EXHIBIT 1

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166 FERC ¶ 61,049

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Cheryl A. LaFleur and Richard Glick.

 

NextEra Energy, Inc. and NextEra Energy Partners, L.P. 

 v. 

Pacific Gas and Electric Company

 Docket No. EL19-35-000

ORDER ON PETITION FOR DECLARATORY ORDER AND COMPLAINT

(Issued January 25, 2019)

On January 18, 2019, NextEra Energy, Inc. and NextEra Energy Partners, L.P. 

(collectively, NextEra) filed, pursuant to sections 206 and 306 of the Federal Power Act 

(FPA)1 and Rules 206 and 207 of the Commission’s Rules of Practice and Procedure,2 a 

petition for declaratory order and complaint (Petition) against Pacific Gas and Electric 

Company (PG&E) requesting that the Commission find that, if PG&E files for 

bankruptcy, PG&E may not abrogate, amend, or reject in a bankruptcy proceeding any 

rates, terms and conditions of its wholesale power purchase agreements subject to the

Commission’s jurisdiction without first obtaining approval from the Commission under 

FPA sections 205 and 206.3

 In this order, the Commission addresses NextEra’s Petition 

for a declaratory order and clarifies its position with regard to bankruptcy filings that seek 

to reject Commission-jurisdictional wholesale power purchase agreements.

I. Background

NextEra states that several of its subsidiaries sell wind and solar energy to PG&E, 

pursuant to market-based rate authority, under various wholesale power purchase 

 1 16 U.S.C. §§ 824e, 825e (2012).

2 18 C.F.R. §§ 385.206, 385.207 (2018).

3 16 U.S.C. §§ 824d, 824e (2012).

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agreements.4

 NextEra states that PG&E recently announced that it will file for 

bankruptcy protection due to, among other reasons, liabilities relating to wildfires in 

California and that it will make that filing on or about January 29, 2019.5

 In order to 

protect its wholesale power purchase agreements, NextEra requests that the Commission 

issue an order finding PG&E may not abrogate, amend, or reject its Commissionjurisdictional wholesale power purchase agreements with NextEra in any bankruptcy 

proceedings that may be initiated by PG&E without first obtaining approval from the

Commission under FPA sections 205 or 206.6

NextEra argues that this Commission has exclusive jurisdiction to regulate the 

rates, terms, and conditions of PG&E’s wholesale power purchase agreements.

7

 NextEra 

asserts that, when enacting the FPA, Congress created a comprehensive regulatory 

framework for protecting the public interest and entrusted the Commission with the sole 

authority to implement that framework. According to NextEra, the core of the

Commission’s regulatory responsibilities under the FPA is the exclusive authority to 

regulate the rates, terms and conditions for interstate transmission and wholesale sales of 

electric energy under FPA sections 205 and 206.8

NextEra states that the Commission’s broad and exclusive jurisdiction over rates 

has led to the filed-rate doctrine, which provides that a party “can claim no rate as a legal 

right that is other than the filed rate, whether fixed or merely accepted by the 

Commission, and not even a court can authorize commerce in the commodity on other 

 4 NextEra Petition at 2. NextEra notes that the subsidiaries with wholesale power 

purchase agreements with PG&E include: Desert Sunlight Holdings, LLC, Shafter Solar, 

LLC, Genesis Solar, LLC, Westside Solar, LLC, Vasco Wind, LLC, North Sky River 

Energy, LLC, FPL Energy Montezuma Wind, LLC, and NextEra Energy Montezuma II 

Wind, LLC.

5 Id. (citing Current Report on Form 8-K of Pacific Gas and Electric Corp. and 

PG&E (Jan. 13, 2019)).

6 NextEra also requests an order no later than January 25, 2019 to reduce the risk 

that PG&E may attempt to obtain a restraining order or injunction in order to disable this 

Commission from exercising its jurisdiction over filed rates. Id.

