Justia Energy, Oil & Gas Law Opinion Summaries

Dayton Power & Light Company, along with other utilities, sought an RTO adder from the Federal Energy Regulatory Commission (FERC) as an incentive for joining a Regional Transmission Organization (RTO). Ohio law mandates that utilities join an RTO, which led FERC to deny Dayton Power's application, arguing that the adder is meant to incentivize voluntary actions, not those required by law. The Ohio Consumers’ Counsel (OCC) challenged the existing RTO adders for other Ohio utilities, leading FERC to remove the adder for AEP but not for Duke and FirstEnergy, citing the latter's comprehensive settlement agreements.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court first addressed whether the utilities could challenge the voluntariness requirement of Order 679, concluding that they could because FERC's past practices did not clearly indicate a strict voluntariness requirement. The court then interpreted Section 219(c) of the Federal Power Act, agreeing with FERC that the best reading of the statute supports the requirement that RTO membership must be voluntary to qualify for the adder.The court also considered the utilities' preemption argument, which claimed that federal law should override Ohio's mandate for RTO membership. The court held that the Federal Power Act does not preempt Ohio law, as Congress did not intend to prevent states from mandating RTO participation, especially when such mandates align with federal goals of increasing RTO membership.Finally, the court found FERC's differential treatment of AEP, Duke, and FirstEnergy to be arbitrary and capricious. It noted that all three utilities' rates included a 50-basis-point RTO adder, whether explicitly approved or impliedly included in settlements. The court affirmed FERC's denial of Dayton Power's application and the removal of AEP's adder but reversed the decision to retain the adders for Duke and FirstEnergy, remanding for further proceedings. View "Dayton Power & Light Co. v. Federal Energy Regulatory Commission" on Justia Law

The case involves Michigan's electricity market regulations, specifically the Individual Local Clearing Requirement (ILCR), which mandates that electricity retailers in Michigan's lower peninsula procure a certain percentage of their capacity from within that region. Plaintiffs, including Energy Michigan and the Association of Businesses Advocating Tariff Equity (ABATE), challenged the ILCR on the grounds that it violates the dormant Commerce Clause by discriminating against interstate commerce.The United States District Court for the Eastern District of Michigan initially dismissed the Michigan Public Service Commission (MPSC) on Eleventh Amendment grounds but allowed the case to proceed against individual commissioners. The court denied summary judgment motions from both sides, finding that there were factual disputes regarding whether the ILCR discriminated against interstate commerce. After a three-day bench trial, the district court concluded that the ILCR did not violate the Commerce Clause.The United States Court of Appeals for the Sixth Circuit reviewed the case and determined that the ILCR is facially discriminatory because it requires electricity to be generated within a specific geographic region, effectively favoring in-state over out-of-state electricity. The court held that this discrimination necessitates strict scrutiny, which the district court did not properly apply. The Sixth Circuit reversed the district court's judgment and remanded the case for further proceedings to determine if the ILCR can survive strict scrutiny by proving it is the only means to achieve the state's goal of ensuring a reliable energy supply. View "Energy Michigan, Inc. v. Public Service Commission" on Justia Law

Petitioners sought review of the Federal Energy Regulatory Commission's (FERC) grant of an abandonment incentive to ITC Midwest, LLC (ITC). This incentive allows ITC to recover 100% of its prudently incurred costs if a planned transmission project is abandoned for reasons beyond its control. Petitioners, a group of organizations whose members purchase electricity, argued that ITC's ownership of the project was uncertain due to ongoing litigation challenging the Iowa Right of First Refusal statute.The Federal Energy Regulatory Commission approved ITC's request for the abandonment incentive, finding that the project met the necessary criteria, including enhancing reliability and reducing congestion. Petitioners filed a protest, which FERC rejected, stating that regulatory or litigation uncertainty does not preclude granting an abandonment incentive. Petitioners then sought rehearing, which FERC also denied, reiterating that the approval was consistent with its precedent.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court determined that petitioners lacked Article III standing because they failed to show imminent injury from FERC's orders. The court noted that petitioners' claims of potential future higher rates were speculative and not concrete or imminent. The court also found that petitioners' interest in the proper application of the law and potential collateral estoppel effects did not constitute a cognizable injury. Consequently, the court dismissed the petition for lack of jurisdiction. View "Industrial Energy Consumers of America v. FERC" on Justia Law

