United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 17, 2024 Decided July 9, 2024

No. 22-1116

SHELL ENERGY NORTH AMERICA (US), L.P.,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

CALIFORNIA PUBLIC UTILITIES COMMISSION, ET AL.,

INTERVENORS

Consolidated with 22-1121, 22-1153, 22-1154, 22-1155, 

22-1156, 22-1157, 22-1159, 22-1167, 22-1168, 22-1169, 

22-1182, 22-1207, 22-1211, 22-1212, 22-1213, 22-1243, 

22-1250, 22-1259, 22-1263, 22-1265, 22-1298, 22-1299, 

22-1304, 22-1305, 22-1306, 22-1307, 22-1319, 22-1322, 

22-1323, 22-1324, 22-1325, 23-1008, 23-1011, 23-1012, 

23-1013

On Petitions for Review of Orders of the

Federal Energy Regulatory Commission
2

Scott H. Angstreich argued the cause for Seller-Marketer 

petitioners. With him on the joint briefs were Paul W. Hughes, 

Neil L. Levy, David G. Tewksbury, Andrew A. Lyons-Berg, 

David C. Frederick, Collin R. White, Kenneth W. Irvin, Brian 

P. Morrissey, David A. Super, and Britt Cass Steckman. 

Vincenzo Franco entered an appearance.

Candace J. Morey argued the cause for CPUC-SCE 

petitioners. With her on the briefs were Christine Hammond, 

Jonathan Knapp, Angela Wuerth, Aaron Jacobs-Smith, 

William Yu, and Rebecca Furman. Christopher E. Clay, Anand 

Durvasula, and Hannah E. Ford-Stille entered appearances.

Scott Ray Ediger, Attorney, Federal Energy Regulatory 

Commission, argued the causes for respondent. With him on 

the brief were Matthew R. Christiansen, General Counsel, 

Robert H. Solomon, Solicitor, and Lona T. Perry, Deputy 

Solicitor.

Candace J. Morey argued the cause for CPUC-SCE 

intervenors in support of respondent. With her on the brief 

were Christine Hammond, Aaron Jacobs-Smith, Anand 

Durvasula, Hannah Ford-Stille, William Yu, and Rebecca 

Furman. Jonathan P. Knapp and Angela L. Wuerth, and 

Christopher E. Clay entered appearances.

Paul W. Hughes argued the cause for Seller-Marketer 

intervenors. With him on the joint brief were David C. 

Frederick, Scott H. Angstreich, Collin R. White, David G. 

Tewksbury, Neil L. Levy, Kenneth W. Irvin, Brian P. Morrissey, 

Suedeen Gibbons Kelly, John N. Estes III, Christopher R. 

Jones, Vincenzo Franco, Mark R. Haskell, and Brian B. Bell. 

Betsy R. Carr, Vernle C. Durocher, Jr., Matthew E. Price, Britt 

C. Steckman, and Connor Suozzo entered appearances. 
3

Before: SRINIVASAN, Chief Judge, MILLETT and PILLARD, 

Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM: This case concerns the sale of electricity 

under the Federal Power Act, 16 U.S.C. §§ 791a et seq, and the 

Federal Energy Regulatory Commission’s (“FERC” or the 

“Commission”) efforts to limit the rates at which certain 

wholesale electricity is traded. 

For over two decades, the Commission has maintained a 

“soft” price cap for certain short-term electricity sales in parts 

of the western United States. That soft cap limits the price at 

which electricity sellers can offer electricity for sale in certain 

markets and requires “justification and refund” of above-cap 

sales—sellers who transact at prices above the soft cap must

justify those transactions to the Commission or be required to 

refund sale prices that exceed the cap. 

In August 2020, the western United States experienced a 

heat wave that affected wholesale electricity supply and 

demand and led to increased prices in the market for short-term 

electricity supply in that region. Some of the short-term sales 

occurred at prices above the Commission’s soft cap. Sellers 

who transacted at above-cap prices were thus required to justify 

those transactions to the Commission.

After reviewing the sellers’ justification filings, the 

Commission determined that some sellers had failed to justify 

their above-cap sales and ordered partial refunds. As relevant 

here, the Commission determined that the justification-andrefund inquiry into those above-cap sales did not implicate the 

Mobile-Sierra presumption established in case law. That 

presumption holds that contract rates formed through arms-
4

length, bilateral negotiation are entitled to a presumption of 

reasonableness that the Commission can overcome only by

finding that the rate “seriously harms the public interest” or by 

determining that the conditions underlying the presumption do 

not apply. 

