Opinion ID: 511559
Heading Depth: 2
Heading Rank: 3

Heading: The Mobile-Sierra Doctrine.

Text: 43 The Mobile-Sierra doctrine impinges upon the cluttered corner where the prohibition against retroactive ratemaking butts up against the filed rate doctrine. Derived from the paired decisions in United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373 (1956) and in FPC v. Sierra Pacific Power Co., 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed.2d 388 (1956), the rule acknowledges that a salient purpose of the Federal Power Act was to preserve the integrity of contracts, ... [thereby permitting] the stability of supply arrangements. Mobile, 350 U.S. at 344, 76 S.Ct. at 380. The Act recognizes the desirability of private contracts and the need of contracting parties to craft a variety of consensual terms and conditions. When negotiated in the context of initial rates, such agreements may then be filed and begin to operate, de facto and de jure, as the rate schedule. As the Court explained, the statute permits relations between utilities and wholesale customers to be established initially by contract, the protection of the public interest being afforded by supervision of the individual contracts, which to that end must be filed with the Commission and made public. Id. at 339, 76 S.Ct. at 378. Because the rates, though set in the first instance by agreement, are subject to review and prospective modification by the Commission, the law affords a reasonable accommodation between the conflicting interests of contract stability on the one hand and public regulation on the other. Id. at 344, 76 S.Ct. at 381. The obvious implication of the statutory scheme, as the Mobile Court suggested, is that, 44 except as specifically limited by the Act, the rate-making powers of ... companies were to be no different from those they would possess in the absence of the Act: ... to fix by contract, and change only by mutual agreement, the rate agreed upon with a particular customer. 45 Id. at 343, 76 S.Ct. at 380. See also Sierra Power, 350 U.S. at 352-55, 76 S.Ct. at 371-73. In the proverbial nutshell, the Mobile-Sierra doctrine is that: 46 The contract between the parties governs the legality of the filing. Rate filings consistent with contractual obligations are valid; rate filings inconsistent with contractual obligations are invalid. 47 Richmond Power and Light Co. v. FPC, 481 F.2d 490, 493 (D.C.Cir.), cert. denied, 414 U.S. 1068, 94 S.Ct. 578, 38 L.Ed.2d 473 (1973). 10 48 With this background, we turn to the remedial order, mindful that our proper prerogative is to review FERC's exercise of claimed authority to fashion anodynes under 16 U.S.C. Sec. 825h for reasonableness. See Southern California Edison Co., 805 F.2d at 1071-72; Niagara Mohawk Power Corp. v. FPC, 379 F.2d 153, 158-160 (D.C.Cir.1967). 49