7 Id. at 3-7.

8 Id. at 3-4.

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terms.”9

 NextEra asserts that once the Commission accepts or approves a filed rate as 

just and reasonable, the filed rate has the force of law and is the “equivalent of a federal 

regulation.”10 In other words, NextEra explains that “the filed rate . . . is to be treated as 

though it were a statute, binding upon the seller and purchaser alike.”11 NextEra states 

that the filed-rate doctrine protects more than just the rate, but also the terms and

conditions, including the duration of a filed contract. NextEra also argues that wholesale 

electricity contracts may be filed directly with the Commission under the FPA or may be 

negotiated under a filed and approved market-based rate tariff that does not require the 

utility to separately file each individual contract, but either way, the Commission’s 

authority to regulate the rates, terms and conditions of the contract is exclusive and 

subject to the filed-rate doctrine.12

NextEra further argues that a bankruptcy court’s authority to reject contracts 

cannot deprive this Commission of its exclusive authority to determine whether rates, 

terms and conditions of wholesale power purchase agreements should be amended or 

abrogated.13 NextEra states that section 365(a) of the Bankruptcy Code14 authorizes a 

bankruptcy court to assume or reject any executory contract of a debtor. NextEra notes 

that, under the Bankruptcy Code, rejection acts as a breach that gives counterparties a 

general, unsecured claim for damages against the estate, and that, while the debtor has the 

initial responsibility for determining which contracts should be assumed and which 

should be rejected, and the debtor’s decisions are generally reviewed by the bankruptcy 

court under the business judgement rule.15

NextEra acknowledges that the Bankruptcy Code gives the bankruptcy court broad 

authority over a bankrupt entity’s estate, but argues that the court cannot exercise its 

 9 Id. at 4-5 (quoting Montana-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341 U.S. 

246, 251 (1951) (Montana-Dakota Utilities) (internal quotations omitted)).

10 Id. at 5 (quoting Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 839 (9th Cir. 

2004) (internal quotations omitted)).

11 Id. (quoting Bos. Edison Co. v. FERC, 856 F.2d 362, 372 (1st Cir. 1988)

(internal quotations omitted)).

12 Id. at 6-7.

13 Id. at 7-15.

14 11 U.S.C. § 365(a) (2012).

15 NextEra Petition at 7.

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authority in a way that invades on the Commission’s exclusive jurisdiction under the 

FPA. Specifically, NextEra argues that a bankruptcy court cannot divest this 

Commission of its exclusive jurisdiction over the rates, terms and conditions in a 

wholesale electricity contract.16

While acknowledging the United States Court of Appeals for the Fifth Circuit’s

(Fifth Circuit) decision in In the Matter of Mirant Corp.,

17 where the court found that 

rejection of a contract in bankruptcy does not amount to an invasion of this 

Commission’s jurisdiction under the FPA, NextEra notes that, in subsequent years, 

federal courts have declined to follow Mirant.

18 Specifically, NextEra states that in 

Calpine, the court rejected Mirant’s argument that the bankruptcy court does not interfere 

with the Commission’s jurisdiction when it rejects a wholesale contract and authorizes an 

unsecured breach of contract claim. NextEra states that the Calpine court also found that 

the Fifth Circuit decision in Mirant relied on precedent that had no corollaries in the 

United States Court of Appeals for the Second Circuit.19 Similarly, NextEra states that in 

Boston Generating, the court recognized that the bankruptcy court had the authority to 

reject a contract but held that debtors must also receive approval from the Commission 

for abrogation of the contract.20 In short, NextEra argues that the Commission should 

decline to follow Mirant and, instead, rely on Calpine and Boston Generating because the 

later decisions are better-reasoned and more respectful of the filed-rate doctrine and this 

Commission’s regulatory responsibilities.

