## Facts

- New England’s wholesale electricity market faced reliability concerns and persistent capacity shortages.
- Market participants reached a comprehensive settlement establishing new capacity-market rate mechanisms and providing that challenges to resulting rates would be reviewed under the Mobile–Sierra public-interest standard.
- The Federal Energy Regulatory Commission (FERC) approved the settlement as producing rates that were just and reasonable and consistent with the public interest.
- State utility commissions, state attorneys general, and consumer-side interests sought review, arguing that nonsettling, noncontracting challengers should not be bound by Mobile–Sierra.
- The D.C. Circuit held that Mobile–Sierra does not apply when a rate challenge is brought by a noncontracting third party, limiting the doctrine to contracting parties.

## Issues

1. Whether the Mobile–Sierra public-interest standard for reviewing challenges to FERC-jurisdictional contract rates applies only to challenges brought by contracting parties.
2. Whether noncontracting third parties’ challenges to contract rates are subject to the same Mobile–Sierra presumption that the contract rate is just and reasonable unless it seriously harms the public interest.

## Decision

- The Supreme Court reversed the D.C. Circuit to the extent it rejected applying Mobile–Sierra to noncontracting parties and remanded.
- The Court held that the Mobile–Sierra presumption does not depend on the identity of the complainant and applies to challenges initiated by noncontracting parties.
- The Court reasoned that Mobile–Sierra is an application of the Federal Power Act’s just-and-reasonable standard in the contract context, not a separate exception that turns on who files the complaint.
- The Court emphasized that exempting noncontracting challengers from Mobile–Sierra would weaken contract stability by permitting effectively de novo review of rates set by contract and approved by FERC.
- A dissent would have limited Mobile–Sierra to disputes between contracting parties, stressing that noncontracting states and consumers did not assent to the bargain.

## Legal Principles

- Under the Federal Power Act, wholesale electricity rates must be just and reasonable, and FERC regulates rates for interstate wholesale sales.
- For freely negotiated contract rates, FERC applies the Mobile–Sierra presumption that the rate is just and reasonable.
- The presumption may be overcome only if the contract rate seriously harms the public interest.
- The Mobile–Sierra public-interest standard applies to challenges to contract rates regardless of whether the challenger is a contracting party, a noncontracting third party, or FERC acting on its own initiative.
- Limiting Mobile–Sierra by complainant identity is inconsistent with treating the doctrine as the method for applying the statutory just-and-reasonable standard to contract-based rates.

## Conclusion

The Court held that Mobile–Sierra’s public-interest standard governs all challenges to FERC-jurisdictional contract rates, including those brought by noncontracting third parties, reinforcing the stability of FERC-approved contract pricing in wholesale electricity markets.


NRG Power Mktg., LLC v. Me. Pub. Utils. Comm'n, 558 U.S. 165 (2010)