DC Circuit Remands Mobile-Sierra Case Back to FERC

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The U.S. Court of Appeals for the District of Columbia Circuit recently remanded Maine Public Utilities Commission v. FERC to the Federal Energy Regulation Commission. FERC must now explain why the Mobile-Sierra doctrine applies to auction rates.

On November 5, 2010, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) remanded a case concerning the Mobile-Sierra doctrine back to the Federal Energy Regulatory Commission (FERC). The case, Maine Public Utilities Commission v. FERC, involves the issue of whether the Mobile-Sierra doctrine applies to the auction rates resulting from a settlement agreement involving the New England capacity market. This proceeding was previously remanded to the DC Circuit by the Supreme Court of the United States in January.

The DC Circuit case arises out of a line of judicial decisions surrounding the Mobile-Sierra doctrine, which presumes that freely negotiated wholesale contract rates are just and reasonable. In 2008 the Supreme Court decided Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1 of Snohomish County, Washington, holding that FERC must apply the Mobile-Sierra doctrine to all negotiated wholesale power contracts unless it determines the contract harms the public interest.

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