This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
Background and question before the Court
The contracts at issue gave first priority to commercial power users, which during shortages could result in residential customers being cut off.
What each side argues
Petitioners
Petitioners argue that a Ninth Circuit decision limits the Commission’s power, asserting that the Commission’s authority is pre‑empted.
According to MR. WRIGHT, petitioners contend they should not prevail unless they can show they lacked just and reasonable alternatives when they entered into the contract.
According to MR. WRIGHT, petitioners argue that market‑based rate authority only lifts market‑based rate authority and that a 206 action under the Federal Power Act is required for consumer relief.
Respondents
Respondents argue that the Commission unusually lacked discretion to apply the statute in this case.
What happened at oral argument
According to Justice Stevens, Justice Stevens noted the case being heard.
Justice Ginsburg asked whether the Commission staff’s comment that spot‑market dysfunction carried over into the forward market, inflating forward prices, was relevant.
Justice Scalia asked whether the current market dysfunction makes it impossible to predict future rates.
Justice Alito asked whether the interpretation of the Federal Power Act at issue is permissible.
Justice Souter asked whether the petitioners were guilty of a failure to report.
Justice Souter further asked whether parties innocent of manipulation but caught in a chaotic market are entitled to relief.
- [1] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 4
- [2] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 22
- [3] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 23
- [4] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 26
- [5] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 30
- [6] b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdf, p. 40
What the Court decided
Why it matters
The Commission noted that the contracts gave first priority to commercial users, which could result in residential customers being cut off during shortages.
According to MR. WRIGHT, the Commission argued that market‑based rate authority only lifts market‑based rate authority and that a 206 action under the Federal Power Act is needed for consumer relief.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- b4dfffd95df3edb8ce89-r1-a97b1de3046c2150.pdforal argument transcript
Guide generated September 22, 2026. Automated validation accepted this version.