NextEra summarizes Mirant as holding that the rejection of a contract in 

bankruptcy does not invade the Commission’s exclusive jurisdiction because it merely 

constitutes a breach of the agreement, giving rise to a claim for contract damages—albeit 

an unsecured claim that must be asserted among all the other competing claims against 

the bankrupt estate.21 But NextEra states that there are at least two flaws with this 

 16 Id. at 8 (citing Blumenthal v. NRG Power Mktg., Inc., 103 FERC ¶ 61,344, reh’g 

denied, 104 FERC ¶ 61,211 (2003)).

17 378 F.3d 511 (5th Cir. 2004) (Mirant).

18 NextEra Petition at 9-11 (citing In re Calpine Corp., 337 B.R. 27 (S.D.N.Y. 

2006) (Calpine); In re Bos. Generating, LLC, No. 10 Civ. 6258, 2010 WL 4616243 

(S.D.N.Y. Nov. 12, 2010) (Boston Generating)).

19 Id. at 10.

20 Id. at 11.

21 Id. at 12 (citing Mirant, 378 F.3d at 520).

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reasoning. First, NextEra argues that the rejection of a wholesale power contract in 

bankruptcy is more than a simple breach of that contract. The rejection terminates the 

contract before the agreed upon term has expired, and, therefore, effectively amends or 

modifies the obligation to deliver wholesale power for the term of the contract.22 Second, 

NextEra argues that when a bankruptcy court rejects a contract, it authorizes, as the 

exclusive form of relief, the counterparty to bring an unsecured claim against the 

bankrupt estate. NextEra asserts that this has a direct effect on the rate charged under the 

agreement, because there is a substantial risk (indeed, a near certainty) that the 

counterparty to a wholesale contract will recover a rate that is different from the 

Commission-approved rate in its contract. In other words, NextEra argues that for the 

counterparty, there is no practical difference between an order that directly changes the 

lawful rate and an order that changes the lawful rate by rejecting the contract and 

requiring the counterparty to assert an unsecured claim against the bankrupt estate.23 

NextEra also argues that the Mirant decision improperly relies on the absence in 

the Bankruptcy Code of any provision expressly stating that rates subject to the

Commission’s jurisdiction are exempt from rejection.24 Instead, NextEra asserts that, in 

light of the extensive precedent regarding the Commission’s vast and exclusive authority 

to regulate wholesale rates, terms and conditions, if Congress had intended to divest the 

Commission of this long-recognized authority in bankruptcy proceedings, then it would 

have included such language in the Bankruptcy Code. However, NextEra argues that no 

such language or stated intent exists in the text or is apparent in the legislative history of 

the Bankruptcy Code.

Lastly, NextEra argues that there are sound policy reasons to embrace Calpine and

Boston Generating. Specifically, NextEra claims that the Commission’s review of 

PG&E’s wholesale contracts are greater than the policy concerns generally considered by 

a bankruptcy court.25 NextEra explains that in bankruptcy, the primary concern is to 

preserve the assets of the debtor so that they can be fairly divided among the creditors, 

but here, rejecting PG&E’s wholesale contracts (at least its wholesale contracts with 

NextEra) will not have a significant impact on PG&E’s estate. According to NextEra, 

this is because PG&E’s purchased power costs are generally passed through to its 

 22 Id.

23 Id. at 13.

24 Id. at 14.

25 Id.

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customers and therefore, those costs do not shrink PG&E’s estate.26 Conversely, NextEra 

states that rejection of the wholesale contracts by a bankruptcy court will directly and 

adversely impact the Commission’s ability to promote rate certainty and facilitate the 

development of adequate power supplies. NextEra argues that, if bankruptcy courts are 

allowed unilaterally to reject Commission-approved wholesale power contracts, it will 

create significant uncertainty for developers of new electric supplies, which will impede 

the development of new supplies. Thus, NextEra requests that the Commission issue an 

order consistent with Calpine and Boston Generating and holding that PG&E cannot 

reject its wholesale power purchase agreements in bankruptcy, without the Commission’s 

approval of the contract abrogation or modification under the standards of FPA 

sections 205 and 206.27

II. Notice and Responsive Pleadings

Notice of NextEra’s Petition was issued by the Commission, with PG&E’s 

answer, interventions, and comments, due on or before January 22, 2019. Timely 

motions to intervene were filed by Allco Finance Limited, American Wind Energy 

Association (AWEA), Avangrid Renewables, LLC, BP Energy Company, California 

Municipal Utilities Association, California Department of Water Resources, Cogentrix 

