Justice BREYERdelivered the opinion of the Court.

In this case, a group of manufacturers, hospitals, and other institutions that buy natural gas directly from interstate pipelines sued the pipelines, claiming that they engaged in behavior that violated state antitrust laws. The pipelines' behavior affected bothfederally regulated wholesale natural-gas prices andnonfederally regulated retailnatural-gas prices. The question is whether the federal Natural Gas Act pre-empts these lawsuits. We have said that, in passing the Act, "Congress occupied the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce." Schneidewind v. ANR Pipeline Co.,485 U.S. 293, 305, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988). Nevertheless, for the reasons given below, we conclude that the Act does not pre-empt the state-law antitrust suits at issue here.

I

A

The Supremacy Clause provides that "the Laws of the United States" (as well as treaties and the Constitution itself) "shall be the supreme Law of the Land *1595... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." Art. VI, cl. 2. Congress may consequently pre-empt, i.e.,invalidate, a state law through federal legislation. It may do so through express language in a statute. But even where, as here, a statute does not refer expressly to pre-emption, Congress may implicitly pre-empt a state law, rule, or other state action. See Sprietsma v. Mercury Marine,537 U.S. 51, 64, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002).

It may do so either through "field" pre-emption or "conflict" pre-emption. As to the former, Congress may have intended "to foreclose any state regulation in the area," irrespective of whether state law is consistent or inconsistent with "federal standards." Arizona v. United States,567 U.S. ----, ----, 132 S.Ct. 2492, 2502, 183 L.Ed.2d 351 (2012)(emphasis added). In such situations, Congress has forbidden the State to take action in the fieldthat the federal statute pre-empts.

By contrast, conflict pre-emption 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.' " California v. ARC America Corp.,490 U.S. 93, 100, 101, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989). In either situation, federal law must prevail.

No one here claims that any relevant federal statute expressly pre-empts state antitrust lawsuits. Nor have the parties argued at any length that these state suits conflict with federal law. Rather, the interstate pipeline companies (petitioners here) argue that Congress implicitly " 'occupied the field of mattersrelating to wholesale sales and transportation of natural gas in interstate commerce.' " Brief for Petitioners 18 (quoting Schneidewind, supra,at 305, 108 S.Ct. 1145(emphasis added)). And they contend that the state antitrust claims advanced by their direct-sales customers (respondents here) fall within that field. The United States, supporting the pipelines, argues similarly. See Brief for United States as Amicus Curiae15. Since the parties have argued this case almost exclusively in terms of field pre-emption, we consider only the field pre-emption question.

B

1

Federal regulation of the natural-gas industry began at a time when the industry was divided into three segments. See 1 Regulation of the Natural Gas Industry § 1.01 (W. Mogel ed. 2008) (hereinafter Mogel); General Motors Corp. v. Tracy,519 U.S. 278, 283, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997). First, natural-gas producers sunk wells in large oil and gas fields (such as the Permian Basin in Texas and New Mexico). They gathered the gas, brought it to transportation points, and left it to interstate gas pipelines to transport the gas to distant markets. Second, interstate pipelines shipped the gas from the field to cities and towns across the Nation. Third, local gas distributors bought the gas from the interstate pipelines and resold it to business and residential customers within their localities.

Originally, the States regulated all three segments of the industry. See 1 Mogel § 1.03. But in the early 20th century, this Court held that the Commerce Clause forbids the States to regulate the second part of the business-i.e.,the interstate shipment and sale of gas to local distributors for resale. See, e.g.,Public Util. Comm'n of R.I. v. Attleboro Steam & Elec. Co.,273 U.S. 83, 89-90, 47 S.Ct. 294, 71 L.Ed. 549 (1927);

*1596Missouri ex rel. Barrett v. Kansas Natural Gas Co.,265 U.S. 298, 307-308, 44 S.Ct. 544, 68 L.Ed. 1027 (1924). These holdings left a regulatory gap. Congress enacted the Natural Gas Act, 52 Stat. 821, to fill it. See Phillips Petroleum Co. v. Wisconsin,347 U.S. 672, 682-684, n. 13, 74 S.Ct. 794, 98 L.Ed. 1035 (1954)(citing H.R.Rep. No. 709, 75th Cong., 1st Sess., 1-2 (1937); S.Rep. No. 1162, 75th Cong., 1st Sess., 1-2 (1937)).

The Act, in § 5(a), gives rate-setting authority to the Federal Energy Regulatory Commission (FERC, formerly the Federal Power Commission (FPC)). That authority allows FERC to determine whether "any rate, charge, or classification ... collected by any natural-gas company in connection with any transportation or sale of natural gas, subject to the jurisdiction of [FERC]," or "any rule, regulation, practice, or contract affecting suchrate, charge, or classification is unjust, unreasonable, unduly discriminatory, or preferential." 15 U.S.C. § 717d(a)(emphasis added). As the italicized words make clear, § 5(a) limits the scope of FERC's authority to activities "in connection with any transportation or sale of natural gas, subject to the jurisdiction of the Commission." Ibid. (emphasis added). And the Act, in § 1(b), limits FERC's "jurisdiction" to (1) "the transportation of natural gas in interstate commerce," (2) "the sale in interstate commerce of natural gas for resale," and (3) "natural-gas companies engaged in such transportation or sale." § 717(b). The Act leaves regulation of other portions of the industry-such as production, local distribution facilities, and direct sales-to the States. See Northwest Central Pipeline Corp. v. State Corporation Comm'n of Kan.,489 U.S. 493, 507, 109 S.Ct. 1262, 103 L.Ed.2d 509 (1989)(Section 1(b) of the Act "expressly" provides that "States retain jurisdiction over intrastatetransportation, local distribution, and distribution facilities, and over 'the production or gathering of natural gas' ").

To simplify our discussion, we shall describe the firms that engage in interstate transportation as "jurisdictional sellers" or "interstate pipelines" (though various brokers and others may also fall within the Act's jurisdictional scope). Similarly, we shall refer to the sales over which FERC has jurisdiction as "jurisdictional sales" or "wholesale sales."

2

Until the 1970's, natural-gas regulation roughly tracked the industry model we described above. Interstate pipelines would typically buy gas from field producers and resell it to local distribution companies for resale. See Tracy, supra,at 283, 117 S.Ct. 811. FERC (or FPC), acting under the authority of the Natural Gas Act, would set interstate pipeline wholesale rates using classical "cost-of-service" ratemaking methods. See Public Serv. Comm'n of N.Y. v. Mid-Louisiana Gas Co.,463 U.S. 319, 328, 103 S.Ct. 3024, 77 L.Ed.2d 668 (1983). That is, FERC would determine a pipeline's revenue requirement by calculating the costs of providing its services, including operating and maintenance expenses, depreciation expenses, taxes, and a reasonable profit. See FERC, Cost-of-Service Rates Manual 6 (June 1999). FERC would then set wholesale rates at a level designed to meet the pipeline's revenue requirement.

Deregulation of the natural-gas industry, however, brought about changes in FERC's approach. In the 1950's, this Court had held that the Natural Gas Act required regulation of prices at the interstate pipelines' buying end-i.e., the prices at which field producers sold natural gas to interstate pipelines. Phillips Petroleum Co., supra,at 682, 685, 74 S.Ct. 794. By the 1970's, many in Congress thought that such efforts to regulate field prices *1597had jeopardized natural-gas supplies in an industry already dependent "on the caprice of nature." FPC v. Hope Natural Gas Co.,320 U.S. 591, 630, 64 S.Ct. 281, 88 L.Ed. 333 (1944)(opinion of Jackson, J.); see id.,at 629, 64 S.Ct. 281(recognizing that "the wealth of Midas and the wit of man cannot produce ... a natural gas field"). Hoping to avoid future shortages, Congress enacted forms of field price deregulation designed to rely upon competition, rather than regulation, to keep field prices low. See, e.g.,Natural Gas Policy Act of 1978, 92 Stat. 3409, codified in part at 15 U.S.C. § 3301 et seq.(phasing out regulation of wellhead prices charged by producers of natural gas); Natural Gas Wellhead Decontrol Act of 1989, 103 Stat. 157 (removing price controls on wellhead sales as of January 1993).

FERC promulgated new regulations designed to further this process of deregulation. See, e.g., Regulation of Natural Gas Pipelines after Partial Wellhead Decontrol, 50 Fed.Reg. 42408 (1985)(allowing "open access" to pipelines so that consumers could pay to ship their own gas). Most important here, FERC adopted an approach that relied on the competitive marketplace, rather than classical regulatory rate-setting, as the main mechanism for keeping wholesalenatural-gas rates at a reasonable level. Order No. 636, issued in 1992, allowed FERC to issue blanket certificates that permitted jurisdictional sellers (typically interstate pipelines) to charge market-based rates for gas, provided that FERC had first determined that the sellers lacked market power. See 57 Fed.Reg. 57957-57958 (1992); id.,at 13270.

After the issuance of this order, FERC's oversight of the natural-gas market largely consisted of (1) ex ante examinations of jurisdictional sellers' market power, and (2) the availability of a complaint process under § 717d(a). See Brief for United States as Amicus Curiae4. The new system also led many large gas consumers-such as industrial and commercial users-to buy their own gas directly from gas producers, and to arrange (and often pay separately) for transportation from the field to the place of consumption. See Tracy,519 U.S., at 284, 117 S.Ct. 811. Insofar as interstate pipelines sold gas to such consumers, they sold it for direct consumption rather than resale.

3

The free-market system for setting interstate pipeline rates turned out to be less than perfect. Interstate pipelines, distributing companies, and many of the customers who bought directly from the pipelines found that they had to rely on privately published price indices to determine appropriate prices for their natural-gas contracts. These indices listed the prices at which natural gas was being sold in different (presumably competitive) markets across the country. The information on which these indices were based was voluntarily reported by natural-gas traders.

In 2003, FERC found that the indices were inaccurate, in part because much of the information that natural-gas traders reported had been false. See FERC, Final Report on Price Manipulation in Western Markets (Mar. 2003), App. 88-89. FERC found that false reporting had involved "inflating the volume of trades, omitting trades, and adjusting the price of trades." Id.,at 88. That is, sometimes those who reported information simply fabricated it. Other times, the information reported reflected "wash trades," i.e.,"prearranged pair[s] of trades of the same good between the same parties, involving no economic risk and no net change in beneficial ownership." Id.,at 215. FERC concluded that these "efforts to manipulate *1598price indices compiled by trade publications" had helped raise "to extraordinary levels" the prices of both jurisdictional sales (that is, interstate pipeline sales for resale) and nonjurisdictional direct sales to ultimate consumers. Id.,at 86, 85.

After issuing its final report on price manipulation in western markets, FERC issued a Code of Conduct. That code amended all blanket certificates to prohibit jurisdictional sellers "from engaging in actions without a legitimate business purpose that manipulate or attempt to manipulate market conditions, including wash trades and collusion." 68 Fed.Reg. 66324 (2003). The code also required jurisdictional companies, when they provided information to natural-gas index publishers, to "provide accurate and factual information, and not knowingly submit false or misleading information or omit material information to any such publisher."Id.,at 66337. At the same time, FERC issued a policy statement setting forth "minimum standards for creation and publication of any energy price index," and "for reporting transaction data to index developers." Price Discovery in Natural Gas and Elec. Markets,104 FERC ¶ 61,121, pp. 61,407, 61,408 (2003). Finally, FERC, after finding that certain jurisdictional sellers had "engaged in wash trading ... that resulted in the manipulation of [natural-gas] prices," terminated those sellers' blanket marketing certificates. Enron Power Marketing, Inc.,103 FERC ¶ 61,343, p. 62,303 (2003).

Congress also took steps to address these problems. In particular, it passed the Energy Policy Act of 2005, 119 Stat. 594, which gives FERC the authority to issue rules and regulations to prevent "any manipulative or deceptive device or contrivance" by "any entity ... in connection with the purchase or sale of natural gas or the purchase or sale of transportation services subject to the jurisdiction of" FERC, 15 U.S.C. § 717c-1.

C

We now turn to the cases before us. Respondents, as we have said, bought large quantities of natural gas directly from interstate pipelines for their own consumption. They believe that they overpaid in these transactions due to the interstate pipelines' manipulation of the natural-gas indices. Based on this belief, they filed state-law antitrust suits against petitioners in state and federal courts. See App. 244-246 (alleging violations of Wis. Stat. §§ 133.03, 133.14, 133.18); see also App. 430-433 (same); id.,at 519-521 (same); id.,at 362-364 (alleging violations of Kansas Restraint of Trade Act, Kan. Stat. Ann. § 50-101 et seq.); App. 417-419 (alleging violations of Missouri Antitrust Law, Mo.Rev.Stat. §§ 416.011-416.161). The pipelines removed all the state cases to federal court, where they were consolidated and sent for pretrial proceedings to the Federal District Court for the District of Nevada. See 28 U.S.C. § 1407.

The pipelines then moved for summary judgment on the ground that the Natural Gas Act pre-empted respondents' state-law antitrust claims. The District Court granted their motion. It concluded that the pipelines were "jurisdictional sellers," i.e.,"natural gas companies engaged in" the "transportation of natural gas in interstate commerce." Order in No. 03-cv-1431 (D Nev., July 18, 2011), pp. 4, 11. And it held that respondents' claims, which were "aimed at" these sellers' "alleged practices of false price reporting, wash trades, and anticompetitive collusive behavior" were pre-empted because "such practices," not only affected nonjurisdictional direct-sale prices but also "directly affect[ed]" jurisdictional (i.e.,wholesale) rates. Id.,at 36-37.

*1599The Ninth Circuit reversed. It emphasized that the price-manipulation of which respondents complained affected not only jurisdictional (i.e.,wholesale) sales, but also nonjurisdictional (i.e.,retail) sales. The court construed the Natural Gas Act's pre-emptive scope narrowly in light of Congress' intent-manifested in § 1(b) of the Act-to preserve for the States the authority to regulate nonjurisdictional sales.And it held that the Act did not pre-empt state-law claims aimed at obtaining damages for excessively high retail natural-gas prices stemming from interstate pipelines' price manipulation, even if the manipulation raised wholesalerates as well. See In re Western States Wholesale Natural Gas Antitrust Litigation,715 F.3d 716, 729-736 (2013).

The pipelines sought certiorari. They asked us to resolve confusion in the lower courts as to whether the Natural Gas Act pre-empts retail customers' state antitrust law challenges to practices that also affect wholesale rates. Compare id.,at 729-736, with Leggett v. Duke Energy Corp.,308 S.W.3d 843 (Tenn.2010). We granted the petition.

II

Petitioners, supported by the United States, argue that their customers' state antitrust lawsuits are within the field that the Natural Gas Act pre-empts. See Brief for Petitioners 18 (citing Schneidewind,485 U.S., at 305, 108 S.Ct. 1145); Brief for United States as Amicus Curiae13 (same). They point out that respondents' antitrust claims target anticompetitive activities that affected wholesale (as well as retail) rates. See Brief for Petitioners 2. They add that the Natural Gas Act expressly grants FERC authority to keep wholesale rates at reasonable levels. See ibid. (citing 15 U.S.C. §§ 717(b), 717d(a)). In exercising this authority, FERC has prohibited the very kind of anticompetitive conduct that the state actions attack. See Part I-B-3, supra.And, petitioners contend, letting these actions proceed will permit state antitrust courts to reach conclusions about that conduct that differ from those that FERC might reach or has already reached. Accordingly, petitioners argue, respondents' state-law antitrust suits fall within the pre-empted field.

A

Petitioners' arguments are forceful, but we cannot accept their conclusion. As we have repeatedly stressed, the Natural Gas Act "was drawn with meticulous regard for the continued exercise of state power, not to handicap or dilute it in any way." Panhandle Eastern Pipe Line Co. v. Public Serv. Comm'n of Ind.,332 U.S. 507, 517-518, 68 S.Ct. 190, 92 L.Ed. 128 (1947); see also Northwest Central,489 U.S., at 511, 109 S.Ct. 1262(the "legislative history of the [Act] is replete with assurances that the Act 'takes nothing from the State [regulatory] commissions' " (quoting 81 Cong. Rec. 6721 (1937))). Accordingly, where (as here) a state law can be applied to nonjurisdictional as well as jurisdictional sales, we must proceed cautiously, finding pre-emption only where detailed examination convinces us that a matter falls within the pre-empted field as defined by our precedents. See Panhandle Eastern, supra,at 516-518, 68 S.Ct. 190; Interstate Natural Gas Co. v. FPC,331 U.S. 682, 689-693, 67 S.Ct. 1482, 91 L.Ed. 1742 (1947).

