ABA SEER Quick Teleconference on 9th Circuit Cases Revisiting Mobile-Sierra Public Interest Review of Unilateral Modifications of Power Contracts

Energy Contracts in Context: The Ninth Circuit Revisits Mobile-Sierra Review in Light of the Western Energy Crisis   Wednesday, January 24, 2007     12:30 p.m. – 2:00 p.m. Eastern Time / 11:30 a.m. – 1:00 p.m. Central Time / 10:30 a.m. – 12:00 p.m. Mountain Time / 9:30 a.m. – 11:00 a.m. Pacific Time

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Program Overview:
The Federal Power Act requires FERC to ensure that all rates, terms and conditions for the sale of power are “just and reasonable.” Since 1956, the Supreme Court has recognized a stringent standard of review, known as the Mobile-Sierra doctrine, which under certain circumstances forbad attempts to modify contracts unilaterally unless such modifications are required by the “public interest.” For decades, this standard has been regarded by many as “practically insurmountable.” That era may now have come to a close.

On December 19, 2006, the Ninth Circuit published a pair of decisions arising from the Western Energy Crisis of 2000-2001 that revisit the application of Mobile-Standard review in the modern context of market-based rates. In Public Utility District No. 1 of Snohomish County Washington v. FERC, and its companion case, Public Utilities Commission of the State of California v. FERC, the Ninth Circuit determined that the Mobile-Sierra public interest standard of review should apply only when: “ (1) the contract by its own terms must not preclude the limited Mobile-Sierra review; (2) the regulatory scheme in which the contracts are formed must provide FERC with an opportunity for effective, timely review of the contracted rates; and (3) where . . . FERC is relying on a market-based rate-setting system to produce just and reasonable rates, this review must permit consideration of all factors relevant to the propriety of the contract’s formation.”

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Moderator and Panelist:
                Russ Campbell, Balch & Bingham LLP, Birmingham, AL Panelists:
    Jared des Rosiers, Pierce Atwood LLP, Portland, ME
    John Estes, Skadden, Arps, Slate, Meagher & Flom, Washington, DC
    Melissa Lauderdale, Director, Industry Legal Affairs, Edison Electric Institute, Washington, DC

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