In an article for Law360, Brunini member Curt Hébert, former Federal Energy Regulatory Commission commissioner and chairman, examines two recent U.S. Supreme Court decisions and their potential impact on constitutional limits of power and ultimately the energy industry.
Two recent landmark U.S. Supreme Court decisions are reshaping the constitutional foundations of the administrative state.
For the energy industry — and for agencies such as the Federal Energy Regulatory Commission — the consequences may extend far beyond the end of Chevron deference or presidential removal authority.
Nearly 30 years ago, while serving as a FERC commissioner, I warned that the commission was drifting away from faithfully executing the laws enacted by Congress and toward making energy policy of its own.
That concern was expressed in my 1997 dissent from FERC’s decision in the Edwards Dam relicensing case.
Now, following the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo in 2024, and its decision in Trump v. Slaughter in June of this year, the constitutional questions underlying that dissent have moved to the center of administrative law.
Considered separately, each decision is significant. Taken together, they mark one of the most consequential restructurings of the administrative state in generations.
For industries regulated by independent agencies such as FERC, they signal not merely a change in legal doctrine, but a fundamental shift in how federal agencies derive and exercise their authority.
A Warning That Preceded the Debate
In 1997, FERC ordered the removal of the Edwards Dam in Maine, marking the first time the commission directed the dismantling of an operating hydroelectric facility. The decision reflected a significant expansion of the commission’s view of its authority under the Federal Power Act.
The dissent raised a concern that went well beyond whether a particular hydroelectric project should continue operating.
The more fundamental question was whether FERC had moved beyond implementing the authority granted by Congress, and had begun exercising policymaking authority that properly belonged to the legislative branch.
The issue was broader than one dam. It concerned whether independent agencies remain legitimate only when they faithfully execute statutes enacted by Congress, or whether they may independently define the policies those statutes are meant to serve.
For many years, courts generally afforded agencies substantial latitude in addressing those questions. That constitutional landscape has now changed dramatically.
Two Decisions, Two Constitutional Questions
Although Loper Bright and Trump v. Slaughter are often discussed separately, they address complementary constitutional questions.
Loper Bright asks a fundamental question: Who decides what federal law means?
The Supreme Court answered by rejecting Chevron deference and reaffirming that the judiciary, not administrative agencies, bears the responsibility to interpret statutes enacted by Congress.
Trump v. Slaughter asks a different but equally fundamental question: Who controls the execution of federal law?
There, the court concluded that officials exercising substantial executive authority must remain accountable to the president through the constitutional power of removal, thereby overturning nearly 90 years of precedent associated with the court’s 1935 decision in Humphrey’s Executor v. U.S.
Viewed together, these decisions reaffirm two basic constitutional principles: Courts interpret the law. The executive implements the law.
Administrative agencies continue to play an essential role, but neither the interpretation nor the execution of federal law is insulated from the constitutional structure established by Articles II and III of the U.S. Constitution.
Why This Matters for FERC
While Trump v. Slaughter directly addressed the Federal Trade Commission, its implications extend well beyond that agency.
Like the FTC, FERC promulgates regulations, investigates potential violations, conducts administrative proceedings and enforces federal law. Many of these functions involve the exercise of substantial executive authority.
As a result, regulated industries should expect renewed constitutional scrutiny of both agency structure and agency action.
The questions are no longer limited to whether commissioners may be removed by the president. Courts are increasingly being asked whether constitutional defects in agency structure affect the validity of investigations, enforcement actions and administrative adjudications.
Several recent cases involving the National Labor Relations Board have already raised those questions. Similar constitutional arguments have been made against FERC, including litigation challenging the commission’s authority to conduct investigations under a structure previously insulated from presidential control.
Although courts have not yet resolved all of these issues, the cases demonstrate that Trump v. Slaughter is already influencing litigation strategy well beyond the FTC.
Beyond Chevron
Many observers describe Loper Bright as simply ending Chevron deference. That description understates its importance.
Chevron stood for more than a rule of statutory interpretation. Over time, it allowed agencies substantial latitude to resolve policy questions through interpretations of broadly worded statutes.
Without Chevron, agencies must increasingly persuade courts that Congress delegated the authority they claim to exercise.
When considered alongside Trump v. Slaughter, the constitutional direction becomes clearer: Agencies possess only the authority Congress grants.
Courts determine what Congress granted. The president remains politically accountable for those who exercise executive authority.
That represents a significant reallocation — or, perhaps more accurately, a restoration — of institutional responsibility among the branches of government.
Increased Constitutional Litigation
The next several years are likely to see increased constitutional challenges involving independent agencies.
Litigants may challenge not only specific agency actions but also broader questions involving agency structure, presidential supervision, administrative adjudication and the continued validity of statutory provisions enacted under assumptions that no longer align with current constitutional doctrine.
Questions of severability may also become increasingly important. If one aspect of an agency’s structure is found unconstitutional, courts must determine whether the offending provision can simply be severed, or whether broader portions of the statutory framework are affected.
These issues remain unsettled, but they are no longer theoretical.
Practical Implications for the Energy Industry
Energy companies should anticipate a regulatory environment that grows increasingly dynamic. Among the likely consequences are:
· Greater constitutional challenges to agency action;
· More frequent judicial scrutiny of regulatory authority;
· Faster changes in regulatory priorities following presidential transitions;
· Increased attention to the statutory authority supporting major agency initiatives; and
· Greater uncertainty surrounding long-term permitting, infrastructure development and compliance planning.
At the same time, constitutional accountability does not necessarily entail regulatory instability.
Properly understood, these decisions reinforce the separation of powers by requiring agencies to exercise only the authority Congress has granted while remaining accountable within the constitutional framework.
For regulated companies, that distinction matters. A regulatory system grounded in clearly delegated statutory authority and meaningful political accountability may ultimately provide greater predictability, even if the transition to that system produces significant litigation in the near term.
A New Constitutional Era
Whether Loper Bright and Trump v. Slaughter ultimately reshape FERC’s structure, alter its decision-making processes or primarily redefine the limits of its authority remains to be seen.
What is already clear, however, is that regulated industries are entering a new constitutional era.
For decades, many disputes focused primarily on what agencies could do under broad statutory language. Increasingly, courts will also ask whether agencies are exercising that authority in a manner consistent with the Constitution’s allocation of power among the three branches of government.
The questions facing regulated industries have therefore become both statutory and constitutional.
That constitutional reset reflects concerns that have been building for decades. My Edwards Dam dissent warned that agencies derive their legitimacy from faithfully executing the law enacted by Congress — not from exercising independent political authority. Nearly 30 years later, the Supreme Court has begun to reaffirm those same first principles.
For energy companies, utilities, pipelines, developers, investors and other regulated entities, understanding this constitutional realignment may prove as important as understanding the next regulation issued by FERC.
Reprinted with permission from Law360.