Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 330.0

Cite as: 558 U. S. 165 (2010) 

169 

Opinion of the Court 

electricity  providers  generally  purchase  more  capacity,  i. e., 
rights  to  acquire  energy,  than  necessary  to  meet  their  cus­
tomers’  anticipated  demand.  For  many  years  in  New  Eng­
land, the supply of capacity was barely sufﬁcient to meet the 
region’s  demand.  FERC  and  New  England’s  generators, 
electricity providers, and power customers made several at­
tempts  to  address  this  problem.  This  case  stems  from  the 
latest effort to design a solution. 

In 2003, a group of generators sought to enter into “relia­
bility  must-run”  agreements  with  the  New  England  Inde­
pendent System Operator (ISO), which operates the region’s 
transmission system.1  In its orders addressing those agree­
ments,  FERC  directed  the  ISO  to  develop  a  new  market 
mechanism  that  would  set  prices  separately  for  various 
geographical  subregions.  Devon  Power  LLC,  103  FERC 
¶ 61,082, pp. 61,266, 61,271 (2003). 

In  March  2004,  the  ISO  proposed  a  market  structure  re­
sponsive to FERC’s directions.  See Devon Power LLC, 107 
FERC  ¶ 61,240,  p.  62,020  (2004).  FERC  set  the  matter  for 
hearing before an Administrative Law Judge (ALJ), who is­
sued  a  177-page  order  largely  accepting  the  ISO’s  proposal. 
Devon  Power  LLC,  111  FERC  ¶ 63,063,  p.  65,205  (2005). 
Several  parties  ﬁled  exceptions  to  the  ALJ’s  order;  on  Sep­
tember  20,  2005,  the  full  Commission  heard  arguments  on 
the  proposed  market  structure,  and  thereafter  established 
settlement procedures.  Devon  Power  LLC,  113 FERC 
¶ 61,075, p. 61,271 (2005). 

After four months of negotiations, on March 6, 2006, a set­
tlement was reached.  Of the 115 negotiating parties, only 8 
opposed the settlement. 

1 An  ISO  is  an  independent  company  that  has  operational  control,  but 
not  ownership,  of  the  transmission  facilities  owned  by  member  utilities. 
ISOs “provide open access to the regional transmission system to all elec­
tricity  generators  at  rates  established  in  a  single,  unbundled,  grid-wide 
tariff . . . .”  Midwest ISO Transmission Owners v.  FERC, 373 F. 3d 1361, 
1364 (CADC 2004) (internal quotation marks omitted).