# Amicus Curiae Brief — American Electric Power Service Co. Corp. v. Public Utility District No. 1 of Snohomish County, Washington (Nos. 06-1462, 06-1457)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007

## Text

Nos. 06-1454, 06-1457, 06-1462, 0€
Supreme Court of the United States

SEMPRA GENERATION ei al., PETITIONERS,
Vv.
PUBLIC UTILITIES COMMISSION OF THE STATE OF CA, et al.

MORGAN STANLEY CAPITAL GROUP, INC., PETITIONER,
Vv.
PUBLIC UTILITY D1sT. NO. 1 OF SNOHOMISH COUNTY Wa, et al.

CALPINE ENERGY SERVICES, L.P., et al., PETITIONERS,
Vv

PUBLIC UTILITY Dist. No. 1 OF SNOHOMISH COUNTY WA, ef al.

DYNEGY POWER MARKETING, INC., et al., PETITIONERS,
We

PUBLIC UTILITIES COMMISSION OF THE STATE OF CA, et al.

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Ninth Circuit

BRIEF OF THE NATURAL GAS SUPPLY
ASSOCIATION AND INDEPENDENT PETROLEUM
ASSOCIATION OF AMERICA AS AMICI CURIE IN
SUPPORT OF THE PETITIONS FOR CERTIORARI

BARRY RUSSELL ROBERT R. GASAWAY
INDEPENDENT PETROLEUM Counsel of Record
ASSOCIATION OF AMERICA ASHLEY C. PARRISH

1201 15th Street, N.W. KIRKLAND & ELLIS LLP
Washington, D.C. 20005 655 Fifteenth Street, N.W.
(202) 857-4722 Washington, D.C. 20005

Attorney for the Independent (202) 879-5000
Petroleum Association of Am. _ Attorneys for the Natural
Gas Supply Association

August 6, 2007

yrs

i

QUESTIONS PRESENTED

Under the Natural Gas Act and the Federal
Power Act, as interpreted by this Court in United
Gas Pipe Line Co. v. Mobile Gas Service Corp., 350
U.S. 332 (1956) and in Federal Power Commission v.
Sierra Pacific Power Co., 350 U.S. 348 (1956), the
Federal Energy Regulatory Commission may not
modify valid contracts except in extraordinary
circumstances of unequivocal public necessity. In
conflict with this Court’s decisions and those of other
Courts of Appeals, the Ninth Circuit held that the
Commission may nullify a wholesale power contract,
even in the absence of public necessity, if the
contract rates were not pre-approved by the
Commission or if the contract is later deemed to have
been formed during a period of market “dysfunction.”

The questions presented are:

1. Whether the Ninth Circuit erred in failing to
abide by this Court’s decisions precluding the
Federal Energy Regulatory Commission from
retroactively abrogating valid, wholesale power
contracts absent a showing that abrogation is
required in the public interest.

2. Whether the Ninth Circuit erred in effectively
determining that the Mobile-Sierra public-interest
standard applies to sellers, but not buyers, that are
seeking to escape the terms of freely negotiated
wholesale power contracts.

QUESTIONS PRESENTED
TABLE OF AUTHORITIES
INTEREST OF AMICI CURIAE
INTRODUCTION

I.

II.

‘s

TABLE OF CONTENTS

Because The Nation’s Electricity And
Natural Gas’ Markets Are Increasingly
Interdependent, The Ninth Circuit
Decisions Could Spill Over Into Natural

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The Ninth Circuit Decisions Introduce
Uncertainty By Undermining The
Principal of Stare. Decisis And The
Doctrinal Stability Of This Court’s Mobile-

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CONCLUSION

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TABLE OF AUTHORITIES
' Page(s)

Cases |
Boston Edison Co. v. FERC,

233 F.3d 60 (1st Cir. 2000)........................cccccc0e0 13
California v. FERC, |

a 13
Dickerson v. United States,

ee 11
Federal Power Commission v.

Sierra Pacific Power Co.,

IE sic sncerinssencconssncnnsnssessonssesiin passim
IBP, Inc. v. Alvarez,

546 U.S. 21, 126 S.Ct. 514 (2005) ........ 12
In re Permian Basin Area Rates Cases,

I cuneenininiion 13
Maislin Indus., U.S., Inc. v.

