dissenting:
This ease raises a novel issue under the Appointments Clause of the United States Constitution. We must consider whether Congress may delegate certain federal authority to a body, acting through state-appointed officers, or whether such responsibilities must be reserved to a properly constituted federal agency acting through constitutionally appointed executive officials.
At issue is the constitutionality of the method of selecting the members of the Pacific Northwest Electric Power and Conservation Planning Council. Because I conclude that the method of selecting the members of the Council violates the Appointments Clause, I respectfully dissent.
I
Background
In 1937, Congress created the Bonneville Power Administration (“BPA”), a federal agency charged with the production, marketing, and distribution of electric power in the Pacific Northwest. In 1980, Congress created the Pacific Northwest Electric Power and Conservation Planning Council (“Council”), which is responsible for promulgating a regional conservation and electric power plan. Pacific Northwest Electric Power Planning and Conservation Act (“the Planning Act”), 16 U.S.C. §§ 839-839h. The Council is composed of members appointed by the governors of Idaho, Montana, Oregon, and Washington. Id. § 839b(a)(2)(B). Each state has passed implementing legislation. Idaho Code §§ 61-1201 to -1207; Mont.Code Ann. §§ 90-4-401 to -404; Or.Rev.Stat. § 469.800-.845; Wash.Rev.Code §§ 43.52A.010-.050.
The Council adopted a plan on June 1, 1983. 48 Fed.Reg. 24,493 (1983). Pursuant to 16 U.S.C. § 839f(e)(l)(A), the Seattle Master Builders Association and several other business organizations filed a petition for review in this court. The United States of America intervened on behalf of the Council.
II
The Applicability of the Appointments Clause
The petitioners argue that the members of the Council must be selected in accordance with the Appointments Clause, which states:
[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be estab*1372lished by Law: but the Congress may by Law vest the Appointment of such inferi- or Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.
U.S. Const, art. II, § 2, cl. 2 (emphasis added). The Council argues that the Appointments Clause is inapplicable because the Council is an interstate compact agency. As a result, two threshold issues must be addressed: (1) whether the Council is an interstate compact agency, and (2) whether the Appointments Clause applies to the members of interstate compact agencies.
A. The Existence of an Interstate Compact
Over half a century ago, Felix Frankfurter and James Landis argued that interstate compacts could provide an effective means for allowing coordinated federal-state control of electric power. Frankfurter & Landis, The Compact Clause of the Constitution — A Study in Interstate Adjustments, 34 Yale L.J. 685, 717 (1925). The Council, joined by the four Pacific Northwest states and the National Governors’ Association as amici curiae, argues that the Planning Act created an interstate compact. The petitioners, joined by the Pacific Legal Foundation as amicus curiae, argue that the Council is a federal agency.
In form, the creation of the Council resembles the creation of an interstate compact. After listing the purposes of the Council, the Planning Act states: “To achieve such purposes and facilitate cooperation among the States of Idaho, Montana, Oregon, and Washington, and with the Bonneville Power Administration, the consent of Congress is given for an agreement described in this paragraph and not in conflict with this chapter____” 16 U.S.C. § 839b(a)(2). The Planning Act also states that the appointment of members by three states “shall constitute an agreement by the States establishing the Council and such agreement is hereby consented to by the Congress.” Id.
On the other hand, the Council lacks several of the classic indicia of an interstate compact. For example, the Supreme Court recently noted that two reciprocal state statutes were unlike an interstate compact because “[njeither statute is conditioned on action by the other State, and each State is free to modify or repeal its law unilaterally.” Northeast Bancorp, Inc. v. Board of Governors, — U.S.-, 105 S.Ct. 2545, 2554, 86 L.Ed.2d 112 (1985). None of the Pacific Northwest states conditioned their agreement to participate in the Council on action by the other states. All four states are free to repeal their statutes unilaterally.
