Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 332

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

171 

Opinion of the Court 

Six of the eight objectors to the settlement sought review 
in  the  D.  C.  Circuit.  For  the  most  part,  the  Court  of  Ap­
peals  rejected  the  objectors’  efforts  to  overturn  FERC’s 
order approving the settlement.  520 F. 3d, at 467.  But the 
objectors  prevailed  on  the  Mobile-Sierra  issue:  The  D.  C. 
Circuit  held  that  Mobile-Sierra  applies  only  to  contract­
ing  parties.  Id.,  at  478.  In  this  Court,  the  parties  have 
switched places.  Defenders of the settlement, including the 
Mobile-Sierra  provision,  are  petitioners;  objectors  to  the 
settlement,  victorious  in  the  Court  of  Appeals  only  on  the 
Mobile-Sierra issue, are respondents. 

Because of the importance of the issue, and in light of our 
recent  decision  in  Morgan  Stanley,  we  granted  certiorari, 
556  U. S.  1207  (2009),  to  resolve  this  question:  “[Does] 
Mobile-Sierra’s public-interest standard appl[y] when a con­
tract rate is challenged by an entity that was not a party to 
the  contract[?]”  Brief  for  Petitioners  i.  Satisﬁed  that  the 
answer to that question is yes, we reverse the D. C. Circuit’s 
judgment insofar as it rejected application of Mobile-Sierra 
to noncontracting parties. 

II 

The  FPA  gives  FERC  authority  to  regulate  the  “sale  of 
electric  energy  at  wholesale  in  interstate  commerce.”  See 
16  U. S. C.  § 824(b)(1).  The  Act  allows  regulated  utilities 
to  set  rates  unilaterally  by  tariff;  alternatively,  sellers  and 
buyers  may  agree  on  rates  by  contract.  See  § 824d(c),  (d). 
Whether set by tariff or contract, however, all rates must be 
“just  and  reasonable.”  § 824d(a).  Rates  may  be  examined 
by  the  Commission,  upon  complaint  or  on  its  own  initiative, 
when  a  new  or  altered  tariff  or  contract  is  ﬁled  or  after  a 
rate goes into effect.  §§ 824d(e), 824e(a).  Following a hear­
ing,  the  Commission  may  set  aside  any  rate  found  “unjust, 
unreasonable, unduly discriminatory or preferential,” and re­
place it with a just and reasonable rate.  § 824e(a).