Electricity: A "Good" under the UCC. Should be a Simple Question — Right?

A question which often arises in the litigation of power supply contracts is whether the transaction is governed by the Uniform Commercial Code ("UCC"). Article 2 of the UCC applies to "transactions in goods." UCC § 2-102. A "good" is defined as "all things . . . which are movable at the time of identification to the contract for sale . . . ." UCC § 2-105. For those involved in the generation and transmission of electricity, this may appear to be a fairly straightforward question. Electricity is generated, sold under contract, and transmitted, i.e. moved, to its ultimate destination where it is consumed. It should not matter that electricity cannot be stored or that it is consumed rapidly. Surprisingly, however, the courts are split on whether electricity is a good governed by the UCC. The answer to this question is anything but inconsequential. It can be a decisive factor in litigation.