More significantly, the Planning Act authorized the creation of the Council on the consent of only three of the four states. 16 U.S.C. § 839b(a)(2). The Planning Act does not, however, limit the geographical scope of the Council’s responsibilities in such a case. Suppose, for example, that Idaho, Montana, and Oregon had joined the Council, but that Washington had declined to join. The Council, composed of members from Idaho, Montana, and Oregon, would have been responsible for preparing a plan for all four states. In that case, the Council would have taken action that could have substantive effects in a nonmember state.1 If the Council is truly an interstate compact agency, that result would not be possible.
In fact, the “region” serviced by the BPA includes portions of Nevada, Utah, Wyoming, and California. 16 U.S.C. §§ 839a(14)(A) & (B). To the extent the Council has authority over BPA actions, the Council also exercises authority affecting electric utility consumers living outside the four states from which the Council members were appointed. The four states involved have therefore agreed to participate in establishing policy and standards, not for each other, but for a federal agency with regional authority extending beyond those states. This is strong evidence that Congress did not intend the establishment of an interstate compact.
*1373Finally, the Council lacks the most important indicia of an interstate compact agency: a state purpose. While it is apparent that the Pacific Northwest states have a strong interest in obtaining representation in regional policy making by the BPA, the purpose of the Council is not representative in nature. Instead, the purpose of the Council is to guide the actions of the BPA. Because the states have no right to exercise control over the BPA, that is not a state purpose. If the Council was responsible for coordinating energy and conservation planning at the state level, it would have a state purpose. See Frankfurter & Landis, supra, at 717 (proposing “[ejoordinated [electric power] regulation among groups of States, in harmony with Federal administration over developments on navigable streams and in the public domain”). The Council has no such responsibility.
It is true that interstate compacts by their very nature have federal law implications and provide a vehicle for states to act in a manner in which a state may not act without congressional consent, thus altering a state’s sphere of authority. See L. Tribe, American Constitutional Law § 6-31, at 402 (1978).- Congressional consent does “transform an interstate compact ... into a law of the United States,” Cuyler v. Adams, 449 U.S. 433, 438, 101 S.Ct. 703, 707, 66 L.Ed.2d 641 (1981), in that federal judicial interpretation of a compact under the Supremacy Clause controls over a state’s application of its own law. See West Virginia ex rel. Dyer v. Sims, 341 U.S. 22, 33, 71 S.Ct. 557, 563, 95 L.Ed.2d 713 (1951) (Reed, J., concurring). However, granting a body of state-appointed officials the power to constrain the actions of a federal executive agency is quite another thing. That is not a legitimate function of an interstate compact agency.
While it is difficult to characterize the Council as an interstate compact agency, it is easy to characterize the Council as a federal agency. The classic definition of an “agency” is “a governmental authority, other than a court and other than a legislative body, which affects the rights of private parties through either adjudication or rulemaking.” 1 K. Davis, Administrative Law Treatise § 1.01, at 1 (1st ed. 1958); see id. § 1.02 (2d ed. 1978). The Council is a “governmental authority,” and its plan constitutes “rulemaking.” See 16 U.S.C. § 839b(a)(4) (stating that the Council is subject to the same general administrative rules as the BPA and the Federal Energy Regulatory Commission). As this case demonstrates, the Council’s plan “affects the rights of private parties.” The Council is thus an agency. Because the Council has a federal purpose and receives its authority from federal law, the Council is a federal agency.
In sum, the Council is not an ordinary interstate compact agency. At best, the Council can be characterized as a federal agency created through the interstate compact process. At worst, the Council is a federal agency with its members appointed by state governors. Under either approach, the Council is not exempt from the requirements of the Appointments Clause.
B. The Applicability of the Appointments Clause to Interstate Compacts
The Council argues that interstate compacts are exempt from the Appointments Clause. Assuming for present purposes that the Council can be treated as an interstate compact agency, this argument raises a single issue: whether persons who would ordinarily be regarded as “Officers of the United States” for purposes of the Appointments Clause need not be appointed in accordance with that provision when their authority is based on an interstate compact. A careful review of the relevant constitutional provisions reveals that the members of interstate compact agencies are not exempt from the Appointments Clause.
