Term: 2009
Docket: 08-674
Nrg Power Marketing, Llc, Et Al. v. Maine Public Utilities Commission Et Al.
- Pro
08-674 NRG POWER MARKETING V. MAINE PUB. UTILITIES DECISION BELOW: 520 F.3d 464 CERT. GRANTED 4/27/2009 QUESTION PRESENTED: Section 206 of the Federal Power Act (FPA), 16 U.S.C. § 824e(a), requires that rates for the transmission and sale of electricity in interstate commerce be "just and reasonable." Under the Mobile-Sierra doctrine-named for this Court's decisions in United Gas Pipeline Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), and FPC v. Sierra Pacific Power Co., 350 U.S. 348 (1956)-the Federal Energy Regulatory Commission ("FERC") must "presume that the rate set out in a freely negotiated wholesale-energy contract meets the 'just and reasonable' requirement imposed by law," and that "presumption may be overcome only if FERC concludes that the contract seriously harms the public interest." Morgan Stanley Capital Group Inc. v. Pub. Util. Dist. No.1, 128 S. Ct. 2733, 2737 (2008). In the decision below, the court of appeals held that, ''when a rate challenge is brought by a non-contracting third party, the Mobile-Sierra doctrine simply does not apply." The question presented is: Whether Mobile-Sierra's public-interest standard applies when a contract rate is challenged by an entity that was not a party to the contract. LOWER COURT CASE NUMBER: 06-1403, 06-1427, 07-1193
In the case of NRG Power Marketing, LLC et al. v. Maine Public Utilities Commission et al., 2009, the U.S Supreme Court ruled in favor of Federal Energy Regulatory Commission (FERC) and its authority to approve wholesale electricity rates that were negotiated voluntarily between sellers and buyers. The dispute arose when several public utilities commissions challenged FERC's approval of a multi-party settlement agreement establishing rates for transmission services on grounds that it discriminated against non-settling parties by not allowing them to opt out or challenge the rate after it was set. However, the court held that FERC’s decision did not violate federal law nor did it undermine any party’s right to a reasonable rate as all parties had an opportunity to participate in negotiations before finalization.
In the dissenting opinion for NRG Power Marketing, LLC v. Maine Public Utilities Commission et al., Justice John Paul Stevens argued that the Federal Energy Regulatory Commission (FERC) did not have authority to impose a Mobile-Sierra clause on non-assenting parties. He contended that FERC's decision was inconsistent with contract principles and exceeded its statutory authority under the Federal Power Act. The majority’s interpretation of Mobile-Sierra doctrine, according to him, would allow FERC to force unwilling parties into contracts they had not agreed upon or negotiated themselves which is contrary to basic principles of freedom of contract and fair dealing. Furthermore, he expressed concern about potential abuse by dominant market players who could exploit this power imbalance in their favor at the expense of smaller entities or consumers.
