Justia Energy, Oil & Gas Law Opinion Summaries

The Federal Energy Regulatory Commission must ensure that the rules for funding new transmission facilities are just and reasonable. A funding regime is not just and reasonable if it makes one party foot the bill for a project with broad benefits. Old Dominion Electric Cooperative v. FERC, 898 F.3d 1254, 1255 (D.C. Cir. 2018). Here, two transmission owners and a utility company say FERC approved an unjust and unreasonable change to the transmission-funding regime in a region managed by Southwest Power Pool. The new regime, the Petitioners say, will likely force transmission owners to pay for projects that benefit the entire power grid. They petitioned for judicial review.   The DC Circuit denied the petitions for judicial review. But the Petitioners oversell the risk that the new regime will foist the costs of new projects on individual owners. For that to happen, the regime’s primary mechanisms for allocating costs would have to fail. In any case, FERC may balance the need to ensure that transmission owners bear perfectly proportional costs and benefits with other policy goals. Consolidated Edison Co. v. FERC, 45 F.4th 265, 286 (D.C. Cir. 2022). It did that here by approving a regime that allows participants in regional transmission zones to collaborate on selecting and funding new projects. View "Evergy Kansas Central, Inc. v. FERC" on Justia Law

MSHA’s jurisdiction, the Federal Mine Safety and Health Review Commission (“Commission”) held that for the list of items in Section 802(h)(1)(C) to be considered a “mine,” the items had to be located at an extraction site, or the roads appurtenant thereto.  Because neither the trucks nor the facility associated with the citations at issue were located on land covered under subsections (A)–(B), the Commission found they failed to constitute a “mine” and vacated the citations. The Commission also found that, as an independent contractor not engaged in servicing a mine at the time of the citation, KC Transport failed to qualify as an “operator” under Section 802(d) of the Mine Act. The Secretary of Labor (“the Secretary”), acting through MSHA, appealed the Commission’s decision and asked the court to uphold the two citations as an appropriate exercise of the Secretary’s jurisdiction under the Mine Act. In the Secretary’s view, subsection (C) of the “mine” definition covers KC Transport’s facility and trucks because they were “used in” mining activity.   The DC Circuit vacated and remanded the Commission’s decision, allowing the Secretary to interpret the statute’s ambiguous language. The court explained that given the Mine Act’s language, context, and the court’s binding precedent, it finds that the Commission erred in its interpretation of the “mine” and “operator” definitions. And we generally defer to the Secretary’s reasonable interpretation of an ambiguous statute—even when the Commission disagrees. But here, the Secretary’s position treats subsection (C) as 4 unambiguous and makes no meaningful effort to address the numerous practical concerns that would arise under such an interpretation. View "Secretary of Labor v. KC Transport, Inc." on Justia Law

Dakota Energy Power Cooperative, Inc., a member of East River Electric Power Cooperative, Inc., sought to withdraw from East River and to terminate the parties’ long-term power contract so that it could purchase electricity from another source. When East River resisted, Dakota Energy sued for anticipatory breach of contract and sought a declaratory judgment providing that it had a contractual right to withdraw from East River by way of a buyout. The district court granted summary judgment in favor of East River, and Dakota Energy appealed.   The Eighth Circuit affirmed. The court explained that under the UCC, the terms of a written contract “may be explained or supplemented” by certain extrinsic evidence, including “usage of trade.” Dakota Energy’s proffered trade usage evidence would effectively add an entirely new provision to the WPC. Moreover, under the UCC, “the express terms of an agreement and any applicable . . . usage of trade must be construed whenever reasonable as consistent with each other.” Here, the express terms of the WPC—which provide that the agreement will “remain in effect” until December 31, 2075, and which contain no provision allowing for an early buyout—are inconsistent with any trade usage evidence suggesting something to the contrary. Therefore, the court concluded that the WPC unambiguously requires Dakota Energy to purchase all of its electricity from East River until December 31, 2075, and that no provision in the WPC or East River’s Bylaws allows for an earlier termination of that obligation. View "Dakota Energy Coop, Inc. v. East River Electric Power Coop., Inc." on Justia Law

The Supreme Court affirmed the judgment of the superior court in favor of the Town of Exeter in this action seeking injunctive and declaratory relief challenging the Town's decision to amend its zoning ordinance, which prevented Plaintiff from developing three commercial solar-field projects in Exeter, holding that Plaintiff was not entitled to relief on its allegations of error.On appeal, Plaintiff challenged several aspects of the superior court's judgment denying Plaintiff's request to enjoin enforcement of an emergency moratorium ordinance preventing review of Plaintiff's solar-field projects and to declare that Plaintiff's solar-field projects were vested pursuant to R.I. Gen. Laws 45-24-44. The Supreme Court affirmed, holding that, under this Court's understanding of the relevant law, the trial court properly entered judgment in favor of the Town. View "Green Development, LLC v. Town of Exeter" on Justia Law

Petitioner Green Development, LLC (Green Development) sought interconnection with the distribution system of Narragansett Electric Company (Narragansett), a public utility. Accommodation of the increased flows of electricity required certain upgrades to the transmission system owned by Respondent-Intervenor New England Power Company d/b/a National Grid (NE Power). NE Power assigned the costs of the transmission system upgrades directly to Narragansett. The newly assigned costs were reflected in a revised transmission service agreement (TSA) that NE Power and Narragansett filed for approval by the Federal Energy Regulatory Commission (Commission or FERC). Green Development protested the revised TSA. The Commission denied Green Development’s protest.  Green Development petitions for review contending that the Commission (1) erroneously concluded that Green Development’s arguments in the underlying section 205 proceeding operated as a “collateral attack” on the Complaint Order; (2) improperly applied the governing seven-factor test; (3) misinterpreted the Tariff’s definition of “direct assignment facilities”; and (4) erroneously failed to apply the filing procedures of Schedule 21-Local Service of the Tariff.   The DC Circuit denied the petitions. First, the court held that Commission has cured any purportedly erroneous ruling that Green Development’s section 205 protest constituted a collateral attack on the Complaint Order. The court rejected Green Development’s fourth claim. The court wrote that the issue with Green Development’s contention is that it presumes that the procedures in Schedule 21-Local Service are “mandatory processes” that applied to the filing of the TSA. But, the SIS and associated technical arrangements “pertain to initiating transmission service” and “do not demonstrate that Narragansett as an existing transmission customer was required to request new transmission service” under the Tariff. View "Green Development, LLC v. FERC" on Justia Law