Two groups of petitioners now challenge the 

Commission’s refund orders. One group of petitioners consists 

of sellers of electricity whose transactions were subject to 

refund under the soft-cap framework (“Sellers”). Sellers argue, 

among other things, that the Commission erred by failing to 

conduct any Mobile-Sierra analysis prior to ordering refunds. 

The other group consists of the California Public Utilities 

Commission, a state regulatory agency, and Southern 

California Edison Company, an investor-owned utility 

(“Consumers”). The Consumers contend that the Commission 

committed errors in calculating the Sellers’ refunds that will 

lead to higher electricity prices in the future. 

We agree with the Sellers that the Commission should 

have conducted the Mobile-Sierra analysis prior to ordering 

refunds, and so we grant the Sellers’ petitions for review, 

vacate the orders they challenge, and remand for further 

proceedings. Because of that holding, the Commission 

necessarily will need to change its refund analysis for abovecap sales going forward, and any decision by this Court on the 

validity of that framework would be purely advisory. For that 

reason, we dismiss the Consumers’ petitions for review as 

moot.
5

I

A

1

The Federal Energy Regulatory Commission has 

“jurisdiction over all facilities” involved in “the transmission 

of electric energy in interstate commerce and * * * the sale of 

electric energy at wholesale in interstate commerce[.]” 16 

U.S.C. § 824(b)(1).

The Federal Power Act, 16 U.S.C. § 791a et seq., charges 

the Commission with ensuring that “[a]ll rates and charges 

made, demanded, or received by any public utility for or in 

connection with the transmission or sale of electric energy 

* * * and all rules and regulations affecting or pertaining to 

such rates or charges [are] just and reasonable,” id. § 824d(a). 

As such, the Act empowers the Commission, “upon its own 

motion or upon complaint,” to “fix” any rate or charge subject 

to its jurisdiction, as well as “any rule, regulation, practice, or 

contract affecting such rate, charge, or classification” that the 

Commission finds to be “unjust, unreasonable, unduly 

discriminatory or preferential[.]” Id. § 824e(a). 

Commission-regulated public utilities set rates using two 

different methods. Utilities may “set rates with individual 

electricity purchasers through bilateral contracts.” Morgan 

Stanley Cap. Grp. Inc. v. Public Util. Dist. No. 1 of Snohomish 

County, 554 U.S. 527, 531 (2008). Alternatively, utilities can 

“unilaterally set rates, terms, and conditions for service—

commonly referred to as tariffs.” Advanced Energy United, 

Inc. v. FERC, 82 F.4th 1095, 1100 (D.C. Cir. 2023) (quotation 

marks omitted); see 16 U.S.C. §§ 824d(c), (d). Both tariffs and 

contracts “must be filed with the Commission before they go 
6

into effect.” Morgan Stanley, 554 U.S. at 531; see 16 U.S.C. 

§§ 824d(c), (d).

Tariffs take two forms: standard tariffs and market-based 

tariffs. Standard tariffs list the fixed dollar prices that the utility 

will charge for units of electricity. See Public Citizen, Inc. v. 

FERC, 7 F.4th 1177, 1184 (D.C. Cir. 2021). The rates in 

standard tariffs “generally reflect[] the utility’s costs plus a 

reasonable rate of return.” Id. 

Market-based tariffs, by contrast, “do not list any actual 

prices for electricity, but instead ‘simply state that the seller 

will enter into freely negotiated contracts with purchasers.’” 

Public Citizen, 7 F.4th at 1184 (quoting Morgan Stanley, 554 

U.S. at 537). Unlike traditional energy contracts, contracts 

entered into under market-based tariffs need not be filed 

immediately with the Commission because “the initial filing of 

the market-based tariffs themselves” satisfies that requirement. 

Morgan Stanley, 554 U.S. at 537. Even so, the “seller must file 

quarterly reports summarizing the contracts that it has entered 

into, even extremely short-term contracts.” Id. With marketbased tariffs, “purchasers no longer have the option of buying 

electricity at a [fixed price] set by tariff and contracts no longer 

need to be filed with FERC (and subjected to its investigatory 

power) before going into effect.” Id. at 538.1

1 Not every utility may utilize market-based tariffs for rate setting. 

The Commission “will grant approval of a market-based tariff only 

if a utility demonstrates that it lacks or has adequately mitigated 

market power, lacks the capacity to erect other barriers to entry, and 

has avoided giving preferences to its affiliates.” Morgan Stanley, 

554 U.S. at 537. Once the Commission has authorized a marketbased tariff, the Commission requires large utilities to demonstrate 

every three years that they still lack or have adequately mitigated 

market power. See 18 C.F.R. § 35.37. If the Commission 
7

Both standard tariffs and market-based tariffs are subject 

to the filed-rate doctrine. Under that doctrine, a utility may not 

charge a rate other than the rate filed with the Commission. See

West Deptford Energy, LLC v. FERC, 766 F.3d 10, 12 (D.C. 

