Justia Energy, Oil & Gas Law Opinion Summaries

This petition challenges several interrelated orders of the Federal Energy Regulatory Commission (“FERC” or “Commission”) that permitted the creation of a new energy transmission service across several states in the Southeast region of the United States, entitled the Southeast Energy Exchange Market (“SEEM”). FERC adopted the first order (“Deadlock Order”) by operation of law when its four Commissioners deadlocked 2-2 on whether the overall proposal was “just and reasonable” and otherwise met the requirements of the Federal Power Act (“FPA” or “Act”), and related FERC regulations. In a later order by majority vote, the Commission accepted tariff revisions by transmission service providers within SEEM to enable the new transmission service. Petitioners challenged these orders throughout the initial proceedings, on rehearing at the Commission, and now in this petition.   The DC Circuit granted the petition in part, denied the petition in part, and remanded it to the Commission for further proceedings. The court explained that since SEEM “began operations in November 2022” and only provides energy transactions for non-firm service, it follows that vacatur would not be disruptive, and the parties offer no arguments to the contrary in their briefing. Accordingly, vacatur of the Tariff Order is appropriate. The court wrote that the Commission’s orders finding Petitioners’ rehearing requests of the Deadlock Order untimely are vacated, and the petition—as it relates to review of the Deadlock Order and the associated orders accepting amendments to the SEEM Proposal—is remanded without vacatur of the related orders. View "Advanced Energy United, Inc. v. FERC" on Justia Law

XO Energy petitioned for a review of the Federal Energy Regulatory Commission’s approval of filings implementing a regional transmission organization’s (“RTO”) revised Forfeiture Rule for Financial Transmission Rights (“FTRs”). It contends that the Commission erred as a matter of law in declining to issue refunds to market participants who incurred forfeitures under the unapproved interim Rule. It further contends that the Commission’s approval of the revised 2021 Rule was arbitrary and capricious.   The DC Circuit granted the petition in part and denied it in part. The court affirmed the Commission’s denial of refunds and remands without vacating the 2021 Rule for further explanation of the Commission’s decision to exclude consideration of leverage as a required element of the Rule. The court explained that although the Commission acknowledges that leverage might be one way to determine cross-product manipulation, it states that it opted to allow PJM to employ other means to detect this conduct rather than require exemptions based on leverage. That is the extent of the Commission’s explanation. It does not address XO Energy’s position that market manipulation cannot occur when the net losses of a trader’s virtual transaction portfolio exceed the net profits from its FTR portfolio. Nor does it explain why the exclusion of this requirement strikes the appropriate balance between preventing manipulative conduct and not hindering legitimate hedging activity. Absent such explanation of its decision, the Commission’s failure to order a leverage exemption appears arbitrary and capricious. View "XO Energy MA, LP v. FERC" on Justia Law

This appeal was the second relating to a suit brought by the City of Hesperia (the City) against respondents Lake Arrowhead Community Services District and the Board of Directors of Lake Arrowhead Community Services District (jointly, the District) regarding a proposed 0.96-megawatt solar photovoltaic project (the Solar Project) that the District had been planning to develop on six acres of a 350-acre property it owned, known as the Hesperia Farms Property. The Hesperia Farms Property was located within the City’s municipal boundary and was generally subject to the City’s zoning regulations. The District first approved its Solar Project in December 2015, after determining that the project was either absolutely exempt from the City’s zoning regulations under Government Code section 53091, or qualifiedly exempt under Government Code section 53096. The City sought a writ of mandate prohibiting the District from further pursuing the Solar Project. In Hesperia I, the Court of Appeal determined the District’s Solar Project was not exempt from the City’s zoning regulations under Government Code section 53091’s absolute exemption, or under Government Code section 53096’s qualified exemption. The Court concluded, however, that Government Code section 52096’s qualified exemption did not apply to the District’s approval of the Solar Project only because the District had failed to provide substantial evidence to support its conclusion that there was no other feasible alternative to its proposed location for the Solar Project. This result left open the possibility that the District could undertake further analyses and show that there was no feasible alternative to the Solar Project’s proposed location in order to avoid application of the City’s zoning ordinances. A few months after the District made its second no-feasible-alternative determination with respect to the Solar Project, the City filed a second petition for writ of mandate and complaint challenging the Solar Project. The trial court ultimately denied the City’s second petition. When the City appealed, the Court of Appeal concluded the trial court did not err in rejecting the City’s petition for writ of mandate. View "City of Hesperia v. Lake Arrowhead Community Services Dist." on Justia Law

