Justia Energy, Oil & Gas Law Opinion Summaries

In 2013, Duke Energy Carolinas filed an application with the North Carolina Utilities Commission requesting authority to adjust and increase its North Carolina retail electric service rates. The Commission entered an order granting a $234,480,000 annual retail revenue increase, approving a 10.2 percent return on equity (ROE), and authorizing the use the single coincident peak (“1CP”) cost-of-service methodology. The Supreme Court affirmed, holding (1) the Commission made sufficient findings regarding the impact of changing economic conditions upon customers, and these findings were supported by competent, material, and substantial evidence in view of the entire record; (2) the use of 1CP did not unreasonably discriminate against residential customers; and (3) no improper costs were included in the Commission’s order. View "State ex rel. Utils. Comm'n v. Cooper" on Justia Law

In 2006, Tellus Operating Group, LLC, sought to integrate the interests of various owners for the purpose of drilling a well unit in Jefferson Davis County. In accordance with its statutory duty to make a good-faith effort to negotiate the voluntary integration of the owners’ interests on reasonable terms, Tellus mailed option forms to the owners in June and July of 2006. In this case, the issue this case presented for the Supreme Court's review was a challenge to a Mississippi Oil and Gas Board pooling order force-integrating various owners’ interests in a proposed drilling unit. After review, the Court held that the Board’s order was supported by substantial evidence. The Court also found that one owner’s attempt to voluntarily integrate his interest within twenty days of the Board’s pooling order did not satisfy Section 53-3-7(2)(g)(iii). View "Tellus Operating Group, LLC v. Maxwell Energy, Inc." on Justia Law

In 2012, after auditing Cloud Peak Energy Resources, LLC’s Montana Coal Tax payments for years 2005-2007, the Department levied a deficiency assessment for additional taxes owing from sales involving non-arm’s length (NAL) agreements. Cloud Peak filed a complaint alleging that the Department’s methodology for determining market value was illegal and that it had also illegally assessed taxes on coal additives for the years 2005-2007. The district court (1) held in Cloud Peak’s favor on the first issue, concluding that the market value of coal sold under NAL agreements is determined by comparing its price with that of coal sold under arm’s length contracts negotiated in a similar timeframe; and (2) ruled in the Department’s favor on the issue regarding additives. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly found that market value is properly based upon similarly negotiated contracts, but the additional language included in the order was inappropriate; and (2) did not err in holding that coal additives used from 2005-2007 are subject to Montana Coal Taxes. View "Cloud Peak Energy Res., Inc. v. Dep’t of Revenue" on Justia Law

L.B. 1161, which was passed in 2012, allows major oil pipeline carriers to bypass the regulatory procedures of the Public Service Commission, instead allowing them to obtain approval from the Governor to exercise the power of eminent domain for building a pipeline in Nebraska. Appellees, a group of landowners, filed a complaint alleging that the bill violated the state Constitution’s equal protection, due process, and separation of powers provisions, as well as the Constitution’s prohibition of special legislation. The district court determined that L.B. 1161 was unconstitutional. Four members of the Supreme Court - a majority of its seven members - held that Appellees had standing to challenge the constitutionality of the bill and that the legislation was unconstitutional. However, because five judges of the Court did not vote on the constitutionality of the bill, the Court held that L.B. must stand by default. View "Thompson v. Heineman" on Justia Law

Duke Energy Carolinas (Duke) filed an application with the North Carolina Utilities Commission requesting authority to increase its North Carolina retail electric services rates and asking that the rates be established using a return on equity (ROE) of 11.5 percent. Duke subsequently stipulated to an ROE of 10.5 percent. The Commission entered a Rate Order approving the revenue increase and ROE contained in the stipulation. The Attorney General appealed. The Supreme Court reversed. On remand, the Commission concluded that the Rate Order was supported by the evidence and was reasonable in light of the stipulation as a whole. The Supreme Court affirmed, holding that the Commission’s order authorizing a 10.5 percent ROE for Duke contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. View "State ex rel Utils. Comm'n v. Cooper" on Justia Law

In 2013, the Utah Public Service Commission (PSC) approved power purchase agreements between PacifiCorp and two small power producers. Under these agreements, PacifiCorp’s Rocky Mountain Power division would become obligated to purchase all power produced by the producers’ clean energy wind projects. Ellis-Hall Consultants, a competitor of the two small power producers, intervened in the PSC proceedings and subsequently appealed. The Supreme Court affirmed the PSC’s decision, holding (1) the power purchase agreements did not contravene the terms of an applicable regulatory tariff referred to as Schedule 38; (2) PacifiCorp did not engage in discrimination in its application of the terms of Schedule 38; and (3) the power purchase agreements were enforceable. View "Ellis-Hall Consultants, LLC v. Pub. Serv. Comm’n of Utah" on Justia Law