Energy Power Management, LLC, D.E. Shaw Renewable Investments, L.L.C., Diablo 

Winds, LLC, Dominion Energy Services, Inc., EDP Renewables North America LLC, 

El Dorado Hydro, LLC, First Solar, Inc., KES Kingsburg, L.P., Kingston Energy Storage, 

LLC, MC Shiloh IV Holdings LLC, Middle River Power, LLC, Modesto Irrigation 

District, Mojave Solar LLC, Northern California Power Agency, NRG Power Marketing 

LLC, Ruby Pipeline, L.L.C., the City of Santa Clara, California and M-S-R Public Power 

Agency, the Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, 

California, State Water Contractors, Transmission Agency of Northern California, and 

Vistra Energy Corporation and Dynegy Marketing and Trade, LLC. Algonquin Power 

Company, Algonquin Power Sanger LLC, Algonquin SKIC 20 Solar, LLC, Brookfield 

Renewable Partners L.P., Calpine Corporation, Capital Dynamics, Inc., Clearway Energy 

Group LLC and Clearway Energy, Inc.,28 Consolidated Edison Development, Inc., 

 26 Id.

27 Id. at 15.

28 Clearway Energy Group LLC’s and Clearway Energy, Inc.’s comments were 

joined by Sand Drag LLC, Sun City Project LLC, El Dorado Hydro, LLC, Rock Creek 

Hydro, LLC, Cascade Energy Storage, LLC, Kingston Energy Storage, LLC, Sierra 

Energy Storage, LLC, First Solar, Inc., MC Shiloh IV Holdings LLC and NRG Power 

Marketing LLC.

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Exelon Corporation, Solar Energy Industries Association, Southern Power Company,29

TerraForm Companies, Topaz Solar Farms LLC, Vantage Wind Energy, and Western 

Power Trading Forum filed timely motions to intervene and comments in support of 

NextEra’s Petition. 

Burney Forest Products, California Public Utilities Commission, Chevron 

Power Holdings Inc., Citizens Sunrise Transmission LLC, the City and County of 

San Francisco, Earthjustice, EDF Renewables, Inc., Fresno Cogeneration Partners, LP, 

FTP Power LLC, National Rural Electric Cooperative Association, Natural Resources 

Defense Council, Panoche Energy Center, LLC, PSEG Energy Resources & Trade LLC, 

PSEG Power LLC, Sacramento Municipal Utility District, Sustainable FERC Project, 

Turlock Irrigation District, Wellhead Electric Company, Western Area Power 

Administration, and Yuba City Cogen, Inc. filed motions to intervene out-of-time. 

American Council on Renewable Energy and Sunray Energy 2, LLC and Westlands Solar 

Farms LLC filed motions to intervene out-of-time and comments in support of NextEra’s 

Petition on January 23, 2019. Also on January 23, 2019, AWEA filed comments out-oftime supporting the Petition. Bayerische Landesbank New York Branch submitted a 

letter in support of NextEra’s Petition on January 23, 2019.

On January 22, 2019, PG&E filed an answer to the Petition. On January 23, 2019, 

NextEra filed a motion for leave to answer and an answer to PG&E’s answer.

