Decisions Threaten Market-Based Rate Contracts

Law360, New York (March 29, 2007, 12:00 AM EDT) -- The Supreme Court’s “Mobile-Sierra doctrine,” as interpreted by the courts for decades, has long given parties with contracts subject to the Federal Energy Regulatory Commission’s (FERC or Commission) jurisdiction a relatively high degree of certainty that their contracts would not be subject to modification by FERC, absent a showing that the rate would “adversely affect the public interest.”

As understood by the courts and FERC, this public interest test would permit the undoing of a contract only in “extraordinary circumstances” beyond mere buyer’s or seller’s remorse....
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