Justia Energy, Oil & Gas Law Opinion Summaries

Florida Power & Light Company (FPL) entered into a multi-party settlement agreement to establish base rates, which was approved by the Florida Public Service Commission (Commission). The settlement allowed FPL to increase rates annually for four years, generating significant additional revenue and permitting incremental rate increases for solar projects. It also included provisions for an equity-to-debt ratio, return on equity, and a minimum base bill for customers. The settlement aimed to support investments in power generation, transmission, distribution systems, and renewable energy programs.The Commission's initial approval of the settlement was challenged, leading to a remand by the Supreme Court of Florida in Floridians Against Increased Rates, Inc. v. Clark (FAIR). The Court required the Commission to provide a more detailed explanation of its reasoning and to consider FPL's performance under the Florida Energy Efficiency and Conservation Act (FEECA). On remand, the Commission denied a motion to reopen the evidentiary record and issued a Supplemental Final Order, reaffirming that the settlement was in the public interest.The Supreme Court of Florida reviewed the case again. The Court upheld the Commission's approval of the settlement, finding that the Commission's factual findings were supported by competent, substantial evidence and that its policy decisions were within its discretion. The Court concluded that the Commission had adequately considered the mandatory and discretionary factors, including FPL's FEECA performance, and provided a reasoned explanation for its decision. The Court affirmed the Commission's Final and Supplemental Final Orders, determining that the settlement established fair, just, and reasonable rates. View "Florida Rising, Inc. v. Florida Public Service Commission" on Justia Law

John and Stacy Bang own several parcels of real property in Dunn County, including the subject property in this dispute. They own both the surface and mineral estates. In May 2004, John Bang executed an oil and gas lease agreement with Diamond Resources, Inc., whose successor, Continental Resources, Inc., is the operator and holds the mineral lease. Continental notified the Bangs of its intent to install oil and gas facilities on the property, which the Bangs objected to. Continental subsequently constructed various facilities on the property.The Bangs filed a lawsuit against Continental in 2022, alleging trespass, seeking an injunction, and claiming damages under North Dakota law. The district court denied the Bangs' motions for a temporary restraining order and preliminary injunction. Continental filed a separate action seeking a declaratory judgment and an injunction against John Bang, which was consolidated with the Bangs' case. In January 2024, the district court granted Continental partial summary judgment, declaring Continental had the right to install a pipeline corridor and denied the Bangs' claims for trespass and permanent injunction. The court also denied Continental summary judgment on damages. A jury trial in February 2024 awarded the Bangs $97,621.90 for their compensation claims. The Bangs' motions for a new trial and other relief were denied.The North Dakota Supreme Court reviewed the case and affirmed the district court's amended judgment and order denying a new trial. The court held that the lease was unambiguous and provided Continental the authority to install pipeline facilities on the subject property. The court also upheld the district court's evidentiary rulings, including the exclusion of certain expert testimony and evidence of settlement agreements, and the exclusion of speculative evidence of future agricultural damages. The court found no error in the jury instructions and concluded that the district court did not abuse its discretion in denying the Bangs' motions under N.D.R.Civ.P. 59 and 60. View "Bang v. Continental Resources" on Justia Law

The Bureau of Land Management (BLM) approved over 4,000 permits for oil and gas wells on public land in New Mexico and Wyoming from January 2021 to August 2022. Environmental organizations challenged these permits, alleging that BLM failed to adequately consider the climate and environmental justice impacts of the wells. The district court dismissed the claims, holding that the plaintiffs lacked standing.The plaintiffs appealed, asserting standing based on affidavits from their members who live, work, and recreate near the drilling sites, claiming injuries to their health, safety, and recreational and aesthetic interests. They also claimed standing based on the wells' overall contribution to global climate change and an organizational injury from the government's failure to publicize information about climate change.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that the plaintiffs failed to sufficiently link their alleged harms to the specific agency actions they sought to reverse. The court emphasized that plaintiffs must demonstrate standing for each challenged permit by showing a concrete and particularized injury that is fairly traceable to the challenged action and likely to be redressed by a favorable ruling. The court found that the plaintiffs' generalized claims about the harms of oil and gas development were insufficient to establish standing for the specific permits at issue.The court also rejected the plaintiffs' claims of organizational standing, finding that the alleged injuries were limited to issue advocacy and did not demonstrate a concrete and demonstrable injury to the organization's activities. Consequently, the court affirmed the district court's judgment of dismissal. View "Center for Biological Diversity v. Department of the Interior" on Justia Law

