NRG POWER MARKETING, LLC, ET AL., Petitioners, v ... - ISDA

19environment that creates uncertainty about contractenforcement, and thus impedes the ability to managerisk, will tend to raise the costs, reduce the financialrewards, and increase the risks of companies thattrade in wholesale power markets.The decision below severely impedes contractingparties’ ability to manage the risk posed by the ordinaryjust-and-reasonable standard. As this Court’sprecedent makes clear, contracting parties have alwaysbeen free to contract around the Mobile-Sierra“public interest” standard by negotiating for the inclusionof so-called “Memphis clauses” that permit aparty to petition FERC at any time to adjust agreeduponrates under the ordinary just-and-reasonablestandard. See Memphis Light, Gas & Water Div.,358 U.S. at 112; see also Williston Basin InterstatePipeline Co. v. FERC, 519 F.3d 497, 499 (D.C. Cir.2008) (discussing origin of Memphis clauses). Beforethe D.C. Circuit’s opinion in this case, power marketers(like any market participant) could induceother contracting parties to forgo the protection of aMemphis clause and lock in agreed-upon rates by offeringmore attractive contract terms than theymight otherwise make available under the ordinaryjust-and-reasonable standard. In other words, theparties to each and every contract could decide forthemselves whether they wished to be bound—or notto be bound—by Mobile-Sierra.Under the decision below, in contrast, every contracteffectively has a built-in Memphis clause fornon-parties, denying both sellers and buyers theability to negotiate for the certainty Mobile-Sierraaffords. And FERC has, “in light of the Maine PUCdecision,” required replacement of “provisions that