Those precedents emphasize the importance of considering the targetat which the state law aimsin determining whether that law is pre-empted. For example, in Northern Natural Gas Co. v. State Corporation Comm'n of Kan.,372 U.S. 84, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963), the Court said that it had "consistently recognized"

*1600that the "significant distinction" for purposes of pre-emption in the natural-gas context is the distinction between "measures aimed directly atinterstate purchasers and wholesales for resale, and those aimed at" subjects left to the States to regulate. Id.,at 94, 83 S.Ct. 646(emphasis added). And, in Northwest Central,the Court found that the Natural Gas Act did not pre-empt a state regulation concerning the timing of gas production from a gas field within the State, even though the regulation might have affected the costs of and the prices of interstate wholesale sales, i.e.,jurisdictional sales. 489 U.S., at 514, 109 S.Ct. 1262. In reaching this conclusion, the Court explained that the state regulation aimed primarily at "protect[ing] producers' ... rights-a matter firmly on the States' side of that dividing line." Ibid.The Court contrasted this state regulation with the state orders at issue in Northern Natural,which " 'invalidly invade[d] the federal agency's exclusive domain' precisely because" they were " 'unmistakably and unambiguously directed at purchasers.' " Id.,at 513, 109 S.Ct. 1262(quoting Northern Natural, supra,at 92, 83 S.Ct. 646; emphasis added). Here, too, the lawsuits are directed at practices affecting retailrates-which are "firmly on the States' side of that dividing line."

Petitioners argue that Schneidewindconstitutes contrary authority. In that case, the Court found pre-empted a state law that required public utilities, such as interstate pipelines crossing the State, to obtain state approval before issuing long-term securities. 485 U.S., at 306-309, 108 S.Ct. 1145. But the Court there thought that the State's securities regulation was aimed directly at interstate pipelines. It wrote that the state law was designed to keep "a natural gas company from raising its equity levels above a certain point" in order to keep the company's revenue requirement low, thereby ensuring lower wholesale rates. Id.,at 307-308, 108 S.Ct. 1145. Indeed, the Court expressly said that the state law was pre-empted because it was "directed at ... the control of rates and facilities of natural gas companies," "precisely the things over which FERC has comprehensive authority." Id.,at 308, 108 S.Ct. 1145(emphasis added).

The dissent rejects the notion that the proper test for purposes of pre-emption in the natural gas context is whether the challenged measures are "aimed directly at interstate purchasers and wholesales for resale" or not. Northern Natural, supra,at 94, 83 S.Ct. 646. It argues that this approach is "unprecedented," and that the Court's focus should be on "whatthe State seeks to regulate ..., not whythe State seeks to regulate it." Post, at 1606 (opinion of SCALIA, J.). But the "target" to which our cases refer must mean more than just the physical activity that a State regulates. After all, a single physical action, such as reporting a price to a specialized journal, could be the subject of many different laws-including tax laws, disclosure laws, and others. To repeat the point we made above, no one could claim that FERC's regulation of this physical activity for purposes of wholesale rates forecloses every other form of state regulation that affects those rates.

Indeed, although the dissent argues that Schneidewindcreated a definitive test for pre-emption in the natural gas context that turns on whether "the matter on which the State asserts the right to act is in any way regulated by the Federal Act," post, at 1604 (quoting 485 U.S., at 310, n. 13, 108 S.Ct. 1145), Schneidewindcould not mean this statement as an absolute test. It goes on to explain that the Natural Gas Act does not pre-empt "traditional" state regulation, such as state blue sky laws (which, of course, raise wholesale-as well as retail *1601-investment costs). Id.,at 308, n. 11, 108 S.Ct. 1145.

Antitrust laws, like blue sky laws, are not aimed at natural-gas companies in particular, but rather all businesses in the marketplace. See ibid.They are far broader in their application than, for example, the regulations at issue in Northern Natural,which applied only to entities buying gas from fields within the State. See 372 U.S., at 85-86, n. 1, 83 S.Ct. 646; contra, post, at 1605 - 1606 (stating that Northern Naturalconcerned "background market conditions"). This broad applicability of state antitrust law supports a finding of no pre-emption here.

Petitioners and the dissent argue that there is, or should be, a clear division between areas of state and federal authority in natural-gas regulation. See Brief for Petitioners 18; post,at 1606. But that Platonic ideal does not describe the natural gas regulatory world. Suppose FERC, when setting wholesale rates in the former cost-of-service rate-making days, had denied cost recovery for pipelines' failure to recycle. Would that fact deny States the power to enact and apply recycling laws? These state laws might well raise pipelines' operating costs, and thus the costs of wholesale natural gas transportation. But in Northwest Centralwe said that "[t]o find field pre-emption of [state] regulation merely because purchasers' costs and hence rates might be affected would be largely to ify ... § 1(b)." 489 U.S., at 514, 109 S.Ct. 1262.

The dissent barely mentions the limitations on FERC's powers in § 1(b), but the enumeration of FERC's powers in § 5(a) is circumscribed by a reference back to the limitations in § 1(b). See post, at 1603 - 1605. As we explained above, see Part I-B-1, supra,those limits are key to understanding the careful balance between federal and state regulation that Congress struck when it passed the Natural Gas Act. That Act "was drawn with meticulous regard for the continued exercise of state power, not to handicap or dilute it in any way." Panhandle Eastern,332 U.S., at 517-518, 68 S.Ct. 190. Contra, post,at 1607. States have a "long history of" providing "common-law and statutory remedies against monopolies and unfair business practices." ARC America,490 U.S., at 101, 109 S.Ct. 1661; see also Watson v. Buck,313 U.S. 387, 404, 61 S.Ct. 962, 85 L.Ed. 1416 (1941)(noting the States' "long-recognized power to regulate combinations in restraint of trade"). Respondents' state-law antitrust suits relied on this well established state power.

B

Petitioners point to two other cases that they believe support their position. The first is Mississippi Power & Light Co. v. Mississippi ex rel. Moore,487 U.S. 354, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988). There, the Court held that the Federal Power Act-which gives FERC the authority to determine whether rates charged by public utilities in electric energy sales are "just and reasonable," 16 U.S.C. § 824d(a)-pre-empted a state inquiry into the reasonableness of FERC-approved prices for the sale of nuclear power to wholesalers of electricity (which led to higher retail electricity rates). 487 U.S., at 373-377, 108 S.Ct. 2428. Petitioners argue that this case shows that state regulation of similar sales here-i.e.,by a pipeline to a direct consumer-must also be pre-empted. See Reply Brief 11-12. Mississippi Power,however, is best read as a conflict pre-emption case, not a field pre-emption case. See 487 U.S., at 377, 108 S.Ct. 2428("[A] state agency's 'efforts to regulate commerce must fall when they conflict with or interfere with federal authority over the same activity' " (quoting *1602Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co.,450 U.S. 311, 318-319, 101 S.Ct. 1124, 67 L.Ed.2d 258 (1981))).

Regardless, the state inquiry in Mississippi Powerwas pre-empted because it was directed at jurisdictional sales in a way that respondents' state antitrust lawsuits are not. Mississippi's inquiry into the reasonableness of FERC-approved purchases was effectively an attempt to "regulate in areas where FERC has properly exercised its jurisdiction to determine just and reasonable wholesale rates." 487 U.S., at 374, 108 S.Ct. 2428. By contrast, respondents' state antitrust lawsuits do not seek to challenge the reasonableness of any rates expressly approved by FERC. Rather, they seek to challenge the background marketplace conditions that affected both jurisdictional and nonjurisdictional rates.

Petitioners additionally point to FPC v. Louisiana Power & Light Co.,406 U.S. 621, 92 S.Ct. 1827, 32 L.Ed.2d 369 (1972). In that case, the Court held that federal law gave FPC the authority to allocate natural gas during shortages by ordering interstate pipelines to curtail gas deliveries to all customers, including retail customers.This latter fact, the pipelines argue, shows that FERC has authority to regulate index manipulation insofar as that manipulation affects retail (as well as wholesale) sales. Brief for Petitioners 26. Accordingly, they contend that state laws that aim at this same subject are pre-empted.

This argument, however, makes too much of too little. The Court's finding of pre-emption in Louisiana Powerrested on its belief that the state laws in question conflicted with federal law. The Court concluded that "FPC has authority to effect orderly curtailment plans involving both direct sales and sales for resale," 406 U.S., at 631, 92 S.Ct. 1827because otherwise there would be "unavoidable conflict between" state regulation of direct sales and the "uniform federal regulation" that the Natural Gas Act foresees, id.,at 633-635, 92 S.Ct. 1827. Conflict pre-emption may, of course, invalidate a state law even though field pre-emption does not. Because petitioners have not argued this case as a conflict pre-emption case, Louisiana Powerdoes not offer them significant help.

C

To the extent any conflicts arise between state antitrust law proceedings and the federal rate-setting process, the doctrine of conflict pre-emption should prove sufficient to address them. But as we have noted, see Part I-A, supra,the parties have not argued conflict pre-emption. See also, e.g., Tr. of Oral Arg. 24 (Solicitor General agrees that he has not "analyzed this [case] under a conflict preemption regime"). We consequently leave conflict pre-emption questions for the lower courts to resolve in the first instance.

D

We note that petitioners and the Solicitor General have argued that we should defer to FERC's determination that field pre-emption bars the respondents' claims. See Brief for Petitioners 22 (citing Arlington v. FCC,569 U.S. ----, ---- - ----, 133 S.Ct. 1863, 1871-1873, --- L.Ed.2d ---- (2013)); Brief for United States as Amicus Curiae32 (same). But they have not pointed to a specific FERC determination that state antitrust claims fall within the field pre-empted by the Natural Gas Act. Rather, they point only to the fact that FERC has promulgated detailed rules governing manipulation of price indices. Because there is no determination by FERC that its regulation pre-empts the field into which respondents' state-law antitrust *1603suits fall, we need not consider what legal effect such a determination might have. And we conclude that the detailed federal regulations here do not offset the other considerations that weigh against a finding of pre-emption in this context.

* * *

For these reasons, the judgment of the Court of Appeals for the Ninth Circuit is affirmed.

It is so ordered.

Justice THOMAS, concurring in part and concurring in the judgment.

I agree with much of the majority's application of our precedents governing pre-emption under the Natural Gas Act. I write separately to reiterate my view that "implied pre-emption doctrines that wander far from the statutory text are inconsistent with the Constitution." Wyeth v. Levine,555 U.S. 555, 583, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009)(THOMAS, J., concurring in judgment). The Supremacy Clause of our Constitution "gives 'supreme' status only to those [federal laws] that are 'made in Pursuance' " of it. Id.,at 585, 129 S.Ct. 1187 (quoting Art. VI, cl. 2). And to be "made in Pursuance" of the Constitution, a law must fall within one of Congress' enumerated powers and be promulgated in accordance with the lawmaking procedures set forth in that document. Id.,at 585-586, 129 S.Ct. 1187. "The Supremacy Clause thus requires that pre-emptive effect be given only to those federal standards and policies that are set forth in, or necessarily follow from, the statutory text that was produced through the constitutionally required bicameral and presentment procedures." Id.,at 586, 129 S.Ct. 1187.

In light of this constitutional requirement, I have doubts about the legitimacy of this Court's precedents concerning the pre-emptive scope of the Natural Gas Act, see, e.g.,Northern Natural Gas Co. v. State Corporation Comm'n of Kan.,372 U.S. 84, 91-92, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963)(defining the pre-empted field in light of the "objective[s]" of the Act). Neither party, however, has asked us to overrule these longstanding precedents or "to overcome the presumption of stare decisisthat attaches to" them. Kurns v. Railroad Friction Products Corp.,565 U.S. ----, ----, 132 S.Ct. 1261, 1267, --- L.Ed.2d ---- (2012). And even under these precedents, the challenged state antitrust laws fall outside the pre-empted field. Because the Court today avoids extending its earlier questionable precedents, I concur in its judgment and join all but Part I-A of its opinion.

Justice SCALIA, with whom THE CHIEF JUSTICE joins, dissenting.

The Natural Gas Act divides responsibility over trade in natural gas between federal and state regulators. The Act and our cases interpreting it draw a firm line between national and local authority over this trade: If the Federal Government may regulate a subject, the States may not. Today the Court smudges this line. It holds that States may use their antitrust laws to regulate practices already regulated by the Federal Energy Regulatory Commission whenever "other considerations ... weigh against a finding of pre-emption." Ante,at 1603. The Court's make-it-up-as-you-go-along approach to preemption has no basis in the Act, contradicts our cases, and will prove unworkable in practice.

I

Trade in natural gas consists of three parts. A drilling company collects gas from the earth; a pipeline company then carries the gas to its destination and sells *1604it at wholesale to a local distributor; and the local distributor sells the gas at retail to industries and households. See ante,at 1595. The Natural Gas Act empowers the Commission to regulate the middle of this three-leg journey-interstate transportation and wholesale sales. 15 U.S.C. § 717 et seq.But it does not empower the Commission to regulate the opening and closing phases-production at one end, retail sales at the other-thus leaving those matters to the States. § 717(b). (Like the Court, I will for simplicity's sake call the sales controlled by the Commission wholesale sales, and the companies controlled by the Commission pipelines. See ante,at 1596.)

Over 70 years ago, the Court concluded that the Act confers "exclusive jurisdiction upon the federal regulatory agency." Public Util. Comm'n of Ohio v. United Fuel Gas Co.,317 U.S. 456, 469, 63 S.Ct. 369, 87 L.Ed. 396 (1943). The Court thought it "clear" that the Act contemplates "a harmonious, dual system of regulation of the natural gas industry-federal and state regulatory bodies operating side by side, each active in its own sphere," "without any confusion of functions." Id.,at 467, 63 S.Ct. 369. The Court drew this inference from the law's purpose and legislative history, though it could just as easily have relied on the law's terms and structure. The Act grants the Commission a wide range of powers over wholesale sales and transportation, but qualifies only some of these powers with reservations of state authority over the same subject. See § 717g(a) (concurrent authority over recordkeeping); § 717h(a) (concurrent authority over depreciation and amortization rates). Congress's decision to include express reservations of state power alongside these grants of authority, but to omit them alongside other grants of authority, suggests that the other grants are exclusive. Right or wrong, in any event, our inference of exclusivity is now settled beyond debate.

United Fuelrejected a State's regulation of wholesale rates. Id.,at 468, 63 S.Ct. 369. But our later holdings establish that the Act makes exclusive the Commission's powers in general, not just its rate-setting power in particular. We have again and again set aside state laws-even those that do not purport to fix wholesale rates-for regulating a matter already subject to regulation by the Commission. See, e.g.,Northern Natural Gas Co. v. State Corporation Comm'n of Kan.,372 U.S. 84, 89, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963)(state regulation of pipelines' gas purchases preempted because it "invade[s] the exclusive jurisdiction which the Natural Gas Act has conferred upon the [Commission]"); Exxon Corp. v. Eagerton,462 U.S. 176, 185, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983)(state law prohibiting producers from passing on production taxes preempted because it "trespasse[s] upon FERC's authority"); Schneidewind v. ANR Pipeline Co.,485 U.S. 293, 309, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988)(state securities regulation directly affecting wholesale rates and gas transportation facilities preempted because it regulates "matters that Congress intended FERC to regulate"). The test for preemption in this setting, the Court has confirmed, " 'is whether the matter on which the State asserts the right to act is in any way regulated by the Federal Act.' " Id.,at 310, n. 13, 108 S.Ct. 1145.

Straightforward application of these precedents would make short work of the case at hand. The Natural Gas Act empowers the Commission to regulate "practice[s] ... affecting [wholesale] rate[s]." § 717d. Nothing in the Act suggests that the States share power to regulate these practices. The Commission has reasonably determined that this power allows it *1605to regulate the behavior involved in this case, pipelines' use of sham trades and false reports to manipulate gas price indices. Because the Commission's exclusive authority extends to the conduct challenged here, state antitrust regulation of that conduct is preempted.

