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EPSA-Led Coalition Urges Supreme Court to Reaffirm Integrity of Energy Contracts
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) has filed a "friend of the court" brief with the U.S. Supreme Court supporting the petition of NRG Power Marketing, LLC, et al. to reverse a lower court's decision that threatens the integrity of privately negotiated energy contracts when challenged by any entity not a party to the contract. EPSA was joined by seven other organizations representing a diverse array of participants in the electric and natural gas industries in urging the Supreme Court to reverse a D.C. Circuit Court decision (Maine Public Utilities Commission v. FERC) which fashions a new exception to the Mobile-Sierra doctrine when contracts are challenged by non-contracting third parties.
EPSA President and CEO John E. Shelk said, "In its Morgan Stanley decision issued this past summer, the Supreme Court acknowledged that upholding the integrity of contracts is vital to the development and preservation of this nation's bulk power markets, particularly in promoting needed capital investments. Similarly, the lower court's decision in this case must be reversed in order to help consumers avoid the risk premium that would help drive up energy prices if contract integrity is uncertain."
In its brief, EPSA pointed out that both the Federal Power Act and the Supreme Court's recent decision in Morgan Stanley clearly recognize the importance of upholding the integrity of privately negotiated contracts. As EPSA emphasized in its brief, the Mobile-Sierra doctrine allows for contract modification only in extraordinary circumstances of unequivocal public necessity. The brief argues that the D.C. Circuit's decision carves out a new and unjustified exception to the Mobile-Sierra doctrine, narrowing its field of application to the point of effectively nullifying its protections.
According to the brief, "If not corrected, the D.C. Circuit's new exception will gut Morgan Stanley, effectively consigning that decision and the Mobile-Sierra doctrine to a footnote in the regulation of the energy industry, and upending the stability of long-term contracts on which this Nation's energy markets depend. The lower court's disruptive decision should not be allowed to stand."
The EPSA brief said, "Regulatory certainty, including the assurance that contracts for Commission-jurisdictional services are protected from modification, has played a central role in the development of this Nation's bulk power markets." Additionally, the brief stated that, "the risk that market participants will be unnecessarily subject to uncertain Commission policies poses an undeniable further threat to the stability of our Nation's energy markets at the worse possible juncture. That threat can and should be defused by this Court's review of the [D.C. Circuit decision]."
EPSA was joined by the Colorado Independent Energy Association; the Electric Power Generation Association; the Independent Power Producers of New York; the Natural Gas Supply Association; the New England Power Generators Association, Inc.; the Northwest and Intermountain Power Producers Coalition and the Western Power Trading Forum in the "friends of the court" brief.
EPSA Amicus Brief in NRG v. Maine PUC Supreme Court Appeal on Contract Integrity
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.