Mississippi Power & Light Company v. Mississippi ex rel. Moore

PETITIONER: Mississippi Power & Light Company
RESPONDENT: Mississippi ex rel. Moore
LOCATION: Eastern Michigan District Court in Detroit

DOCKET NO.: 86-1970
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT:

CITATION: 487 US 354 (1988)
ARGUED: Feb 22, 1988
DECIDED: Jun 24, 1988

Facts of the case

Question

Media for Mississippi Power & Light Company v. Mississippi ex rel. Moore

Audio Transcription for Oral Argument - February 22, 1988 in Mississippi Power & Light Company v. Mississippi ex rel. Moore

Audio Transcription for Opinion Announcement - June 24, 1988 in Mississippi Power & Light Company v. Mississippi ex rel. Moore

William H. Rehnquist:

The opinions of the Court in two cases, No. 86-1970, Mississippi Power & Light Company versus Mississippi Ex Rel. Moore, No. 87-626, Sheridan against United States will be announced by Justice Stevens.

John Paul Stevens:

In the Mississippi case, the appellant, Mississippi Power & Light Company is one of four operating companies whose voting stock is wholly owned by Middle South Utilities, a public utility holding company.

The four companies are engaged both in the wholesale sale of electricity to each other and the companies outside the MSU System and in the retail sale of electricity in separate service areas in Louisiana, Arkansas, Missouri and Mississippi.

Through MSU, the four companies operate as an integrated power pool with all energy in the entire system being distributed by a single dispatch center located in Arkansas.

Wholesale transactions among the four operating companies historically have been governed by a succession of three system agreements which were filed with the Federal Energy Regulatory Commission in 1951, 1973 and 1982.

The system agreements have provided the basis for planning and operating the company's generating units on a single-system basis and for equalizing cost imbalances among the four companies.

Through the 1950s and into the 1960s, most of the system's generating plants were fueled with oil and gas.

In the late 1960s, the system sought to meet projected increases in demand and diversify its fuel base by adding coal and most importantly, nuclear generating units.

The question in this case involves the prudence of the decision to construct and complete the major nuclear power plant known as Grand Gulf Unit 1 which is located in Port Gibson, Mississippi.

That plant began commercial operations on July 1, 1985 after years of planning construction and complexed proceedings conducted before the Federal Energy Regulatory Commission.

An order entered by the Federal Commission allocating the power produced at Grand Gulf among the four companies requires this appellant to purchase 33% of the plant's output at rates which are determined by the Commission to be just and reasonable.

The Mississippi Public Service Commission subsequently granted appellant an increase in its retail rates to enable it to recover the costs of its purchases of Grand Gulf power.

On appeal, however, the Mississippi Supreme Court held that no such increase could be granted by the State Commission without first examining the prudence of the management decisions that had led to the construction and completion of Grand Gulf 1 over the period of years that I have described.

The case comes to us on appeal from the Mississippi Supreme Court decision.

For reasons stated at some length in an opinion filed with the clerk, we conclude that the federal administrative proceedings have preempted the prudence inquiry that has been ordered by the State Commission.

We therefore reverse the judgment of the Mississippi Supreme Court.

Justice Scalia has filed an opinion concurring in the judgment.

Justice Brennan has filed a dissenting opinion in which Justices Marshall and Blackmun have joined.