A. Answer and Answer to Answer

PG&E argues that the Commission should deny NextEra’s Petition. According to 

PG&E, a Commission order limiting PG&E’s rights prior to its bankruptcy filing would 

violate the FPA and the Bankruptcy Code. It would also contravene the terms of the 

agreements between NextEra and PG&E. PG&E offers three reasons in support of its 

position: First, PG&E argues that NextEra’s Petition is speculative and hypothetical 

because PG&E’s bankruptcy has not yet occurred and no action has been taken with 

regard to any particular contract. Additionally, PG&E claims that the Commission’s 

jurisdiction under the FPA applies to the sale, but not the purchase, of power, and by 

extension, to sellers, but not buyers, of power. Accordingly, PG&E states that the 

Commission is not authorized to order a buyer to continue to purchase power. According 

to PG&E, such Commission action, as well as the Commission’s potential involvement in 

 29 Southern Power Company moved to intervene and filed comments on behalf of 

itself and its affiliates Morelos Solar, LLC, Blackwell Solar, LLC, Lost Hills Solar, LLC, 

North Star Solar, LLC, and Parrey, LLC.

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the bankruptcy of any company involved in purchasing power, would represent a 

significant expansion of the Commission’s authority.30 

Second, PG&E argues that the bankruptcy court will have jurisdiction over the 

issues raised in the Petition and that the Bankruptcy Code does not list wholesale power 

purchase agreements among the specific obligations that cannot be discharged in 

bankruptcy. PG&E contends that there is no precedent to support the argument that the 

Commission has exclusive jurisdiction over breaches of wholesale power purchase 

agreements or that parties must receive permission from the Commission before 

breaching. PG&E states that the rejection of a contract in bankruptcy is simply a breach 

of contract and cites the Court of Appeals conclusion in Mirant that debtors may reject 

wholesale power contracts in bankruptcy without Commission approval. PG&E further 

argues that breaching a contract is not a violation of the filed rate doctrine, but rather a 

failure to perform under a Commission-approved performance obligation, subject to 

claims for damages.31

Third, PG&E asserts that the Commission should disclaim jurisdiction in this 

proceeding in light of the specific contracts at issue. PG&E contends that the 

Commission’s argument in FirstEnergy that Mobile-Sierra gave the Commission a role 

in ensuring that any contract rejection was consistent with the public interest is not 

relevant here. PG&E claims that the parties to the wholesale power purchase agreements 

with PG&E either declined to apply Mobile-Sierra or waived the right to make the type 

of Commission filing contemplated by the Petition. Specifically, PG&E states that every 

single NextEra contract either expressly disclaims Mobile-Sierra protection, or includes a 

waiver provision indicating that they would not seek the Commission’s modification of 

the contracts. PG&E argues that these contractual provisions represent choices by the 

parties that the Commission should respect.32

Additionally, PG&E asserts that, even if the Commission has concurrent 

jurisdiction with the bankruptcy court, the Commission should decline to exercise that 

jurisdiction. According to PG&E, this proceeding does not satisfy the conditions that the 

Commission has previously applied to determine whether to exercise jurisdiction. PG&E 

argues that (1) this dispute does not draw upon the Commission’s special expertise, 

(2) Commission action would create regulatory uncertainty, and (3) these cases are 

 30 PG&E Answer at 2, 3, 12.

31 Id. at 3, 17.

32 Id. at 5, 22.

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unimportant in relation to the Commission’s regulatory responsibilities.33 For these 

reasons, PG&E requests that the Commission deny NextEra’s Petition.

In its answer, NextEra first argues that PG&E’s procedural arguments should be 

rejected. Noting the split between courts on the issue, NextEra argues that Rule 207 of 

the Commission’s Rules of Practice and Procedure, 18 C.F.R. § 385.207, gives the 

Commission the authority to resolve the current controversy and remove uncertainty 

relating to whether a bankruptcy court may approve the rejection of a wholesale power 

contract.34 NextEra also argues that PG&E misconstrues the issues raised and relief 

requested in NextEra’s Petition in arguing that the Commission has no jurisdiction over 

buyers; instead, NextEra asserts that it is asking the Commission to assert its jurisdiction 

over wholesale contracts, to which both sellers and buyers are parties.35 

With regard to the merits of its Petition, NextEra argues that rejection in

bankruptcy is not like a run-of-the-mill contract breach. Rather, according to NextEra,

rejections are different because they require bankruptcy court approval and they establish 

bankruptcy court jurisdiction over the resolution of payments under the contract. 