Aclara Meters LLC owned the license for the Somersworth Hydroelectric Project on the Salmon Falls River between New Hampshire and Maine from 2016 to 2023. In 2019, Aclara sought to surrender its license to the Federal Energy Regulatory Commission (FERC). After conducting an environmental assessment, FERC authorized the surrender in 2023. American Whitewater, a conservation organization, requested a rehearing, arguing that two dams from the Project should be removed as a condition of surrender. FERC denied the request, leading Whitewater to petition the United States Court of Appeals for the District of Columbia Circuit for relief, claiming that FERC acted arbitrarily and capriciously under the Federal Power Act (FPA) and the National Environmental Policy Act (NEPA).The Commission's environmental assessment concluded that approving the surrender as proposed would not significantly affect the environment, thus an Environmental Impact Statement (EIS) was unnecessary. FERC found that removing the dams was unfeasible due to the local municipalities' reliance on the reservoir for water supply and other needs. The Commission also determined that the benefits of keeping the dams outweighed the environmental and recreational benefits of their removal. FERC's decision was based on the public interest, considering the water supply, firefighting needs, and potential impacts on local infrastructure.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and denied Whitewater's petition for review. The court held that FERC's analysis was neither arbitrary nor capricious. The Commission reasonably determined that dam removal was unfeasible and appropriately assessed the public interest. The court found that FERC's decision to approve the license surrender without dam removal was supported by substantial evidence and consistent with its policies and precedents. View "American Whitewater v. FERC" on Justia Law

The State of Indiana approved a plan to retire a coal-fired facility and replace it with wind and solar energy sources, supplemented by two new natural gas turbines to ensure grid reliability. The Federal Energy Regulatory Commission (FERC) approved a natural gas pipeline to serve these turbines. The Citizens Action Coalition of Indiana challenged FERC’s approval, arguing that FERC’s environmental analysis was unreasonable and inconsistent with the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). The core claim was that FERC should have analyzed non-gas alternatives before approving the pipeline.The Indiana Utility Regulatory Commission initially denied CenterPoint Energy’s proposal for an 850-megawatt natural gas unit due to inadequate consideration of alternatives. CenterPoint then modified its plan to include wind generation and applied to build two smaller gas-fired turbines, which the Indiana Commission approved. CenterPoint contracted with Texas Gas Transmission for a 24-mile pipeline to supply natural gas to the new units. Citizens Action intervened in the FERC proceeding, raising environmental concerns. FERC prepared an environmental impact statement and approved the pipeline. Citizens Action’s request for rehearing was denied by operation of law, leading to the current petition for review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that FERC acted lawfully and reasonably in its environmental analysis and public convenience and necessity determination. FERC was not required to consider non-gas alternatives outside its jurisdiction and properly identified the project’s purpose as supporting CenterPoint’s new natural gas units. The court also found that FERC’s use of emissions percentages and the absence of a significance label were reasonable and consistent with NEPA. The petition for review was denied. View "Citizens Action Coalition of Indiana, Inc. v. FERC" on Justia Law

Stingray Pipeline Company LLC operates a pipeline system under the jurisdiction of the Federal Energy Regulatory Commission (FERC). Due to declining throughput and financial losses, Stingray sought FERC's permission to abandon part of its pipeline network by selling it to a non-jurisdictional entity. However, a hurricane damaged a segment of the pipeline, Segment 3394, which has remained out of service since 2020. FERC granted the abandonment request but imposed a condition that Stingray must either restore Segment 3394 to service or reach an agreement with the affected shipper, ERT.The Federal Energy Regulatory Commission largely granted Stingray's application to abandon the pipeline but imposed the condition regarding Segment 3394. Stingray challenged this condition as unreasonable and unsupported by the record. FERC reaffirmed its order, leading Stingray to petition the United States Court of Appeals for the District of Columbia Circuit for review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and denied the Petition for Review. The court held that FERC's decision to impose the condition was not arbitrary and capricious. The court found that Stingray had not met its burden to show that unconditional abandonment was consistent with the public convenience and necessity. The court emphasized that Stingray had repeatedly assured FERC that it would restore Segment 3394 to service but failed to provide sufficient evidence to justify abandoning the segment without restoring service or reaching an agreement with ERT. The court also rejected Stingray's arguments that the condition exceeded FERC's regulatory authority. View "Stingray Pipeline Company, L.L.C. v. FERC" on Justia Law

The case involves the approval process for a large-scale commercial offshore wind energy facility located on the Outer Continental Shelf, fourteen miles south of Martha's Vineyard and Nantucket. The plaintiffs, consisting of commercial fishing entities and a nonprofit organization, challenged the federal government's approval of the project, citing violations of the Administrative Procedure Act (APA), the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), the Marine Mammal Protection Act (MMPA), the Clean Water Act (CWA), and the Outer Continental Shelf Lands Act (OCSLA).The United States District Court for the District of Massachusetts granted summary judgment in favor of the defendants, which included various federal departments and agencies, as well as the business entity responsible for the wind project. The court found that the plaintiffs' ESA claims were non-justiciable due to lack of standing and mootness, as the initial biological opinion had been superseded by a new one. The court also ruled that the plaintiffs were outside the zone of interests protected by the NEPA and the MMPA, and that the Alliance had failed to show that the Corps' issuance of the CWA Section 404 permit was arbitrary or capricious.The United States Court of Appeals for the First Circuit reviewed the district court's rulings de novo. The appellate court affirmed the district court's judgments, agreeing that the plaintiffs lacked standing for their ESA claims and that the claims were moot. The court also upheld the district court's zone-of-interests rulings regarding the NEPA and MMPA claims. Additionally, the court found that the Corps' decision to issue the CWA permit was not arbitrary or capricious and that the BOEM's approval of the project under the OCSLA was lawful. The appellate court concluded that the plaintiffs' arguments did not demonstrate that the BOEM had acted arbitrarily or capriciously in approving the project. View "Seafreeze Shoreside, Inc. v. Department of the Interior" on Justia Law