Pusateri, a former employee of Peoples Gas Light and Coke Company (PG) filed a complaint under the False Claims Act, 740 ILCS 175/1, alleging that PG used falsified gas leak response records to justify a fraudulently inflated natural gas rate before the Illinois Commerce Commission. As a customer, the State of Illinois would have paid such fraudulently inflated rates,. The Cook County circuit court dismissed with prejudice, finding that as a matter of law, there was no causal connection between the allegedly false reports and the Commission-approved rates. The appellate court reversed, construing the complaint’s allegations liberally to find PG could have submitted the safety reports in support of a request for a rate increase, despite not being required to do so under the Administrative Code. The Illinois Supreme Court reinstated the dismissal, reasoning that the court lacked jurisdiction to order relief. The legislature did not intend the False Claims Act to apply to a Commission-set rate. The Commission has the duty to ensure regulated utilities obey the Public Utilities Act and other statutes, except where enforcement duties are “specifically vested in some other officer or tribunal.” View "Pusateri v. Peoples Gas Light & Coke Co." on Justia Law

LPSC sought review of FERC's orders relating to the allocation of production costs among Entergy's six operating companies. LPSC argued that certain revenues and expenses should be removed from the bandwidth calculation for 2008 because they were not incurred in that test year and that the production cost formula should account for the mid-year acquisition of generation facilities by Entergy Gulf States Louisiana and Entergy Arkansas on a partial-year basis. The court concluded that FERC reasonably excluded challenges to the "justness and reasonableness" of formula inputs from annual bandwidth implementation proceedings where FERC reasonably interpreted the System Agreement and correctly applied the filed rate doctrine, and FERC's reversal of its initial interpretation of the scope of bandwidth implementation proceedings was not arbitrary. The court also concluded that FERC reasonably required Entergy to include casualty loss Net Accumulated Deferred Income Taxes (ADIT) in its third bandwidth calculation where LPSC had notice of the casualty loss ADIT issue, and FERC's decision to include casualty loss ADIT in the bandwidth formula was rational. Accordingly, the court denied LPSC's petition for review. View "Louisiana Public Svc. Cmsn. v. FERC" on Justia Law

In 2010, Idaho Power entered into two Firm Energy Sales Agreements, one with New Energy Two, LLC, and the other with New Energy Three, LLC, under which Idaho Power agreed to purchase electricity from them that was to be generated by the use of biogas. The agreement with New Energy Two stated that the project would be operational on October 1, 2012, and the agreement with New Energy Three stated that the project would be operational on December 1, 2012. Both contracts were submitted for approval to the Idaho Public Utilities Commission, and were both approved on July 1, 2010. Each of the agreements contained a force majeure clause. By written notice, New Energy Two and New Energy Three informed Idaho Power that they were claiming the occurrence of a force majeure event, which was ongoing proceedings before the Public Utilities Commission. New Energy asserted that until those proceedings were finally resolved "the entire circumstance of continued viability of all renewable energy projects in Idaho is undecided"and that as a consequence "renewable energy project lenders are unwilling to lend in Idaho pending the outcome of these proceedings."Idaho Power filed petitions with the Commission against New Energy Two and New Energy Three seeking declaratory judgments that no force majeure event, as that term was defined in the agreements, had occurred and that Idaho Power could terminate both agreements for the failure of the projects to be operational by the specified dates. New Energy filed a motion to dismiss both petitions on the ground that the Commission lacked subject matter jurisdiction to interpret or enforce contracts. After briefing from both parties, the Commission denied New Energy's motion to dismiss. The Commission's order was an interlocutory order that is not appealable as a matter of right. New Energy filed a motion with the Supreme Court requesting a permissive appeal pursuant to Idaho Appellate Rule 12, and the Court granted the motion. New Energy then appealed. Finding no reversible error, the Supreme Court affirmed the Commission's order. View "Idaho Power v. New Energy Two" on Justia Law

Appellants the South Carolina Energy Users Committee (the SCEUC) and the Sierra Club appealed orders of the Public Service Commission that approved Respondent South Carolina Electric & Gas's (SCE&G) application for updated capital cost and construction schedules, pursuant to the Base Load Review Act, (the BLRA). The issues this case presented for the Supreme Court's review was whether the Commission applied the correct section of the BLRA, and whether the Commission had to also consider the prudence of project completion at the update stage. Finding no reversible error in the Commission's orders, the Supreme Court affirmed. View "SC Energy Users Committee v. SCE&G" on Justia Law