Summit Carbon Solutions, LLC plans to build an interstate pipeline through Iowa, passing through Shelby and Story Counties. Both counties enacted ordinances regulating pipelines, including setback, emergency response plan, and local permit requirements. Summit challenged these ordinances, claiming they were preempted by the federal Pipeline Safety Act (PSA) and Iowa law. The district court granted summary judgment in favor of Summit, permanently enjoining the ordinances.The United States District Court for the Southern District of Iowa reviewed the case and ruled in favor of Summit, finding that the PSA preempted the counties' ordinances. The court held that the ordinances imposed safety standards, which are under the exclusive regulatory authority of the federal government. The court also found that the ordinances were inconsistent with Iowa state law, which grants the Iowa Utilities Commission (IUC) the authority to regulate pipeline routes and safety standards.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court's decision. The court held that the PSA preempts the Shelby and Story ordinances' setback, emergency response, and abandonment provisions. The court found that the ordinances' primary motivation was safety, which falls under the exclusive regulatory authority of the federal government. The court also held that the ordinances were inconsistent with Iowa state law, as they imposed additional requirements that could prohibit pipeline construction even if the IUC had granted a permit.The Eighth Circuit affirmed the district court's judgment in both cases, but vacated and remanded the judgment in the Story County case to the extent it addressed a repealed ordinance. View "McNair v. Johnson" on Justia Law

Energy Harbor, LLC, the owner and operator of the W.H. Sammis power plant, was assessed $12 million in penalties by PJM Interconnection, L.L.C. for failing to comply with PJM’s Tariff during a major winter storm in December 2022. Energy Harbor contested these penalties, arguing that the penalties were inconsistent with the terms of the Tariff, particularly the exception for maintenance outages. The Federal Energy Regulatory Commission (FERC) denied Energy Harbor’s complaint, leading Energy Harbor to petition for judicial review.The Federal Energy Regulatory Commission (FERC) reviewed Energy Harbor’s complaint and found that PJM had correctly interpreted the Tariff and calculated the penalties. FERC concluded that the maintenance outage at the Sammis Plant was not the sole cause of the performance shortfall, as the plant had sufficient capacity to meet its commitments but failed due to forced outages. Energy Harbor’s request for rehearing was denied by operation of law.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and upheld FERC’s decision. The court agreed with FERC’s interpretation of the Tariff, stating that PJM correctly evaluated whether the maintenance outage was the sole cause of the performance shortfall. The court found that the Sammis Plant had enough installed capacity to meet its expected performance during the emergency, and the forced outages were also causes of the shortfall. The court also rejected Energy Harbor’s argument that the penalty exception should be assessed for each generating unit, affirming that the entire Sammis Plant was the resource at issue. Consequently, the court denied Energy Harbor’s petition for review. View "Energy Harbor, LLC v. FERC" on Justia Law

A regional transmission organization, Southwest Power Pool, sought to integrate the City of Nixa's transmission assets into its Zone 10 infrastructure. This integration would spread the costs of the Nixa Assets across all Zone 10 customers. Several nearby cities and utilities objected, arguing that they would bear unjustified costs without receiving corresponding benefits. They took their objections to the Federal Energy Regulatory Commission (FERC).FERC initially found insufficient evidence to determine whether the cost shift was justified and remanded the case for further proceedings. After a second hearing, an administrative law judge concluded that the integration was just and reasonable, providing incremental benefits such as improved reliability and power support for all Zone 10 customers. FERC affirmed this decision, finding that the integration's benefits justified the cost shift and denied the non-Nixa parties' request for rehearing.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that FERC's decision to analyze costs and benefits at the zonal level, rather than on a customer-by-customer basis, was reasonable. The court noted that requiring a hyper-granular approach would undermine the zonal system. The court also upheld FERC's consideration of unquantifiable systemwide benefits, such as improved integration and reliability, as sufficient to justify the cost shift. Finally, the court found that FERC's decision was supported by substantial evidence, including testimony and records indicating that the integration would benefit all Zone 10 customers.The court denied the petition for review, affirming FERC's decision to approve the integration and the associated cost allocation. View "Paragould Light & Water Commission v. FERC" on Justia Law

Equinor Energy LP operated oil and gas wells in North Dakota and contracted with its affiliate for saltwater gathering services. Versa Energy, LLC, a non-operating working interest owner in these wells, alleged that Equinor overcharged for these services. Versa petitioned the North Dakota Industrial Commission to determine the proper costs, claiming Equinor violated state law by charging more than the "reasonable actual cost" of operation.The North Dakota Industrial Commission concluded it had jurisdiction to adjudicate the dispute and determined that Equinor's costs were improper. The Commission set the proper cost for saltwater gathering services at $0.35 per barrel. Equinor appealed to the District Court of McKenzie County, which affirmed the Commission's order.The North Dakota Supreme Court reviewed the case and concluded that the Commission lacked jurisdiction to adjudicate the dispute. The court held that the Commission's regulatory authority under N.D.C.C. § 38-08-04 does not extend to adjudicating private contractual disputes. Additionally, the court determined that saltwater gathering costs are post-production costs, which fall outside the scope of "operation of a well" under N.D.C.C. § 38-08-08(2). Therefore, the Commission did not have jurisdiction under this statute to determine the proper costs for saltwater gathering.The North Dakota Supreme Court reversed the district court's order and vacated the Commission's order. View "Equinor Energy v. NDIC" on Justia Law

