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Today, the Large Public Power Council (LPPC) filed an Amicus Curaie (friend of the court) brief in Morgan Stanley v. Public Utility District No. 1 of Snohomish County asking the United States Supreme Court to direct the Federal Energy Regulatory Commission (FERC) to take a fresh look at contracts that customers were required to enter into at the height of the Western Energy Crisis of 2000-2001. In its review of the underlying FERC decision, the Ninth Circuit Court of Appeals faulted FERC for refusing to reevaluate these agreements in view of the Commission’s own finding that the markets were “dysfunctional” as a result of factors including market manipulation and the exercise of market power. The Ninth Circuit decision is under attack by power suppliers that believe these contracts should be treated like ordinary commercial agreements. LPPC disagrees. In LPPC’s view, customers had no choice but to enter into these agreements when seeking long-term, securely priced power at a time when the FERC itself described the market for power sales as “dysfunctional.” In the FERC decision on appeal, FERC took the position that the contracts formed during the Western Energy Crisis are protected by the fifty-year Mobile-Sierra doctrine established by the Supreme Court. That doctrine disfavors regulatory intervention in agreements between utilities and their customers. But, as LPPC pointed out, this doctrine should not undermine FERC’s obligation to protect consumers from high prices in a market the Commission itself found was marred by supplier gaming and abuse. As LPPC commented to the Court: “In a dysfunctional market, adopting a presumption that contract prices … are just and reasonable, conflicts with the agency’s statutory responsibility and common sense.” The Large Public Power Council represents 24 of the nation’s largest publicly owned, not-for-profit energy systems. Member utilities are located in 11 states and provide power to some of the largest cities in the country including Los Angeles, Seattle, Omaha, Phoenix, Sacramento, San Antonio, Orlando and Austin. Together, LPPC members control 90% of the public agency-owned, but non-federal transmission investment in the nation.
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