Justia Energy, Oil & Gas Law Opinion Summaries

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

Canyon Mine is located within the Kaibab National Forest, which has been withdrawn from new mining claims; the withdrawal did not extinguish “valid existing rights.” The Trust challenged the Forest Service’s determination that Energy Fuels holds a valid existing right to operate the uranium mine, alleging that in determining that there were “valuable mineral deposits,” 30 U.S.C. 22, the Service ignored sunk costs. The Ninth Circuit previously held that the Trust had Article III standing.The Ninth Circuit subsequently affirmed the summary judgment rejection of the claim. It was not arbitrary for the Service to ignore costs that have already been incurred and cannot be recovered. Applying Chevron analysis, the court held that the critical term in the Mining Act, “valuable mineral deposits,” was ambiguous. The Department of the Interior’s interpretation of the Act, in which sunk costs are not considered when determining whether a mine is profitable, was permissible and not manifestly contrary to the Act; it was consistent with the prudent person and marketability tests. It is a basic principle of economics that sunk costs should be ignored when making a rational decision about whether to make further expenditures. It was not arbitrary for the Forest Service to rely on the Department's interpretation. View "Grand Canyon Trust v. Provencio" on Justia Law

The district court dismissed a suit alleging that a price plan adopted by Salt River Project Agricultural Improvement and Power District (SRP) unlawfully discriminated against customers with solar-energy systems and was designed to stifle competition in the electricity market.The Ninth Circuit affirmed in part, applying Arizona’s notice-of-claim statute, which provides that persons who have claims against a public entity, such as SRP, must file with the entity a claim containing a specific amount for which the claim can be settled.The district court erred in dismissing plaintiffs’ equal protection claim as barred by Arizona’s two-year statute of limitations. The claim did not accrue when SRP approved the price plan, but rather when plaintiffs received a bill under the new rate structure. The plaintiffs alleged a series of violations, each of which gave rise to a new claim and began a new limitations period.Monopolization and attempted monopolization claims under the Sherman Act were not barred by the filed-rate doctrine, which bars individuals from asserting civil antitrust challenges to an entity’s agency-approved rates. SRP was not entitled to state-action immunity because Arizona had not articulated a policy to displace competition.The Local Government Antitrust Act shielded SRP from federal antitrust damages because SRP is a special functioning governmental unit but the Act does not bar declaratory or injunctive relief. The district court erred in concluding that plaintiffs failed to adequately allege antitrust injury based on the court’s finding that the price plan actually encouraged competition in alternative energy investment. View "Ellis v. Salt River Project Agricultural Improvement and Power District" on Justia Law

The owners of New England electric generation facilities are paid through formula rates established by ISO New England’s (a regional transmission organization) open access transmission tariff. The owners challenged Federal Energy Regulatory Commission’s (FERC) orders approving Schedule 17, an amendment to the ISO tariff, establishing a new recovery mechanism for costs incurred by certain electric generation and transmission facilities to comply with mandatory reliability standards FERC had approved.FERC ruled that the owners could use Schedule 17 to recover only costs incurred after they filed and FERC approved a cost-based rate under the Federal Power Act (FPA), 16 U.S.C. 824d. FERC reasoned that recovery was limited to prospective costs, citing the filed rate doctrine, which forbids utilities from charging rates other than those properly filed with FERC, and its corollary, the rule against retroactive rate-making, which prohibits FERC from adjusting current rates to make up for a utility’s over- or under-collection in prior periods.The D.C. Circuit denied the petition for review. FERC’s application of the filed rate doctrine and the rule against retroactive rate-making to Schedule 17 was not arbitrary or capricious. Schedule 17 does not expressly permit recovery of mandatory reliability costs incurred prior to a facility’s individual FPA filing. View "Cogentrix Energy Power Management, LLC v. Federal Energy Regulatory Commission" on Justia Law