Initially, it should be noted that the Appointments Clause is a grant of power to the executive branch. The President has the power to nominate federal officers and, with the advice and consent of the Senate, *1374to appoint them.2 See Buckley v. Valeo, 424 U.S. 1, 131, 96 S.Ct. 612, 688, 46 L.Ed.2d 659 (1976) (per curiam); L. Tribe, American Constitutional Law § 4-8 (1978). In the absence of specific constitutional authority, Congress may not usurp the President’s power to nominate federal officers. See Buckley, 424 U.S. at 135, 96 S.Ct. at 689 (holding that the Necessary and Proper Clause, U.S. Const, art. II, § 8, cl. 18, does not authorize congressional abrogation of the Appointments Clause); L. Tribe, supra, § 4-8, at 184-85 (noting that the Appointments Clause “seeks to preserve an executive check upon legislative authority”).
Congressional authority would be enhanced at the expense of the executive if Congress had the unrestricted power to confer the appointment authority on third parties. To the extent that a governor can appoint a member of an interstate compact agency who would otherwise be subject to the Appointments Clause, the power of the ■ executive branch is diminished.3
The Compacts Clause, on the other hand, is not a grant of power either to the states or to Congress. On the contrary, it is a prohibition: “No State shall, without the Consent of Congress, ... enter into any Agreement or Compact with another State ____” U.S. Const, art. I, § 10, cl. 3. The Compacts Clause does not give Congress the power to create interstate compacts. Similarly, the Compacts Clause does not expressly authorize states to enter into compacts. Instead, the Compacts Clause is a prohibition with an exception. Cf U.S. Const, amend. X (“The powers not ... prohibited by.[the Constitution] to the States, are reserved to the States respectively —”). Indeed, most of the cases that have analyzed the Compacts Clause have involved unauthorized interstate compacts. E.g., Northeast Bancorp, 105 S.Ct. at 2554-55.
In light of the language of the two clauses, it is apparent that the Compacts Clause is not an exception to the Appointments Clause. The executive branch has the unqualified right to nominate all federal officers. Congress lacks the constitutional authority to delegate that power to the states. Moreover, the Supremacy Clause prevents the states from usurping the executive branch’s power. U.S. Const, art. VI, cl. 2. Accordingly, the Council’s alleged status as an interstate compact agency does not exempt it from scrutiny under the Appointments Clause.
Ill
The Constitutionality of the Council
It is next necessary to determine whether the method of selecting Council members is constitutional under the Appointments Clause. In light of the Supreme Court’s decision in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam), it is apparent that the relevant provisions of the Planning Act are unconstitutional.
*1375A. The Constitutional Status of Council Members
1. The Appropriate Legal Standard
The Council argues that the Appointments Clause applies only to employees of the federal government. In essence, the Council is arguing that the applicability of the Appointments Clause is determined by the status of the officer, rather than by the officer’s power and authority. In Buckley, the Supreme Court specifically rejected that approach and instead emphasized substance over form:
The Appointments Clause could, of course, be read as merely dealing with etiquette or protocol in describing “Officers of the United States,” but the drafters had a less frivolous purpose in mind____
We think that the term “Officers of the United States” as used in Art. II, defined to include “all persons who can be said to hold an office under the government” in United States v. Germaine, [99 U.S. (9 Otto) 508, 25 L.Ed. 482 (1878)], is a term intended to have substantial meaning. We think its fair import is that any appointee exercising significant authority pursuant to the laws of the United States is an “Officer of the United States,” and must, therefore, be appointed in the manner prescribed by § 2, cl. 2, of that Article.
424 U.S. at 125-26, 96 S.Ct. at 685. Accordingly, the issue is whether Council members exercise “significant authority pursuant to the laws of the United States.”4
2. Significant Authority Pursuant to Federal Law
The Council does not argue that it lacks significant authority pursuant to federal law. Indeed, the United States government concedes that several provisions of the Planning Act may give the Council “significant” authority pursuant to federal law. An examination of the Planning Act reveals that the Council is not an advisory planning council. Instead, the Council’s plan had substantive effects. By issuing the plan, the Council exercised significant authority under federal law.