Primary Steel, Inc.,

III sss sscinncncessonsesussobosoensenedanenniaes 12
Payne v. Tennessee,

I eeeeaiion cag an
United Dist. Cos. v. FERC,

68 F346 1106 (D.C. Cit. 1906) .......ccccccccccccccsceccccees 9
United Gas Pipe Line Co. v.

Mobile Gas Service Corp.,

I secant passim

iv
Agency Cases

Pipeline Service Obligations and
Revisions to Regulations Governing
Self-Implementing Transportation Under
Part 284 of the Commission’s Regulations,
Order No. 636, FERC Stats. & Regs. J 30,939
(Apr. 8, 1992), on reh’g, Order No. 636-A,
FERC Stats. & Regs. J 30,950 (Aug. 3, 1992),
on reh’g, Order No. 636-B, 61 FERC 4 61,272

(1992), on reh’g, 62 FERC 4 61,007 (1993)........... 9
Statutes and Rules
15 U.S.C. § 3431(b)(1)(A) (2000)... eee eeeeeeeee ee 9
ee Se Fe itintcncnccscnccctenscctsitaniiciniinnsbii 9
18 C.F.R. § 284.284(a) (2007) ................cccccccccccccceeseces 9
bok f Be | __, , ESNNU NEN TN ESTE 9
Other Authorities

Asia Pacific Energy Research Centre,
Natural Gas Market Reform in the
APEC Region (2003),
available at http://www.iee).or.jp/aperc/
pdf/project2002/gas-market.pdf........................ 4,6

EIA,
The Majors’ Shift to Natural Gas (2001),
available at http://www.eia.doe.gov/emeu/

FERC, 2004 State of the Markets
Report (June 2005), available at
http://www.ferc.gov/EventCalendar/Files/
200506 15093455-06-15-05-som2004.pdf.............. 4

v

available at http://www.ferc.gov/
market-oversight/st-mkt-ovr/

GAO,

FERC, 2006 State of the Markets Report (2007),

Meeting Energy Demand in the 21st Century,

GAO-05-414T (March 16, 2005),
available at http://www.gao.gov/

new.items/d05414t.pdf ....................ccccceeeeees
Goldstein, Eli & Young, Warren,

Regulatory Failures and Regulatory
Successes: The Case of U.S. Electricity
Regulatory Reforms 8 (2002),
available at http://regulation.upf.edu/

National Association of

Regulatory Utility Commissioners,

Gas and Electricity Interdependence:
The Current Situation and Intermediate
and Long-Term Solutions (2003),
available at http://www.globalregulatory

network.org/pdfs/interdependence.pdf.......
National Petroleum Council,

Balancing Natural Gas Policy:

Fueling the Demands of a Growing
Economy 48 (2003),

available at http://www.npc.org/reports/

TTS
Shively, Bob & Ferrare, John,

Understanding Today’s Natural

Gas Business (2004) ........................c.-eeeeeee0

INTEREST OF AMICI CURIAE!

The Natural Gas Supply Association (“NGSA”)
represents U.S.-based producers and marketers of
natural gas on issues that broadly affect the natural
gas industry. The Independent Petroleum
Association of America (“IPAA”) represents
independent oil and natural gas producers and
associated service companies. As the voice of the
producers and marketers who find, produce, sell, and
deliver most of the Nation’s natural gas supply,
NGSA and IPAA work to ensure reliable and
efficient delivery of natural gas to end-consumers
and to increase the supply of natural gas to domestic
markets. NGSA’s and IPAA’s members have made
significant financial commitments in reliance on the
current structure of the Nation’s energy markets.
These commitments are necessary to satisfy the
demand for natural gas for all end-uses—including
electric power produced by natural gas generation
facilities, which represents the single fastest growing

! Petitioners and respondents have consented to the filing of
this brief in letters on file in the Clerk's office. Pursuant to S.

Ct. R. 37.6, amici state that no counsel for a party authored any

part of this brief. No person or entity other than amici, their

members, or their counsel made a monetary contribution to the

preparation or submission of this brief. The attorneys

preparing this brief direct the Court’s attention to the fact that

a second brief as amici curiae will be filed in these same cases

on behalf of the Electric Power Supply Association and others
by different attorneys from the same law firm. Although the

attorneys working on the two briefs have shared work product

and engaged in joint efforts, the resulting briefs are

independent statements reflecting the independent views of the

respective clients on whose behalf the two individual briefs are

being filed.

2

component of natural gas demand in the United
States.