The Supreme Court affirmed the decision of the Public Utilities Regulatory Authority (PURA) establishing a regulatory framework for a certain renewable energy product, holding that the trial court correctly correctly determined that the reactions did not violate the dormant commerce clause.In 2020, PURA imposed a series of restrictions on retail electric suppliers offering Connecticut customers voluntary products, known as voluntary renewable offers (VROs), consisting of renewable energy credits (REC) bundled with electric supply. One of the restrictions at issue, the geographic restriction, prohibited VROs from containing RECs sourced outside of particular geographic regions. The other restriction, the marketing restriction, required suppliers to provide clear language informing consumers that a VRO backed by RECs is an energy product backed by RECs rather than a renewable energy itself. Plaintiffs argued that both restrictions violated the dormant commerce clause. The trial court rejected Plaintiffs' commerce clause arguments as to each restriction. The Supreme Court affirmed, holding that there was no error. View "Direct Energy Services, LLC v. Public Utilities Regulatory Authority" on Justia Law

The Supreme Court reversed the decision of the court of appeals dismissing an administrative appeal for lack of appellate jurisdiction in the underlying case involving an air emissions permit issued by the Minnesota Pollution Control Agency for the NorthMet mining project in northern Minnesota, holding that the service and other steps taken by Appellants were effective to invoke appellate jurisdiction and that the appeal was timely-filed under the thirty-day service deadline set forth in Minn. Stat. 14.63.After the Agency issued the permit at issue to Poly Met Mining, Inc., Appellants filed a certiorari appeal. The court of appeals granted PolyMet's motion to dismiss the appeal for lack of jurisdiction on the ground that Appellants had failed to serve PolyMet's counsel within thirty days of receiving the decision. At issue before Supreme Court was whether the service requirements in the judicial review provisions of the Minnesota Administrative Procedure Act, Minn. Stat. 14.63-.69, require petitioners to serve appeal papers on a represented party's counsel. The Supreme Court reversed, holding that, when initiating judicial review where the parties were otherwise served directly, the Act's judicial review provisions do not require service on a represented party's attorney. View "In re Issuance of Air Emissions Permit No. 13700345-101 for PolyMet Mining Inc." on Justia Law

During World War II, the federal government played a significant role in American oil and gasoline production, often telling refineries what to produce and when to produce it. It also rationed crude oil and refining equipment, prioritized certain types of production, and regulated industry wages and prices. This case involves 12 refinery sites, all owned by Valero, that operated during the war, faced wartime regulations, and managed wartime waste. After the war, inspections revealed environmental contamination at each site. Valero started cleaning up the sites. It then sought contribution from the United States, arguing that the government “operated” each site during World War II. It did not contend that government personnel regularly disposed of waste at any of the sites or handled specific equipment there. Nor did it allege that the United States designed any of the refineries or made engineering decisions on their behalf.The Sixth Circuit reversed the district court. The United States was not a refinery “operator” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601–75. CERCLA liability requires control over activities “specifically related to pollution” rather than control over general pricing and product-related decisions. View "MRP Properties Co., LLC v. United States" on Justia Law

