"We view the [Entergy-ITC] transaction [as] an attempt to extract excess value."-Mississippi PSC
inquiry to whether issues of health, safety, and reliability are threatened. Such a discontinuance procedure would work an equitable balance between the interests underlying successful reorganizations of energy suppliers and the regulatory concerns of FERC, while avoiding regulatory risk and injury to investor confidence from alteration of the Bankruptcy Code's claims priority and distribution scheme. Yes, not everyone will get to keep their favored contracts, but the overall benefit of allowing debtors a fresh start and the opportunity to reorganize will serve the greater public interest in a deep and robust market.
An expedited procedure, like the FCC's discontinuance process focused on health, safety and reliability issues, strikes just such a balance, and can be effective here. Issues of creditor's rights should be left for the bankruptcy court.
- , Aug. 12, 2003; http://biz.yahoo.com/rf/030812/utilities_exelon_mystic_1.html.
- Order Upholding Contract, 104 FERC 61,214 (2003); Order Denying Rehearing and Late Intervention; 104 FERC 61,213 (2003).
- 103 FERC 61,344 (2003).
- at 29, 63, quoting , 350 U.S. 348, 355 (1956).
- FERC's analysis here raises a number of questions in its own right. Moreover, NRG-PMI's contention that because the CL&P contract at issue was never "filed" with FERC it is not subject to protection under misses the mark too. These issues are left for another day.
- See Commissioner Brownell's dissent, 103 FERC at 61, 344 (The FERC's order "confuses the issue of abrogating a contract with the issue of remedying the breach of contract" effected by rejection under the Bankruptcy Code); , 54 F.3d 406, 408 (7th Circ. 1995 ("Rejection is a device [under the Bankruptcy Code] to avoid specific performance."); , 756 F.2d 1043, 1048 (4th Cir. 1985) ("the legislative history of §365(g) makes clear that the purpose of the provision is to provide for the non-bankrupt party.") (emphasis added).
- , 104 FERC 61,185 (2003).
- 465 U.S. 513 (1984).
- at 528.
- , 103 FERC at 21, 49; FCC v. , 123 S.Ct. 832, 839 (2003).
- 28 U.S.C. § 1334(e).
- See , Docket No. RP99-274-006, et al., 101 FERC 61,374, p. 62, 556 (2002) ("the automatic stay gave Enron the right to determine, at its sole discretion, whether to reject or accept [the contract]"); , Docket no. , 71 FERC 61,194, p. 61,678 (1995) ("the Commission has reiterated its determination that Columbia's decision to reject its contracts is an issue to be resolved before the Bankruptcy Court and ) (emphasis added).
- FERC abdicates its responsibility under the FPA to guard against discrimination by concluding it lacks jurisdiction because supposedly "relief under is not available to redress alleged discrimination as between counterparties to non-jurisdictional contracts. Those interests are outside the scope of interests under Section 206 of the FPA." , 103 FERC at 25, 67.
- , 465 U.S. at 529-30.
- at 7-8, 16.
- 104 FERC 61,213 at 29, 58.
- , Energy Central Professional, July 10, 2003; http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=3978347.
- , The Hartford Courant, June 26, 2003.
- 47 C.F.R. § 63.71
- Indeed, in its recent filings with the United States Court of Appeals, FERC acknowledged that the Supreme Court's decision in required giving credence to a debtor's right to reject even