II

The Court agrees that the Commission may regulate index manipulation, but upholds state antitrust regulation of this practice anyway on account of "other considerations that weigh against a finding of pre-emption in this context."Ante,at 1603. That is an unprecedented decision. The Court does not identify a single case-not one-in which we have sustained state regulation of behavior already regulated by the Commission. The Court's justifications for its novel approach do not persuade.

A

The Court begins by considering "the targetat which the state law aims." Ante,at 1599. It reasons that because this case involves a practice that affects both wholesale and retail rates, the Act tolerates state regulation that takes aim at the practice's retail-stage effects. Ibid.

This analysis misunderstands how the Natural Gas Act divides responsibilities between national and local regulators. The Act does not give the Commission the power to aim at particular effects; it gives it the power to regulate particular activities. When the Commission regulates those activities, it may consider their effects on allparts of the gas trade, not just on wholesale sales. It may, for example, set wholesale rates with the aim of encouraging producers to conserve gas supplies-even though production is a state-regulated activity. See Colorado Interstate Gas Co. v. FPC,324 U.S. 581, 602-603, 65 S.Ct. 829, 89 L.Ed. 1206 (1945); id.,at 609-610, 65 S.Ct. 829(Jackson, J., concurring). Or it may regulate wholesale sales with an eye toward blunting the sales' anticompetitive effects in the retail market-even though retail prices are controlled by the States. See FPC v. Conway Corp.,426 U.S. 271, 276-280, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976). The Court's ad hoc partition of authority over index manipulation-leaving it to the Commission to control the practice's consequences for wholesale sales, but allowing the States to target its consequences for retail sales-thus clashes with the design of the Act.

To justify its fixation on aims, the Court stresses that this case involves regulation of "background marketplace conditions" rather than regulation of wholesale rates or sales themselves. Ante,at 1602. But the Natural Gas Act empowers the Commission to regulate wholesale rates and"background" practices affecting such rates. It grants both powers in the same clause: "Whenever the Commission ... find[s] that a [wholesale] rate, charge, or classification ... [or] any rule, regulation, practice,or contract affecting such rate, charge, or classification is unjust [or] unreasonable, ... the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice,or contract to be thereafter observed." § 717d(a)(emphasis added). Nothing in this provision, and for that matter nothing in the Act, suggests that federal authority over practices is a second-class power, somehow less exclusive than the authority over rates.

The Court persists that the background conditions in this case affect bothwholesale and retail sales. Ante,at 1599. This observation adds atmosphere, but nothing more. The Court concedes that index manipulation's dual effect does not weaken the Commission's power to regulate it.

*1606Ante,at 1599. So too should the Court have seen that this simultaneous effect does not strengthen the claims of the States. It is not at all unusual for an activity controlled by the Commission to have effects in the States' field; production, wholesale, and retail are after all interdependent stages of a single trade. We have never suggested that the rules of field preemption change in such situations. For example, producers' ability to pass production taxes on to pipelines no doubt affects both producers and pipelines. Yet we had no trouble concluding that a state law restricting producers' ability to pass these taxes impermissibly attempted to manage "a matter within the sphere of FERC's regulatory authority." Exxon, supra,at 185-186, 103 S.Ct. 2296.

The Court's approach makes a snarl of our precedents. In Northern Natural,the Court held that the Act preempts state regulations requiring pipelines to buy gas ratably from gas wells. 372 U.S., at 90, 83 S.Ct. 646. The regulations in that case shared each of the principal features emphasized by the Court today. They governed background market conditions, not wholesale prices. Id.,at 90-91, 83 S.Ct. 646. The background conditions in question, pipelines' purchases from gas wells, affected both the federal field of wholesale sales and the state field of gas production. Id.,at 92-93, 83 S.Ct. 646. And the regulations took aim at the purchases' effects on production; they sought to promote conservation of natural resources by limiting how much gas pipelines could take from each well. Id.,at 93, 83 S.Ct. 646. No matter; the Court still concluded that the regulations "invade [d] the federal agency's exclusive domain." Id.,at 92, 83 S.Ct. 646. The factors that made no difference in Northern Naturalshould make no difference today.

Contrast Northern Naturalwith Northwest Central Pipeline Corp. v. State Corporation Comm'n of Kan.,489 U.S. 493, 109 S.Ct. 1262, 103 L.Ed.2d 509 (1989), which involved state regulations that restricted the times when producers could take gas from wells. On this occasion the Court upheld the regulations-not because the law aimed at the objective of gas conservation, but because the State pursued this end by regulating " 'the physical ac[t] of drawing gas from the earth.' " Id.,at 510, 109 S.Ct. 1262. Our precedents demand, in other words, that the Court focus in the present case upon whatthe State seeks to regulate (a pipeline practice that is subject to regulation by the Commission), not whythe State seeks to regulate it (to curb the practice's effects on retail rates).

Trying to turn liabilities into assets, the Court brandishes statements from Northern Naturaland Northwest Centralthat (in its view) discuss where state law was "aimed" or "directed." Ante,at 1600. But read in context, these statements refer to the entity or activity that the state law regulates, not to which of the activity's effects the law seeks to control by regulating it. See, e.g., Northern Natural, supra,at 94, 83 S.Ct. 646("[O]ur cases have consistently recognized a significant distinction ... between conservation measures aimed directly at interstate purchasers and wholesales ..., and those aimed at producers and production"); Northwest Central, supra,at 512, 109 S.Ct. 1262("[This regulation] is directed to the behavior of gas producers"). The lawsuits at hand target pipelines (entities regulated by the Commission) for their manipulation of indices (behavior regulated by the Commission). That should have sufficed to establish preemption.

B

The Court also tallies several features of state antitrust law that, it believes, weigh *1607against preemption. Ante,at 1601. Once again the Court seems to have forgotten its precedents. We have said before that " 'Congress meant to draw a bright line easily ascertained, between state and federal jurisdiction' " over the gas trade. Nantahala Power & Light Co. v. Thornburg,476 U.S. 953, 966, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986)(quoting FPC v. Southern Cal. Edison Co.,376 U.S. 205, 215-216, 84 S.Ct. 644, 11 L.Ed.2d 638 (1964)). Our decisions have therefore " 'squarely rejected' " the theory, endorsed by the Court today, that the boundary between national and local authority turns on " 'a case-by-case analysis of the impact of state regulation upon the national interest.' " Ibid.

State antitrust law, the Court begins, applies to "all businesses in the marketplace" rather than just "natural-gas companies in particular." Ante,at 1601. So what? No principle of our natural-gas preemption jurisprudence distinguishes particularized state laws from state laws of general applicability. We have never suggested, for example, that a State may use general price-gouging laws to fix wholesale rates, or general laws about unfair trade practices to control wholesale contracts, or general common-carrier laws to administer interstate pipelines. The Court in any event could not have chosen a worse setting in which to attempt a distinction between general and particular laws. Like their federal counterpart, state antitrust laws tend to use the rule of reason to judge the lawfulness of challenged practices. Legal Aspects of Buying and Selling § 10:12 (P. Zeidman ed. 2014-2015). This amorphous standard requires the reviewing court to consider "a variety of factors, including specific information about the relevant business, its condition before and after the restraint was imposed, and the restraint's history, nature, and effect." State Oil Co. v. Khan,522 U.S. 3, 10, 118 S.Ct. 275, 139 L.Ed.2d 199 (1997). Far from authorizing across-the-board application of a uniform requirement, therefore, the Court's decision will invite state antitrust courts to engage in targeted regulation of the natural-gas industry.

The Court also stresses the " 'long history' " of state antitrust regulation. Ante,at 1601.Again, quite beside the point. States have long regulated public utilities, yet the Natural Gas Act precludes them from using that established power to fix gas wholesale prices. United Fuel,317 U.S., at 468, 63 S.Ct. 369. States also have long enacted laws to conserve natural resources, yet the Act precludes them from deploying that power to control purchases made by gas pipelines. Northern Natural,372 U.S., at 93-94, 83 S.Ct. 646. The Court's invocation of the pedigree of state antitrust law rests on air.

One need not launch this unbounded inquiry into the features of state law in order to preserve the States' authority to apply "tax laws," "disclosure laws," and "blue sky laws" to natural-gas companies, ante,at 1600. One need only stand by the principle that if the Commission has authority over a subject, the States lack authority over that subject. The Commission's authority to regulate gas pipelines "in the public interest," § 717a, is a power to address matters that are traditionally the concern of utility regulators, not "a broad license to promote the general public welfare," NAACP v. FPC,425 U.S. 662, 669, 96 S.Ct. 1806, 48 L.Ed.2d 284 (1976). We have explained that the Commission does not, for example, have power to superintend "employment discrimination" or "unfair labor practices." Id.,at 670-671, 96 S.Ct. 1806. So the Act does not preempt state employment discrimination or labor laws. But the Commission does have power to consider, say, "conservation, *1608environmental, and antitrustquestions." Id.,at 670, n. 6, 96 S.Ct. 1806(emphasis added). So the Act does preempt state antitrust laws.

C

At bottom, the Court's decision turns on its perception that the Natural Gas Act " 'was drawn with meticulous regard for the continued exercise of state power.' " Ante,at 1599. No doubt the Act protects state authority in a variety of ways. It gives the Commission authority over only some parts of the gas trade. § 717(b). It establishes procedures under which the Commission may consult, collaborate, or share information with States. § 717p. It even provides that the Commission may regulate practices affecting wholesale rates "upon its own motion or upon complaint of any State." § 717d(a)(emphasis added). It should have gone without saying, however, that no law pursues its purposes at all costs. Nothing in the Act and nothing in our cases suggests that Congress protected state power in the way imagined by today's decision: by licensing state sorties into the Commission's domain whenever judges conclude that an incursion would not be too disruptive.

The Court's preoccupation with the purpose of preserving state authority is all the more inexpiable because that is not the Act's only purpose. The Act also has competing purposes, the most important of which is promoting "uniformity of regulation." Northern Natural, supra,at 91, 83 S.Ct. 646. The Court's decision impairs thatobjective. Before today, interstate pipelines knew that their practices relating to price indices had to comply with one set of regulations promulgated by the Commission. From now on, however, pipelines will have to ensure that their behavior conforms to the discordant regulations of 50 States-or more accurately, to the discordant verdicts of untold state antitrust juries. The Court's reassurance that pipelines may still invoke conflict preemption, see ante,at 1602, provides little comfort on this front. Conflict preemption will resolve only discrepancies between state and federal regulations, not the discrepancies among differing state regulations to which today's opinion subjects the industry.

* * *

"The Natural Gas Act was designed ... to produce a harmonious and comprehensive regulation of the industry. Neither state nor federal regulatory body was to encroach upon the jurisdiction of the other." FPC v. Panhandle Eastern Pipe Line Co.,337 U.S. 498, 513, 69 S.Ct. 1251, 93 L.Ed. 1499 (1949)(footnote omitted). Today, however, the Court allows the States to encroach. Worse still, it leaves pipelines guessing about when States will be allowed to encroach again. May States aim at retail rates under laws that share none of the features of antitrust law advertised today? Under laws that share only some of those features? May States apply their antitrust laws to pipelines withoutaiming at retail rates? But that is just the start. Who knows what other "considerations that weigh against a finding of preemption" remain to be unearthed in future cases? The Court's all-things-considered test does not make for a stable background against which to carry on the natural gas trade.

I would stand by the more principled and more workable line traced by our precedents. The Commission may regulate the practices alleged in this case; the States therefore may not. I respectfully dissent.

Justice KAGAN delivered the opinion of the Court.

The Federal Power Act (FPA or Act), 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq., authorizes the Federal Energy Regulatory Commission (FERC or Commission) to regulate "the sale of electric energy at wholesale in interstate commerce," including both wholesale electricity rates and any rule or practice "affecting" such rates. §§ 824(b), 824e(a). But the law places beyond FERC's power, and leaves to the States alone, the regulation of "any other sale"-most notably, any retail sale-of electricity. § 824(b). That statutory division generates a steady flow of jurisdictional disputes because-in point of fact if not of law-the wholesale and retail markets in electricity are inextricably linked.

*767These cases concern a practice called "demand response," in which operators of wholesale markets pay electricity consumers for commitments not to use power at certain times. That practice arose because wholesale market operators can sometimes-say, on a muggy August day-offer electricity both more cheaply and more reliably by paying users to dial down their consumption than by paying power plants to ramp up their production. In the regulation challenged here, FERC required those market operators, in specified circumstances, to compensate the two services equivalently-that is, to pay the same price to demand response providers for conserving energy as to generators for making more of it.

Two issues are presented here. First, and fundamentally, does the FPA permit FERC to regulate these demand response transactions at all, or does any such rule impinge on the States' authority? Second, even if FERC has the requisite statutory power, did the Commission fail to justify adequately why demand response providers and electricity producers should receive the same compensation? The court below ruled against FERC on both scores. We disagree.

I

A

Federal regulation of electricity owes its beginnings to one of this Court's decisions. In the early 20th century, state and local agencies oversaw nearly all generation, transmission, and distribution of electricity. But this Court held in Public Util. Comm'n of R.I. v. Attleboro Steam & Elec. Co., 273 U.S. 83, 89-90, 47 S.Ct. 294, 71 L.Ed. 549 (1927), that the Commerce Clause bars the States from regulating certain interstate electricity transactions, including wholesale sales (i.e., sales for resale) across state lines. That ruling created what became known as the "Attleboro gap"-a regulatory void which, the Court pointedly noted, only Congress could fill. See id., at 90, 47 S.Ct. 294.

Congress responded to that invitation by passing the FPA in 1935. The Act charged FERC's predecessor agency with undertaking "effective federal regulation of the expanding business of transmitting and selling electric power in interstate commerce." New York v. FERC, 535 U.S. 1, 6, 122 S.Ct. 1012, 152 L.Ed.2d 47 (2002) (quoting Gulf States Util. Co. v. FPC, 411 U.S. 747, 758, 93 S.Ct. 1870, 36 L.Ed.2d 635 (1973) ). Under the statute, the Commission has authority to regulate "the transmission of electric energy in interstate commerce" and "the sale of electric energy at wholesale in interstate commerce." 16 U.S.C. § 824(b)(1).

In particular, the FPA obligates FERC to oversee all prices for those interstate transactions and all rules and practices affecting such prices. The statute provides that "[a]ll rates and charges made, demanded, or received by any public utility for or in connection with" interstate transmissions or wholesale sales-as well as "all rules and regulations affecting or pertaining to such rates or charges"-must be "just and reasonable." § 824d(a). And if "any rate [or] charge," or "any rule, regulation, practice, or contract affecting such rate [or] charge[,]" falls short of that standard, the Commission must rectify the problem: It then shall determine what is "just and reasonable" and impose "the same by order." § 824e(a).

Alongside those grants of power, however, the Act also limits FERC's regulatory reach, and thereby maintains a zone of exclusive state jurisdiction. As pertinent here, § 824(b)(1) -the same provision that gives FERC authority over wholesale sales-states that "this subchapter," including *768its delegation to FERC, "shall not apply to any other sale of electric energy." Accordingly, the Commission may not regulate either within-state wholesale sales or, more pertinent here, retail sales of electricity (i.e., sales directly to users). See New York, 535 U.S., at 17, 23, 122 S.Ct. 1012. State utility commissions continue to oversee those transactions.

Since the FPA's passage, electricity has increasingly become a competitive interstate business, and FERC's role has evolved accordingly. Decades ago, state or local utilities controlled their own power plants, transmission lines, and delivery systems, operating as vertically integrated monopolies in confined geographic areas. That is no longer so. Independent power plants now abound, and almost all electricity flows not through "the local power networks of the past," but instead through an interconnected "grid" of near-nationwide scope. See id ., at 7, 122 S.Ct. 1012 ("electricity that enters the grid immediately becomes a part of a vast pool of energy that is constantly moving in interstate commerce," linking producers and users across the country). In this new world, FERC often forgoes the cost-based rate-setting traditionally used to prevent monopolistic pricing. The Commission instead undertakes to ensure "just and reasonable" wholesale rates by enhancing competition-attempting, as we recently explained, "to break down regulatory and economic barriers that hinder a free market in wholesale electricity." Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 536, 128 S.Ct. 2733, 171 L.Ed.2d 607 (2008).

