utilities, requiring
each to purchase a portion of the plant’s output at FERC-
determined rates.176 The Mississippi Supreme Court directed
a state agency to conduct a “prudence” review of the
underlying construction of the plant,177 which could be relevant
171 Entergy La., Inc. v. La. Pub. Serv. Comm’n, 539 U.S. 39, 47
(2003) (quoting Nantahala, 476 U.S. at 962).
172 Id.; see also Montana-Dakota Utils. Co. v. Nw. Pub. Serv.
Co., 341 U.S. 246, 251 (1951) (“[T]he right to a reasonable rate
is the right to the rate which the Commission files or fixes.”).
173 476 U.S. at 968.
174 Id. at 956.
175 Id. at 968.
176 487 U.S. at 362–63.
177 Id. at 368.

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to whether the FERC-mandated payments could be passed on
to consumers through state retail rates.178 The Supreme Court
held this state action preempted because, even though
Mississippi had authority over retail rates, “[o]nce FERC sets
[a wholesale] rate, a State may not conclude in setting retail
rates that the FERC-approved wholesale rates are
unreasonable.”179 The Supremacy Clause prohibited “any
proceedings that challenge the reasonableness of FERC’s
allocation.”180
The Supreme Court reinforced these principles in
Hughes v. Talen Energy Marketing, LLC.181 At issue there was
a PJM capacity auction, which FERC had approved “as the sole
ratesetting mechanism for sales of capacity to PJM.”182
Maryland sought to encourage in-state generation by
guaranteeing a new power plant a set price for its capacity.183
This had the effect of overriding the auction price, established
through a process that FERC had determined made the price
just and reasonable.184 The Supreme Court explained that
while the FPA left certain zones of authorities to the states,
“States may not seek to achieve ends, however legitimate,” in
a manner that would effectively undermine a FERC-
determined rate.185
178 Id. at 372 n.12.
179 Id. at 373 (quoting Nantahala, 476 U.S. at 966).
180 Id. at 374.
181 578 U.S. 150.
182 Id. at 163.
183 Id. at 158–59.
184 Id. at 163.
185 Id. at 164.

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52
Like the state agencies in Nantahala, Mississippi
Power, and Hughes, the PUC here would substitute its
determination for that of FERC on an issue that federal law
places squarely in FERC’s hands: identifying regional
planning needs and selecting projects to relieve congestion.
FERC determined that the benefit-cost methodology PJM used
in this case was “a just and reasonable means by which to
measure whether an economic-based enhancement or
expansion should be included in the RTEP.”186 The PUC’s
rejection of that measure arose from its disagreement with
constructing the project. Much like the prudence inquiry in
Mississippi Power, the PUC order here would “substitute[ the
PUC’s] own determination[] of what would be just and fair”
for that of FERC.187
The PUC order raises an obstacle to accomplishing
federal objectives in a manner the Supremacy Clause does not
permit. Because the conflict is clear and manifest, it
overcomes our usual presumption against preemption. It is
clearly preempted.188
4. State Authority Over Siting
Defendants’ central argument for reversal is that the
PUC, in denying Transource’s applications, was simply
186 PJM Interconnection, L.L.C., 123 FERC at ¶ 61417.
187 Mississippi Power, 487 U.S. at 371.
188 See Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363,
374 n.8 (2000) (explaining that state law presented “a
sufficient obstacle to the full accomplishment of Congress’s
objectives” to overcome any presumption against preemption).

