Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 329

168 

NRG  POWER  MARKETING,  LLC  v.  MAINE  PUB. 
UTIL.  COMM’N 
Opinion of the Court 

address  the  problems,  FERC  approved  a  comprehensive 
settlement  agreement  (hereinafter  Settlement  Agreement 
or  Agreement).  Most  relevant  here,  the  Agreement  estab­
lished  rate-setting  mechanisms  for  sales  of  energy  capacity, 
and provided that the Mobile-Sierra public interest standard 
would govern rate challenges.  Parties who opposed the set­
tlement  petitioned  for  review  in  the  United  States  Court  of 
Appeals  for  the  D.  C.  Circuit.  Among  multiple  objections 
to  FERC’s  order  approving  the  Agreement,  the  settlement 
opponents urged that the rate challenges of nonsettling par­
ties should not be controlled by the restrictive Mobile-Sierra 
public  interest  standard.  The  Court  of  Appeals  agreed, 
holding  that  “when  a  rate  challenge  is  brought  by  a  non-
contracting  third  party,  the  Mobile-Sierra  doctrine  simply 
does  not  apply.”  Maine  Pub.  Util.  Comm’n  v.  FERC,  520 
F. 3d 464, 478 (2008) (per curiam). 

We reverse the D. C. Circuit’s judgment to the extent that 
it rejects the application of Mobile-Sierra to noncontracting 
parties.  Our  decision  in  Morgan  Stanley,  announced  three 
months  after  the  D.  C.  Circuit’s  disposition,  made  clear  that 
the  Mobile-Sierra  public  interest  standard  is  not  an  excep­
tion  to  the  statutory  just-and-reasonable  standard;  it  is  an 
application  of  that  standard  in  the  context  of  rates  set  by 
contract.  The  “venerable  Mobile-Sierra  doctrine”  rests  on 
“the  stabilizing  force  of  contracts.”  Morgan  Stanley,  554 
U. S.,  at  548;  see  id.,  at  551  (describing  contract  rates  as 
“a key source of stability”).  To  retain vitality, the doctrine 
must  control  FERC  itself,  and,  we  hold,  challenges  to  con­
tract  rates  brought  by  noncontracting  as  well  as  contract­
ing parties. 

I 

In  a  capacity  market,  in  contrast  to  a  wholesale-energy 
market,  an  electricity  provider  purchases  from  a  generator 
an option to buy a quantity of energy, rather than purchasing 
the  energy  itself.  To  maintain  the  reliability  of  the  grid,