As part of that effort, FERC encouraged the creation of nonprofit entities to manage wholesale markets on a regional basis. Seven such wholesale market operators now serve areas with roughly two-thirds of the country's electricity "load" (an industry term for the amount of electricity used). See FERC, Energy Primer: A Handbook of Energy Market Basics 58-59 (Nov. 2015) (Energy Primer). Each administers a portion of the grid, providing generators with access to transmission lines and ensuring that the network conducts electricity reliably. See ibid. And still more important for present purposes, each operator conducts a competitive auction to set wholesale prices for electricity.

These wholesale auctions serve to balance supply and demand on a continuous basis, producing prices for electricity that reflect its value at given locations and times throughout each day. Such a real-time mechanism is needed because, unlike most products, electricity cannot be stored effectively. Suppliers must generate-every day, hour, and minute-the exact amount of power necessary to meet demand from the utilities and other "load-serving entities" (LSEs) that buy power at wholesale for resale to users. To ensure that happens, wholesale market operators obtain (1) orders from LSEs indicating how much electricity they need at various times and (2) bids from generators specifying how much electricity they can produce at those times and how much they will charge for it. Operators accept the generators' bids in order of cost (least expensive first) until they satisfy the LSEs' total demand. The price of the last unit of electricity purchased is then paid to every supplier whose bid was accepted, regardless of its actual offer; and the total cost is split among the LSEs in proportion to how much energy they have ordered. So, for example, suppose that at 9 a.m. on August 15 four plants serving Washington, D.C. can each produce some amount of electricity for, respectively, $10/unit, $20/unit, $30/unit, and $40/unit. And suppose that LSEs' demand at that time and place is met after the operator accepts the three *769cheapest bids. The first three generators would then all receive $30/unit. That amount is (think back to Econ 101) the marginal cost-i.e., the added cost of meeting another unit of demand-which is the price an efficient market would produce. See 1 A. Kahn, The Economics of Regulation: Principles and Institutions 65-67 (1988). FERC calls that cost (in jargon that will soon become oddly familiar) the locational marginal price, or LMP.1

As in any market, when wholesale buyers' demand for electricity increases, the price they must pay rises correspondingly; and in those times of peak load, the grid's reliability may also falter. Suppose that by 2 p.m. on August 15, it is 98 degrees in D.C. In every home, store, or office, people are turning the air conditioning up. To keep providing power to their customers, utilities and other LSEs must ask their market operator for more electricity. To meet that spike in demand, the operator will have to accept more expensive bids from suppliers. The operator, that is, will have to agree to the $40 bid that it spurned before-and maybe, beyond that, to bids of $50 or $60 or $70. In such periods, operators often must call on extremely inefficient generators whose high costs of production cause them to sit idle most of the time. See Energy Primer 41-42. As that happens, LMP-the price paid by all LSEs to all suppliers-climbs ever higher. And meanwhile, the increased flow of electricity through the grid threatens to overload transmission lines. See id., at 44. As every consumer knows, it is just when the weather is hottest and the need for air conditioning most acute that blackouts, brownouts, and other service problems tend to occur.

Making matters worse, the wholesale electricity market lacks the self-correcting mechanism of other markets. Usually, when the price of a product rises, buyers naturally adjust by reducing how much they purchase. But consumers of electricity-and therefore the utilities and other LSEs buying power for them at wholesale-do not respond to price signals in that way. To use the economic term, demand for electricity is inelastic. That is in part because electricity is a necessity with few ready substitutes: When the temperature reaches 98 degrees, many people see no option but to switch on the AC. And still more: Many State regulators insulate consumers from short-term fluctuations in wholesale prices by insisting that LSEs set stable retail rates. See id., at 41, 43-44. That, one might say, short-circuits the normal rules of economic behavior. Even in peak periods, as costs surge in the wholesale market, consumers feel no pinch, and so keep running the AC as before. That means, in turn, that LSEs must keep buying power to send to those users-no matter that wholesale prices spiral out of control and increased usage risks overtaxing the grid.

But what if there were an alternative to that scenario? Consider what would happen if wholesale market operators could induce consumers to refrain from using (and so LSEs from buying) electricity during peak periods. Whenever doing that costs less than adding more power, an operator could bring electricity supply and demand into balance at a lower price. And simultaneously, the operator could ease pressure on the grid, thus protecting against system failures. That is the idea behind the practice at issue here: Wholesale demand response, as it is called, pays *770consumers for commitments to curtail their use of power, so as to curb wholesale rates and prevent grid breakdowns. See id., at 44-46.2

These demand response programs work through the operators' regular auctions. Aggregators of multiple users of electricity, as well as large-scale individual users like factories or big-box stores, submit bids to decrease electricity consumption by a set amount at a set time for a set price. The wholesale market operators treat those offers just like bids from generators to increase supply. The operators, that is, rank order all the bids-both to produce and to refrain from consuming electricity-from least to most expensive, and then accept the lowest bids until supply and demand come into equipoise. And, once again, the LSEs pick up the cost of all those payments. So, to return to our prior example, if a store submitted an offer not to use a unit of electricity at 2 p.m. on August 15 for $35, the operator would accept that bid before calling on the generator that offered to produce a unit of power for $40. That would result in a lower LMP-again, wholesale market price-than if the market operator could not avail itself of demand response pledges. See ISO/RTO Council, Harnessing the Power of Demand: How ISOs and RTOs Are Integrating Demand Response Into Wholesale Electricity Markets 40-43 (2007) (estimating that, in one market, a demand response program reducing electricity usage by 3% in peak hours would lead to price declines of 6% to 12%). And it would decrease the risk of blackouts and other service problems.

Wholesale market operators began using demand response some 15 years ago, soon after they assumed the role of overseeing wholesale electricity sales. Recognizing the value of demand response for both system reliability and efficient pricing, they urged FERC to allow them to implement such programs. See, e.g., PJM Interconnection, L.L.C., Order Accepting Tariff Sheets as Modified, 95 FERC ¶ 61,306 (2001) ; California Independent System Operator Corp., Order Conditionally Accepting for Filing Tariff Revisions, 91 FERC ¶ 61,256 (2000). And as demand response went into effect, market participants of many kinds came to view it-in the words of respondent Electric Power Supply Association (EPSA)-as an "important element[ ] of robust, competitive wholesale electricity markets." App. 94, EPSA, Comments on Proposed Rule on Demand Response Compensation in Organized Wholesale Energy Markets (May 12, 2010).

Congress added to the chorus of voices praising wholesale demand response. In the Energy Policy Act of 2005, 119 Stat. 594 (EPAct), it declared as "the policy of the United States" that such demand response "shall be encouraged." § 1252(f), 119 Stat. 966, 16 U.S.C. § 2642 note. In particular, Congress directed, the deployment of "technology and devices that enable electricity customers to participate in ... demand response systems shall be facilitated, and unnecessary barriers to demand response participation in energy ... markets shall be eliminated." Ibid .3

*771B

Spurred on by Congress, the Commission determined to take a more active role in promoting wholesale demand response programs. In 2008, FERC issued Order No. 719, which (among other things) requires wholesale market operators to receive demand response bids from aggregators of electricity consumers, except when the state regulatory authority overseeing those users' retail purchases bars such demand response participation. See 73 Fed. Reg. 64119, ¶ 154 (codified 18 CFR § 35.28(g)(1) (2015) ). That original order allowed operators to compensate demand response providers differently from generators if they so chose. No party sought judicial review.

Concerned that Order No. 719 had not gone far enough, FERC issued the rule under review here in 2011, with one commissioner dissenting. See Demand Response Competition in Organized Wholesale Energy Markets, Order No. 745, 76 Fed. Reg. 16658 (Rule) (codified 18 CFR § 35.28(g)(1)(v) ). The Rule attempts to ensure "just and reasonable" wholesale rates by requiring market operators to appropriately compensate demand response providers and thus bring about "meaningful demand-side participation" in the wholesale markets. 76 Fed. Reg. 16658, ¶ 1, 16660, ¶ 10 ; 16 U.S.C. § 824d(a). The Rule's most significant provision directs operators, under two specified conditions, to pay LMP for any accepted demand response bid, just as they do for successful supply bids. See 76 Fed. Reg. 16666-16669, ¶¶ 45-67. In other words, the Rule requires that demand response providers in those circumstances receive as much for conserving electricity as generators do for producing it.

The two specified conditions ensure that a bid to use less electricity provides the same value to the wholesale market as a bid to make more. First, a demand response bidder must have "the capability to provide the service" offered; it must, that is, actually be able to reduce electricity use and thereby obviate the operator's need to secure additional power. Id., at 16666, ¶¶ 48-49. Second, paying LMP for a demand response bid "must be cost-effective," as measured by a standard called "the net benefits test." Ibid., ¶ 48. That test makes certain that accepting a lower-priced demand response bid over a higher-priced supply bid will actually save LSEs (i.e ., wholesale purchasers) money. In some situations it will not, even though accepting a lower-priced bid (by definition) reduces LMP. That is because (to oversimplify a bit) LSEs share the cost of paying successful bidders, and reduced electricity use makes some LSEs drop out of the market, placing a proportionally greater burden on those that are left. Each remaining LSE may thus wind up paying more even though the total bill is lower; or said otherwise, the costs associated with an LSE's increased share of compensating bids may exceed the savings that the LSE obtains from a lower wholesale price.4

*772The net benefits test screens out such counterproductive demand response bids, exempting them from the Rule's compensation requirement. See id., at 16659, 16666-16667, ¶¶ 3, 50-53. What remains are only those offers whose acceptance will result in actual savings to wholesale purchasers (along with more reliable service to end users). See id., at 16671, ¶¶ 78-80.

The Rule rejected an alternative scheme for compensating demand response bids. Several commenters had urged that, in paying a demand response provider, an operator should subtract from the ordinary wholesale price the savings that the provider nets by not buying electricity on the retail market. Otherwise, the commenters claimed, demand response providers would receive a kind of "double-payment" relative to generators. See id., at 16663, ¶ 24. That proposal, which the dissenting commissioner largely accepted, became known as LMP minus G, or more simply LMP-G, where "G" stands for the retail price of electricity. See id., at 16668, ¶ 60, 16680 (Moeller, dissenting). But FERC explained that, under the conditions it had specified, the value of an accepted demand response bid to the wholesale market is identical to that of an accepted supply bid because each succeeds in cost-effectively "balanc[ing] supply and demand." Id., at 16667, ¶ 55. And, the Commission reasoned, that comparable value is what ought to matter given FERC's goal of strengthening competition in the wholesale market: Rates should reflect not the costs that each market participant incurs, but instead the services it provides. See id., at 16668, ¶ 62. Moreover, the Rule stated, compensating demand response bids at their actual value-i.e., LMP-will help overcome various technological barriers, including a lack of needed infrastructure, that impede aggregators and large-scale users of electricity from fully participating in demand response programs. See id., at 16667-16668, ¶¶ 57-58.

The Rule also responded to comments challenging FERC's statutory authority to regulate the compensation operators pay for demand response bids. Pointing to the Commission's analysis in Order No. 719, the Rule explained that the FPA gives FERC jurisdiction over such bids because they "directly affect [ ] wholesale rates." Id., at 16676, ¶ 112 (citing 74 id., at 37783, ¶ 47, and 16 U.S.C. § 824d ). Nonetheless, the Rule noted, FERC would continue Order No. 719's policy of allowing any state regulatory body to prohibit consumers in its retail market from taking part in wholesale demand response programs. See 76 Fed. Reg. 16676, ¶ 114 ; 73 id., at 64119, ¶ 154. Accordingly, the Rule does not require any "action[ ] that would violate State laws or regulations." 76 id., at 16676, ¶ 114.

C

A divided panel of the Court of Appeals for the District of Columbia Circuit vacated the Rule as "ultra vires agency action." 753 F.3d 216, 225 (2014). The court held that FERC lacked authority to issue the Rule even though "demand response compensation affects the wholesale market." Id., at 221. The Commission's "jurisdiction to regulate practices 'affecting' rates," the court stated, "does not erase the specific limit[ ]" that the FPA imposes on FERC's regulation of retail sales. Id., at 222. And the Rule, the court concluded, exceeds that limit: In "luring ... retail customers" into the wholesale market, and causing them to decrease "levels of retail electricity consumption," the Rule engages in "direct regulation of the retail market." Id., at 223-224.

The Court of Appeals held, alternatively, that the Rule is arbitrary and capricious under the Administrative Procedure Act, *7735 U.S.C. § 706(2)(A), because FERC failed to "adequately explain[ ]" why paying LMP to demand response providers "results in just compensation." 753 F.3d, at 225. According to the court, FERC did not "properly consider" the view that such a payment would give those providers a windfall by leaving them with "the full LMP plus ... the savings associated with" reduced consumption. Ibid. (quoting Demand Response Competition in Organized Wholesale Energy Markets: Order on Rehearing and Clarification, Order No. 745-A (Rehearing Order), 137 FERC ¶ 61,215, p. 62,316 (2011) (Moeller, dissenting)). The court dismissed out of hand the idea that "comparable contributions [could] be the reason for equal compensation." 753 F.3d, at 225.

Judge Edwards dissented. He explained that the rules governing wholesale demand response have a "direct effect ... on wholesale electricity rates squarely within FERC's jurisdiction." Id., at 227. And in setting those rules, he argued, FERC did not engage in "direct regulation of the retail market"; rather, "[a]uthority over retail rates ... remains vested solely in the States." Id., at 234 (internal quotation marks omitted). Finally, Judge Edwards rejected the majority's view that the Rule is arbitrary and capricious. He noted the substantial deference due to the Commission in cases involving ratemaking, and concluded that FERC provided a "thorough" and "reasonable" explanation for choosing LMP as the appropriate compensation formula. Id., at 236-238.

We granted certiorari, 575 U.S. ----, 135 S.Ct. 2049, 191 L.Ed.2d 954 (2015), to decide whether the Commission has statutory authority to regulate wholesale market operators' compensation of demand response bids and, if so, whether the Rule challenged here is arbitrary and capricious. We now hold that the Commission has such power and that the Rule is adequately reasoned. We accordingly reverse.

II

Our analysis of FERC's regulatory authority proceeds in three parts. First, the practices at issue in the Rule-market operators' payments for demand response commitments-directly affect wholesale rates. Second, in addressing those practices, the Commission has not regulated retail sales. Taken together, those conclusions establish that the Rule complies with the FPA's plain terms. And third, the contrary view would conflict with the Act's core purposes by preventing all use of a tool that no one (not even EPSA) disputes will curb prices and enhance reliability in the wholesale electricity market.5

A

The FPA delegates responsibility to FERC to regulate the interstate wholesale market for electricity-both wholesale rates and the panoply of rules and practices affecting them. As noted earlier, the Act establishes a scheme for federal regulation of "the sale of electric energy at wholesale in interstate commerce." 16 U.S.C. § 824(b)(1) ; see supra, at 767. Under the statute, "[a]ll rates and charges made, demanded, or received by any public utility for or in connection with" interstate wholesale sales "shall be just and reasonable"; so too shall "all rules and regulations affecting or pertaining to such rates or charges." § 824d(a). And if FERC sees *774a violation of that standard, it must take remedial action. More specifically, whenever the Commission "shall find that any rate [or] charge"-or "any rule, regulation, practice, or contract affecting such rate [or] charge"-is "unjust [or] unreasonable," then the Commission "shall determine the just and reasonable rate, charge[,] rule, regulation, practice or contract" and impose "the same by order." § 824e(a). That means FERC has the authority-and, indeed, the duty-to ensure that rules or practices "affecting" wholesale rates are just and reasonable.

Taken for all it is worth, that statutory grant could extend FERC's power to some surprising places. As the court below noted, markets in all electricity's inputs-steel, fuel, and labor most prominent among them-might affect generators' supply of power. See 753 F.3d, at 221 ; id., at 235 (Edwards, J., dissenting). And for that matter, markets in just about everything-the whole economy, as it were-might influence LSEs' demand. So if indirect or tangential impacts on wholesale electricity rates sufficed, FERC could regulate now in one industry, now in another, changing a vast array of rules and practices to implement its vision of reasonableness and justice. We cannot imagine that was what Congress had in mind.