Additionally, NextEra asserts that a rejection modifies the duration of the contract and 

abrogates or terminates the obligation to deliver wholesale power under it.36 NextEra 

thus argues that these distinctions bring rejection within the scope of the filed rate 

doctrine, and under the Commission’s exclusive jurisdiction. Lastly, NextEra argues that 

PG&E’s arguments concerning the Mobile-Sierra presumption, the Commission’s lack of 

specialized expertise with rejection of wholesale power contracts in bankruptcy, and 

other related arguments are without merit.37

III. Commission Determination

A. Procedural Matters

Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure, 

18 C.F.R. § 385.214 (2018), the timely, unopposed motions to intervene serve to make 

the entities that filed them parties to this proceeding.

 33 Id. at 25-28.

34 NextEra Answer at 3-4.

35 Id. at 5-6.

36 Id. at 6 (citing Calpine, 337 B.R. at 36-37).

37 Id. at 8-10.

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Pursuant to Rule 214(d) of the Commission’s Rules of Practice and Procedure, 

18 C.F.R. § 385.214(d) (2018), the Commission will grant the late-filed motions to 

intervene given the entities’ interests in the proceeding, the early stage of the proceeding, 

and the absence of undue prejudice or delay.

Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R. 

§ 385.213(a)(2) (2018), prohibits an answer to an answer unless otherwise ordered by the 

decisional authority. We will accept NextEra’s answer because it has provided 

information that assisted us in our decision-making process.

B. Substantive Matters

In this order, we provide clarification on the Commission’s position with respect 

to the issues raised in the Petition. In so doing, we acknowledge that the law in this area 

is unsettled. Several courts have read the FPA and the Bankruptcy Code in pari materia

and reached different conclusions.38 

In Mirant, the Fifth Circuit concluded that the FPA does not preempt the 

Bankruptcy Code because rejection of the wholesale power purchase agreement in that 

proceeding would only have an indirect effect upon the filed rate.39 The court explained 

that rejection of an executory contract amounts to a breach of contract, providing the nonbreaching party with an unsecured claim against the bankruptcy estate for an amount 

equal to its damages from the breach. The court further determined that such a breach 

does not amount to a modification of the filed rate, but rather gives effect to it because 

the award of damages due to the breach would be based on the filed rate.40 The court 

also stated that the structure of the Bankruptcy Code indicates that Congress did not 

intend to limit the ability of utility companies to reject an executory power contract.41

Thus, the court concluded that the FPA does not preempt a district court’s jurisdiction to 

 38 See Mirant, 378 F.3d 511; Calpine, 337 B.R. 27; Boston Generating, 

2010 WL 4616243.

39 Mirant, 378 F.3d at 519-520. The court explained, however, that “the FPA does 

preempt breach of contract claims that challenge a filed rate.” Id. at 519.

40 Id. at 520.

41 Id. at 521.

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authorize the rejection of an executory contract subject to Commission regulation as part 

of a bankruptcy proceeding.42

In Calpine, the United States District Court for the Southern District of New York 

declined to follow Mirant; instead, it found that it lacked subject matter jurisdiction to 

authorize rejection of the energy contracts at issue and concluded that the Commission 

has exclusive jurisdiction over their disposition.43 The court acknowledged this 

Commission’s broad and exclusive jurisdiction over rates, terms, and conditions, and 

noted that nothing in the FPA limits the Commission’s jurisdiction in the bankruptcy 

context.44 The court further found that, upon examining the Bankruptcy Code, there is 

little evidence of congressional intent to limit the Commission’s regulatory authority, and 

