Opinion ID: 450364
Heading Depth: 2
Heading Rank: 3

Heading: The Clauses as Contractual Conditions

Text: 37 KG & E also argues that the burden of proof should not be imposed on it because the minimum demand clauses are contractual. KG & E points to the Mobile-Sierra doctrine in which the Supreme Court said that FERC bears the burden of justifying its abrogation of contractual provisions. See United Gas Pipeline Co. v. Mobile Gas Service Corp., 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373 (1956); FPC v. Sierra Pacific Power Co., 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed. 388 (1956). In addition to responding to this substantive argument, FERC emphasizes that KG & E did not make this argument in its application to the Commission for rehearing. FERC thus argues that KG & E should be barred from making the argument to this court. 38 The Federal Power Act requires that a reviewing court consider only those issues raised in an application for rehearing, unless the litigant can show reasonable ground for not having raised an issue. 16 U.S.C. Sec. 825l(b). In this case KG & E has not even attempted to offer a reason for its failure to raise the Mobile-Sierra argument in its petition to the Commission. We thus have no basis for considering an argument that the Commission did not have an opportunity to address within its regulatory process. 39 In conclusion, KG & E's arguments are insufficient to dislodge FERC's requirement that the utility justify the combination that the Commission has found to be generally unjust and unreasonable. The Commission has acted within its statutory authority to determine the propriety of rates, and the presence of these clauses in earlier rate arrangements does not insulate them from that determination.