For that reason, an earlier D.C. Circuit decision adopted, and we now approve, a common-sense construction of the FPA's language, limiting FERC's "affecting" jurisdiction to rules or practices that "directly affect the [wholesale] rate." California Independent System Operator Corp. v. FERC, 372 F.3d 395, 403 (2004) (emphasis added); see 753 F.3d, at 235 (Edwards, J., dissenting). As we have explained in addressing similar terms like "relating to" or "in connection with," a non-hyperliteral reading is needed to prevent the statute from assuming near-infinite breadth. See New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) ("If 'relate to' were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes [the statute] would never run its course"); Maracich v. Spears, 570 U.S. ----, ----, 133 S.Ct. 2191, 2200, 186 L.Ed.2d 275 (2013) ("The phrase 'in connection with' is essentially indeterminat[e] because connections, like relations, stop nowhere" (internal quotation marks omitted)). The Commission itself incorporated the D.C. Circuit's standard in addressing its authority to issue the Rule. See 76 Fed. Reg. 16676, ¶ 112 (stating that FERC has jurisdiction because wholesale demand response "directly affects wholesale rates"). We think it right to do the same.

Still, the rules governing wholesale demand response programs meet that standard with room to spare. In general (and as earlier described), wholesale market operators employ demand response bids in competitive auctions that balance wholesale supply and demand and thereby set wholesale prices. See supra, at 769 - 770. The operators accept such bids if and only if they bring down the wholesale rate by displacing higher-priced generation. And when that occurs (most often in peak periods), the easing of pressure on the grid, and the avoidance of service problems, further contributes to lower charges. See Brief for Grid Engineers et al. as Amici Curiae 26-27. Wholesale demand response, in short, is all about reducing wholesale rates; so too, then, the rules and practices that determine how those programs operate.

And that is particularly true of the formula that operators use to compensate demand response providers. As in other areas of life, greater pay leads to greater *775participation. If rewarded at LMP, rather than at some lesser amount, more demand response providers will enter more bids capable of displacing generation, thus necessarily lowering wholesale electricity prices. Further, the Commission found, heightened demand response participation will put "downward pressure" on generators' own bids, encouraging power plants to offer their product at reduced prices lest they come away empty-handed from the bidding process. 76 Fed. Reg. 16660, ¶ 10. That, too, ratchets down the rates wholesale purchasers pay. Compensation for demand response thus directly affects wholesale prices. Indeed, it is hard to think of a practice that does so more.

B

The above conclusion does not end our inquiry into the Commission's statutory authority; to uphold the Rule, we also must determine that it does not regulate retail electricity sales. That is because, as earlier described, § 824(b)"limit[s] FERC's sale jurisdiction to that at wholesale," reserving regulatory authority over retail sales (as well as intrastate wholesale sales) to the States. New York, 535 U.S., at 17, 122 S.Ct. 1012 (emphasis deleted); see 16 U.S.C. § 824(b) ; supra, at 767 - 768.6 FERC cannot take an action transgressing that limit no matter how direct, or dramatic, its impact on wholesale rates. Suppose, to take a far-fetched example, that the Commission issued a regulation compelling every consumer to buy a certain amount of electricity on the retail market. Such a rule would necessarily determine the load purchased on the wholesale market too, and thus would alter wholesale prices. But even given that ineluctable consequence, the regulation would exceed FERC's authority, as defined in § 824(b), because it specifies terms of sale at retail-which is a job for the States alone.7

*776Yet a FERC regulation does not run afoul of § 824(b)'s proscription just because it affects-even substantially-the quantity or terms of retail sales. It is a fact of economic life that the wholesale and retail markets in electricity, as in every other known product, are not hermetically sealed from each other. To the contrary, transactions that occur on the wholesale market have natural consequences at the retail level. And so too, of necessity, will FERC's regulation of those wholesale matters. Cf. Oneok, Inc. v. Learjet, Inc., 575 U.S. ----, ----, 135 S.Ct. 1591, 1601, 191 L.Ed.2d 511 (2015) (noting that in the similarly structured world of natural gas regulation, a "Platonic ideal" of strict separation between federal and state realms cannot exist). When FERC sets a wholesale rate, when it changes wholesale market rules, when it allocates electricity as between wholesale purchasers-in short, when it takes virtually any action respecting wholesale transactions-it has some effect, in either the short or the long term, on retail rates. That is of no legal consequence. See, e.g., Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 365, 370-373, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988) (holding that an order regulating wholesale purchases fell within FERC's jurisdiction, and preempted contrary state action, even though it clearly affected retail prices); Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 959-961, 970, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986) (same); FPC v. Louisiana Power & Light Co., 406 U.S. 621, 636-641, 92 S.Ct. 1827, 32 L.Ed.2d 369 (1972) (holding similarly in the natural gas context). When FERC regulates what takes place on the wholesale market, as part of carrying out its charge to improve how that market runs, then no matter the effect on retail rates, § 824(b) imposes no bar.

And in setting rules for demand response, that is all FERC has done. The Commission's Rule addresses-and addresses only-transactions occurring on the wholesale market. Recall once again how demand response works-and forgive the coming italics. See supra, at 769 - 770. Wholesale market operators administer the entire program, receiving every demand response bid made. Those operators accept such a bid at the mandated price when (and only when) the bid provides value to the wholesale market by balancing supply and demand more "cost-effective[ly]"-i.e., at a lower cost to wholesale purchasers-than a bid to generate power. 76 Fed. Reg. 16659, 16666, ¶ 2, 48. The compensation paid for a successful bid (LMP) is whatever the operator's auction has determined is the marginal price of wholesale electricity at a particular location and time. See id., at 16659, ¶ 2. And those footing the bill are the same wholesale purchasers that have benefited from the lower wholesale price demand response participation has produced. See id., at 16674, ¶¶ 99-100. In sum, whatever the effects at the retail level, every aspect of the regulatory plan happens exclusively on the wholesale market and governs exclusively that market's rules.

What is more, the Commission's justifications for regulating demand response are all about, and only about, improving the wholesale market. Cf. Oneok, 575 U.S., at ----, 135 S.Ct., at 1599 (considering "the target at which [a] law aims " in determining whether a State is properly regulating retail or, instead, improperly *777regulating wholesale sales). In Order No. 719, FERC explained that demand response participation could help create a "well-functioning competitive wholesale electric energy market" with "reduce[d] wholesale power prices" and "enhance[d] reliability." 73 Fed. Reg. 64103, ¶ 16. And in the Rule under review, FERC expanded on that theme. It listed the several ways in which "demand response in organized wholesale energy markets can help improve the functioning and competitiveness of those markets": by replacing high-priced, inefficient generation; exerting "downward pressure" on "generator bidding strategies"; and "support[ing] system reliability." 76 id., at 16660, ¶ 10 ; see Notice of Proposed Rulemaking for Order No. 745, 75 id., at 15363-15364, ¶ 4 (2010) (noting similar aims); supra, at 769 - 770. FERC, that is, focused wholly on the benefits that demand response participation (in the wholesale market) could bring to the wholesale market. The retail market figures no more in the Rule's goals than in the mechanism through which the Rule operates.

EPSA's primary argument that FERC has usurped state power (echoed in the dissent) maintains that the Rule "effectively," even though not "nominal[ly]," regulates retail prices. See, e.g., Brief for Respondents 1, 10, 23-27, 35-39; Tr. of Oral Arg. 26, 30; post, at 786 - 787. The argument begins on universally accepted ground: Under § 824(b), only the States, not FERC, can set retail rates. See, e.g., FPC v. Conway Corp., 426 U.S. 271, 276, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976). But as EPSA concedes, that tenet alone cannot make its case, because FERC's Rule does not set actual rates: States continue to make or approve all retail rates, and in doing so may insulate them from price fluctuations in the wholesale market. See Brief for Respondents 39. Still, EPSA contends, rudimentary economic analysis shows that the Rule does the "functional equivalen[t]" of setting-more particularly, of raising-retail rates. Id., at 36. That is because the opportunity to make demand response bids in the wholesale market changes consumers' calculations. In deciding whether to buy electricity at retail, economically-minded consumers now consider both the cost of making such a purchase and the cost of forgoing a possible demand response payment. So, EPSA explains, if a factory can buy electricity for $10/unit, but can earn $5/unit for not buying power at peak times, then the effective retail rate at those times is $15/unit: the $10 the factory paid at retail plus the $5 it passed up. See id., at 10. And by thus increasing effective retail rates, EPSA concludes, FERC trespasses on the States' ground.

The modifier "effective" is doing quite a lot of work in that argument-more work than any conventional understanding of rate-setting allows. The standard dictionary definition of the term "rate" (as used with reference to prices) is "[a]n amount paid or charged for a good or service." Black's Law Dictionary 1452 (10th ed. 2014); see, e.g., 13 Oxford English Dictionary 208-209 (2d ed. 1989) ("rate" means "price," "cost," or "sum paid or asked for a ... thing"). To set a retail electricity rate is thus to establish the amount of money a consumer will hand over in exchange for power. Nothing in § 824(b) or any other part of the FPA suggests a more expansive notion, in which FERC sets a rate for electricity merely by altering consumers' incentives to purchase that product.8 And *778neither does anything in this Court's caselaw. Our decisions uniformly speak about rates, for electricity and all else, in only their most prosaic, garden-variety sense. As the Solicitor General summarized that view, "the rate is what it is." Tr. of Oral Arg. 7. It is the price paid, not the price paid plus the cost of a forgone economic opportunity.

Consider a familiar scenario to see what is odd about EPSA's theory. Imagine that a flight is overbooked. The airline offers passengers $300 to move to a later plane that has extra seats. On EPSA's view, that offer adds $300-the cost of not accepting the airline's proffered payment-to the price of every continuing passenger's ticket. So a person who originally spent $400 for his ticket, and decides to reject the airline's proposal, paid an "effective" price of $700. But would any passenger getting off the plane say he had paid $700 to fly? That is highly unlikely. And airline lawyers and regulators (including many, we are sure, with economics Ph.D.'s) appear to share that common-sensical view. It is in fact illegal to "increase the price" of "air transportation ... after [such] air transportation has been purchased by the consumer." 14 CFR § 399.88(a) (2015). But it is a safe bet that no airline has ever gotten into trouble by offering a payment not to fly.9

And EPSA's "effective price increase" claim fares even worse when it comes to payments not to use electricity. In EPSA's universe, a wholesale demand response program raises retail rates by compelling consumers to "pay" the price of forgoing demand response compensation. But such a consumer would be even more surprised than our air traveler to learn of that price hike, because the natural consequence of wholesale demand response programs is to bring down retail rates. Once again, wholesale market operators accept demand response bids only if those offers lower the wholesale price. See supra, at 769 - 770. And when wholesale prices go down, retail prices tend to follow, because state regulators can, and mostly do, insist that wholesale buyers eventually pass on their savings to consumers. EPSA's theoretical construct thus runs headlong into the real world of electricity sales-where the Rule does anything but increase retail prices.

EPSA's second argument that FERC intruded into the States' sphere is more historical and purposive in nature. According to EPSA, FERC deliberately "lured [retail customers] into the[ ] wholesale markets"-and, more, FERC did so "only because [it was] dissatisfied with the *779States' exercise of their undoubted authority" under § 824(b) to regulate retail sales. Brief for Respondents 23; see id., at 2-3, 31, 34. In particular, EPSA asserts, FERC disapproved of "many States' continued preference" for stable pricing-that is, for insulating retail rates from short-term fluctuations in wholesale costs. Id., at 28. In promoting demand response programs-or, in EPSA's somewhat less neutral language, in "forc[ing] retail customers to respond to wholesale price signals"-FERC acted "for the express purpose of overriding" that state policy. Id., at 29, 49.

That claim initially founders on the true facts of how wholesale demand response came about. Contra EPSA, the Commission did not invent the practice. Rather, and as described earlier, the impetus came from wholesale market operators. See supra, at 770. In designing their newly organized markets, those operators recognized almost at once that demand response would lower wholesale electricity prices and improve the grid's reliability. So they quickly sought, and obtained, FERC's approval to institute such programs. Demand response, then, emerged not as a Commission power grab, but instead as a market-generated innovation for more optimally balancing wholesale electricity supply and demand.

And when, years later (after Congress, too, endorsed the practice), FERC began to play a more proactive role, it did so for the identical reason: to enhance the wholesale, not retail, electricity market. Like the market operators, FERC saw that sky-high demand in peak periods threatened network breakdowns, compelled purchases from inefficient generators, and consequently drove up wholesale prices. See, e.g., 73 Fed. Reg. 64103, ¶ 16 ; 76 id., at 16660, ¶ 10 ; see supra, at 769 - 770. Addressing those problems-which demand response does-falls within the sweet spot of FERC's statutory charge. So FERC took action promoting the practice. No doubt FERC recognized connections, running in both directions, between the States' policies and its own. The Commission understood that by insulating consumers from price fluctuations, States contributed to the wholesale market's difficulties in optimally balancing supply and demand. See 76 Fed. Reg. 16667-16668, ¶¶ 57, 59 ; supra, at 769 - 770. And FERC realized that increased use of demand response in that market would (by definition) inhibit retail sales otherwise subject to State control. See 73 Fed. Reg. 64167. But nothing supports EPSA's more feverish idea that the Commission's interest in wholesale demand response emerged from a yen to usurp State authority over, or impose its own regulatory agenda on, retail sales. In promoting demand response, FERC did no more than follow the dictates of its regulatory mission to improve the competitiveness, efficiency, and reliability of the wholesale market.

Indeed, the finishing blow to both of EPSA's arguments comes from FERC's notable solicitude toward the States. As explained earlier, the Rule allows any State regulator to prohibit its consumers from making demand response bids in the wholesale market. See 76 id., at 16676, ¶ 114 ; 73 id., at 64119, ¶ 154 ; supra, at 772. Although claiming the ability to negate such state decisions, the Commission chose not to do so in recognition of the linkage between wholesale and retail markets and the States' role in overseeing retail sales. See 76 Fed. Reg. 16676, ¶¶ 112-114. The veto power thus granted to the States belies EPSA's view that FERC aimed to "obliterate[ ]" their regulatory authority or "override" their pricing policies. Brief for Respondents 29, 33. And that veto gives States the means to *780block whatever "effective" increases in retail rates demand response programs might be thought to produce. Wholesale demand response as implemented in the Rule is a program of cooperative federalism, in which the States retain the last word. That feature of the Rule removes any conceivable doubt as to its compliance with § 824(b)'s allocation of federal and state authority.

C

One last point, about how EPSA's position would subvert the FPA.

EPSA's jurisdictional claim, as may be clear by now, stretches very far. Its point is not that this single Rule, relating to compensation levels, exceeds FERC's power. Instead, EPSA's arguments-that rewarding energy conservation raises effective retail rates and that "luring" consumers onto wholesale markets aims to disrupt state policies-suggest that the entire practice of wholesale demand response falls outside what FERC can regulate. EPSA proudly embraces that point: FERC, it declares, "has no business regulating 'demand response' at all." Id., at 24. Under EPSA's theory, FERC's earlier Order No. 719, although never challenged, would also be ultra vires because it requires operators to open their markets to demand response bids. And more: FERC could not even approve an operator's voluntary plan to administer a demand response program. See Tr. of Oral Arg. 44. That too would improperly allow a retail customer to participate in a wholesale market.

Yet state commissions could not regulate demand response bids either. EPSA essentially concedes this point. See Brief for Respondents 46 ("That may well be true"). And so it must. The FPA "leaves no room either for direct state regulation of the prices of interstate wholesales" or for regulation that "would indirectly achieve the same result." Northern Natural Gas Co. v. State Corporation Comm'n of Kan., 372 U.S. 84, 91, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963). A State could not oversee offers, made in a wholesale market operator's auction, that help to set wholesale prices. Any effort of that kind would be preempted.