Michigan Electric Transmission Company (METC) owns a high-voltage transmission line with Michigan Public Power Agency (MPPA) and Wolverine Power Supply Cooperative. The case concerns the ownership of new transmission facilities, or "network upgrades," connecting a new solar generation park to the transmission line. METC claims exclusive ownership based on existing agreements, while MPPA and Wolverine disagree.The Federal Energy Regulatory Commission (FERC) reviewed the case and found that no agreement conclusively determined ownership rights. FERC declined to decide the ownership question, leading METC to petition for review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court agreed with FERC's interpretation that the relevant agreements did not grant METC exclusive ownership of the network upgrades. The court found that the Styx-Murphy line qualifies as a "system" under the Transmission Owners Agreement (TOA), and since METC is not the sole owner, it cannot claim exclusive ownership. The court also found that the Styx-Murphy Agreements did not preclude MPPA and Wolverine from owning network upgrades.The court denied METC's petitions for review, upholding FERC's decision. View "Michigan Electric Transmission Company, LLC v. FERC" on Justia Law

In the oilfields of West Texas, a dispute arose over the ownership of "produced water," a byproduct of oil-and-gas production. COG Operating, LLC, a hydrocarbon lessee, claimed ownership of the produced water under its oil-and-gas leases, arguing that the right to produce oil and gas includes the right to handle and dispose of the resulting liquid waste. Cactus Water Services, LLC, a surface-estate lessee, countered that once hydrocarbons are separated, the remaining produced water belongs to the surface estate unless expressly conveyed otherwise.The trial court ruled in favor of COG, declaring that COG owns the produced water and has exclusive rights to its possession, custody, control, and disposition. The court of appeals affirmed this decision, holding that produced water is oil-and-gas waste that belongs to the mineral lessee, not groundwater that belongs to the surface estate. The court emphasized that the leases did not suggest an intent to reserve rights to oil-and-gas waste for the surface owner.The Supreme Court of Texas reviewed the case and affirmed the lower courts' decisions. The Court held that under Texas law, a conveyance of oil-and-gas rights includes the right to handle and dispose of produced water, which is considered oil-and-gas waste. The Court noted that produced water is inherently part of hydrocarbon production and must be managed by the operator. The Court rejected Cactus's argument that produced water should be treated as surface estate water, emphasizing that produced water is distinct from groundwater and is subject to specific regulatory requirements for waste disposal. The Court concluded that the leases conveyed the right to produced water to COG, and any reservation of rights to produced water by the surface owner must be expressly stated in the conveyance. View "CACTUS WATER SERVICES, LLC v. COG OPERATING, LLC" on Justia Law

The case involves Oklahoma Gas and Electric Company (OG&E) and CKenergy Electric Cooperative, Inc. (CKenergy) regarding the provision of retail electric service to two facilities located in CKenergy's certified territory. OG&E began providing service to these facilities in 2017 and 2018, respectively. CKenergy filed an application with the Oklahoma Corporation Commission (the Commission) in 2019, requesting that OG&E be enjoined from continuing to serve the facilities, arguing that OG&E was in violation of the Retail Energy Supplier Certified Territory Act (RESCTA). OG&E contended that it was allowed to serve the facilities under the one megawatt exception of RESCTA.The Commission found that the connected load for initial full operation did not meet or exceed 1,000 kW at either facility and enjoined OG&E from providing service. OG&E appealed the Commission's order. The Commission also issued an order granting OG&E's request for a stay upon posting a supersedeas bond, which CKenergy and the Oklahoma Association of Electric Cooperatives (OAEC) appealed.The Supreme Court of the State of Oklahoma reviewed the case de novo. The Court held that the term "connected load for initial full operation" in the one megawatt exception of RESCTA refers to the total nameplate values of all connected electrical equipment when full operation of the facility commences. The Court found that the Commission's interpretation ignored the plain language of the statute and was not sustained by law. It was undisputed that the connected load for each facility exceeded 1,000 kW when full operation commenced. Therefore, the one megawatt exception applied, and the Commission improperly enjoined OG&E from providing service. The Court reversed the Commission's order and deemed the appeal regarding the stay moot. View "OG&E Co. v. OKLAHOMA CORPORATION COMMISSION" on Justia Law