Cir. 2014); see also Arkansas La. Gas Co. v. Hall, 453 U.S. 

571, 577–578 (1981). For standard tariffs, the filed rate is the 

rate set forth in the tariff. See Oklahoma Gas & Elec. Co. v. 

FERC, 11 F.4th 821, 829 (D.C. Cir. 2021). For market-based 

tariffs, the filed rate is generally the market rate, as reflected in 

each contract. See Public Citizen, 7 F.4th at 1184, 1194. In 

both cases, “the filed rate is not limited to ‘rates’ per se, but 

also extends to matters directly affecting rates.” Oklahoma 

Gas & Elec. Co., 11 F.4th at 829 (formatting modified).

2

We have held that “the Commission’s market-based 

approach is consistent with the Federal Power Act’s 

requirement of ‘just and reasonable’ rates[.]” Public Citizen, 7 

F.4th at 1184. We have done so because, “in a ‘competitive 

market, where neither buyer nor seller has significant market 

power, it is rational to assume that the terms of their voluntary 

exchange are reasonable, and specifically to infer that price is 

close to marginal cost, such that the seller makes only a normal 

return on its investment.’” Id. (quoting Tejas Power Corp. v. 

FERC, 908 F.2d 998, 1004 (D.C. Cir. 1990)).

Still, the Commission must fulfill its statutory obligation 

to ensure that the ultimate rates are just and reasonable. See 

Public Citizen, 7 F.4th at 1184–1186; see also 16 U.S.C. 

“determines from these filings that a seller has reattained market 

power, it may revoke the [tariff] prospectively.” Morgan Stanley, 

554 U.S. at 538.
8

§ 824d(a). As a result, contracts entered into under marketbased tariffs are subject to challenge and Commission review.

The Mobile-Sierra doctrine guides the Commission’s justand-reasonable review of market-based-tariff contracts. See 

generally United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 

350 U.S. 332 (1956); Federal Power Comm’n v. Sierra Pac.

Power Co., 350 U.S. 348 (1956). Under that doctrine, the 

Commission “must presume that the rate set out in a freely 

negotiated wholesale-energy contract meets the ‘just and 

reasonable’ requirement imposed by law.” Morgan Stanley, 

554 U.S. at 530. “Th[at] presumption may be overcome only 

if FERC concludes that the contract seriously harms the public 

interest.” Id.; see Oklahoma Gas & Elec. Co. v. FERC, 827 

F.3d 75, 76 (D.C. Cir. 2016) (“FERC must presume a contract 

rate for wholesale energy is just and reasonable and cannot set 

aside the rate unless it is contrary to the public interest.”). “The 

burden of proving an unjust or unreasonable rate rests with the 

party that initiated the proceeding—that is, the Commission or 

the third-party complainant.” Public Citizen, 7 F.4th at 1183; 

see 16 U.S.C. § 824e(b).

B

1

The Western Interconnection, which encompasses all or 

portions of fourteen states, including California, is one of three 

major regions of the U.S. electric grid. See U.S. Grid Regions, 

EPA, https://perma.cc/F8CC-3D84 (last updated Jan. 15, 

2024). For purposes of the orders under review, the Western 

Interconnection is divided into two footprints: the California 

Independent System Operator Corporation (“CAISO”) region
9

and the Western Electricity Coordinating Council (“WECC”)

region.

2

For more than twenty years, the Commission has imposed 

conditions on the market-based rate authority of utilities 

operating in the Western Interconnection. In July 2002, the 

Commission determined that “the California wholesale 

electricity market ha[d] be[come] dysfunctional and ha[d] 

experienced extremely high prices during certain periods.” 

California Indep. Sys. Operator Corp., 100 FERC ¶ 61060, 

para. 4 (July 17, 2002). 

As relevant here, the Commission responded by capping 

the prices that sellers could offer into CAISO-administered 

wholesale power markets, as well as the prices of bilateral spotmarket transactions in the WECC. See California Indep. Sys. 