The decisions of the Ninth Circuit below place in
doubt the willingness of that Circuit and the ability
of the Federal Energy Regulatory Commission
faithfully to apply this. Court’s landmark, half-
century-old, decisions in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S. 332 (1956) and
Federal Power Commission v. Sierra Pacific Power
Co., 350 U.S. 348 (1956), at least as those decisions
apply to market-based rate contracts for electricity.
The Ninth Circuit decisions have therefore cast a
pall of uncertainty over future investments in
electric generating infrastructure, including
infrastructure designed to run on natural gas. More
broadly, the decisions raise troubling questions as to
how far any tremors from the precedential
aftershocks of the Ninth Circuit's doctrinal
departures will radiate out from electricity markets
and into natural gas markets within’ the
‘Commissiou’s jurisdiction. Depending on their
magnitude, those precedential aftershocks risk
unsettling crucial parts of what had been thought to
be settled rules and practices governing natural gas
transactions. It is for these reasons that NGSA and
IPAA are taking the unusual step of making their
views known to the Court, even though the
underlying decisions, properly interpreted, do not
apply to the natural gas industry.

INTRODUCTION

Over a_ half-century ago, this Court first
articulated what has come to be known as the
Mobile-Sierra doctrine. The Court described that
doctrine as embodying Congress's “reasonable
accommodation between the conflicting interests of
contract stability on the one hand and public
regulation on the other.” United Gas Pipe Line Co.
v. Mobile Gas Serv. Corp., 350 U.S. 332, 344 (1956);
see also Federal Power Commission v. Sierra Pac.
Power Co., 350 U.S. 348 (1956). Since then, the
courts and (with some infrequent exceptions) the
Commission have consistently and wisely declined
invitations to modify the terms of fixed-price bulk
energy contracts except in “extraordinary
circumstances” where revised contract terms are
clearly “necessary in the public interest.” Mobile, 350
U.S. at 344 (emphasis added).

Regulatory certainty, including the assurance
that contracts for Commission-jurisdictional services
are protected by Mobile-Sierra, has played a central
role in the Nation developing and maintaining “the
largest and most liquid gas market in the world.”
National Petroleum Council, Balancing Natural Gas
Policy: Fueling the Demands of a Growing Economy,
at 48 (2003). Together with pro-competitive
initiatives adopted by Congress and the Commission,
regulatory certainty has produced robust natural gas
markets that enable the natural gas industry to
respond effectively to price signals. Most
importantly, markets conveying clear price signals
have prompted billions of dollars of investment in
North American gas infrastructure, representing an
“important market success story” that sharply

4

contrasts to the endemic underinvestment
experienced under past regulatory regimes. FERC,
2004 State of the Markets Report, at 7, 145 (June
2005); see also EIA, The Majors’ Shift to Natural
Gas, at 19 (2001). Regulatory certainty has thus
enhanced the stability of natural gas supplies, which
is essential to keeping gas prices at reasonable levels
in a growing economy. See Asia Pacific Energy
Research Centre, Natural Gas Market Reform in the
APEC Region, at 149 (2003) (‘APEC Region”). The
happy result has been an “exciting new industry
characterized by free market enterprise, competition
and continual innovation.” Bob Shively & John
Ferrare, Understanding Today's Natural Gas
Business, at 1 (2004).

The Ninth Circuit’s doctrinal departures threaten
to undermine these successes. If allowed to stand,
the decisions risk exposing American consumers to
the same types of high and volatile prices and
frequent supply shortages that prompted Congress
and the Commission to discard the regulatory
practices of the past in favor of supply arrangements

that are at once more flexible, more stable, and more |
reliable.

REASONS FOR GRANTING THE WRIT

This Court should grant certiorari to correct the
Ninth Circuit's unwarranted and unwise judicial
policymaking in an industry of central national
importance. As petitioners explain, by setting aside
congressional policy, the Ninth Circuit decisions
have opened a conflict with the longstanding
precedent of both this Court and other Courts of
Appeals. Because fuel costs are the largest variable
cost involved in producing electricity, the lower

9)

court's destabilization of the already volatile
electricity market could have significant spillover
effects in the Nation’s natural gas markets. (See
Section I, below.) Moreover, by calling into question
the Ninth Circuit’s respect for Mobile-Sierra’s
well-understood principles, the decisions below may
infect the natural gas markets with legal
uncertainty—in the form of fears that the Ninth
Circuit's unwise decisions might be improperly
extended to encompass certain natural gas
transactions. (See Section II, below.) Both types of
disruption threaten the interests of the very
consumers the Ninth Circuit decisions were intended
to protect.