The San Francisco Public Utilities Commission owns a power supply system in the Hetch Hetchy Valley and transmission lines but does not own distribution lines and relies on PG&E’s distribution system. The Commission is both a customer and a competitor of PG&E. The Federal Energy Regulatory Commission (FERC) approved PG&E’s Tariff, which stated the generally applicable terms for “open-access” wholesale distribution service. In 2019, San Francisco filed a complaint under the Federal Power Act (FPA), 16 U.S.C. 824e, 825e, 825h, challenging PG&E’s refusal to offer secondary-voltage service in lieu of more burdensome primary-voltage service to certain San Francisco sites and provide service to delivery points that San Francisco maintains are eligible for service under the Tariff’s grandfathering provision. PG&E maintained that it had not given customers the right to dictate the level of service to be received and that any denials of secondary-voltage service were supported by “technical, safety, reliability, and operational reasons.”FERC denied San Francisco’s complaint, ruling that PG&E should retain discretion to determine what level of service is most appropriate for a customer because the provider “is ultimately responsible for the safety and reliability of its distribution system.” The D.C. Circuit vacated and remanded, citing FERC’s own precedent and noting a “troubling pattern of inattentiveness to potential anticompetitive effects of PG&E’s administration of its open-access Tariff.” View "City and County of San Francisco v. Federal Energy Regulatory Commission" on Justia Law

The DC Circuit granted the City's petitions for review of FERC orders rejecting the City's complaint regarding periodic outflow coming from the operation of the Pensacola Project, a downstream dam licensed by FERC. The court found FERC's position unpersuasive and remanded for the Commission to determine the role of the Corps, the responsibility the Authority bears if it caused flooding in the City, analyze the evidence petitioner has produced, and finally interpret the Pensacola Act. View "The City of Miami, Oklahoma v. Federal Energy Regulatory Commission" on Justia Law

Phillip Armstrong appealed a judgment dismissing his amended complaint. The district court granted dismissal of the amended complaint after finding Armstrong had failed to exhaust his administrative remedies. In 1996, Armstrong filed a surety bond with the North Dakota Industrial Commission when he became the operator of several oil wells on private land. In 2001, Armstrong also began operating wells on federal lands. Armstrong was engaged with federal authorities in formulating a reclamation plan for the federal lands. The wells were not producing oil, and Armstrong requested a release of his surety bond filed with the Commission. The Commission conditioned the release of the bond on Armstrong performing a geoprobe assessment of the wells, which Armstrong refused. Armstrong thereafter filed a complaint in the district court seeking release of his bond. The court ultimately concluded Armstrong's claims were barred by his failure to exhaust his administrative remedies, rejected Armstrong’s argument state law did not apply because of federal preemption, and entered a judgment dismissing the action. The North Dakota Supreme Court concluded federal regulations did not preempt the application of N.D.C.C. ch. 38-08, Armstrong failed to exhaust his administrative remedies, and the court properly dismissed the action. View "Armstrong v. Helms" on Justia Law

The First Circuit affirmed the decision of the Massachusetts Department of Environmental Protection (DEP) reaffirming the issuance of an air permit to Algonquin Gas Transmission, LLC for a natural gas compressor station in Weymouth, Massachusetts, holding that the agency's actions were not arbitrary or capricious.DEP had previously approved Algonquin's plans to power the Weymouth station using a natural gas-fired turbine, which emitted nitrogen oxides. In a prior appeal, the City of Quincy, the Towns of Braintree and Hingham, and a group of citizens (collectively, the City) and other petitioners established that the DEP did not follow its own procedures when it eliminated an electric motor as a possible alternative to the gas-fired turbine, and the First Circuit remanded the case. On remand, DEP again concluded that an electric motor was not what Massachusetts regulations call the "best available control technology" (BACT) for the new compressor station and reaffirmed the air permit at issue. The First Circuit affirmed the DEP's decision after remand, holding that substantial evidence supported the decision and that the agency's determination was not arbitrary and capricious. View "City of Quincy v. Massachusetts Department of Environmental Protection" on Justia Law