In these two consolidated cases involving claims brought against the Electric Reliability Council of Texas, Inc. (ERCOT) the Supreme Court answered, among other questions, that ERCOT is a governmental unit as defined in the Texas Tort Claims Act and is thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction.CPS Energy sued ERCOT and several of its officers for, inter alia, breach of contract. The trial court denied ERCOT'S plea to the jurisdiction. Ultimately, the court of appeals held that ERCOT was a governmental unit entitled to take an interlocutory appeal. In the second case, Panda sued ERCOT for, inter alia, fraud. The trial court denied ERCOT's pleas to the jurisdiction. The court of appeals ultimately held that ERCOT was not entitled to sovereign immunity. The Supreme Court affirmed in the first case and reversed in the other, holding (1) ERCOT was entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction; (2) the Public Utility Commission of Texas has exclusive jurisdiction over the parties' claims against ERCOT; and (3) ERCOT was entitled to sovereign immunity. View "CPS Energy v. Electric Reliability Council of Texas" on Justia Law

The Supreme Court affirmed the order of the Public Service Commission (PSC) denying in part and granting in part motions for reconsideration of an order it issued setting forth the inputs it would use to calculate the export credit rate (ECR), holding that this Court lacked jurisdiction as to certain issues and, as to the two remaining issues, the PSC did not exceed the bounds of its authority.The export credit rate system at issue in this case was created to eventually replace the "net metering" program for customers who generated electricity. The PSC engaged in a lengthy public process to decide what factors to consider in calculating the ECR. After the PSC issued an order setting forth the inputs to use for the ECR Appellants filed motions for reconsideration. The PSC granted in part the motions, agreeing to reconsider some of the ECR calculation's components. The Supreme Court dismissed the petition as to issues for which the Court lacked jurisdiction and otherwise denied the motion, holding that the PSC did not exceed the bounds of its authority. View "Vote Solar v. Public Service Comm'n" on Justia Law

The Supreme Court affirmed the judgment of the Minnesota Tax Court reducing the Commissioner of Revenue's valuations of CenterPoint Energy Minnegasco's natural gas distribution pipeline system for January 2, 2018 through January 2, 2019, holding that the Commissioner was not entitled to relief.The tax court reduced the Commissioner's valuations and ordered the Commissioner to recalculate Minnegasco's tax liability. The Commissioner appealed, challenging the tax court's income-equalization and cost approaches. The Supreme Court affirmed, holding that the tax court (1) did not err in the way that it used the Commissioner's initial assessments when evaluating the totality of the evidence and making its independent evaluations; (2) did not abuse its discretion in considering the conflicting expert opinions; and (3) did not clearly err in finding external obsolescence. View "Commissioner of Revenue v. CenterPoint Energy Resources Corp." on Justia Law

Gulf South Pipeline Company, LLC owned an underground natural gas storage facility in Rankin County, Mississippi. It owned additional properties that ran through thirty-two Mississippi counties. As a public service corporation with property situated in more than one Mississippi county, property belonging to Gulf South was assessed centrally by the Mississippi Department of Revenue rather than by individual county tax assessors. After conducting the central assessment, MDOR apportions the tax revenues among the several counties in which the property is located. A significant amount of the natural gas stored in Gulf South’s Rankin County facility is owned by Gulf South’s customers and, therefore, it is excluded from MDOR’s central assessment. The Rankin County tax assessor requested that Gulf South disclose the volume of natural gas owned by each of its customers. Following Gulf South’s refusal to provide these data, in September 2021 the Rankin County tax assessor gave notice of its intention to assess Gulf South more than sixteen million dollars for approximately four billion cubic feet of natural gas stored by Gulf South but owned by its customers. Gulf South filed suit at the Chancery Court in Hinds County, seeking to enjoin the assessment and seeking a declaratory judgment that MDOR was the exclusive entity with the authority to assess a public service corporation with property located in more than one Mississippi county. On interlocutory appeal, the Mississippi Supreme Court was asked to determine whether venue was proper in Hinds County when Rankin County was named as a defendant and MDOR was joined as a necessary party. The Court held that, under the venue provisions of Mississippi Code Section 11-45-17 and the Court’s consistent construction of these statutory provisions as mandatory and controlling, venue was proper only in Rankin County. Therefore, the chancellor erred by denying Rankin County’s motion to transfer venue. View "Rankin County v. Boardwalk Pipeline Partners, L.P., et al." on Justia Law