Operator Corp., 100 FERC ¶ 61060, paras. 44–47 (July 17, 

2002); J.A. 585.3 The Commission explained that these caps, 

together with other mitigation measures, represented “a careful 

balance of the need to provide incentive for market entry by 

new generation investment with the need to protect markets 

from the potential of market power abuse.” California Indep. 

Sys. Operator Corp., 100 FERC ¶ 61060, para. 51 (July 17, 

2002). 

Three months later, the Commission “clarif[ied]” that 

these caps were soft caps. California Indep. Sys. Operator 

2

In this opinion, “WECC” thus refers to the non-CAISO portions of 

the Western Interconnection, rather than to the regional reliability 

entity responsible for ensuring reliable electricity in the Western 

Interconnection. See J.A. 584 n.1.

3

“Spot markets consist of sales that are 24 hours or less in duration 

and that are entered into the day of or the day prior to delivery.” J.A. 

584 n.1.
10

Corp., 101 FERC ¶ 61061, para. 17 (Oct. 11, 2002) (“Soft-Cap 

Order”). By that, the Commission meant that sellers could 

“continue to submit bids above the bid cap[,]” but cautioned 

that “such bids * * * w[ould] be subject to justification and 

refund.” Id. For many years, however, the Commission 

declined to “delineate the specific types of documentation a 

seller might provide” to justify its above-cap prices, noting that 

it could not “anticipate all of the possible justifications[.]” 

California Indep. Sys. Operator, 114 FERC ¶ 61135, para. 16

(Feb. 13, 2006); see Western Elec. Coordinating Council, 133 

FERC ¶ 61026, para. 16 (Oct. 8, 2010) (“As the Commission 

has stated in the past, we cannot anticipate all of the possible 

reasons a supplier may exceed the soft cap. Therefore, we 

decline to predetermine the specific types of documentation a 

seller might provide.”). Instead, the Commission considered 

justifications “on a case-by-case basis.” California Indep. Sys. 

Operator, 114 FERC ¶ 61135, para. 16 (Feb. 13, 2006).

Over time, the Commission has raised the CAISO and 

WECC caps in parallel. See Western Elec. Coordinating 

Council, 133 FERC ¶ 61026, paras. 2–5 (Oct. 8, 2010). During

the period relevant to this case, both caps were set at $1,000 

per megawatt-hour. See id. para. 15.

2

In August and September 2020, a period of “extreme heat 

* * * significantly affected the demand for and supply of 

electric generation throughout the Western Interconnection.” 

Shell Energy North America (US), L.P., 179 FERC ¶ 61034, 

para. 4 (Apr. 22, 2022). As a result of this extreme-heat event, 

the Sellers made bilaterally negotiated sales that exceeded the 

$1,000/MWh soft cap. The Commission “posted limited 

guidance” under which sellers would “be required to justify 

transactions that exceed the soft price cap in WECC[,]” and it 
11

extended the deadline to file justifications until October 7, 

2020. ConocoPhillips Co., 175 FERC ¶ 61226, para. 6 (June 

17, 2021).

The Sellers subsequently submitted filings to the 

Commission to justify their above-cap sales. Each of the 

Sellers argued that its above-cap sales were justified because 

the sales were consistent with market conditions at the time of 

the transactions. Three of the Sellers further argued that the 

above-cap sales were “the kind of short-term bilateral power 

sale contracts that both the Supreme Court and the Commission 

have found are subject to the Mobile-Sierra presumption 

regarding contract modifications.” J.A. 162 (footnote omitted) 

(Shell); see J.A. 137 (Tenaska); J.A. 198–200 (Brookfield); see 

also J.A. 166 (Shell Justification Filing arguing that the 

Commission should find sale prices in excess of the soft cap 

justified “when they are consistent with prevailing market 

conditions, including the prices at which analogous products 

traded on [the Intercontinental Exchange] or on other platforms 

or markets”).

In June 2021, the Commission issued guidance for pending 

and future soft-cap justification filings (“Guidance Order”). 

See ConocoPhillips Co., 175 FERC ¶ 61226 (June 17, 2021). 

The Guidance Order delineated three non-exhaustive 

frameworks that sellers could use to justify above-cap sales: 

“(1) a production cost-based framework; (2) an index-based 

framework; and (3) an opportunity cost-based framework.” Id.

para. 1; see id. para. 13 (“[I]n providing this guidance, the 

Commission does not intend to preclude sellers from seeking 

to justify their transactions under approaches different from the 

ones identified.”).

