The Supreme Court today made it difficult for utility companies to successfully challenge costly, long-term energy supply contracts negotiated during the West Coast energy crisis seven years ago. Ruling in a case involving the Snohomish County Public Utility District, the justices said in a 5-2 decision that the contracts must be presumed to be just and reasonable, absent serious harm to the public interest.

Writing for the majority, Justice Antonin Scalia nonetheless ruled in favor of the utilities on one point, saying the Federal Energy Regulatory Commission must provide a more complete explanation of why it upheld the agreements.The presidentially appointed commission said the agreements were not contrary to the public interest. In dissent, Justice John Paul Stevens said that both the commission and the court majority have construed the federal regulators' authority too narrowly, setting up a rigid standard that Congress did not intend. Justice David Souter also dissented.

Chief Justice John Roberts and Justice Stephen Breyer did not participate in the case. In refusing to order that the contracts be modified, federal regulators said the utilities failed to show that the agreements imposed financial distress on the utilities and failed to show that the contracts would impose excessive burdens on consumers.

Associated Press