And all of that creates a problem. If neither FERC nor the States can regulate wholesale demand response, then by definition no one can. But under the Act, no electricity transaction can proceed unless it is regulable by someone. As earlier described, Congress passed the FPA precisely to eliminate vacuums of authority over the electricity markets. See supra, at 767 - 768. The Act makes federal and state powers "complementary" and "comprehensive," so that "there [will] be no 'gaps' for private interests to subvert the public welfare." Louisiana Power & Light Co., 406 U.S., at 631, 92 S.Ct. 1827. Or said otherwise, the statute prevents the creation of any regulatory "no man's land." FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 19, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961) ; see id., at 28, 81 S.Ct. 435. Some entity must have jurisdiction to regulate each and every practice that takes place in the electricity markets, demand response no less than any other.10

*781For that reason, the upshot of EPSA's view would be to extinguish the wholesale demand response program in its entirety. Under the FPA, each market operator must submit to FERC all its proposed rules and procedures. See 16 U.S.C. §§ 824d(c) -(d) ; 18 CFR §§ 35.28(c)(4), 35.3(a)(1). Assume that, as EPSA argues, FERC could not authorize any demand response program as part of that package. Nor could FERC simply allow such plans to go into effect without its consideration and approval. There are no "off the books" programs in the wholesale electricity markets-because, once again, there is no regulatory "no man's land." Transcontinental, 365 U.S., at 19, 81 S.Ct. 435. The FPA mandates that FERC review, and ensure the reasonableness of, every wholesale rule and practice. See 16 U.S.C. §§ 824d(a), 824e(a) ; supra, at 767 - 768, 773 - 774. If FERC could not carry out that duty for demand response, then those programs could not go forward.

And that outcome would flout the FPA's core objects. The statute aims to protect "against excessive prices" and ensure effective transmission of electric power. Pennsylvania Water & Power Co. v. FPC, 343 U.S. 414, 418, 72 S.Ct. 843, 96 L.Ed. 1042 (1952) ; see Gulf States Util. Co. v. FPC, 411 U.S. 747, 758, 93 S.Ct. 1870, 36 L.Ed.2d 635 (1973). As shown above, FERC has amply explained how wholesale demand response helps to achieve those ends, by bringing down costs and preventing service interruptions in peak periods. See supra, at 776 - 777. No one taking part in the rulemaking process-not even EPSA-seriously challenged that account. Even as he objected to FERC's compensation formula, Commissioner Moeller noted the unanimity of opinion as to demand response's value: "[N]owhere did I review any comment or hear any testimony that questioned the benefit of having demand response resources participate in the organized wholesale energy markets. On this point, there is no debate." 76 Fed. Reg. 16679 ; see also App. 82, EPSA, Comments on Proposed Rule (avowing "full[ ] support" for demand response participation in wholesale markets because of its "economic and operational" benefits).11 Congress itself agreed, "encourag[ing]" greater use of demand response participation at the wholesale level. EPAct § 1252(f), 119 Stat. 966. That undisputed judgment extinguishes *782any last flicker of life in EPSA's argument. We will not read the FPA, against its clear terms, to halt a practice that so evidently enables the Commission to fulfill its statutory duties of holding down prices and enhancing reliability in the wholesale energy market.

III

These cases present a second, narrower question: Is FERC's decision to compensate demand response providers at LMP-the same price paid to generators-arbitrary and capricious? Recall here the basic issue. See supra, at 770 - 772. Wholesale market operators pay a single price-LMP-for all successful bids to supply electricity at a given time and place. The Rule orders operators to pay the identical price for a successful bid to conserve electricity so long as that bid can satisfy a "net benefits test"-meaning that it is sure to bring down costs for wholesale purchasers. In mandating that payment, FERC rejected an alternative proposal under which demand response providers would receive LMP minus G (LMP-G), where G is the retail rate for electricity. According to EPSA and others favoring that approach, demand response providers get a windfall-a kind of "double-payment"-unless market operators subtract the savings associated with conserving electricity from the ordinary compensation level. 76 Fed. Reg. 16663, ¶ 24. EPSA now claims that FERC failed to adequately justify its choice of LMP rather than LMP-G.

In reviewing that decision, we may not substitute our own judgment for that of the Commission. The "scope of review under the 'arbitrary and capricious' standard is narrow." Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). A court is not to ask whether a regulatory decision is the best one possible or even whether it is better than the alternatives. Rather, the court must uphold a rule if the agency has "examine [d] the relevant [considerations] and articulate[d] a satisfactory explanation for its action[,] including a rational connection between the facts found and the choice made." Ibid. (internal quotation marks omitted). And nowhere is that more true than in a technical area like electricity rate design: "[W]e afford great deference to the Commission in its rate decisions." Morgan Stanley, 554 U.S., at 532, 128 S.Ct. 2733.

Here, the Commission gave a detailed explanation of its choice of LMP. See 76 Fed. Reg. 16661-16669, ¶¶ 18-67. Relying on an eminent regulatory economist's views, FERC chiefly reasoned that demand response bids should get the same compensation as generators' bids because both provide the same value to a wholesale market. See id., at 16662-16664, 16667-16668, ¶¶ 20, 31, 57, 61 ; see also App. 829-851, Reply Affidavit of Dr. Alfred E. Kahn (Aug. 30, 2010) (Kahn Affidavit). FERC noted that a market operator needs to constantly balance supply and demand, and that either kind of bid can perform that service cost-effectively-i.e., in a way that lowers costs for wholesale purchasers. See 76 Fed. Reg. 16667-16668, ¶¶ 56, 61. A compensation system, FERC concluded, therefore should place the two kinds of bids "on a competitive par." Id., at 16668, ¶ 61 (quoting Kahn Affidavit); see also App. 830, Kahn Affidavit (stating that "economic efficiency requires" compensating the two equally given their equivalent function in a "competitive power market [ ]"). With both supply and demand response available on equal terms, the operator will select whichever bids, of whichever kind, provide the needed electricity at the lowest possible cost. See Rehearing *783Order, 137 FERC, at 62,301-62,302, ¶ 68 ("By ensuring that both ... receive the same compensation for the same service, we expect the Final Rule to enhance the competitiveness" of wholesale markets and "result in just and reasonable rates").

That rationale received added support from FERC's adoption of the net benefits test. The Commission realized during its rulemaking that in some circumstances a demand response bid-despite reducing the wholesale rate-does not provide the same value as generation. See 76 Fed. Reg. 16664-16665, ¶ 38. As described earlier, that happens when the distinctive costs associated with compensating a demand response bid exceed the savings from a lower wholesale rate: The purchaser then winds up paying more than if the operator had accepted the best (even though higher priced) supply bid available. See supra, at 771 - 772. And so FERC developed the net benefits test to filter out such cases. See 76 Fed. Reg. 16666-16667, ¶¶ 50-53. With that standard in place, LMP is paid only to demand response bids that benefit wholesale purchasers-in other words, to those that function as "cost-effective alternative[s] to the next highest-bid generation." Id., at 16667, ¶ 54. Thus, under the Commission's approach, a demand response provider will receive the same compensation as a generator only when it is in fact providing the same service to the wholesale market. See ibid., ¶ 53.

The Commission responded at length to EPSA's contrary view that paying LMP, even in that situation, will overcompensate demand response providers because they are also "effectively receiv[ing] 'G,' the retail rate that they do not need to pay." Id., at 16668, ¶ 60. FERC explained that compensation ordinarily reflects only the value of the service an entity provides-not the costs it incurs, or benefits it obtains, in the process. So when a generator presents a bid, "the Commission does not inquire into the costs or benefits of production." Ibid., ¶ 62. Different power plants have different cost structures. And, indeed, some plants receive tax credits and similar incentive payments for their activities, while others do not. See Rehearing Order, 137 FERC, at 62,301, ¶ 65, and n. 122. But the Commission had long since decided that such matters are irrelevant: Paying LMP to all generators-although some then walk away with more profit and some with less-"encourages more efficient supply and demand decisions." 76 Fed. Reg. 16668, ¶ 62 (internal quotation marks omitted). And the Commission could see no economic reason to treat demand response providers any differently. Like generators, they too experience a range of benefits and costs-both the benefits of not paying for electricity and the costs of not using it at a certain time. But, FERC again concluded, that is immaterial: To increase competition and optimally balance supply and demand, market operators should compensate demand response providers, like generators, based on their contribution to the wholesale system. See ibid. ; 137 FERC, at 62,300, ¶ 60.

Moreover, FERC found, paying LMP will help demand response providers overcome certain barriers to participation in the wholesale market. See 76 Fed. Reg. 16667-16668, ¶¶ 57-59. Commenters had detailed significant start-up expenses associated with demand response, including the cost of installing necessary metering technology and energy management systems. See id., at 16661, ¶ 18, 16667-16668, ¶ 57 ; see also, e.g., App. 356, Viridity Energy, Inc., Comments on Proposed Rule on Demand Response Compensation in Organized Wholesale Energy Markets (May 13, 2010) (noting the "capital investments and operational changes needed" for demand *784response participation). The Commission agreed that such factors inhibit potential demand responders from competing with generators in the wholesale markets. See 76 Fed. Reg. 16668, ¶ 59. It concluded that rewarding demand response at LMP (which is, in any event, the price reflecting its value to the market) will encourage that competition and, in turn, bring down wholesale prices. See ibid.

Finally, the Commission noted that determining the "G" in the formula LMP-G is easier proposed than accomplished. See ibid., ¶ 63. Retail rates vary across and even within States, and change over time as well. Accordingly, FERC concluded, requiring market operators to incorporate G into their prices, "even though perhaps feasible," would "create practical difficulties." Ibid. Better, then, not to impose that administrative burden.

All of that together is enough. The Commission, not this or any other court, regulates electricity rates. The disputed question here involves both technical understanding and policy judgment. The Commission addressed that issue seriously and carefully, providing reasons in support of its position and responding to the principal alternative advanced. In upholding that action, we do not discount the cogency of EPSA's arguments in favor of LMP-G. Nor do we say that in opting for LMP instead, FERC made the better call. It is not our job to render that judgment, on which reasonable minds can differ. Our important but limited role is to ensure that the Commission engaged in reasoned decisionmaking-that it weighed competing views, selected a compensation formula with adequate support in the record, and intelligibly explained the reasons for making that choice. FERC satisfied that standard.

IV

FERC's statutory authority extends to the Rule at issue here addressing wholesale demand response. The Rule governs a practice directly affecting wholesale electricity rates. And although (inevitably) influencing the retail market too, the Rule does not intrude on the States' power to regulate retail sales. FERC set the terms of transactions occurring in the organized wholesale markets, so as to ensure the reasonableness of wholesale prices and the reliability of the interstate grid-just as the FPA contemplates. And in choosing a compensation formula, the Commission met its duty of reasoned judgment. FERC took full account of the alternative policies proposed, and adequately supported and explained its decision. Accordingly, we reverse the judgment of the Court of Appeals for the District of Columbia Circuit and remand the cases for further proceedings consistent with this opinion.

It is so ordered.

Justice ALITO took no part in the consideration or decision of these cases.

Justice SCALIA, with whom Justice THOMAS joins, dissenting.

I believe the Federal Power Act (FPA or Act), 16 U.S.C. § 791a et seq., prohibits the Federal Energy Regulatory Commission (FERC) from regulating the demand response of retail purchasers of power. I respectfully dissent from the Court's holding to the contrary.

I

A

I agree with the majority that FERC has the authority to regulate practices "affecting" wholesale rates. §§ 824d(a), 824e(a) ;

*785Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 371, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988). I also agree that this so-called "affecting" jurisdiction cannot be limitless. And I suppose I could even live with the Court's "direct effect" test as a reasonable limit. Ante, at 773. But as the majority recognizes, ante, at 775, that extratextual limit on the "affecting" jurisdiction merely supplements, not supplants, limits that are already contained in the statutory text and structure. I believe the Court misconstrues the primary statutory limit. (Like the majority, I think that deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), is unwarranted because the statute is clear.)

The Act grants FERC authority to regulate the "generation ... [and] transmission of electric energy in interstate commerce and the sale of such energy at wholesale." § 824(a). Yet the majority frames the issue thusly: "[T]o uphold the [r]ule, we also must determine that it does not regulate retail electricity sales." Ante, at 775. That formulation inverts the proper inquiry. The pertinent question under the Act is whether the rule regulates sales "at wholesale ." If so, it falls within FERC's regulatory authority. If not, the rule is unauthorized whether or not it happens to regulate "retail electricity sales"; for, with exceptions not material here, the FPA prohibits FERC from regulating "any other sale of electric energy" that is not at wholesale. § 824(b)(1) (emphasis added). (The majority wisely ignores FERC's specious argument that the demand-response rule does not regulate any sale, wholesale or retail. See Brief for Petitioner in No. 14-840, p. 39. Paying someone not to conclude a transaction that otherwise would without a doubt have been concluded is most assuredly a regulation of that transaction. Cf. Gonzales v. Raich, 545 U.S. 1, 39-40, 125 S.Ct. 2195, 162 L.Ed.2d 1 (2005) (SCALIA, J., concurring in judgment).)

Properly framing the inquiry matters not because I think there exists "some undefined category of ... electricity sales" that is "non-retail [and] non-wholesale," ante, at 775, n. 7,1 but because a proper framing of the inquiry is important to establish the default presumption regarding the scope of FERC's authority. While the majority would find every sale of electric energy to be within FERC's authority to regulate unless the transaction is demonstrably a retail sale, the statute actually excludes from FERC's jurisdiction all sales of electric energy except those that are demonstrably sales at wholesale.

So what, exactly, is a "sale of electric energy at wholesale"? We need not guess, for the Act provides a definition: "a sale of electric energy to any person for resale ." § 824(d) (emphasis added). No matter how many times the majority incants and italicizes the word "wholesale," ante, at 776 - 777, nothing can change the fact that the vast majority of (and likely all) demand-response participants-"[a]ggregators of multiple users of electricity, as well as large-scale individual users like factories or big-box stores," ante, at 770-do not resell electric energy ; they consume it themselves. FERC's own definition of demand response is aimed at energy consumers, not resellers. 18 CFR § 35.28(b)(4) (2015).

*786It is therefore quite beside the point that the challenged "[r]ule addresses-and addresses only-transactions occurring on the wholesale market," ante, at 776. For FERC's regulatory authority over electric-energy sales depends not on which "market" the "transactions occu[r] on" (whatever that means), but rather on the identity of the putative purchaser . If the purchaser is one who resells electric energy to other customers, the transaction is one "at wholesale" and thus within FERC's authority. If not, then not. Or so, at least, says the statute. As we long ago said of the parallel provision in the Natural Gas Act, 15 U.S.C. § 717, "[t]he line of the statute [i]s thus clear and complete. It cut[s] sharply and cleanly between sales for resale and direct sales for consumptive uses. No exceptions [a]re made in either category for particular uses, quantities, or otherwise." Panhandle Eastern Pipe Line Co. v. Public Serv. Comm'n of Ind., 332 U.S. 507, 517, 68 S.Ct. 190, 92 L.Ed. 128 (1947). The majority makes no textual response to this plain reading of the statute.

The demand-response bidders here indisputably do not resell energy to other customers. It follows that the rule does not regulate electric-energy sales "at wholesale," and 16 U.S.C. § 824(b)(1) therefore forbids FERC to regulate these demand-response transactions. See New York v. FERC, 535 U.S. 1, 17, 122 S.Ct. 1012, 152 L.Ed.2d 47 (2002). That is so whether or not those transactions "directly affect" wholesale rates; as we recently said in another context, we will not adopt a construction that "needlessly produces a contradiction in the statutory text." Shapiro v. McManus, 577 U.S. ----, ----, 136 S.Ct. 450, 454, 193 L.Ed.2d 279 (2015). A faithful application of that principle would compel the conclusion that FERC may not "do under [§§ 824d(a) and 824e(a) ] what [it] is forbidden to do under [§ 824(b)(1) ]." Id., at ----, 136 S.Ct., at 455.