After the Commission issued the Guidance Order, the 

Sellers supplemented their justification filings with additional 
12

information. In these supplemental filings, each Seller argued 

that the Mobile-Sierra presumption applied to their above-cap 

sales and thus prevented the Commission from ordering 

refunds absent a finding that the sales were contrary to the 

public interest. Each Seller also explained that its above-cap 

sales were consistent with the Commission’s index-based 

framework.4

3

The Commission subsequently issued orders on each of 

the Sellers’ justification filings. See J.A. 584–606 (Shell); J.A. 

485–508 (Tenaska); J.A. 899–918 (TransAlta); J.A. 682–706

(Brookfield); J.A. 707–732 (Macquarie). Where the 

Commission determined that a Seller had identified an 

appropriate price index, the Commission found that the Seller 

had justified relevant above-cap sales up to, but not over, that 

price index. For those sales, the Commission ordered the Seller 

to refund amounts exceeding the relevant index. Where the 

Commission determined that a Seller had not identified an 

appropriate price index, the Commission ordered the Seller to 

refund all amounts exceeding the soft cap.5

4 Under the index-based framework, a seller justifies an above-cap 

sale by identifying a geographic and temporally relevant weighted 

average price index that meets the Commission’s liquidity standards. 

See ConocoPhillips Co., 175 FERC ¶ 61226, paras. 20–25 (June 17, 

2021).

5 Although the Commission addressed each Seller’s filings in 

separate orders, the orders are substantially identical as to the issues 

on appeal. So this opinion, like the Sellers’ and the Commission’s

briefs, cites to the Commission’s original and rehearing orders as to 

Shell Energy. See Sellers Opening Br. 11 n.7; Commission Br. 19.
13

In ordering refunds, the Commission rejected the Sellers’

argument that the Mobile-Sierra doctrine dictated approval of 

their contract prices. Although the Commission “agree[d]” that 

the Mobile-Sierra presumption applied to the above-cap sales, 

it “f[ou]nd that the presumption d[id] not prevent the 

Commission from enforcing the requirement that sales in 

excess of the WECC soft price cap must be justified and [we]re 

subject to refund.” Shell Energy North America (US), L.P., 179 

FERC ¶ 61034, para. 36 (Apr. 22, 2022); see id. (explaining 

that the fact that the Mobile-Sierra presumption applied “[wa]s 

not dispositive as to the question of whether [the Sellers’] sales 

that exceeded the WECC soft price cap were justified, or 

whether the Commission c[ould] order refunds if it f[ound] that 

the prices for those sales [we]re not justified”).

The Commission further reasoned that, in reviewing the 

Sellers’ justification filings, the Commission “[wa]s not 

modifying the contracts, as would trigger application of the 

Mobile-Sierra presumption[,]” but was instead “enforcing 

requirements incorporated into the contracts via the 

Commission orders establishing the price cap and provisions in 

[the Sellers’] market-based rate tariff[s].” Shell Energy North 

America (US), L.P., 179 FERC ¶ 61034, para. 36 (Apr. 22, 

2022) (footnote omitted). The Commission reasoned that, 

because the Sellers conducted the above-cap sales pursuant to 

their market-based authority, the sales were “governed by [the 

Sellers’] market-based rate tariff and the requirements 

established therein.” Id. para 37. Those tariffs stated that each 

Seller “must comply with ‘orders concerning [the] seller’s 

market-based rate authority, including orders in which the 

Commission authorizes the seller to engage in affiliate sales 

under th[e] tariff or otherwise restricts or limits the seller’s 

market-based rate authority.’” Id. (emphasis omitted). The 

Commission also concluded that “the WECC soft price cap, 

which applies to all jurisdictional sellers transacting in the 
14

WECC outside of CAISO, is a restriction or limit on [the 

Sellers’] market-based rate authority established via 

Commission orders, as contemplated by [the Sellers’] marketbased rate tariff[s].” Id. (footnote omitted).

Commissioner Danly dissented from each of the orders. 

He framed the legal question in each case as “whether the 

Commission can abrogate a contract to sell electricity pursuant 

to market-based rate authority when the contract price is above 

a Commission-imposed ‘soft’ price cap absent a finding that 

the public interest so demands.” Shell Energy North America 

(US), L.P., 179 FERC ¶ 61034, para. 1 (Apr. 22, 2022) (Danly, 

Comm’r, dissenting). Applying the Mobile-Sierra doctrine, 

Commissioner Danly would have answered that question “no.” 