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53
exercising traditional state siting authority. According to
Defendants, the states have “longstanding historical authority
to approve or deny siting permits for the construction of
electric transmission facilities,” which Congress has never
disturbed beyond granting FERC limited “backstop siting
authority.”189 Thus, Defendants would have us confine the
federal sphere to the regional planning process—i.e.,
identifying the need for projects—while leaving to states the
substantive determination of whether a project ultimately can
be built.
We agree that the task of approving construction in a
particular place falls to state authorities. This is clear from the
FPA, which in its original form did not empower the federal
government with any authority over siting. Siting decisions
therefore remained, by default, the province of the states.190
Moreover, we realize that when Congress amended the FPA in
2005 by enacting the Energy Policy Act, it authorized FERC
to exercise siting authority involving designated NIETCs, but
only in select circumstances not applicable here.191 We
therefore appreciate that this limited and highly restrictive
authorization arguably gives rise to a negative inference that
FERC otherwise lacks plenary authority over siting.192 FERC
189 Appellants Br. 31.
190 See 16 U.S.C. § 824(a).
191 Id. § 824p(b).
192 Cf. Lindh v. Murphy, 521 U.S. 320, 336 (1997) (finding
specific provision in one portion of statute, but absence of such
provision elsewhere, gave rise to negative inference that
application was limited to circumstances specifically
described).

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54
moreover has repeatedly reaffirmed that its regulations are not
intended to intrude upon states’ traditional siting authority.193
Even Transource agrees that “states retain authority over siting
and construction.”194
That is not the end of the inquiry, however. Implied
conflict preemption occurs when states act in ways that impede
the federal government from carrying out federal objectives,
“even when [s]tates exercise their traditional authority.”195
What matters for preemption purposes is that the PUC’s
reasons for denying the siting applications amounted to
“second-guess[ing] the reasonableness”196 of PJM’s FERC-
approved approach to determining which projects should be
built. We appreciate that a state-law savings provision, like the
one in the FPA, may “indicate Congress envisioned some role
for state law in the field.”197 However, that “does not ‘bar the
ordinary working of conflict pre-emption principles.’”198 The
question before us is not whether the PUC was acting within
the ordinary scope of state authority, but whether its action
193 See Order No. 1000, 76 Fed. Reg. at 49861; Order No. 1000-
A, 77 Fed. Reg. at 32215; Order No. 2000, 65 Fed. Reg. at 910;
Order No. 890, 72 Fed. Reg. at 12328, 12336.
194 Appellee Br. 15.
195 Hughes, 578 U.S. at 165.
196 Id.
197 Farina, 625 F.3d at 121.
198 Id. at 131 (quoting Geier v. Am. Honda Motor Co., 529 U.S.
861, 869 (2000)).

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55
poses an obstacle to the accomplishment of federal
objectives.199 As we explained above, it clearly does.
If state siting authority permitted the PUC to reject a
federal project on the same basis that the federally authorized
RTO selected the project, the regional planning process would
do nothing to check state utilities’ core economic self-interest.
Congress recognized a need for federal regulation precisely
because ensuring just and reasonable rates and reliable service
on an interstate grid could not be left to the individual states.200
And FERC concluded that to ensure nondiscriminatory
service, it needed to check states’ interests in advantaging
domestic actors.
Defendants emphasize that states must retain the ability
to reject siting applications on the basis of local concerns. To
be clear, the PUC may, consistent with our opinion today,
“grant[] or deny[]” a siting application for reasons other than a
disagreement with PJM’s FERC-approved basis for selecting
the project.201 Pennsylvania law indicates that such reasons
may include public safety and environmental concerns.202
199 We therefore need not go so far as the District Court in
characterizing the PUC’s decision as something other than
siting. See Transource, 705 F. Supp. 3d at 293. Even
assuming, arguendo, that the PUC was engaged in the siting
process when it denied Transource’s applications, this does not
obviate the conflict for preemption purposes.
200 See supra Section III.B.2.
201 52 Pa. Code § 57.76(a).
202 Id. §§ 57.76(a)(2)–(4).