The Supreme Court affirmed the order of the Ohio Power Siting Board authorizing Firelands Wind, LLC to construct, operate, and maintain a wind farm in Huron and Erie Counties, holding that the nineteen nearby residents and the Black Swamp Bird Observatory that brought this appeal (collectively, Appellants) have not established that the Board's order was unlawful or unreasonable.On appeal, Appellants challenged the Board's determination that the wind farm satisfies the statutory requirements for constructing a major utility facility, asserting, among other things, that the project could kill birds and create excessive noise for residents near the wind farm and that the Board improperly failed to follow its administrative rules. The Supreme Court affirmed, holding that the Board's order was neither unlawful nor unreasonable. View "In re Application of Firelands Wind, L.L.C." on Justia Law

The First Circuit denied Petitioners' petition objecting to a permit issued by the Environmental Protection Agency (EPA) and affirmed by the Environmental Appeals Board requiring General Electric Company (GE) to clean up polychlorinated biphenyls from certain portions of the Housatonic River, holding that the EPA's challenged actions were not arbitrary or capricious.On appeal, Petitioners brought three substantive challenges and also brought procedural challenges to the permit's issuance. The First Circuit denied the petition after noting that should GE's cleanup of the river not achieve the goals set out in the permit, the permit requires further measures, holding that Petitioners were not entitled to relief on their procedural and substantive legal challenges. View "Housatonic River Initiative v. U.S. Environmental Protection Agency" on Justia Law

The Natural Gas Act authorizes private entities who have received a certificate of public convenience and necessity to acquire property “by the exercise of the right of eminent domain.” Sabal Trail Transmission, LLC, invoked this power of eminent domain to acquire easements to build a pipeline on land owned by Sunderman Groves, Inc. In the condemnation proceeding, the district court determined that the Act incorporates state eminent domain law, and it consequently applied Florida law to grant attorneys’ fees, costs, and prejudgment interest to Sunderman Groves. Sabal Trail appealed these awards, arguing that the district court should have applied federal law instead. A different panel decided on a nearly identical case that arose out of Sabal Trail’s use of eminent domain power to build this same pipeline.   The Fourth Circuit affirmed. The court explained that it is firmly established” that “each succeeding panel is bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.” United States v. Hogan, 986 F.2d 1364, 1369 (11th Cir. 1993). The court explained that the court’s prior construction of the Natural Gas Act is now the law in the Circuit, and it conclusively resolves this appeal. View "Sabal Trail Transmission, LLC v. Sunderman Groves, Inc" on Justia Law

the Federal Energy Regulatory Commission granted Algonquin a certificate of public convenience and necessity that allowed it and the owner of the neighboring Maritimes & Northeast pipeline to undertake a series of upgrades. Those upgrades are known collectively as the Atlantic Bridge Project (“Project”). As part of the Project, Algonquin planned to build a new compressor station in Weymouth, Massachusetts. The compressor station would pressurize gas traveling north towards Maine. The Town of Weymouth, as well as several residents and environmental groups, petitioned this court to overturn the Commission’s certification decision for the Project. This court found no relevant error in the Commission’s decision and denied the petition. The entities sought review of two orders that followed the Commission’s issuance of the certificate of public convenience and necessity.   The DC Circuit dismissed the petitions. The court explained that to construe the Commission’s denial of rehearing as a reviewable new “order,” that would not change anything. That is because the statute strictly requires that every single “order” we review be accompanied by an “application to the Commission for rehearing.” The court further wrote that the denial of rehearing is not a reviewable order, so the Fore River Residents may not obtain judicial review under 15 U.S.C. Section 717r(b). And even if it were a reviewable order, their petition would be jurisdictionally deficient because they failed to request rehearing of it. View "Fore River Residents Against the Compressor Station v. FERC" on Justia Law

This case concerns how PJM, the manager of a large, multi-state electrical grid, prices the flow of electricity to utilities in times of congestion. Such congestion arises when energy is scarce in a particular location on the grid due to, for example, extreme weather conditions or a fire at a transmission station. That scarcity causes the dispatch of more expensive generation and can trigger the Transmission Constraint Penalty Factor (“Penalty Factor”) when such alternative generation is unavailable. The Penalty Factor imposes an upper bound on the costs PJM will incur to control a transmission constraint, and it is designed to send transparent price signals to the market and incentivize investment that will resolve the congestion and prevent it from recurring. Petitioner Citadel FNGE Ltd. is an energy trading firm. It challenged the Commission’s suspension of the Penalty Factor as arbitrary and capricious.   The DC Circuit denied the petitions. The court explained that substantial evidence supported the Commission’s decision that the Penalty Factor, as applied to the unique Northern Neck circumstances, could not work as designed because it increased costs without incentivizing supply or demand responses. Because application of the Penalty Factor increased costs for consumers without a commensurate benefit, the Commission reasonably found that its application in this context was unjust and unreasonable. View "Citadel FNGE Ltd. v. FERC" on Justia Law