Supreme Court Considers FERC’s Ability To Void Wholesale Energy Contracts
Last week, the Supreme Court heard oral arguments in the consolidated cases Morgan Stanley Capital Group v. Public Utility Dist. 1, et al., Docket No. 06-1457 (U.S.), and American Elec. Power Serv. Corp., et al. v. Public Utility Dist. 1, et al., Docket No. 06-1462 (U.S.), regarding the ability of the Federal Energy Regulatory Commission (“FERC”) to abrogate otherwise valid wholesale energy contracts. The central issues before the Court are what standard FERC must apply in these cases, and whether the market disruptions caused by the Energy Crisis of 2000-2001 are grounds for abrogating the challenged agreements, regardless of what standard applies.