Mobile Sierra Doctrine Law and Legal Definition

Mobile Sierra Doctrine refers to a principle that Federal Power Act (FPA) and the Natural Gas Act presume the justness and reasonableness of rates negotiated by private parties at arm’s length and do not sanction Federal Energy Regulatory Commission’s (FERC) modification of such rates unless the terms of the contract threaten the public interest or the contract expressly allows for it. It obligates FERC to treat any freely negotiated wholesale transaction as satisfying the requirement of justness and reasonableness unless Commission finds that the agreed-upon arrangements seriously harm the public interest.

The doctrine is named after a pair of 1956 Supreme Court decisions [United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (U.S. 1956) and Federal Power Comm'n v. Sierra Pac. Power Co., 350 U.S. 348 (U.S. 1956)] addressing challenges to rates within the jurisdiction of the then Federal Power Commission.