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56
As Defendants emphasize, Pennsylvania law also
instructs the PUC to conduct its own need determination.203
Our holding today need not render state “need” inquiries
entirely superfluous. According to Transource, “the vast
majority of new transmission lines” did not originate with an
RTO’s regional planning process, and instead address “local
problems.”204 Defendants do not rebut this assertion or the
evidence Transource cites in support. Accordingly, it is at least
203 Id. § 57.76(a)(1). Defendants note that other siting state
laws include similar “need” elements. See, e.g., Fla. Stat. §
403.537; Me. Stat. 35-A § 3132(6); M.D. Code Ann., Pub. Util.
§ 7-207(f)(1)(i); Mont. Code Ann. § 75-20-301(1)(a); N.Y.
Pub. Serv. Law § 122(1)(d). Defendants emphasize that FERC
Commissioner Mark Christie has expressed a conviction that
states’ historic siting authority properly comprises a need
determination. See Balt. Gas & Elec. Co., 187 FERC ¶ 61030,
2024 WL 2272575, at *7 (Apr. 23, 2024) (Christie, dissenting);
Duquesne Lighting Co., PJM Interconnection, L.L.C., 189
FERC ¶ 61181, ¶ 16 n.268, 2024 WL 5006632, at *34 (Dec. 6,
2024) (Christie, concurring in part and concurring in the result
in part); PJM Interconnection, L.L.C., 191 FERC ¶ 61056,
2025 WL 1165765, at *5 (Apr. 17, 2025) (Christie,
concurring).
204 Appellee Br. 4; see also id. at 36 n.10 (citing PJM document
explaining that “supplemental projects” are developed outside
of PJM’s process and “[t]ransmission owners develop these
[supplemental] projects themselves to address local reliability
needs”); id. at 36 (citing FERC notice of proposed rulemaking
from 2022, which observes that the majority of investments
since Order No. 1000 have gone toward local transmission
facilities, not regional projects).

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57
arguable that when the PUC reviews siting applications that do
not originate with RTO regional planning, the PUC may
evaluate need without running afoul of the Supremacy Clause
and preemption issues.
On the other hand, when an RTO has selected a project
for inclusion in a regional transmission plan as part of its
federal mandate, a state regulator cannot, consistent with the
Supremacy Clause, reject the project based on a lack of “need.”
FERC explained in Order No. 1000 that regional planning was
essential to “identify and evaluate transmission alternatives at
the regional level that may resolve the region’s needs more
efficiently or cost-effectively than solutions identified in the
local transmission plans of individual public utility
transmission providers.”205 FERC was understandably
concerned that it could not rely upon local public utilities to fill
this role. Local utilities “may not adequately assess the
potential benefits of alternative transmission solutions at the
regional level.”206 If local authorities cannot be depended upon
to “adequately assess”207 regional planning goals, the other
side of that coin is that they cannot veto regional projects
because the project appears insufficiently valuable from a local
perspective, as the PUC did here.
Defendants argue, however, that the PUC’s independent
need determination was necessary to prevent a “wasteful and
counterproductive project,”208 citing a purported decrease in
205 Order No. 1000, 76 Fed. Reg. at 49856.
206 Id. at 49857.
207 Id.
208 Reply 23.

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58
congestion in the years since Project 9A was approved.
Defendants assert that as of June 2024—after the District Court
rendered its decision—PJM evaluated Project 9A and
concluded that it then fell below the requisite 1:1.25 benefit-
cost ratio. Nevertheless, the PUC’s attempt to weigh in on the
current need for the project by recalculating congestion levels
is just another way of redoing PJM’s benefit-cost evaluation.
Transource has represented that PJM annually reevaluates
RTEP projects to determine whether a project should be
cancelled based on changing congestion patterns. The record
supports that assertion. In addition, we note that federal law
provides a process for challenging particular projects before
FERC.209 This process has been used to challenge the
inclusion of particular projects in PJM’s RTEP.210 These are
important tools in checking construction of a project that may
no longer make economic sense because of changed
conditions. Because the need determination falls in the first
instance to PJM, however, the task of reevaluating need based
on changing congestion patterns likewise belongs with PJM
and not with the PUC.
5. Due Process and Eminent Domain
Concerns
Finally, Defendants and amici National Association of
Regulatory Utility Commissioners (NARUC), OCA, Members
209 See 16 U.S.C. § 824e(a) (providing that a concerned party
may file a “complaint” with FERC alleging that a “rule,
regulation, practice, or contract” is “unjust, unreasonable,
unduly discriminatory or preferential”).
210 See PJM Interconnection L.L.C., 156 FERC ¶ 61120, 2016
WL 4466386, at *2 (2016).