that “[a]bsent overriding language, the Bankruptcy Code should not be read to interfere 

with [Commission] jurisdiction.”45 The court thus concluded that it may not authorize 

rejection of the wholesale power purchase agreements at issue because to do so would 

directly interfere with the Commission’s jurisdiction over the rates, terms, conditions, and 

duration of the wholesale energy contracts.46 

In Boston Generating, the parties to the proceeding agreed that debtors should 

seek Commission approval of the wholesale contract at issue, but disagreed over whether 

the bankruptcy court or the Commission may consider the rejection motion concurrently 

or the bankruptcy court must wait until the Commission has ruled.47 The court concluded 

that this disagreement was irrelevant because regardless of the order, “[i]f either the 

bankruptcy court or [the Commission] does not approve the Debtors’ rejection of the 

[wholesale agreement], the Debtors may not reject the contract.” Thus, the court ordered 

 42 Id. at 522. Despite the Fifth Circuit’s conclusion, the court stated that, given the 

unique nature of a wholesale power purchase agreements for electric energy, it may be 

appropriate for the district court to apply a heightened standard of review when 

determining whether to reject wholesale power purchase agreements. Id. at 525. On 

remand, the district court noted that it would apply a heightened standard of review above 

that of the typical business judgement rule. See generally In re Mirant, 318 B.R. 100 

(N.D. Tex. 2004).

43 Calpine, 337 B.R. at 29-30.

44 Id. at 32-33.

45 Id. 

46 Id. at 36, 39.

47 Boston Generating, 2010 WL 4616243 at *3.

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the debtor to obtain a determination from the Commission pursuant to the Natural Gas 

Act as to whether it may reject the wholesale contract.48

More recently, in FirstEnergy Solutions Corp. v. FERC,

49 the bankruptcy court in 

the United States District Court for the Northern District of Ohio (Ohio Bankruptcy 

Court) issued a preliminary injunction enjoining the Commission from requiring 

FirstEnergy Solutions Corporation (FirstEnergy), which had filed a petition for 

bankruptcy, to continue performing under certain wholesale power contracts that 

FirstEnergy sought to reject through bankruptcy. In defending against the injunction, the 

Commission argued that, reading the FPA and the Bankruptcy Code together, the 

Commission maintains concurrent jurisdiction with bankruptcy courts over wholesale 

power agreements. In other words, a debtor must seek bankruptcy court approval to 

reject a wholesale power agreement, as well as Commission approval to unilaterally 

change such agreement. Rejecting the Commission’s position, the Ohio Bankruptcy

Court found that the automatic stay provision of the Bankruptcy Code50 and its power to 

grant equitable relief under the Bankruptcy Code51 support its decision to issue the 

preliminary injunction. That opinion is currently pending appeal before the United States 

Court of Appeals for the Sixth Circuit.52

Against this background, and given the unsettled state of the law, we have 

reviewed the FPA and Bankruptcy Code in light of the arguments raised in the Petition,

and conclude that this Commission and the bankruptcy courts have concurrent 

jurisdiction to review and address the disposition of wholesale power contracts sought to 

be rejected through bankruptcy. We find that to give effect to both the FPA and the 

Bankruptcy Code, a party to a Commission-jurisdictional wholesale power purchase 

agreement must obtain approval from both the Commission and the bankruptcy court to 

modify the filed rate and reject the contract, respectively. 

 48 Id. 

49 2018 WL 2315916 (Bankr. N.D. Ohio May 18, 2018).

50 11 U.S.C. § 362(a) (2012). 

51 11 U.S.C. § 105(a) (2012). 

52 See In re FirstEnergy Solutions Corp., Case Nos. 18-3787, 18-3788, 18-4095, 

181-4097, 18-4107, 18-4110, Briefing Schedule (6th Cir. filed Jan. 17, 2019) (requiring 

appellants’ principal briefs to be filed by February 26, 2019).