Columbia Gas of Ohio, Inc. applied to the Ohio Power Siting Board for approval to construct a 3.7-mile natural-gas-distribution pipeline in Maumee, Ohio. The application was submitted under an accelerated review process for pipelines less than five miles long. Yorktown Management, L.L.C., which owns property adjacent to the proposed pipeline route, raised concerns about the safety and environmental impact of the pipeline, particularly its proximity to their commercial office building.The Ohio Power Siting Board approved Columbia's application under the accelerated review process, finding that the project met the necessary criteria. Yorktown filed a motion to intervene and later a motion to suspend the review, arguing that the board had not adequately addressed their safety concerns. The board denied Yorktown's motion to suspend and subsequently denied their application for rehearing, leading Yorktown to appeal the decision.The Supreme Court of Ohio reviewed the case and affirmed the board's decision. The court found that Columbia's application did not require a 50-foot-wide permanent easement along the entire pipeline route, as Yorktown claimed. The court also determined that Yorktown had waived its right to challenge the board's rejection of testimony from a different pipeline project. Additionally, the court held that the board did not err in refusing to suspend its review of the accelerated application, as Yorktown failed to demonstrate good cause for suspension. The court concluded that the board did not improperly defer to Columbia and had appropriately conditioned the approval on compliance with relevant safety regulations. View "In re Letter of Notification Application of Columbia Gas of Ohio, Inc. for the Ford Street Pipeline Project" on Justia Law

Liberty Petroleum Corporation appealed a judgment affirming North Dakota Industrial Commission (NDIC) orders approving a plan of unitization for the Haystack Butte (Bakken Pool) Unit (HBU) in McKenzie County, North Dakota. Burlington Resources Oil & Gas Co. LP petitioned NDIC for unitized management of the HBU, which would allow drilling without regard to spacing unit boundaries. Liberty, holding federal oil and gas leases and working interests in the HBU, objected to the plan, particularly Article 11.8, which provided for the payment of pre-unitization risk penalty balances from unit production proceeds. Liberty argued this would unfairly take revenue from wells it participated in to satisfy penalties on non-consent wells.The District Court of McKenzie County affirmed NDIC's orders, finding that the plan of unitization was in the public interest, protective of correlative rights, and necessary to increase oil and gas recovery and prevent waste. NDIC concluded that production from the unit area would be distributed to each tract within the unit area, regardless of where it was produced, and rejected Liberty's objections to Article 11.8.The North Dakota Supreme Court reviewed the case and upheld the lower court's decision. The Court found that NDIC did not exceed its authority, misapply the law, or authorize an unconstitutional taking. It held that NDIC's approval of Article 11.8 was consistent with the unitization statutes, which allow for the recovery of risk penalties from unit production. The Court also concluded that NDIC's findings were supported by substantial and credible evidence, including expert testimony from Burlington. The judgment was affirmed, and NDIC's orders were upheld. View "Liberty Petroleum Corp. v. NDIC" on Justia Law

The case involves a proposed electric substation in East Boston by NSTAR Electric Company, doing business as Eversource Energy. The Energy Facilities Siting Board (the board) granted a certificate of environmental impact and public interest to Eversource for the substation. The petitioners, Conservation Law Foundation and GreenRoots, Inc., challenged this decision, arguing that Eversource failed to show "undue delay" by two city agencies, and that the board did not properly consider environmental justice principles, among other issues.Previously, Eversource's petition to build the substation was approved by the board in 2017, with a project change approved in 2018. The petitioners intervened in the proceedings, and the board issued a decision in November 2022, granting the certificate. The petitioners then filed for judicial review in the Supreme Judicial Court for the county of Suffolk.The Supreme Judicial Court of Massachusetts reviewed the case and upheld the board's decision. The court found that the board's determination of "undue delay" by the city agencies was supported by substantial evidence. The court also concluded that the board properly considered environmental justice principles, including the equitable distribution of energy benefits and burdens. Additionally, the court found that the board's decision to issue the equivalent of a G. L. c. 91 tidelands license was lawful and supported by substantial evidence. The court affirmed the board's findings on the need for the substation, its compatibility with environmental protection, public health, and safety, and its alignment with the public interest. The decision of the board was affirmed. View "Conservation Law Foundation v. Energy Facilities Siting Board" on Justia Law