Id.

4

The Sellers sought rehearing of the refund orders. See J.A. 

665–681 (Shell); J.A. 755–783 (Tenaska); J.A. 1050–1091 

(TransAlta); J.A. 954–977 (Brookfield); J.A. 919–953 

(Macquarie).

Because the Commission did not rule on the rehearing 

petitions within 30 days, each petition was “deemed to have 

been denied” by operation of law. 16 U.S.C. § 825l(a).

Each of the Sellers timely filed petitions for review, and 

this court consolidated the petitions. With the Sellers’ consent, 

this court subsequently held the petitions in abeyance while the 

Commission responded to the rehearing petitions.

The Commission subsequently issued orders addressing 

and rejecting the arguments raised on rehearing (“Final Refund 

Orders”). See J.A. 1191–1213 (Shell); J.A. 1150–1171 
15

(Tenaska); J.A. 1348–1376 (TransAlta); J.A. 1267–1291 

(Brookfield); J.A. 1292–1312 (Macquarie); J.A. 1171–1190 

(Mercuria). Although the Commission “continue[d] to find 

that the Mobile-Sierra presumption applie[d] to [the Sellers’] 

contracts,” it again found that the “presumption [wa]s not 

implicated” by the Final Refund Orders. Shell Energy North 

America (US), L.P., 180 FERC ¶ 61182, para. 8 (Sept. 22, 

2022). In reaching this conclusion, the Commission reiterated 

that the refund directive in the Final Refund Orders did not 

modify the Sellers’ contracts because those “contracts were 

executed pursuant to the requirements in [the Sellers’] marketbased rate tariff[s],” which “incorporate[d] the Commission’s 

orders and ‘conditions and requirements’ regarding the WECC 

soft price cap.” Id. para 16. The Commission also reaffirmed 

its refund directive for above-cap prices that exceeded the 

relevant index price.

Commissioner Danly again dissented on the basis that the 

Commission “failed to properly apply the Mobile-Sierra

presumption to the contract sales at issue.” Shell Energy North 

America (US), L.P., 180 FERC ¶ 61182, para. 1 (Sept. 22, 

2022) (Danly, Comm’r, dissenting); see id. (“[The 

Commission] erred by requiring refunds for the ‘premium’ 

amount above the price index that [the Sellers] and the willing 

buyers freely negotiated absent any showing that the public 

interest was seriously harmed by the contract rate.”).

II

We have jurisdiction over the Sellers’ timely petitions for 

review of the Commission’s final orders under 16 U.S.C. 

§ 825l(b). We lack jurisdiction over the Consumers’ petitions 

for review because they are moot.
16

III

A

The Sellers argue that the Commission’s Final Refund 

Orders violated the Mobile-Sierra doctrine because the 

Commission altered the Sellers’ negotiated contract rates 

without first finding that those rates “seriously harm[ed] the 

public interest.” Morgan Stanley, 554 U.S. at 530; see Sellers 

Opening Br. 24–37. We agree.

The Mobile-Sierra doctrine has long made clear that the 

Commission may modify a contracted-for rate “if (but only if) 

the ‘public interest’ so requires[.]” Exxon Corp. v. FERC, 206 

F.3d 47, 49 (D.C. Cir. 2000); see Gulf States Utils. Co. v. 

Federal Power Comm’n, 518 F.2d 450, 452 (D.C. Cir. 1975) 

(noting the Commission’s “power, under § 206(a), to require a 

rate change not agreed to by the parties” when the Commission 

can overcome the Mobile-Sierra presumption).

There is no dispute in this case that the rates for which 

FERC ordered refunds were rates for which the Sellers and 

their customers had mutually contracted in a competitive 

marketplace. Yet the Commission did not perform any MobileSierra public-interest analysis before altering those negotiated 

rates by ordering the refunds at issue here.

The Commission argues that it had authority to enforce the 

Soft-Cap Order through refunds without first conducting a 

Mobile-Sierra public-interest analysis because the Soft-Cap 

Order is part of the Sellers’ filed rate. See FERC Br. 19–28. 

The Commission notes that “[a]ll Sellers’ market-based rate 

tariffs contain a provision requiring compliance with ‘orders 

concerning [the] Seller’s market-based rate authority, 

including orders in which the Commission authorizes Seller to 
17

engage in affiliate sales under this Tariff or otherwise restricts 

or limits the Seller’s market-based rate authority.’” FERC Br. 