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59
of the Pennsylvania General Assembly, and Stop Transource
Franklin County (STFC) raise concerns about how the District
Court’s ruling impacts the due process rights of Pennsylvania
property owners. These parties emphasize that states are better
equipped than federal regulators to weigh the public need for
siting projects alongside local interests. They also raise
concerns that the District Court’s opinion allows PJM to
effectively wield eminent-domain power by determining
whether a regional project is needed. Amici emphasize that
PJM’s process for selecting market-efficiency projects
pursuant to a FERC-approved methodology does not afford
adequate procedural protections to affected landowners and
other citizens.
Landowners are of course entitled to procedural
protections before their property can be condemned.211 We
would therefore be concerned if PJM were wielding
Pennsylvania’s eminent-domain power, but it is not. This
becomes clear when we consider how eminent domain works
in Pennsylvania in the context of constructing transmission
lines. Although the parties and amici failed to adequately
address this in their briefing, we think it will be helpful for us
to describe this process.
Pennsylvania’s Business Corporations Law provides
that a public utility may “condemn property”212 for purposes
211 Rogin v. Bensalem Twp., 616 F.2d 680, 694 (3d Cir. 1980)
(“Before a governmental body may deprive a landowner of a
property interest, it must provide due process.”).
212 15 Pa. Cons. Stat. § 1511(a).

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that include “[t]he transportation of . . . electricity.”213
However, a purported utility such as Transource—not PJM—
only has the status of a public utility if it maintains a certificate
of public convenience.214 Thus, holding a certificate of public
convenience is a prerequisite to exercising-eminent domain
authority.215 The PUC grants a certificate of public
convenience only upon a finding that “such certificate is
necessary or proper for the service, accommodation,
convenience, or safety of the public.”216
A public utility may apply to the PUC to exercise
eminent domain in siting a transmission line.217 The
proceedings on such an application may be consolidated with
proceedings related to the underlying siting application.218 The
213 Id. § 1511(a)(2).
214 66 Pa. Cons. Stat. § 1101 (explaining that upon the approval
of a certificate of public convenience, a “proposed public
utility” may “begin to offer, render, furnish, or supply service”
as a public utility).
215 See id. § 1104 (“[N]o domestic public utility or foreign
public utility authorized to do business in this Commonwealth
shall exercise any power of eminent domain within this
Commonwealth until it shall have received the certificate of
public convenience[.]”); Clean Air Council v. Sunoco Pipeline
L.P., 185 A.3d 478, 482–83 (Pa. Commw. Ct. 2018) (“[Under]
the Public Utility Code, Sunoco must possess [a certificate of
public convenience] in order to exercise its eminent domain
power as a public utility.”).
216 66 Pa. Cons. Stat. § 1103(a).
217 See 52 Pa. Code §§ 57.75(i)(1)–(2).
218 See id.

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61
PUC’s guidelines for reviewing siting applications and, if
applicable, corresponding eminent-domain applications,
provide for (1) notice to persons and property owners affected
by a prospective project,219 and (2) a hearing before the PUC,
in which individuals and entities with “substantial interest in
the proceeding” may participate.220 The hearing entails
presentation of evidence and argument on the need, safety, and
environmental impact of the proposed line, and the availability
of alternative routes.221
Even “[a]fter the PUC authorizes a utility to exercise the
power of eminent domain, a condemnation is far from final.”222
Rather, the utility must still “prevail in a condemnation action
at the Court of Common Pleas.”223 The condemnor must file
“a declaration of taking” and appropriate security with the
court,224 in response to which the condemnee “may file
219 See id. § 57.72(c)(4); see also id. § 57.74(c).
220 Id. §§ 57.75(b), (d).
221 See id. § 57.75(e).
222 Clean Air Council, 185 A.3d at 487 (quoting Se. Pa. Transp.
Auth. v. Pa. Pub. Util. Comm’n, 991 A.2d 1021, 1023 (Pa.
Commw. Ct. 2010)).
223 Id. (quoting Se. Pa. Transp. Auth., 991 A.2d at 1023); see
also id. (“[A]lthough the issuance of the [certificate of public
convenience] allows the public utility to commence
proceedings under the Eminent Domain Code, success in the
common pleas court is not guaranteed.”); 15 Pa. Cons. Stat. §
1511(g) (describing procedure for eminent-domain
proceedings).
224 26 Pa. Cons. Stat. § 302(a)(1).