B

The analysis could stop there. But the majority is wrong even on its own terms, for the rule at issue here does in fact regulate "retail electricity sales," which are indisputably "matters ... subject to regulation by the States" and therefore off-limits to FERC. § 824(a) ; see FPC v. Conway Corp., 426 U.S. 271, 276, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976) ; Panhandle Eastern Pipe Line Co., supra, at 517-518, 68 S.Ct. 190. The demand-response participants are retail customers-they purchase electric energy solely for their own consumption. And FERC's demand-response scheme is intentionally "designed to induce lower consumption of electric energy"-in other words, to induce a reduction in "retail electricity sales"-by offering "incentive payments" to those customers. 18 CFR § 35.28(b)(4). The incentive payments effectively increase the retail price of electric energy for participating customers because they must now account for the opportunity cost of using, as opposed to abstaining from using, more energy. In other words, it literally costs them more to buy energy on the retail market. In the court below, FERC conceded that offering credits to retail customers to reduce their electricity consumption "would be an impermissible intrusion into the retail market" because it would in effect regulate retail rates. 753 F.3d 216, 223 (C.A.D.C.2014). Demand-response incentive payments are identical in substance.

The majority resists this elementary economic conclusion (notwithstanding its own exhortation to "think back to Econ 101," ante, at 769). Why? Because its self-proclaimed "common-sensical" view dictates otherwise. Ante, at 778. Maybe the *787easiest way to see the majority's error is to take its own example: an airline passenger who rejects a $300 voucher for taking a later flight. Consider the following formulation of that example, indistinguishable in substance from the majority's formulation. (Indistinguishable because the hypothetical passenger has exactly the same options and outcomes available to him.) Suppose the airline said to the passenger: "We have proactively canceled your ticket and refunded $400 to your account; and because we have inconvenienced you, we have also deposited an extra $300. The money is yours to use as you like. But if you insist on repurchasing a ticket on the same flight, you must not only pay us $400, but return the $300 too." Now what is the effective price of the ticket? Sometimes an allegedly commonsensical intuition is just that-an intuition, often mistaken.

Moving closer to home, recall that demand-response participants must choose either to purchase a unit of energy at the prevailing retail price (say $10) or to withhold from purchasing that unit and receive instead an incentive payment (of say $5). The two options thus present a choice between having a unit of energy, on the one hand, and having $15 more in the bank, on the other. To repeat: take the energy, be $15 poorer; forgo the energy, be $15 richer. Is that not the very definition of price? See Black's Law Dictionary 1380 (10th ed. 2014) ("[t]he amount of money or other consideration asked for or given in exchange for something else"). In fact, is that not the majority 's definition of price? Ante, at 777 ("the amount of money a consumer will hand over in exchange for power").

In any event, the majority appears to recognize that the effective price is indeed $15-just as the effective price of the airline ticket in the hypothetical is $700. Ante, at 778, n. 9. That recognition gives away the game. For FERC is prohibited not just from directly setting or modifying retail prices ; it is prohibited from regulating retail sales, no matter the means. Panhandle Eastern Pipe Line Co., supra, at 517, 68 S.Ct. 190. Whether FERC sets the "real" retail price (to use the majority's idiosyncratic terminology, ante, at 778, n. 9) or the "effective" retail price is immaterial; either way, the rule-by design -induces demand-response participants to forgo retail electric-energy purchases they otherwise would have made. As noted, even FERC conceded that offering credits to retail customers would impermissibly regulate retail sales. The majority blithely overlooks this concession in favor of its own myopic view of retail pricing-all the while evading the inconvenient fact that fiddling with the effective retail price of electric energy, be it through incentive payments or hypothetical credits, regulates retail sales of electric energy no less than does direct ratesetting.

C

The majority cites dicta in several of our opinions expressing the assumption that state jurisdiction and federal jurisdiction under FERC cover the field, so that there is no regulatory "gap"; one entity or the other "must have jurisdiction to regulate each and every practice that takes place in the electricity markets." Ante, at 780. The cases that express such a principle, with respect to the Federal Power Act and its companion the Natural Gas Act, base it (no surprise) on legislative history. See, e.g., FPC v. Louisiana Power & Light Co., 406 U.S. 621, 631, 92 S.Ct. 1827, 32 L.Ed.2d 369 (1972) ; FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 19, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961) ; Panhandle Eastern Pipe Line Co., 332 U.S., at 517-518, and n. 13, 68 S.Ct. 190.

*788One would expect the congressional proponents of legislation to assert that it is "comprehensive" and leaves no stone unturned. But even if one is a fan of legislative history, surely one cannot rely upon such generalities in determining what a statute actually does. Whether it is "comprehensive" and leaves not even the most minor regulatory "gap" surely depends on what it says and not on what its proponents hoped to achieve. I cannot imagine a more irrational interpretive principle than the following, upon which the majority evidently relies:

"[W]hen a dispute arises over whether a given transaction is within the scope of federal or state regulatory authority, we are not inclined to approach the problem negatively, thus raising the possibility that a 'no man's land' will be created. That is to say, in a borderline case where congressional authority is not explicit we must ask whether state authority can practicably regulate a given area and, if we find that it cannot, then we are impelled to decide that federal authority governs." Transcontinental Gas Pipe Line Corp., supra, at 19-20, 81 S.Ct. 435 (citation omitted).

That extravagant and otherwise-unheard-of method of establishing regulatory jurisdiction was not necessary to the judgments that invoked it, and should disappear in the Court's memory hole.

Suppose FERC decides that eliminating the middleman would benefit the public, and therefore promulgates a rule allowing electric-energy generators to sell directly to retail consumers across state lines and fixing generation, transmission, and retail rates for such sales. I think it obvious this hypothetical scheme would be forbidden to FERC. Yet just as surely the States could not enact it either, for only FERC has authority to regulate "the transmission of electric energy in interstate commerce." 16 U.S.C. § 824(b)(1) ; see also New York, 535 U.S., at 19-20, 122 S.Ct. 1012. Is this a regulatory "gap"? Has the generator-to-consumer sales scheme fallen into a regulatory "no man's land"? Must FERC therefore be allowed to implement this scheme on its own? Applying the majority's logic would yield nothing but "yesses." Yet the majority acknowledges that neither FERC nor the States have regulatory jurisdiction over this scheme. Ante, at 780, n. 10. Such sales transactions, involving a mix of retail and wholesale players-as the demand-response scheme does -can be regulated (if at all) only by joint action. I would not call that a "problem," ante, at 780; I would call it an inevitable consequence of the federal-state division created by the FPA.

The majority is evidently distraught that affirming the decision below "would ... extinguish the wholesale demand response program in its entirety." Ante, at 781. Alarmist hyperbole. Excluding FERC jurisdiction would at most eliminate this particular flavor of FERC-regulated demand response. Nothing prevents FERC from tweaking its demand-response scheme by requiring incentive payments to be offered to wholesale customers, rather than retail ones. Brief for Respondent Electric Power Supply Assn. (EPSA) et al. 47-48; Brief for Respondents Midwest Load-Serving Entities 10-11. And retail-level demand-response programs, run by the States, do and would continue to exist. See Brief for Respondent EPSA et al. 46-47; Brief for Respondents Midwest Load-Serving Entities 6-11. In fact Congress seemed to presuppose that States, not FERC, would run such programs: The relevant provisions of the Energy Policy Act of 2005, 119 Stat. 594 et seq., are intended "to encourage States to coordinate, on a regional basis, State energy policies to provide reliable and affordable demand response services." § 1252(e)(1), id., at 965, codified at *78916 U.S.C. § 2642 note (emphasis added). That statute also imposes several duties on the Secretary of Energy to assist States in implementing demand-response programs. §§ 1252(e)(2), (e)(3), 119 Stat. 965-966. In context, § 1252(f) of the 2005 Act is therefore best read as directing the Secretary to eliminate "unnecessary barriers" to States ' adopting and implementing demand-response systems-and not, as the majority contends, as "praising wholesale demand response" systems to be deployed and regulated by FERC, ante, at 770 (emphasis added).

Moreover, the rule itself allows States to forbid their retail customers to participate in the existing demand-response scheme. 18 CFR § 35.28(g)(1)(i)(A) ; see Brief for Petitioner in No. 14-840, at 43. The majority accepts FERC's argument that this is merely a matter of grace, and claims that it puts the "finishing blow" to respondents' argument that 16 U.S.C. § 824(b)(1) prohibits the scheme. Ante, at 779. Quite the contrary. Remember that the majority believes FERC's authority derives from 16 U.S.C. §§ 824d(a) and 824e(a), the grants of "affecting" jurisdiction. Yet those provisions impose a duty on FERC to ensure that "all rules and regulations affecting or pertaining to [wholesale] rates or charges shall be just and reasonable ." § 824d(a) (emphasis added); see § 824e(a) (similar); Conway Corp., 426 U.S., at 277-279, 96 S.Ct. 1999. If inducing retail customers to participate in wholesale demand-response transactions is necessary to render wholesale rates "just and reasonable," how can FERC, consistent with its statutory mandate, permit States to thwart such participation? See Brief for United States as Amicus Curiae 20-21, in Hughes v. Talen Energy Marketing, LLC, No. 14-614 etc., now pending before the Court (making an argument similar to ours); cf. New England Power Co. v. New Hampshire, 455 U.S. 331, 339-341, 102 S.Ct. 1096, 71 L.Ed.2d 188 (1982). Although not legally relevant, the fact that FERC-ordinarily so jealous of its regulatory authority, see Brief for United States as Amicus Curiae in No. 14-614 etc.-is willing to let States opt out of its demand-response scheme serves to highlight just how far the rule intrudes into the retail electricity market.

II

Having found the rule to be within FERC's authority, the Court goes on to hold that FERC's choice of compensating demand-response bidders with the "locational marginal price" is not arbitrary and capricious. There are strong arguments that it is. Brief for Robert L. Borlick et al. as Amici Curiae 5-34. Since, however, I believe FERC's rule is ultra vires I have neither need nor desire to analyze whether, if it were not ultra vires, it would be reasonable.

* * *

For the foregoing reasons, I respectfully dissent.

Justice GINSBURG delivered the opinion of the Court.

The Federal Power Act (FPA), 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq., vests in the Federal Energy Regulatory Commission (FERC) exclusive jurisdiction over wholesale sales of electricity in the interstate market. FERC's regulatory scheme includes an auction-based market *1292mechanism to ensure wholesale rates that are just and reasonable. FERC's scheme, in Maryland's view, provided insufficient incentive for new electricity generation in the State. Maryland therefore enacted its own regulatory program. Maryland's program provides subsidies, through state-mandated contracts, to a new generator, but conditions receipt of those subsidies on the new generator selling capacity into a FERC-regulated wholesale auction. In a suit initiated by competitors of Maryland's new electricity generator, the Court of Appeals for the Fourth Circuit held that Maryland's scheme impermissibly intrudes upon the wholesale electricity market, a domain Congress reserved to FERC alone. We affirm the Fourth Circuit's judgment.

I

A

Under the FPA, FERC has exclusive authority to regulate "the sale of electric energy at wholesale in interstate commerce." § 824(b)(1). A wholesale sale is defined as a "sale of electric energy to any person for resale." § 824(d). The FPA assigns to FERC responsibility for ensuring that "[a]ll 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 ... shall be just and reasonable." § 824d(a). See also § 824e(a) (if a rate or charge is found to be unjust or unreasonable, "the Commission shall determine the just and reasonable rate"). "But the law places beyond FERC's power, and leaves to the States alone, the regulation of 'any other sale'-most notably, any retail sale-of electricity." FERC v. Electric Power Supply Assn., 577 U.S. ----, ----, 136 S.Ct. 760, 766, 193 L.Ed.2d 661 (2016) (EPSA ) (quoting § 824(b) ). The States' reserved authority includes control over in-state "facilities used for the generation of electric energy." § 824(b)(1) ; see Pacific Gas & Elec. Co. v. State Energy Resources Conservation and Development Comm'n, 461 U.S. 190, 205, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983) ("Need for new power facilities, their economic feasibility, and rates and services, are areas that have been characteristically governed by the States.").

"Since the FPA's passage, electricity has increasingly become a competitive interstate business, and FERC's role has evolved accordingly." EPSA, 577 U.S., at ----, 136 S.Ct., at 768. Until relatively recently, most state energy markets were vertically integrated monopolies-i.e., one entity, often a state utility, controlled electricity generation, transmission, and sale to retail consumers. Over the past few decades, many States, including Maryland, have deregulated their energy markets. In deregulated markets, the organizations that deliver electricity to retail consumers-often called "load serving entities" (LSEs)-purchase that electricity at wholesale from independent power generators. To ensure reliable transmission of electricity from independent generators to LSEs, FERC has charged nonprofit entities, called Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs), with managing certain segments of the electricity grid.

Interstate wholesale transactions in deregulated markets typically occur through two mechanisms. The first is bilateral contracting: LSEs sign agreements with generators to purchase a certain amount of electricity at a certain rate over a certain period of time. After the parties have agreed to contract terms, FERC may review the rate for reasonableness. See Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 546-548, 128 S.Ct. 2733, 171 L.Ed.2d 607 (2008) (Because rates set *1293through good-faith arm's-length negotiation are presumed reasonable, "FERC may abrogate a valid contract only if it harms the public interest."). Second, RTOs and ISOs administer a number of competitive wholesale auctions: for example, a "same-day auction" for immediate delivery of electricity to LSEs facing a sudden spike in demand; a "next-day auction" to satisfy LSEs' anticipated near-term demand; and a "capacity auction" to ensure the availability of an adequate supply of power at some point far in the future.

These cases involve the capacity auction administered by PJM Interconnection (PJM), an RTO that oversees the electricity grid in all or parts of 13 mid-Atlantic and Midwestern States and the District of Columbia. The PJM capacity auction functions as follows. PJM predicts electricity demand three years ahead of time, and assigns a share of that demand to each participating LSE. Owners of capacity to produce electricity in three years' time bid to sell that capacity to PJM at proposed rates. PJM accepts bids, beginning with the lowest proposed rate, until it has purchased enough capacity to satisfy projected demand. No matter what rate they listed in their original bids, all accepted capacity sellers receive the highest accepted rate, which is called the "clearing price."1 LSEs then must purchase from PJM, at the clearing price, enough electricity to satisfy their PJM-assigned share of overall projected demand. The capacity auction serves to identify need for new generation: A high clearing price in the capacity auction encourages new generators to enter the market, increasing supply and thereby lowering the clearing price in same-day and next-day auctions three years' hence; a low clearing price discourages new entry and encourages retirement of existing high-cost generators.2

The auction is designed to accommodate long-term bilateral contracts for capacity. If an LSE has acquired a certain amount of capacity through a long-term bilateral contract with a generator, the LSE-not the generator-is considered the owner of that capacity for purposes of the auction. The LSE sells that capacity into the auction, where it counts toward the LSE's assigned share of PJM-projected demand, thereby reducing the net costs of the LSE's required capacity purchases from PJM.3 LSEs generally bid their capacity *1294into the auction at a price of $0, thus guaranteeing that the capacity will clear at any price. Such bidders are called "price takers." Because the fixed costs of building generating facilities often vastly exceed the variable costs of producing electricity, many generators also function as price takers.

FERC extensively regulates the structure of the PJM capacity auction to ensure that it efficiently balances supply and demand, producing a just and reasonable clearing price. See EPSA, 577 U.S., at ----, 136 S.Ct., at 769 (the clearing price is "the price an efficient market would produce"). Two FERC rules are particularly relevant to these cases. First, the Minimum Offer Price Rule (MOPR) requires new generators to bid capacity into the auction at or above a price specified by PJM, unless those generators can prove that their actual costs fall below the MOPR price. Once a new generator clears the auction at the MOPR price, PJM deems that generator an efficient entrant and exempts it from the MOPR going forward, allowing it to bid its capacity into the auction at any price it elects, including $0. Second, the New Entry Price Adjustment (NEPA) guarantees new generators, under certain circumstances, a stable capacity price for their first three years in the market. The NEPA's guarantee eliminates, for three years, the risk that the new generator's entry into the auction might so decrease the clearing price as to prevent that generator from recovering its costs.

B

Around 2009, Maryland electricity regulators became concerned that the PJM capacity auction was failing to encourage development of sufficient new in-state generation. Because Maryland sits in a particularly congested part of the PJM grid, importing electricity from other parts of the grid into the State is often difficult. To address this perceived supply shortfall, Maryland regulators proposed that FERC extend the duration of the NEPA from three years to ten. FERC rejected the proposal. PJM, 126 FERC ¶ 61,275 (2009). "[G]iving new suppliers longer payments and assurances unavailable to existing suppliers," FERC reasoned, would improperly favor new generation over existing generation, throwing the auction's market-based price-setting mechanism out of balance. Ibid. See also PJM, 128 FERC ¶ 61,157 (2009) (order on petition for rehearing) ("Both new entry and retention of existing efficient capacity are necessary to ensure reliability and both should receive the same price so that the price signals are not skewed in favor of new entry.").