I. Because The Nation’s Electricity And
Natural Gas Markets Are _ Increasingly
Interdependent, The Ninth Circuit
Decisions Cuuld Spill Over Into Natural Gas
Markets.

The Ninth Circuit decisions dramatically depart
from this Court’s precedents by inventing a new test
for determining whether Mobile-Sierra’s public-
interest standard applies to wholesale power
contracts that incorporate market-based rates. The
decisions fundamentally alter the Mobile-Sierra
standard by creating a one-way ratchet according to
which buyer's remorse—but not seller’s
remorse—can supply a basis for invoking the public
interest to abrogate voluntarily-negotiated contract
rates. In so-called “high rate” cases, the Ninth
Circuit decisions hold, for the very first time, that
the Commission must modify contracts in all
instances where rates are deemed to be outside some
subjectively defined “zone of reasonableness.”

6

If the Ninth Circuit decisions are allowed to
stand, the most immediate result would be the
destabilization of the Nation’s electricity markets.
Next, because electricity generation is a large and
fast growing user of natural gas, see APEC Region, at
143 (the “fastest growth in gas use is projected to
occur in the electric power sector, with demand more
than doubling”), the uncertainty those decisions have
engendered in electricity markets will inevitably
splash back into the market for the natural gas
supplies used to fire much of the Nation’s electric
generating capacity. See FERC, 2006 State of the
Markets Report, at 3 (2007) (“2006 Markets Report”)
(“[a]though we often consider energy markets as
distinct (e.g., electricity and natural gas), they
increasingly influence one another”). |

Under the Ninth Circuit’s approach, generators
that use natural gas to power generating facilities
will be unable to rely on stable, long-term contracts
to sell the electricity they generate. The precise
adjustment that the markets will make to this
unexpected legal development is not yet clear. But
what is clear is that, precisely because they may no
longer enter stable sales contracts with electricity
customers, power generators may take a much
different view of making the multi-million dollar
commitments necessary to add new electric
generation capacity—the great majority of which is
fired by clean-burning natural gas. By calling into
question the economic viability of facilities that
purchase and consume natural gas, the decisions
below cannot help but have substantial impacts on
the natural gas industry.

7

Another likely result of the Ninth Circuit's
doctrinal shift is a destabilization of electric power
generators’ purchases of natural gas on the spot
market. See generally Eli Goldstein & Warren
- Young, Regulatory Failures and Regulatory
Successes: The Case of U.S. Electricity Regulatory
Reforms, at 8 (2002). The Ninth Circuit decisions,
particularly the one-way ratchet set in place by those
decisions, will discourage generators from entering
into long-term contracts to sell electricity and
undermine their ability to rely on existing long-term
contracts. Long-term contracts that are voidable by
electricity customers, but not by electricity
generators, will be seen as having much less value
from the perspective of generators. This will in turn
render generators less willing and less able to make
long-term commitments with suppliers of natural gas
and other fuels, inevitably pushing greater volumes —
of natural gas transactions to compete for the more
volatile supplies traded through spot market
purchases. Generally speaking, the greater the
proportion of natural gas sold through the spot
market, and the more questionable the legal validity
of the contracts used to hedge spot market risks, the
more market participants of every description will be
at the mercy of fluctuations in spot market prices.

For these reasons, the Ninth Circuit decisions
make events like the California energy crisis of
2000-2001 more likely to recur. Moreover, because of
the iterative nature of market responses in the
closely related markets for electricity and natural
gas, the Ninth Circuit’s policies create circumstances
conducive to a vicious cycle of instability across both
markets. “Since the availability and price of natural
gas directly affects electricity markets and electricity

8

prices and because so much of the electricity
generation added in the past decade, and planned to
be added in the future, is gas-fired, all consumers |
across the Nation are likely to experience the
impacts of energy price and supply volatility twice,
on both their gas and electricity bills.” National
Association of Regulatory Utility Commissioners,
Gas and Electricity Interdependence: The Current
Situation and Intermediate and Long-Term
Solutions, at 1 (2003). This Court’s review is needed
in order to short circuit this cycle before it begins.

Il. The Ninth Circuit Decisions Introduce
Uncertainty By Undermining The Principal
of Stare Decisis And The Doctrinal Stability
Of This Court’s Mobile-Sierra Regime.