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preliminary objections,”225 which are “the exclusive method of
challenging” the condemnation.226
These provisions of Pennsylvania law demonstrate that
PJM—which is not a public utility—does not exercise the
power of eminent domain. Moreover, no party has explained
how requiring the PUC to accept PJM’s benefit-cost
determination would ipso facto authorize PJM to exercise
eminent-domain authority over any particular plot of land.
Amici’s argument seems to be that PJM, by determining
whether a project is needed, would predetermine approval of
the corresponding eminent-domain applications. But as we
have explained, a public utility must also prevail in the hearing
before the PUC and in an adversarial process before the Court
of Common Pleas. Only then may a public utility like
Transource—distinct from PJM—condemn private property.
Our opinion therefore cannot reasonably be read to
suggest that the PUC is required to rubber-stamp either a siting
application or an eminent-domain application related to a
project that PJM has approved. It thus does not undermine the
value of Pennsylvania’s “robust process for public
involvement”227 in siting and eminent-domain applications.
Nor does it improperly empower any private party to wield the
sovereign power of eminent domain.
225 Id. § 306(a)(1).
226 Id. § 306(a)(3); see also Se. Pa. Transp. Auth., 991 A.2d at
1023–24 (explaining that any “challenge to the authority of the
utility to condemn is properly raised in proceedings before
common pleas, not the PUC”).
227 OCA Br. 10.

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IV. Conclusion
For the foregoing reasons, we conclude that Transource
is not precluded from raising its preemption claim. We hold
that the PUC’s order rejecting Transource’s siting applications
runs afoul of the Supremacy Clause because it poses an
obstacle to accomplishing federal objectives. The PUC’s order
therefore is preempted, and we will affirm the District Court’s
entry of judgment in favor of Transource.
Because our conclusion on preemption independently
resolves the appeal, we need not discuss the question of
whether the PUC’s order also violates the dormant Commerce
Clause.
V. Glossary of Terms
Term Description
APSRI AP South Reactive Interface, the subregion
including the Pennsylvania-Maryland border
experiencing the congestion that prompted
PJM to solicit proposals for what became
Project 9A.
FERC Federal Energy Regulatory Commission, the
federal agency with jurisdiction over, among
other things, interstate wholesale electricity
transmission.
FPA Federal Power Act, the 1935 law that
empowered the agency that became FERC to

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regulate interstate wholesale electricity rates
and transmission.
NARUC National Association of Regulatory Utility
Commissioners, whose membership comprises
state public utilities and who filed an amicus
brief in support of Defendants in this appeal.
NIETC National Interest Electric Transmission
Corridor, a region designated by the federal
government where FERC may exercise
backstop siting authority.
OCA Pennsylvania’s Office of Consumer Advocate,
a state agency that represents the interests of
consumers, including before the PUC, and that
filed an amicus brief in support of Defendants
in this appeal.
PJM The regional transmission organization for the
region comprising most of Pennsylvania,
empowered by FERC to develop projects to
reduce congestion in interstate transmission.
PJM conducted the benefit-cost analysis for
Project 9A and filed an amicus brief in support
of Transource in this appeal.
PUC The Pennsylvania Public Utility Commission,
the entity responsible for making siting
decisions within Pennsylvania and a
defendant-appellant in this litigation.
RTEP Regional Transmission Expansion Plan, an
annual project that PJM conducts to identify

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areas of congestion and projects to address
them.
RTO Regional Transmission Organization, an
organization empowered by FERC to supervise
interstate transmission planning and to develop
projects to reduce regional congestion.
STFC Stop Transource Franklin County, an interest
group that filed an amicus brief in support of
Defendants in this appeal.

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