Initially, the Planning Act requires the BPA to act in a manner consistent with the plan. Section 839b(d)(2) states: “Following adoption of the plan and any amendment thereto, all actions of the Administrator [of the BPA] pursuant to section 839d of this title [“Conservation and resource acquisition”] shall be consistent with the plan and any amendment thereto, except as otherwise specifically provided in this chapter.” 16 U.S.C. § 839b(d)(2). The Administrator is empowered to determine whether a resource acquisition or conservation decision is consistent with the plan. Id. § 839d(a)(l), (b)(1). As a result, section 839b(d)(2) does not give the Council the power to control the BPA. The issue, however, is not whether the Council can control the BPA, but whether the Council exercises significant authority pursuant to federal law. The ability to issue a plan with which the BPA must act consistently constitutes significant authority pursuant to federal law.
The Council’s authority, however, extends beyond the ability to promulgate the plan. Under section 839b(i), the Council is authorized to review the BPA’s actions “to determine whether such actions are consistent with the plan ... [and] the extent to which the plan ... is being implemented.” Id. § 839b(i). Under section 839b(j), the Council can request the Administrator to take action. Id. § 839b(j)(l). The Administrator must respond in writing within ninety days. Id. § 839b(j)(2). If the Administrator refuses to take the requested action, the Council can request an informal hearing and a final, reviewable decision. Id. § 839b(j)(3). While it is true that the Council cannot force the BPA to take action consistent with the plan, this mechanism allows the Council to exert pressure on the *1376BPA. It also allows the Council to obtain judicial review of the BPA’s inaction.
In addition, the Council has the power to block major resource acquisitions or conservation measures that are inconsistent with the plan. Within sixty days after the Administrator’s decision, the Council may determine by a majority vote that the proposed acquisition or measure is inconsistent with the plan. Id. § 839d(c)(2)(A); see also id. § 839d(c)(2)(B) (stating that the Council may declare a proposed major acquisition or measure inconsistent with the criteria for developing a plan if no plan is in effect). Section 839d(c)(3) states:
The Administrator may not implement any [major resource acquisition or conservation measure] that is determined ... by ... the Council to be inconsistent with the plan ...
(A) unless the Administrator finds that, notwithstanding such inconsistency, such resource is needed to meet the Administrator’s obligations under this chapter, and
(B) until the expenditure of funds for that purpose has been specifically authorized by Act of Congress enacted after December 5, 1980.
Id. § 839d(c)(3) (emphasis added). Under that provision, the Council has authority to block a major resource acquisition or conservation measure unless the BPA can persuade Congress to overrule the Council.
Section 839c(d) gives the Council similar authority. The Planning Act establishes a limitation on the amount cf electric power that the BPA can sell to direct service industrial customers. Id. § 839e(d)(l). If the BPA seeks to exceed that limitation, Council approval is required. Id. § 839c(d)(3).
Finally, the Planning Act allows the Council to recommend the imposition of a surcharge on the electric rates of customers in areas that have not enacted adequate conservation programs. Id. § 839b(f)(2). In the absence of such a recommendation, the BPA lacks authority to impose such a surcharge.
In sum, the Planning Act gives the Council the ability to produce significant substantive effects. As a result, the members of the Council are “Officers of the United States.” Because the President did not appoint the members of the Council, the Council’s actions are contrary to the Constitution and therefore void.
3. Other State Officials
The Council argues that invalidation of the Council under the Appointments Clause would mean that various other state officials must be appointed by the President. This argument overlooks the peculiar nature of the Council. On examination, each of the classes of state officials suggested by the Council lacks the characteristics that make the Council subject to the Appointments Clause.
