Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 333

172 

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

The  Mobile-Sierra  doctrine  originated  in  twin  decisions 
announced  on  the  same  day  in  1956:  United  Gas  Pipe  Line 
Co.  v.  Mobile  Gas  Service  Corp.,  350  U. S.  332,  and  FPC  v. 
Sierra  Paciﬁc  Power  Co.,  350  U. S.  348.  Both  concerned 
rates set by contract rather than by tariff.  Mobile involved 
the  Natural  Gas  Act,  which,  like  the  FPA,  requires  utilities 
to  ﬁle  all  new  rates  with  the  regulatory  commission.  15 
U. S. C.  § 717c(c).  In  Mobile,  we  rejected  a  gas  utility’s  ar­
gument  that  the  ﬁle-all-new-rates  requirement  authorized 
the  utility  to  abrogate  a  lawful  contract  with  a  purchaser 
simply by ﬁling a new tariff.  350 U. S., at 336–337.  Filing, 
we explained, was a precondition to changing a rate, not an 
authorization to do so in violation of a lawful contract.  Id., 
at 339–344; see Morgan Stanley, 554 U. S., at 533. 

The  Sierra  case  involved  a  further  issue.  Not  only  had 
the Commission erroneously concluded that a newly ﬁled tar­
iff superseded a contract rate.  In addition, the Commission 
had  suggested  that,  in  any  event,  the  contract  rate,  which 
the  utility  sought  to  escape, was  itself  unjust  and  unreason­
able.  The  Commission  thought  that  was  so  “solely  because 
[the  contract  rate]  yield[ed]  less  than  a  fair  return  on  the 
[utility’s] net invested capital.”  350 U. S., at 355. 

The Commission’s suggestion prompted this Court to 
home in on “the question of how the Commission may evalu­
ate  whether  a  contract  rate  is  just  and  reasonable.”  Mor­
gan Stanley,  554 U. S., at  533.  The Sierra  Court answered 
the question this way: 

“[T]he Commission’s conclusion appears on its face to be 
based  on  an  erroneous  standard.  .  .  .  [W]hile  it  may  be 
that  the  Commission  may  not  normally  impose  upon  a 
public utility a rate which would produce less than a fair 
return, it does not follow that the public utility may not 
itself  agree  by  contract  to  a  rate  affording  less  than  a 
fair  return  or  that,  if  it  does  so,  it  is  entitled  to  be  re­
lieved  of  its  improvident  bargain.  . . . In  such  circum­
stances the sole concern of the Commission would seem