Justia Energy, Oil & Gas Law Opinion Summaries

LSP, an independent electric transmission developer, bids on proposals to build transmission projects throughout the U.S. LSP sought judicial review of a Federal Energy Regulatory Commission (FERC) decision under 16 U.S.C. 824e concerning ISO New England’s compliance with Commission Order 1000, which required “the removal from Commission-jurisdictional tariffs and agreements” of rights of first refusal to construct transmission facilities and directed incumbent transmission providers to engage in competitive selection of developers. FERC recognized an exception if the time needed to solicit and conduct competitive bidding would delay the project and thereby threaten system “reliability.” FERC found “insufficient evidence” that ISO was incorrectly implementing Order 1000.The D.C. Circuit denied LSP’s petition for judicial review, first holding that FERC’s ruling bears all the indicia of a substantive decision produced after a contested proceeding involving ISO and numerous intervenors and is subject to judicial review. The court found nothing irrational in FERC’s response to LSP’s general criticism of ISO’s use of more conservative assumptions regarding its system capacity and future management in determining when to apply the exception. Although the number of reliability projects exempted from competitive bidding exceeded those open to competition, the appropriate balance between competitive procurement and quick redress of reliability needs is a policy judgment for FERC. View "LSP Transmission Holdings II, LLC v. Federal Energy Regulatory Commission" on Justia Law

The Federal Energy Regulatory Commission (FERC) awarded “incentive adders,” upward adjustments to utilities’ rate of return on equity, to three California-based public utilities. FERC regulations allow for incentive adders to induce voluntary membership in independent system operators. The Ninth Circuit previously concluded that FERC improperly awarded incentive adders to PG&E without considering the California Public Utilities Commission’s (CPUC) assertion that PG&E’s membership in the California independent system operator (CAISO) is mandated. The court directed FERC to “inquire into PG&E’s specific circumstances, i.e., whether it could unilaterally leave the C[AISO].” On remand, FERC concluded that membership in CAISO is voluntary.The Ninth Circuit upheld the decision, holding that its previous decision did not resolve whether California law prevented the utilities from leaving CAISO without approval. FERC did not deviate from the mandate on remand. There was no error in FERC’s conclusion that membership in CAISO was voluntary despite a contrary suggestion in a CPUC 1998 Decision. FERC was not required to apply the Erie doctrine and defer to California’s interpretation. The incentive adder and its requirements arose from federal law. The California Supreme Court has not decided whether membership in CAISO is voluntary; no California Code provision mandates CAISO membership, and no case law discusses whether CAISO members must remain such. California courts would not defer to the CPUC’s 1998 Decision because it was inconsistent with the statute. View "California Public Utilities Commission v. Federal Energy Regulatory Commission" on Justia Law

The Fifth Circuit affirmed the bankruptcy court's judgment and held that, under the particular circumstances presented here, Ultra Resources is not subject to a separate public-law obligation to continue performance of its rejected contract, and that 11 U.S.C. 1129(a)(6) did not require the bankruptcy court to seek FERC's approval before it confirmed Ultra Resource's reorganization plan.Applying In re Mirant Corp., 378 F.3d 511 (5th Cir. 2004), the court concluded that the power of the bankruptcy court to authorize rejection of a filed-rate contract does not conflict with the authority given to FERC to regulate rates; rejection is not a collateral attack upon the contract's filed rate because that rate is given full effect when determining the breach of contract damages resulting from the rejection; and in ruling on a rejection motion, bankruptcy courts must consider whether rejection harms the public interest or disrupts the supply of energy, and must weigh those effects against the contract's burden on the bankrupt estate. Because Mirant clearly holds that rejection of a contract is not a collateral attack on the filed rate, the court concluded that FERC does not have the authority to compel continued performance and continued payment of the filed rate after a valid rejection. The court rejected any further arguments to the contrary. View "Federal Energy Regulatory Commission v. Ultra Resources" on Justia Law

Petitioners sought review of the Commission's decision to authorize a new natural gas pipeline and compressor station in Agawam, Massachusetts. One of the petitioners, Berkshire, has failed to establish standing to challenge the Commission's decision. The other petitioner, Food & Water Watch, has raised challenges related to the Commission's compliance with the National Environmental Policy Act.The DC Circuit mainly rejected Food & Water Watch's claims, but agreed with its contention that the Commission's environmental assessment failed to account for the reasonably foreseeable indirect effects of the project—specifically, the greenhouse-gas emissions attributable to burning the gas to be carried in the pipeline. Accordingly, the court granted Food & Water Watch's petition for review on that basis and remanded for preparation of a conforming environmental assessment. View "Food & Water Watch v. Federal Energy Regulatory Commission" on Justia Law

The Supreme Court reversed a portion of the utility regulatory commission's order that approved in part Duke Energy's request to increase its rates for retail consumers, holding that, absent specific statutory authorization, a utility cannot recoup its past costs adjudicated under a prior rate case by treating the costs as a capitalized asset.In 2020, the commission granted Duke's petition for a rate increase in part permitting Duke to recover about $212 million for coal-ash site closures, remediation, and financing costs, with the bulk of the costs having been incurred from 2015 to 2018. At issue was whether the commission could approve reimbursement for a deferred asset without violating the statutory bar against retroactive ratemaking. The Supreme Court answered in the negative, holding that the commission acted without statutory authority in re-adjudicating expenses already governed by a prior rate order. View "Indiana Office of Utility Consumer Counselor v. Duke Energy Indiana, LLC" on Justia Law