The first class is composed of state officials who spend federal funds. The Council’s brief states that “the provision of conditional federal grants for elementary education, for example, does not bring the appointment of school boards and principals under the supervision of the President; yet these state officials establish plans that govern the manner in which federal money may be spent.” While the Council is correct, this class of officials can be distinguished from the Council in three ways. First, these officials do not exercise significant authority under federal law. They do not decide whether funds will be granted or the size of the grant. Second, these officials do not exercise control over the actions of federal officials. Third, these state officials have no authority at all until the funds are received by the state. At that point, the funds are, in effect, state funds.
The second class is composed of state judges. As the Council notes, state judges can decide federal issues. A state judge’s authority, however, derives solely from state law. If a state chooses to create courts of general jurisdiction, those courts cannot refuse to decide federal issues. See C. Wright, The Law of Federal Courts § 45 (4th ed. 1983). The Supremacy Clause *1377requires state judges to obey federal law, but does not allow those judges to change or to create federal law.
The third class is composed of state legislators. To the extent that state statutes do not discriminate against federal entities or interfere with federal activites, federal agencies are subject to those statutes. See Hancock v. Train, 426 U.S. 167, 179-80, 96 S.Ct. 2006, 2012-13, 48 L.Ed.2d 555 (1976); United States v. Texas, 695 F.2d 136, 138 n. 6 (5th Cir.), cert. denied, 464 U.S. 933, 104 S.Ct. 336, 78 L.Ed.2d 305 (1983). In some cases, Congress specifies that federal entities must obey state laws that would otherwise be preempted. See California v. United States, 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978). In those cases, Congress has merely narrowed the scope of federal preemption. The state legislatures are not authorized to pass legislation solely for the purpose of regulating federal agencies.
The final class is composed of the members of ordinary interstate compact agencies. A compact operates as federal law in the sense that construction of the compact’s terms presents a federal question and that state law is not a defense to noncompliance with the compact’s terms. See L. Tribe, supra, § 6-31, at 402. The Council, however, is not an ordinary compact. The Council was not created for a state purpose. If, for example, the Council had the power to coordinate energy planning at the state level, it would be valid to that extent. Likewise, Congress perhaps could delegate authority over regional energy production and distribution to an interstate compact agreed to by the states in that region, but Congress may not retain that authority in a federal executive agency (BPA) and create or approve a state-appointed body (the Council) that may subject that executive agency, at least in part, to its control. Unlike ordinary compacts, the Council can produce substantive effects under federal law. Because the Council’s actions are at least partially binding on the BPA, the members of the Council must be appointed in accordance with the Appointments Clause.
B. Innovative Cooperative Federalism
The Council, along with the four Pacific Northwest states and the National Governors’ Association as amici curiae, argues that the Planning Act represents an innovative program of cooperative federalism. Noting that the Appointments Clause was intended to prevent the accumulation of. power in one branch of government, the Council asserts that “the innovative form of federalism at issue in this case better serves the concern of the Framers than would a federally appointed council or a complete delegation of both planning and execution functions to the Administrator.” Regardless of the accuracy of that assertion, the Council’s position lacks a basis in the text of the Constitution. The members of the Council exercise significant authority pursuant to federal law. As a result, the system of federalism embodied in the Constitution gives the power to select Council members to the executive branch.
In essence, the Council is arguing that the allocation of powers and duties in the Constitution should be relaxed in this case for policy reasons. Similar arguments have frequently been rejected. During the Great Depression, for example, the government argued that the existence of a domestic emergency justified legislation that would otherwise be unconstitutional. See Belknap, The New Deal and the Emergency Powers Doctrine, 62 Texas L.Rev. 67 (1983). The Supreme Court rejected that argument:
Extraordinary conditions do not create or enlarge constitutional power. The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace, but these powers of the national government are limited by the constitutional grants. Those who act under these grants are not at liberty to transcend the imposed limits because they believe that more or different power is necessary.
A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 528-29, 55 S.Ct. 837, *1378842-43, 79 L.Ed. 1570 (1935); see Belknap, supra, at 92-98.