In addition to the Ninth Circuit decisions’ indirect
impacts on natural gas markets through their effects
on electricity markets, NGSA and IPAA are
concerned about potential direct adverse impacts of
those decisions in the event they were to be
improperly construed as applying to Commission-
jurisdictional sales of natural gas. To be clear,
despite similarities between the Natural Gas Act and
the Federal Power Act, there are critical legal,
factual, and economic distinctions that dispositively
militate against extending the Ninth Circuit
decisions to natural gas sales. Accordingly, even
assuming the decisions below were correct in the
electricity context in which they were decided (they
are not), there still could be no legitimate basis for
applying those decisions in the context of sales of
natural gas.

In contrast to wholesale sales of electricity, a
substantial proportion of natural gas sales are not

9

subject to rate regulation by the Commission.
Congress found that markets for natural gas at the
wellhead and in the field were competitive and
therefore decontrolled rates for so-called “first sales”
of natural gas. See 15 U.S.C. § 3431(b)(1)(A) (2000)
(“for purposes of [the rate provisions] of the Natural
Gas Act, any amount paid in any first sale of natural
gas shall be deemed to be just and reasonable”).
Accordingly, the Natural Gas Act now limits the
Commission’s ratemaking jurisdiction over sales of
natural gas for resale in interstate commerce to
subsequent sales. See 15 U.S.C. § 717(b) (2000).
Moreover, the Commission has used its expertise and
authority to pre-authorize non-“first sales” for resale
at “negotiated rates.” 18 C.F.R. § 284.402(a) (2007);
see also 18 C.F.R. § 284.284(a) (2007). The
Commission embraced this market-oriented
approach based on findings that it could rely on
“market forces at the wellhead or in the field” to
constrain resale gas prices within the Natural Gas
Act’s “just and reasonable’ standard.” Pipeline Serv.
Obligations and Revisions to Regulations Governing
Self-Implementing Transp. Under Part 284 of the
Commission’s Regulations, Order No. 636, FERC
Stats. & Regs. | 30,939 at 30,440 (Apr. 8, 1992), on
reh’g, Order No. 636-A; FERC Stats. & Regs.
{ 30,950 (Aug. 3, 1992), on reh’g, Order No. 636-B, 61
FERC 4 61,272 (1992), on reh’g, 62 FERC ¥ 61,007
(1993), affd in part and remanded in part sub nom.
United Dist. Cos. v. FERC, 88 F.3d 1105 (D.C. Cir.
1996).

The decisions below do not apply to Commission-
jurisdictional sales for resale of natural gas. Nor do
they purport to reverse the elaborate statutory and
regulatory superstructure that has been built by

10

Congress and the Commission to develop and govern
well functioning markets for natural _§ gas.
Nonetheless, the Ninth Circuit’s willingness to
depart from precedent in one context (market-based
rate sales of electricity) suggests the possibility of
comparable departures in a second context (market-
based rate sales of natural gas). By raising the
specter that its misguided decisions might come to
infect market-based rate regulation of non-“first
sales” for resale of natural gas, the Ninth Circuit has
threatened the longstanding regulatory certainty
secured by Mobile-Sierra. Such certainty is essential
to well-functioning natural gas markets, because
only stable and well known contracting rules can
permit buyers to lock in particular prices and
quantities of natural gas using negotiated contracts
adapted to their own particular needs.

Although the Ninth Circuit decisions will have
the most immediate impact on regulatory certainty
in the context of electricity contracts, there can be no
assurance that the decisions’ ultimate reverberations
will be so limited. If the Ninth Circuit can, at the
stroke of a pen, discard a half-century-old legal
standard as to one class of contracts, and if it can
turn a balanced and parallel contracting rule into a
one-way ratchet, what is to prevent similar
treatment of the doctrine as regards other classes of
contracts? What is to prevent innovations in other
doctrines? And what, ultimately, is to prevent the
Ninth Circuit or other lower courts from revamping
any foundational rule governing energy markets?

The Ninth Circuit’s policy innovations have broad
implications for stability, predictability, and legal
expectations throughout the energy industry. At

11

present, “buyers of natural gas have options to
reduce their exposure to volatile prices,” both
through stable contracts to buy physical gas, as well
as financial hedging instruments. GAO, Meeting
Energy Demand in the 21st Century, GAO-05-414T,
at 16 (March 16, 2005); see also 2006 Markets
Report, at 44 (“buyers and sellers would largely lose
the benefits of hedging if there were no speculators
willing to assume the risk that hedgers want to lay
off’). At their most fundamental level, however, the
decisions below have imperiled the viability of these
risk-reducing options.