The Supreme Court dismissed this appeal brought by Solarize Indiana, Inc. seeking judicial review of the administration decision of the Indiana Utility Regulatory Commission (IURC) approving two filings submitted by Vectren Energy Delivery of Indiana, Inc. under an expedited process known as the "Thirty-Day Rule," holding that Solarize lacked standing to bring this appeal.In objecting to Vectren's filings, Solarize, an organization that promotes the use of solar power in Indiana, asserted that the filings were not compliant with federal law. The IURC approved the filings, after which Solarize requested judicial review. The Supreme Court dismissed the appeal, holding that Solarize lacked standing because it failed to show that it was "adversely affected" by the IURC's order. View "Solarize Indiana, Inc. v. Southern Indiana Gas & Electric Co." on Justia Law

The Supreme Court affirmed the decision of the Public Utilities Commission (PUC) approving a power purchase agreement (PPA) between Maui Electric Company, Limited (MECO) and Paeahu Solar LLC (Paeahu), holding that the PUC satisfied its public trust duties in this case.Under the PPA, MECO would purchase renewable energy from Paeahu's solar-plus-battery plant located within the Ulupalakua Ranch on Maui. Pono Power Coalition, a Maui community group, challenging the winning bidders' post-selection use of the same counsel to negotiate non-price PPA terms and asserting that the PUC failed to fulfill its public trust duties. The Supreme Court affirmed, holding (1) this Court declines to inject antitrust standards into PPA approval proceedings; (2) the PUC appropriately evaluated the allegations of anticompetitive conduct; (3) the statutes governing the PUC's PPA review reflect the core public trust principles; and (4) the PUC properly approved the PPA. View "In re Maui Electric Company, Ltd." on Justia Law

Citizens for Fair Rates and the Environment and New Energy Economy, Inc., two organizations that represented energy consumers (collectively, "New Energy"), intervened in the administrative proceedings before the New Mexico Public Regulation Commission. New Energy raised several issues for the New Mexico Supreme Court's review, most of which attacked the Energy Transition Act ("ETA") on constitutional grounds. In addition to these constitutional challenges, New Energy also raised a single claim of error in the findings of the Commission relating to the requirement that Public Service Company of New Mexico’s ("PNM") submit a “memorandum . . . from a securities firm” in support of its application for a financing order. The Supreme Court declined to reach two of New Energy’s issues because they were not properly before the Court and were not essential to the disposition of this appeal. The Court further declined to address New Energy’s arguments regarding an invasion of judicial powers under Section 62-18-8(B) and Section 62-18- 22. With respect to the issues it deemed properly presented, the Court rejected New Energy’s constitutional challenges to the ETA, and concluded the Commission’s final order was based on a reasonable construction of Section 62-18- 4(B)(5) and was supported by substantial evidence. View "Citizens for Fair Rates et al. v. NMPRC" on Justia Law

Congress established the Osage reservation in Oklahoma Territory in 1872. Years later, “mammoth reserves of oil and gas” were found. Congress severed the subsurface mineral estate, reserved it to the tribe, and placed it into trust with the federal government as trustee. Royalties are distributed to tribal members listed on an approved membership roll (a headright).In previous litigation, the Claims Court found the tribe had standing and found the government liable for breaching its fiduciary duties by failing to collect the full amount of royalties and failing to invest the royalty revenue. Individual headright owners (not the present plaintiffs) attempted to intervene. The Claims Court found that the individuals had no legal interest in the dispute because they were not a party to the trust relationship. The $380 million settlement agreement stated that the tribe, “on behalf of itself and the [h]eadright [h]olders,” waived any claims relating to the tribe’s trust assets or resources that were based on violations occurring before September 30, 2011. In a federal suit, filed by individual headright owners, the Tenth Circuit held that headright owners had a trust relationship with the federal government, which was ordered to provide an accounting.In 2019, based on allegations that the accounting revealed mismanagement of the trust fund, headright owners filed the present suit under the Tucker Act and the Indian Tucker Act, citing breach of statutorily imposed trust obligations. The Federal Circuit reversed the dismissal of the suit. A trust relationship exists between the headright owners and the government and the 1906 Act imposes an obligation on the federal government to distribute funds to headright owners in a timely and proper manner. View "Fletcher v. United States" on Justia Law

For seven years, NTE worked to build a natural gas-fueled power plant in Killingly, Connecticut to sell electricity on the New England grid. NTE worked with ISO, the independent system operator authorized by the Federal Energy Regulatory Commission (FERC) to manage the regional grid, to have the project “qualified” to bid for the right to sell electricity. NTE secured a “capacity supply obligation” (CSO) for the 2022 commitment period. NTE secured a guaranteed income stream for the first seven years of the plant’s operation.NTE subsequently encountered setbacks that prevented it from meeting its financing and construction goals. On November 4, 2021, NTE told ISO that it remained confident it could complete construction on time but ISO-NE asked FERC to terminate the Killingly plant’s CSO. In January 2022, FERC did so. In February, the Second Circuit issued an emergency stay of FERC’s order. FERC likely fell short of its obligation under the Administrative Procedure Act to explain its decision. Absent emergency relief, FERC’s order would have irreparably harmed NTE, preventing it from participating in an auction to sell future electricity capacity to New England consumers. Nothing in FERC’s reasoning suggests the risk that incumbents may have to reallocate electricity capacity amongst themselves outweighs the harm of delaying NTE’s project, which could benefit consumers through more efficient, less expensive electricity. View "In re: NTE Connecticut, LLC" on Justia Law