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Courts have repeatedly acknowledged the broad scope of the Commission’s

statutory jurisdiction over rates, terms, and conditions of wholesale electricity sales.

53

The Commission’s exclusive authority to determine the reasonableness of wholesale 

electricity rates also extends to the rates, terms, and conditions of wholesale power 

agreements, as well as changes to those agreements.54 The Commission’s broad and

plenary authority over wholesale electricity rates led to the development of the filed-rate 

doctrine, which holds a party “can claim no rate as a legal right that is other than the filed 

rate, whether fixed or merely accepted by the Commission, and not even a court can 

authorize commerce in the commodity on other terms.”55 First designed to “ensure that 

federal courts respect the decisions of federal administrative agencies,” the filed-rate 

doctrine recognizes that “[the Commission] alone is empowered to make that judgment of 

reasonableness, and until it has done so, no rate other than the one [approved by the 

Commission] may be charged.”56 In short, under the FPA, the Commission determines

the filed rate and “except for review of the Commission’s orders, the courts can assume 

no right to a different one.”57 We find that a rejection of a Commission-jurisdictional 

contract in a bankruptcy court alters the essential terms and conditions of the contract and 

the filed rate; thus, this Commission’s jurisdiction is implicated, and our approval is 

required.58 

We disagree with PG&E’s assertion that a Commission order addressing 

NextEra’s Petition prior to PG&E’s bankruptcy filing would violate the FPA and the 

 53 E.g., FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760 (2016).

54 See Morgan Stanley Capital Grp. Inc. v. Pub. Util. Dist. No. 1 of Snohomish 

Cty., Wash., 554 U.S. 527 (2008) (discussing the standard that the Commission applies 

when reviewing the modification of a wholesale power purchase agreement).

55 Montana–Dakota Utilities, 341 U.S. at 251.

56 Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 964 (1986) (quoting 

Ark. La. Gas Co. v. Hall, 453 U.S. 571, 581-82 (1981)).

57 Montana–Dakota Utilities, 341 U.S. at 252.

58 While this petition was pending, at least one other party to a wholesale power 

contract with PG&E has filed a petition seeking the same declaration that NextEra 

requests in this proceeding. Exelon Corporation, Petition for Declaratory Order and 

Complaint, Docket No. EL19-36-000 (filed Jan. 22, 2019). While the circumstances of 

individual contracts may vary—for example, to the extent Mobile-Sierra protections may 

or may not apply—the Commission’s jurisdictional position is the same with regard to 

other wholesale power contracts PG&E may seek to terminate or modify through 

bankruptcy.

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Bankruptcy Code. We are similarly unpersuaded by the argument that NextEra’s Petition 

is without merit because it was filed in advance of PG&E’s anticipated bankruptcy. 

Given that the law is unsettled, under the circumstances here, we find it appropriate for 

parties to raise concerns related to activities covered by the provisions of the FPA, 

including the rates, terms, and conditions of wholesale power agreements. 

With regard to PG&E’s statement that that the bankruptcy court will have 

jurisdiction over the issues raised in the Petition, we maintain that the Commission shares

concurrent jurisdiction with bankruptcy courts over wholesale power agreements, as 

described above. Similarly, concerning PG&E’s argument that the Commission should 

disclaim its authority due to provisions contained within specific contracts, these 

agreements are still subject to the Commission’s jurisdiction and the Commission 

maintains discretion to exercise its authority. With respect to PG&E’s arguments that the 

Mobile-Sierra doctrine does not apply to its power purchase agreements with NextEra, 

we are not reviewing the specific agreements here, but rather explaining the 

Commission’s concurrent jurisdiction with respect to wholesale power agreements. 

The Commission orders:

We conclude that this Commission and the bankruptcy courts have concurrent 

jurisdiction to review and address the disposition of wholesale power contracts sought to 

be rejected through bankruptcy.

By the Commission. Commissioner McNamee is not participating.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.

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