21 (quoting Shell Energy North America (US), L.P., 180 FERC 

¶ 61182, para. 15 (Sept. 22, 2022)). Drawing on this language, 

the Commission reasons that, because the Soft-Cap Order 

limited the Sellers’ market-based-rate authority, the Final 

Refund Orders enforced the filed-rate doctrine by ensuring 

“that each Seller’s contract rates * * * conform[ed] to the terms 

of its market-based rate tariff, which is the filed rate.” FERC 

Br. 23. 

The Commission relatedly argues that its orders did not 

alter the Sellers’ contracts because the contracts themselves 

incorporated the Soft-Cap Order. See FERC Br. 24; see also 

FERC Br. 24 (Commission acknowledging that, if it “were 

modifying [the] Sellers’ contracts, then [it] would need to 

conduct a Mobile-Sierra ‘public interest’ analysis in support of 

that modification”). The Commission reasons that the soft-cap 

framework and the attendant justification-and-refund scheme 

did not simply require the Sellers to provide documentation and 

evidence to help to justify their above-cap rates. Instead, the 

Sellers also had the affirmative burden of convincing the 

Commission that those rates were justified. When the Sellers 

failed to do so, the Commission enforced the terms of the 

Sellers’ contracts—“consistent with Sellers’ filed rate in the 

form of their market-based rate tariffs”—by ordering refunds 

in line with the soft-cap framework. FERC Br. 24.

The Commission’s arguments fail for a simple reason: 

Even assuming that the Soft-Cap Order was incorporated into 

Sellers’ tariffs and contracts, the Commission did not displace 

the Mobile-Sierra presumption in the Soft-Cap Order itself, 

and so that presumption continues to apply to the Sellers’ 

contracts. More specifically, nothing in the Soft-Cap Order 

established that the Mobile-Sierra doctrine would not apply to 
18

the Commission’s review of any above-cap rates. As such, the 

Soft-Cap Order left intact the Commission’s burden of 

overcoming the presumption that “a freely negotiated 

wholesale-energy contract meets the ‘just and reasonable’ 

requirement imposed by law.” Morgan Stanley, 554 U.S. at 

530. Under the Mobile-Sierra doctrine, the Commission can 

carry that burden only by making a particularized finding that 

a given contract “seriously harms the public interest[,]” id., 

even if that contract’s price exceeds the soft cap, or can avoid 

that inquiry by demonstrating that the Mobile-Sierra

presumption should not apply at all, see id. at 553–555. The 

Commission did not make either determination here.

True, the Soft-Cap Order stated that it was intended to 

ensure “just and reasonable prices[,]” California Indep. Sys. 

Operator Corp., 101 FERC ¶ 61061, para. 1 (Oct. 11, 2002), 

and provided that bids over the soft cap would be “subject to 

justification and refund[,]” id. para. 17. But the mere 

invocation of the phrases “just and reasonable” and 

“justification and refund” does not alone suggest that the 

Commission intended to remove prospectively an entire class 

of bilateral contracts from the Mobile-Sierra framework. 

Importantly, the soft cap is best viewed as a means of flagging 

for the Commission contracts that may warrant a publicinterest analysis. The requirement that sellers “justif[y]” their 

above-cap prices, in turn, facilitates this review by obligating 

sellers to supply information showing that the conditions for 

the ordinary application of the Mobile-Sierra presumption 

(e.g., the absence of market manipulation) were in place at the 

time of the above-cap sale.

In short, because the soft cap is best read in this case as 

functioning in tandem with the Mobile-Sierra doctrine, we 

cannot on this record presume that the Commission meant for 

its orders to displace the presumption that for nearly seventy 
19

years has been the “default rule” in analyzing the justness and 

reasonableness of freely negotiated contract rates. Morgan 

Stanley, 554 U.S. at 534.6

Since the Soft-Cap Order did not displace the MobileSierra framework, the Commission erred by relying on the 

Soft-Cap Order to issue refunds without first determining that 

the Sellers’ contracted-for rates would “seriously harm[] the 

public interest[,]” Morgan Stanley, 554 U.S. at 530, or that the 

Mobile-Sierra framework does not apply, see id. at 553–555. 

We vacate the Final Refund Orders on this basis, and so we 

need not reach the Sellers’ arbitrary-and-capricious 

challenges.7

B

We now turn to the Consumers’ challenge. While the 

Sellers were parties to the Commission’s refund orders and 

challenge the basis for ordering them to pay refunds, the 

Consumers were not parties to the orders and so are not 

themselves eligible to obtain refunds. The Consumers instead 

challenge the Commission’s approach to calculating the 

refunds on the ground that it will lead to higher energy prices. 

