Transource Pa., LLC v. Defrank, 2025 U.S. App. LEXIS 22972 (September 5, 2025) McKee, J.
Before: SHWARTZ, MATEY, and McKEE, Circuit Judges.
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.
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.
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.
• Reaffirm the district court’s order.
• The Third Circuit holds that the PUC’s actions clearly violate the Supremacy Clause.
• The court therefore does not reach the dormant Commerce Clause.
• PEU denied Transource application to build a electricity-transmission line in Pennsylvania.
• Transource’s applications were part of a project selected through a federal process aimed in identifying and relieving regional congestion.
• PEU order was invalid on the Supremacy Clause of the U.S. Constitution because it posed obstacles to federal objectives.