Shortly after FERC rejected Maryland's NEPA proposal, the Maryland Public Service Commission promulgated the Generation Order at issue here. Under the order, Maryland solicited proposals from various companies for construction of a new gas-fired power plant at a particular location, and accepted the proposal of petitioner CPV Maryland, LLC (CPV). Maryland then required LSEs to enter into a 20-year pricing contract (the parties refer to this contract as a "contract for differences") with CPV at a rate CPV specified *1295in its accepted proposal.4 Unlike a traditional bilateral contract for capacity, the contract for differences does not transfer ownership of capacity from CPV to the LSEs. Instead, CPV sells its capacity on the PJM market, but Maryland's program guarantees CPV the contract price rather than the auction clearing price.

If CPV's capacity clears the PJM capacity auction and the clearing price falls below the price guaranteed in the contract for differences, Maryland LSEs pay CPV the difference between the contract price and the clearing price. The LSEs then pass the costs of these required payments along to Maryland consumers in the form of higher retail prices. If CPV's capacity clears the auction and the clearing price exceeds the price guaranteed in the contract for differences, CPV pays the LSEs the difference between the contract price and the clearing price, and the LSEs then pass the savings along to consumers in the form of lower retail prices. Because CPV sells its capacity exclusively in the PJM auction market, CPV receives no payment from Maryland LSEs or PJM if its capacity fails to clear the auction. But CPV is guaranteed a certain rate if its capacity does clear, so the contract's terms encourage CPV to bid its capacity into the auction at the lowest possible price.5

Prior to enactment of the Maryland program, PJM had exempted new state-supported generation from the MOPR, allowing such generation to bid capacity into the auction at $0 without first clearing at the MOPR price. Responding to a complaint filed by incumbent generators in the Maryland region who objected to Maryland's program (and the similar New Jersey program), *1296FERC eliminated this exemption. PJM, 135 FERC ¶ 61,022 (2011). See also 137 FERC ¶ 61,145 (2011) (order on petition for rehearing) ("Our intent is not to pass judgment on state and local policies and objectives with regard to the development of new capacity resources, or unreasonably interfere with those objectives. We are forced to act, however, when subsidized entry supported by one state's or locality's policies has the effect of disrupting the competitive price signals that PJM's [capacity auction] is designed to produce, and that PJM as a whole, including other states, rely on to attract sufficient capacity."); New Jersey Bd. of Pub. Util. v. FERC, 744 F.3d 74, 79-80 (C.A.3 2014) (upholding FERC's elimination of the state-supported generation exemption). In the first year CPV bid capacity from its new plant into the PJM capacity auction, that capacity cleared the auction at the MOPR rate, so CPV was thereafter eligible to function as a price taker.

In addition to seeking the elimination of the state-supported generation exemption, incumbent generators-respondents here-brought suit in the District of Maryland against members of the Maryland Public Service Commission in their official capacities. The incumbent generators sought a declaratory judgment that Maryland's program violates the Supremacy Clause by setting a wholesale rate for electricity and by interfering with FERC's capacity-auction policies.6 CPV intervened as a defendant. After a six-day bench trial, the District Court issued a declaratory judgment holding that Maryland's program improperly sets the rate CPV receives for interstate wholesale capacity sales to PJM. PPL Energyplus, LLC v. Nazarian, 974 F.Supp.2d 790, 840 (Md.2013). "While Maryland may retain traditional state authority to regulate the development, location, and type of power plants within its borders," the District Court explained, "the scope of Maryland's power is necessarily limited by FERC's exclusive authority to set wholesale energy and capacity prices." Id., at 829.7

The Fourth Circuit affirmed. Relying on this Court's decision in Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 370, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988), the Fourth Circuit observed that state laws are preempted when they "den[y] full effect to the rates set by FERC, even though [they do] not seek to tamper with the actual terms of an interstate transaction." PPL EnergyPlus, LLC v. Nazarian, 753 F.3d 467, 476 (2014). Maryland's program, the Fourth Circuit reasoned, "functionally sets the rate that CPV receives for its sales in the PJM auction," "a FERC-approved market mechanism." Id., at 476-477. "[B]y adopting terms and prices set by Maryland, not those sanctioned by FERC," the Fourth Circuit concluded, Maryland's program "strikes at the heart of the agency's statutory power." Id., at 478.8 The *1297Fourth Circuit cautioned that it "need not express an opinion on other state efforts to encourage new generation, such as direct subsidies or tax rebates, that may or may not differ in important ways from the Maryland initiative." Ibid .

The Fourth Circuit then held that Maryland's program impermissibly conflicts with FERC policies. Maryland's program, the Fourth Circuit determined, "has the potential to seriously distort the PJM auction's price signals," undermining the incentive structure FERC has approved for construction of new generation. Ibid. Moreover, the Fourth Circuit explained, Maryland's program "conflicts with NEPA" by providing a 20-year price guarantee to a new entrant-even though FERC refused Maryland's request to extend the duration of the NEPA past three years. Id., at 479.

We granted certiorari, 577 U.S. ----, 136 S.Ct. 356, 193 L.Ed.2d 288 (2015), and now affirm.

II

The Supremacy Clause makes the laws of the United States "the supreme Law of the Land; ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const., Art. VI, cl. 2. Put simply, federal law preempts contrary state law. "Our inquiry into the scope of a [federal] statute's pre-emptive effect is guided by the rule that the purpose of Congress is the ultimate touchstone in every pre-emption case." Altria Group, Inc. v. Good, 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008) (internal quotation marks omitted). A state law is preempted where "Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the States to supplement federal law," Northwest Central Pipeline Corp. v. State Corporation Comm'n of Kan., 489 U.S. 493, 509, 109 S.Ct. 1262, 103 L.Ed.2d 509 (1989), as well as "where, under the circumstances of a particular case, the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Crosby v. National Foreign Trade Council, 530 U.S. 363, 373, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000) (brackets and internal quotation marks omitted).

We agree with the Fourth Circuit's judgment that Maryland's program sets an interstate wholesale rate, contravening the FPA's division of authority between state and federal regulators. As earlier recounted, see supra, at 1292, the FPA allocates to FERC exclusive jurisdiction over "rates and charges ... received ... for or in connection with" interstate wholesale sales. § 824d(a). Exercising this authority, FERC has approved the PJM capacity auction as the sole ratesetting mechanism for sales of capacity to PJM, and has deemed the clearing price per se just and reasonable. Doubting FERC's judgment, Maryland-through the contract for differences-requires CPV to participate in the PJM capacity auction, but guarantees CPV a rate distinct from the clearing price for its interstate sales of capacity to PJM. By adjusting an interstate wholesale rate, Maryland's program invades FERC's regulatory turf. See EPSA, 577 U.S., at ----, 136 S.Ct., at 780 ("The FPA leaves no room either for direct state regulation of the prices of interstate wholesales or for regulation that would indirectly achieve the same result." (internal quotation marks omitted)).9

*1298That Maryland was attempting to encourage construction of new in-state generation does not save its program. States, of course, may regulate within the domain Congress assigned to them even when their laws incidentally affect areas within FERC's domain. See Oneok, Inc. v. Learjet, Inc., 575 U.S. ----, ----, 135 S.Ct. 1591, 1599, 191 L.Ed.2d 511 (2015) (whether the Natural Gas Act (NGA) preempts a particular state law turns on "the target at which the state law aims ").10 But States may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC's authority over interstate wholesale rates, as Maryland has done here. See ibid. (distinguishing between "measures aimed directly at interstate purchasers and wholesalers for resale, and those aimed at subjects left to the States to regulate" (internal quotation marks omitted)).11

The problem we have identified with Maryland's program mirrors the problems we identified in Mississippi Power & Light and Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986). In each of those cases, a State determined that FERC had failed to ensure the reasonableness of a wholesale rate, and the State therefore prevented a utility from recovering-through retail rates-the full cost of wholesale purchases. See Mississippi Power & Light, 487 U.S., at 360-364, 108 S.Ct. 2428 ; Nantahala, 476 U.S., at 956-962, 106 S.Ct. 2349. This Court invalidated the States' attempts to second-guess the reasonableness of interstate wholesale rates. " 'Once FERC sets such a rate,' " we observed in Mississippi Power & Light, " 'a State may not conclude in setting retail rates that the FERC-approved wholesale rates are unreasonable. A State must rather give effect to Congress' desire to give FERC plenary authority over interstate wholesale rates, and to ensure that the States do not interfere with this authority.' " 487 U.S., at 373, 108 S.Ct. 2428 (quoting Nantahala, 476 U.S., at 966, 106 S.Ct. 2349 ). True, Maryland's program does not prevent a utility from recovering through retail sales a cost FERC mandated it incur-Maryland instead guarantees CPV a certain rate for capacity sales to PJM regardless of the clearing *1299price. But Mississippi Power & Light and Nantahala make clear that States interfere with FERC's authority by disregarding interstate wholesale rates FERC has deemed just and reasonable, even when States exercise their traditional authority over retail rates or, as here, in-state generation.

The contract for differences, Maryland and CPV respond, is indistinguishable from traditional bilateral contracts for capacity, which FERC has long accommodated in the auction. See supra, at 1293 - 1294, and n. 3. But the contract at issue here differs from traditional bilateral contracts in this significant respect: The contract for differences does not transfer ownership of capacity from one party to another outside the auction. Instead, the contract for differences operates within the auction; it mandates that LSEs and CPV exchange money based on the cost of CPV's capacity sales to PJM. Notably, because the contract for differences does not contemplate the sale of capacity outside the auction, Maryland and CPV took the position, until the Fourth Circuit issued its decision, that the rate in the contract for differences is not subject to FERC's reasonableness review. See § 824(b)(1) (FERC has jurisdiction over contracts for "the sale of electric energy at wholesale in interstate commerce." (emphasis added)).12

Our holding is limited: We reject Maryland's program only because it disregards an interstate wholesale rate required by FERC. We therefore need not and do not address the permissibility of various other measures States might employ to encourage development of new or clean generation, including tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector. Nothing in this opinion should be read to foreclose Maryland and other States from encouraging production of new or clean generation through measures "untethered to a generator's wholesale market participation." Brief for Respondents 40. So long as a State does not condition payment of funds on capacity clearing the auction, the State's program would not suffer from the fatal defect that renders Maryland's program unacceptable.13

For the reasons stated, the judgment of the Court of Appeals for the Fourth Circuit is

Affirmed.

Justice SOTOMAYOR, concurring.

I write separately to clarify my understanding of the pre-emption principles that should guide this Court's analysis of the Federal Power Act and that underpin its conclusion in these cases.

The process through which consumers obtain energy stretches across state and federal regulatory domains. The Federal Power Act authorizes the States to regulate *1300energy production. 16 U.S.C. § 824(b). It then instructs the Federal Government to step in and regulate wholesale purchases and energy transportation. § 824(a). Finally, it allows the States to assume control over the ultimate sale of energy to consumers. § 824(b). In short, the Federal Power Act, like all collaborative federalism statutes, envisions a federal-state relationship marked by interdependence.

Pre-emption inquiries related to such collaborative programs are particularly delicate. This Court has said that where "coordinate state and federal efforts exist within a complementary administrative framework, and in the pursuit of common purposes, the case for federal pre-emption becomes a less persuasive one." New York State Dept. of Social Servs. v. Dublino, 413 U.S. 405, 421, 93 S.Ct. 2507, 37 L.Ed.2d 688 (1973). That is not to say that pre-emption has no role in such programs, but courts must be careful not to confuse the "congressionally designed interplay between state and federal regulation," Northwest Central Pipeline Corp. v. State Corporation, Comm'n of Kan., 489 U.S. 493, 518, 109 S.Ct. 1262, 103 L.Ed.2d 509 (1989), for impermissible tension that requires pre-emption under the Supremacy Clause.

In this context, therefore, our general exhortation not to rely on a talismanic pre-emption vocabulary applies with special force. See Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941) ("This Court ... has made use of the following expressions: conflicting; contrary to; occupying the field; repugnance; difference; irreconcilability; inconsistency; violation; curtailment; and interference. But none of these expressions provides an infallible constitutional test or an exclusive constitutional yardstick" (footnote omitted)).

I understand today's opinion to reflect these principles. Using the purpose of the Federal Power Act as the "ultimate touchstone" of its pre-emption inquiry, Altria Group, Inc. v. Good, 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008), rather than resting on generic pre-emption frameworks unrelated to the Federal Power Act, the Court holds that Maryland has impermissibly impeded the performance of one of FERC's core regulatory duties. Ensuring "just and reasonable" wholesale rates is a central purpose of the Act. See 16 § 824d(a). Pursuant to its mandate to set such rates, FERC has approved the PJM Interconnection capacity auction as the proper mechanism to determine the "just and reasonable" rate for the sale of petitioner CPV Maryland, LLC's energy at wholesale. Ante, at 1297. Maryland, however, has acted to guarantee CPV a rate different from FERC's "just and reasonable" rate and has thus contravened the goals of the Federal Power Act. Ibid. Such actions must be preempted. Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 374, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988) ("States may not regulate in areas where FERC has properly exercised its jurisdiction to determine just and reasonable wholesale rates"). The Court, however, also rightly recognizes the importance of protecting the States' ability to contribute, within their regulatory domain, to the Federal Power Act's goal of ensuring a sustainable supply of efficient and price-effective energy. Ante, at 1299.

Endorsing those conclusions, I join the Court's opinion in full.

Justice THOMAS, concurring in part and concurring in the judgment.

The Court concludes that Maryland's regulatory program invades the Federal Energy Regulatory Commission's (FERC)

*1301exclusive jurisdiction over interstate wholesale sales of electric energy. Ante, at 1297 - 1298. I agree that the statutory text and framework compel that conclusion, and that Maryland's program therefore cannot stand. Because the statute provides a sufficient basis for resolving these cases, I would not also rest today's holding on principles of implied pre-emption. See, e.g., ante, at 1297 - 1298. For that reason, I join the Court's opinion only to the extent that it rests on the text and structure of the Federal Power Act (FPA), 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq.

The FPA divides federal and state jurisdiction over the regulation of electricity sales. As relevant here, the FPA grants FERC the authority to regulate "the sale of electric energy at wholesale in interstate commerce." § 824(b)(1). That federal authority over interstate wholesale sales is exclusive. See, e.g., Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 966, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986) (recognizing that Congress "vested" in FERC "exclusive jurisdiction" and "plenary authority over interstate wholesale rates"); Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 377, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988) (Scalia, J., concurring in judgment) ("It is common ground that if FERC has jurisdiction over a subject, the States cannot have jurisdiction over the same subject").

To resolve these cases, it is enough to conclude that Maryland's program invades FERC's exclusive jurisdiction. Maryland has partially displaced the FERC-endorsed market mechanism for determining wholesale capacity rates. Under Maryland's program, CPV Maryland, LLC, is entitled to receive, for its wholesale sales into the capacity auction, something other than what FERC has decided that generators should receive. That is a regulation of wholesale sales: By "fiddling with the effective ... price" that CPV receives for its wholesale sales, Maryland has "regulate[d]" wholesale sales "no less than does direct ratesetting." FERC v. Electric Power Supply Assn., 577 U.S. ----, ----, 136 S.Ct. 760, 787, 193 L.Ed.2d 661 (2016) (Scalia, J., dissenting) (emphasis deleted) (addressing analogous situation involving retail sales). Maryland's program therefore intrudes on the exclusive federal jurisdiction over wholesale electricity rates.

Although the Court applies the FPA's framework in reaching that conclusion, see ante, at 1297 - 1298, it also relies on principles of implied pre-emption, see, e.g., ante, at 1297 - 1298. Because we can resolve these cases based on the statute alone, I would affirm based solely on the FPA. Accordingly, I concur in the judgment and I join the Court's opinion to the extent that it holds that Maryland's program invades FERC's exclusive jurisdiction.