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The Mobile-Sierra Doctrine: A Return to Its Statutory Roots

The 9th Circuit’s Snohomish and PUC decisions rationalize what has been a confusing, conflicted area of law.

Fortnightly Magazine - May 2007

(1976) (Obligation to establish just and reasonable rates is a “legislative command,” which includes the “duty to prevent [public utilities] from charging rates based upon illegal, duplicative, or unnecessary labor costs”).

9. See, e.g., Florida Power & Light Co. , 67 F.E.R.C. ¶ 61,141, at 61,398 (1994) (holding that FERC “is not in any circumstance bound, absent its consent, to a public interest standard of review for future changes sought by non-parties to the contract or by the commission acting sua sponte to protect non-parties to the contract.”); Southern Co. Servs. Inc. , 67 F.E.R.C. ¶ 61,080, at 61,227 (1994) (same). In Carolina Power & Light Co. , 67 F.E.R.C. ¶ 61,074 (1994), FERC rejected a contract provision that sought to bind the commission to a “public interest” standard with respect to non-parties. See also Wisconsin Power & Light Co. , 106 F.E.R.C. ¶ 61,112 (2004) (Comm’r Kelly, dissenting in part) (citing cases).

10. E.g., PJM-New Jersey-Maryland Interconnection, et al. , 105 F.E.R.C. ¶ 61,294 (2003), reh’g denied, 108 F.E.R.C. ¶ 61,032 (2004), pet. for review dismissed for lack of jurisdiction sub nom. Old Dominion Elec. Coop. v. FERC , No. 04-1307 (D.C. Cir. Dec. 7, 2005).

11. PPL Wallingford Energy LLC , 118 F.E.R.C. ¶ 61,242, P 7 (2007); Williams Power Co. Inc. , 117 F.E.R.C. ¶ 61,238, P 5 (2006); Los Esteros Critical Energy Facility LLC , 117 F.E.R.C. ¶ 61,350, P 3 (2006).

12. Certification of Contested Offer of Settlement, Bridgeport Energy LLC , 118 F.E.R.C. ¶ 63,018 (2007) (Silverstein, J.) ( Bridgeport Certification ); Certification of Contested Offer of Settlement , PSEG Power Connecticut LLC , 115 F.E.R.C. ¶ 63,071 (2006) (Silverstein, J.) ( PSEG Certification ).

13. Order on Contested Settlement Agreement, Bridgeport Energy LLC , 118 F.E.R.C. ¶ 61,243, P 42 (2007) ( Bridgeport) (approving the settlement in part, on condition that the parties “file revisions to provide that the commission will be bound to the ‘just and reasonable’ standard and not the ‘public-interest’ standard for changes to the RMR Agreement.”).

14. Bridgeport at P 41. The commission goes on to note that “[b]ecause of the uniquely broad applicability of RMR agreements to markets and market participants alike, … it would be inconsistent with our duty under the [FPA] to be bound to the higher ‘public interest’ standard when reviewing RMR agreements.” Id. Interestingly, the commission appears to assume (without deciding, because its decision moots the issue) that the public-interest test remains a “higher … standard” than the just and reasonable standard. Id.

15. Bridgeport (Comm’r Kelly, concurring)

16. See PUC at 592 n.4.

17. Bridgeport Certification at P 29 (quoting Atl. City Elec. Co. v. FERC , 295 F.3d 1, 26 (D.C. Cir. 2002)). Because the commission decided the case on other grounds, it neither adopted nor rejected the judge’s reasoning. Bridgeport at P 42 n.35.

18. 295 F.3d 1 (D.C. Cir. 2002), mandate enforced, 329 F.3d 856, 859 (D.C. Cir. 2003) (FERC “has no jurisdiction to enter limitations requiring utilities to surrender their rights under § 205 of the FPA.”).