Legal Definitions - Sierra–Mobile doctrine

The Sierra–Mobile doctrine, also known as the Mobile–Sierra doctrine, is a principle that states that the Federal Energy Regulatory Commission cannot approve a rate increase for a natural-gas producer unless the producer's contract allows for a rate increase. Alternatively, the existing rate must be so low that it could harm the public interest, such as by threatening the continued operation of the public utility to provide its service.

For example, if a natural-gas producer has a contract with a utility company that specifies a fixed rate for a certain period, the producer cannot increase the rate unless the contract allows for it. However, if the existing rate is so low that it could harm the public interest, the Federal Energy Regulatory Commission may approve a rate increase to ensure the continued operation of the public utility.

The Sierra–Mobile doctrine was established in two cases: United Gas Pipe Line Co. v. Mobile Gas Serv. Corp. and Federal Power Comm'n v. Sierra Pac. Power Co. These cases set the precedent that the public interest must be considered when approving rate increases for natural-gas producers.