6 We need not and do not decide whether the Commission could

prospectively remove a class of freely negotiated, bilateral

wholesale-energy contracts from the Mobile-Sierra framework and 

subject those contracts to the type of justification-and-refund scheme 

the Commission applied here. For present purposes, it is sufficient 

that the Commission did not express any intent to do so in the SoftCap Order.

7 Because the Soft-Cap Order left the Mobile-Sierra presumption in 

place, the Sellers’ petitions were timely filed within sixty days of the 

refund orders and so were not collateral attacks on the soft-cap 

framework. See 16 U.S.C. § 825l(b).
20

The Consumers intervened in the proceedings before the 

Commission and sought rehearing of the Commission’s orders. 

They now challenge all thirteen orders in which the 

Commission permitted sellers to justify above-cap rates. 

We have no occasion to engage with the merits of the 

Consumers’ challenge because it is moot. The Consumers’ 

challenge concerns the methodology applied by the 

Commission in identifying the price index above which the 

Commission deemed refunds required. Recall that the 

Commission ordered the payment of refunds for electricity 

sales made at prices exceeding an appropriate price index 

identified by a Seller. See pp. 12–16, supra. The Consumers 

argue that the Commission’s approach when assessing the 

Sellers’ index-based justification was flawed. In the 

Consumers’ view, the Commission should have applied a 

different approach that would result in a lower price index, 

which in turn would give rise to greater refunds. 

The Consumers’ challenge thus turns on the precise way 

in which the Commission calculated the level of refunds. But 

as we hold above, the Commission erred in ordering refunds in 

the first place without applying the Mobile-Sierra publicinterest analysis. In light of that holding, the Commission can 

order refunds in the circumstances of these cases only if it first 

undertakes to determine—and then finds—that the contract 

rates would “seriously harm[] the public interest” (or that “the 

premise on which the Mobile-Sierra presumption rests” is not 

present). Morgan Stanley, 554 U.S. at 530, 554. Unless and 

until the Commission engages in the requisite analysis and 

makes the requisite finding, the precise methodology for 

calculating any ensuing refunds is an academic question. 

Indeed, even if the Commission were to apply the MobileSierra doctrine to the contract rates—as it now must do before 

ordering any refunds—and were to determine that the Mobile-
21

Sierra presumption could be overcome or is inapplicable, there 

is no reason to assume that the same index-based approach now 

challenged by the Consumers would then come into play.

Mootness principles dictate that we “may only adjudicate 

actual, ongoing controversies.” Honig v. Doe, 484 U.S. 305, 

317 (1988). “[F]ederal courts[,]” in other words, “are without 

authority ‘to render advisory opinions or to decide questions 

that cannot affect the rights of litigants in the case before 

them[.]’” Chamber of Com. of U.S. v. EPA, 642 F.3d 192, 199 

(D.C. Cir. 2011) (formatting modified) (quoting Preiser v. 

Newkirk, 422 U.S. 395, 401 (1975)). A challenge becomes 

moot “when the issues presented are no longer ‘live’ or the 

parties lack a legally cognizable interest in the outcome.” 

Parole Comm’n v. Geraghty, 445 U.S. 388, 396 (1980) 

(quoting Powell v. McCormack, 395 U.S. 486, 496 (1969)). 

Mootness doctrine thus prevents us from resolving a 

challenge when “events have so transpired that the decision 

will neither presently affect the parties’ rights nor have a morethan-speculative chance of affecting them in the future.” 

Clarke v. United States, 915 F.2d 699, 701 (D.C. Cir. 1990) (en 

banc) (quotation marks omitted). That is precisely the situation 

here with respect to the Consumers’ challenge. Our MobileSierra holding means that the Commission has not satisfied the 

preconditions to ordering any refunds, which in turn means that 

any pronouncement about the correctness of the Commission’s 

index-based justification framework for assessing refunds 

would not “presently affect the parties’ rights” or have a “morethan-speculative chance of affecting them in the future.” Id. 

(quotation marks omitted).
22

IV

For the foregoing reasons, we grant the Sellers’ petitions 

for review, vacate their challenged orders, and remand for 

further proceedings consistent with this opinion. We dismiss 

the Consumers’ petitions for review as moot.

So ordered.