Cite as: 535 U. S. 1 (2002)
Opinion of the Court
Rather than grounding its legal authority in Congress' more recent electricity legislation, FERC cited §§ 205-206 of the 1935 FPA—the provisions concerning FERC's power to remedy unduly discriminatory practices—as providing the authority for its rulemaking. See 16 U. S. C. §§ 824d- 824e.
In 1996, after receiving comments on the NPRM, FERC issued Order No. 888. It found that electric utilities were discriminating in the "bulk power markets," in violation of § 205 of the FPA, by providing either inferior access to their transmission networks or no access at all to third-party wholesalers of power. Order No. 888, at 31,682-31,684. Invoking its authority under § 206, it prescribed a remedy containing three parts that are presently relevant.
First, FERC ordered "functional unbundling" of wholesale generation and transmission services. Id., at 31,654. FERC defined "functional unbundling" as requiring each utility to state separate rates for its wholesale generation, transmission, and ancillary services, and to take transmission of its own wholesale sales and purchases under a single general tariff applicable equally to itself and to others.
Second, FERC imposed a similar open access requirement on unbundled retail transmissions in interstate commerce. Although the NPRM had not envisioned applying the open access requirements to retail transmissions, but rather "would have limited eligibility to wholesale transmission customers," FERC ultimately concluded that it was "irrelevant to the Commission's jurisdiction whether the customer receiving the unbundled transmission service in interstate commerce is a wholesale or retail customer." Id., at 31,689. Thus, "if a public utility voluntarily offers unbundled retail access," or if a State requires unbundled retail access, "the affected retail customer must obtain its unbundled transmis-
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