More recently, the Supreme Court considered the validity of the legislative veto. Rejecting numerous policy arguments, the Court held that the legislative veto is unconstitutional. INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). In a dissenting opinion, Justice White focused on the functional utility of the legislative veto. Id. at 967, 103 S.Ct. at 2792 (White, J., dissenting). The majority rejected that approach:
The choices we discern as having been made in the Constitutional Convention impose burdens on government processes that often seem clumsy, inefficient, even unworkable, but those hard choices were consciously made by men who had lived under a form of government that permitted arbitrary governmental acts to go unchecked. There is no support in the Constitution or decisions of this Court for the proposition that the cumbersomeness and delays often encountered in complying with explicit constitutional standards may be avoided, either by the Congress or by the President. With all the obvious flaws of delay, untidiness, and potential for abuse, we have not yet found a better way to preserve freedom than by making the exercise of power subject to the carefully crafted restraints spelled out in the Constitution.
Id. at 959, 103 S.Ct. at 2788 (citation omitted).
It is true that the legislative veto and the emergency powers doctrine involved constitutional issues different from those at issue in this case. Nevertheless, those cases illustrate the importance of maintaining the basic structure set forth in the Constitution. See United States v. Woodley, 751 F.2d 1008, 1014 (9th Cir.1985) (en banc) (“Changes-in [the Constitution] must come through constitutional amendment, not through judicial reform based on policy arguments.”). The Council cannot be upheld as an innovative form of cooperative federalism.
IV
Conclusion
Congress anticipated the possibility that the provisions for formation of the Council might be found unconstitutional. See 16 U.S.C. § 839h (specifically stating that the provisions creating the Council are separable). In fact, Congress provided for the alternative establishment of the Council as a federal agency if the courts invalidated the creation of the Council as a compact. Id. § 839b(b)(l)(A). Under the alternative scheme, the governors of the four Pacific Northwest states may nominate the Council members subject to the approval of the Secretary of Energy. Id. § 839b(2). Similar schemes have been upheld. See United States v. Hartwell, 73 U.S. (6 Wall.) 385, 18 L.Ed. 830 (1867); Woodford v. United States, 77 F.2d 861, 863-64 (8th Cir.1935). In this case, however, Congress has usurped the constitutionally delegated power of the executive branch by authorizing state governors to appoint the members of the Council. I would grant the petition for review and vacate the plan.
. The substantive effects of Council action are discussed below.
. Concurrent with and derived from this power of appointment, the Constitution "implicitly confers upon the President power to remove civil officers whom he appoints, at least those who exercise executive powers.” Synar v. United States, 626 F.Supp. 1374, 1395 (D.D.C.1986) (declaring automatic deficit reduction provisions of the Balanced Budget and Emergency Deficit Control Act of 1985 unconstitutional as vesting executive power to prescribe federal budget reductions in the Comptroller General, an officer removable by Congress); see also Myers v. United States, 272 U.S. 52, 119, 47 S.Ct. 21, 26, 71 L.Ed. 160 (1926) (upholding as incident to power of appointment, the President’s plenary power to dismiss a postmaster despite statutory requirement of advice and consent by the Senate).
As with the appointment power, the authority to remove officers exercising executive autnority serves the constitutional principle of separation of powers by preserving the President’s control over executive governmental functions. It is thus significant that the members of the Council not only are not subject to appointment by the President, but also are not made subject to removal by him.
. Indeed, the Framers expressly rejected the idea that the Appointments Clause is not violated so long as Congress does not arrogate to itself the power to appoint or remove federal officers. The Constitutional Convention voted down a proposed amendment to the Appointments Clause that would have permitted the Congress to delegate appointment power to state governors. 2 M. Farrand, The Records of the Federal Convention of 1787, 406, 418-19 (rev. ed. 1966).
. The Council argues that the Buckley test is inapplicable because this case does not present a separation of powers issue. It is apparent, however, that this case raises a separation of powers issue to the extent that Congress and the states are usurping the President’s power to nominate federal officers. This case also raises a separation of powers issue to the extent that a “state” entity is exercising authority over exclusively federal functions. In any event, the Council’s argument lacks a basis in the text of the Appointments Clause.