The Mobile-Sierra doctrine, and the respect for
settled expectations it demands, may appear to the
uninitiated as mere abstractions. But to participants
in the Nation’s energy markets, the doctrine is
omnipresent. A simple search of the Westlaw legal
database that collects Commission decisions shows
that of the approximately 5,000 administrative
decisions rendered by the Commission since 2000,
over 600 (approximately one in eight) mention
Mobile-Sierra. It may be only a slight exaggeration,
if it is an exaggeration at all, to say that Mobile-
Sierra is to energy regulation what the Miranda rule
is to the law of criminal arrests. Cf. Dickerson uv.
United States, 530 U.S. 428, 443-44 (2000).

Although the Ninth Circuit did not hesitate to
depart from the settled understandings of the
Federal Power Act, this Court has long recognized
that a set of stable and consistent legal rules serves
crucial functions. See, e.g., Payne v. Tennessee, 501
U.S. 808, 828 (1991) (considerations “in favor of stare
decisis are at their acme in cases involving property
and contract rights”), As many of this Court’s

12

decisions have observed, clear legal rules discourage
costly litigation that would otherwise entail
substantial direct costs, and then impose still further
costs by engendering additional rounds of follow-on
litigation as needed to clarify any remaining
uncertainty.

Energy suppliers, like other market participants,
“require clear signals regarding national policies and
confidence that those policies will be sustained over
time in order to undertake the _ substantial
investment needed to support expected increases in
consumption.” GAO, Meeting Energy Demand in the
21st Century, GAO-05-414T, at 7-8 (March 16, 2005).
These important supply signals can only be
scrambled if prices are to be set from time to time
according to a heavy and unpredictable regulatory
hand empowered by indefensible departures from
judicial precedent.

This Court has often recognized that principles of
stare decisis carry maximum force in contexts where,
as here, statutory as opposed to constitutional
policies are at issue. See IBP, Inc. v. Alvarez, 546
U.S. 21, 126 S.Ct. 514, 523 (2005) (“[c]onsiderations
of stare decisis are particularly forceful in the area of
statutory construction, especially when a unanimous
interpretation of a statute has been accepted as
settled law for several decades”). In addition, the
Court has sometimes found it necessary to remind
lower courts, including the Ninth Circuit, that only
this Court may revisit one of the Court’s own
precedents. See Maislin Indus., U.S., Inc. v. Primary
Steel, Inc., 497 U.S. 116, 131 (1990) (once this Court
has “determined a statute’s clear meaning,” it
adheres “to that determination under the doctrine of

13

stare decisis”); see also California v. FERC, 495 U.S.
490, 499 (1990) (recognizing the respect “this Court
must accord to longstanding and well-entrenched
decisions, especially those interpreting statutes that
underlie complex regulatory regimes”). Against this
backdrop, the Ninth Circuit decisions must be
viewed as an assault, not only on the Mobile-Sierra
doctrine, but also on principles of stare decisis more
generally.

Any change in a legal regime that acts, as do the.
Ninth Circuit decisions, to replace settled rules with
vague administrative directives necessarily opens a
door to arbitrary agency decisionmaking. Having
now “bargain[ed] in the shadow” of Mobile-Sierra for ~
more than five decades, Boston Edison Co. v. FERC,
233 F.3d 60, 66 (1st Cir. 2000), energy market
participants have ordered their affairs on the
assumption that the Commission will be allowed to
modify contracts only in accordance with Mobile-
Sierra’s narrow and well-defined understanding of
“extraordinary circumstances” of “unequivocal public
necessity.” In re Permian Basin Area Rates Cases,
390 U.S. 747, 820-22 (1968). Upsetting those
expectations not only engenders uncertainty, it
invites an interlude of impossible-to-predict agency
reaction. The risk that market participants will be
unnecessarily subject to the whim of uncertain
Commission policies poses an undeniable further
threat to the stability of our Nation’s energy
markets—one that can and should be defused by this
Court’s review of the decisions below.

14

CONCLUSION

For the foregoing reasons, and for reasons set
forth in the petition, the Court should grant the writ
of certiorari.

Respectfully submitted,

ROBERT R. GASAWAY
Counsel of Record
7 | ASHLEY C. PARRISH
KIRKLAND & ELLIS LLP
655 Fifteenth Street, N.W.
Washington, D.C. 20005
(202) 879-5000

Attorneys for the Natural
Gas Supply Association

August 6, 2007

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0539%3A12. Public record. Not legal advice.