Justia Energy, Oil & Gas Law Opinion Summaries

This appeal concerns the Texas PUC's interpretation and implementation of a federal statutory and regulatory scheme governing the purchase of energy between public utilities and certain energy production facilities known as Qualifying Facilities. Exelon, qualifying wind generation facilities, challenged a state rule and order which prohibited it from forming Legally Enforceable Obligations when selling power. The court vacated the portion of the judgment regarding Exelon's challenge to the PUC's order and directed the district court to dismiss for want of subject matter jurisdiction. The court reversed as to the remaining challenges to the rule and remanded because PUC acted within its discretion and properly implemented the federal regulation at issue. View "Exelon Wind 1, L.L.C., et al. v. Nelson, et al." on Justia Law

The companies obtained an oil and gas lease from the government for a 5760-acre tract on the Outer Continental Shelf. They made an initial bonus payment of $23,236,314 and have paid additional rental payments of $54,720 per year. The lease became effective on August 1, 2008, and had an initial term running through July 31, 2016. It provided that it issued pursuant to and was subject to the Outer Continental Shelf Lands Act of August 7, 1953, (OCSLA) 43 U.S.C. 1331 and “all regulations issued pursuant to the statute in the future which provide for the prevention of waste and conservation of the natural resources of the Outer Continental Shelf and the protection of correlative rights therein; and all other applicable statutes and regulations.” In 2010, an explosion and fire on the Deepwater Horizon semi-submersible oil drilling rig in the Gulf of Mexico killed 11 workers and caused an oil spill that lasted several months. As a result, the government imposed new regulatory requirements, Oil Pollution Act (OPA), 33 U.S.C. 2701. The companies sued for breach of contract. The Claims Court and Federal Circuit ruled in favor of the government, finding that the government made the changes pursuant to OCSLA, not OPA. View "Century Exploration New Orleans, LLC v. United States" on Justia Law

This case involves challenges to the most recent forms of electric transmission planning and cost allocation adopted by the Commission under the Federal Power Act, 16 U.S.C. 791 et seq. In Order No. 1000, as reaffirmed and clarified in Order Nos. 1000-A and 1000-B (together, the Final Rule), the Commission required each transmission owning and operating public utility to participate in regional transmission planning that satisfies the specific planning principles designed to prevent undue discrimination and preference in transmission service, and that produces a regional transmission plan. The court held that the Commission had authority under Section 206 of the Act to require transmission providers to provide in a regional planning process; there was substantial evidence of a theoretical threat to support adoption of the reforms in the Final Rule; the Commission had authority under Section 206 to require removal of federal rights of first refusal provisions upon determining they were unjust and unreasonable practices affecting rates, and that determination was supported by substantial evidence and was not arbitrary and capricious; the Mobile-Sierra objection to the removal is not ripe; the Commission had authority under Section 206 to require the ex ante allocation of the costs of new transmission facilities among beneficiaries, and that its decision regarding scope was not arbitrary or capricious; the Commission reasonably determined that regional planning must include consideration of transmission needs driven by public policy requirements; and the Commission reasonably relied upon the reciprocity condition to encourage non-public utility transmission providers to participate in a regional planning process. Accordingly, the court denied the petitions for review of the Final Rule. View "South Carolina Public Service v. FERC" on Justia Law

Petitioners challenged the Commission's approval of a proposal for the construction of a natural gas compressor station in the Town of Minisink, New York. Petitioners argued, among other things, that the Commission's approval of the project was arbitrary and capricious, particularly given the existence of a nearby alternative site (the Wagoner Alternative) they insist is better than the Minisink locale. The court concluded that the Commission's consideration of the Wagoner Alternative falls within the bounds of its discretion and the court had no basis to upset the Commission's application of its Section 7 of the Natural Gas Act, 15 U.S.C. 717-717z, authority on this point; the court was satisfied that the Commission properly considered cumulative impacts of the Minisink Project; the court reject petitioners' argument that the Minisink Project violates the siting guidelines; and the court rejected petitioners' claims of procedural errors. Accordingly, the court denied the petitions for review. View "Minisink Residents for Enviro., et al. v. FERC" on Justia Law

Two firms receiving gas storage service in the Washington Storage Field ceased taking service and "released" their storage rights to Paribas. The departing customers exercised their contract rights to buy back so-called "base gas" from the field's operator, Transco. Given the buy-back, Transco had to make new purchases to replenish its base gas so as to maintain service at the levels prevailing before the replacement. At the time of the exiting customers' departure, the historic customers who remained, and the new replacement customers, disputed whether the cost of the new base gas should be charged entirely to the replacement shippers ("incremental pricing") or should be charged to all shippers in proportion to their usage ("rolled-in pricing"). On appeal, Paribas challenged the Commission's ratemaking decisions under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq. In a decision purporting to apply the familiar "cost causation" principle, the Commission chose incremental pricing. The court concluded that the Commission failed to offer an intelligible explanation of how its decision manifested the cost causation principle; failed to explain how or why or in what sense the historic customers' continued demand did not share, pro rata, in causing the need for the new base gas, or, how or why or in what sense the historic customers did not share proportionately in the benefits provided by the new base gas; and brushed off Paribas's invocation of a seemingly parallel set of the Commission's own decisions. Accordingly, the court vacated and remanded.View "BNP Paribas Energy Trading GP v. FERC" on Justia Law

This dispute arose from violations issued by the Department of Labor's Mine Safety and Health Administration. At issue was whether the word "corporation" includes limited liability companies (LLCs) for purposes of the Federal Mine Safety and Health Act of 1977 (the Mine Act), 30 U.S.C. 801 et seq. The court concluded that the terms "corporation" and "corporate operator" in the Mine Act are ambiguous. Applying Chevron deference, the court concluded that the Secretary's interpretation is reasonable where, most importantly, construing section 110(c) to include agents of LLCs is consistent with the legislative history. Therefore, the court held that an LLC is a corporation for purposes of the Mine Act and that section 110(c) can be used to assess civil penalties against agents of an LLC. Because substantial evidence supported the ALJ's decision to hold petitioners personally liable for the order at issue, the court affirmed on this issue. Finally, the order underlying their civil penalties was not duplicative. Accordingly, the court affirmed the ALJ's decision. View "Sumpter, et al. v. Secretary of Labor, et al." on Justia Law

The Federal Energy Regulatory Commission is a federal agency that, under the Federal Power Act, regulates rates charged by public utilities for transmission and sale of energy in interstate commerce, and rules pertaining to such rates, 16 U.S.C. 824d. In 2006, FERC approved a new tariff (rules governing interstate sale of electricity and electric capacity) for the PJM market, covering 13 states and the District of Columbia, as a result of an extensively negotiated settlement between power providers, utility companies, government authorities and others. The order required that load serving entities (LSEs) in the market procure a certain amount of energy capacity for access during peak load; included a rule that offers for the sale of capacity in the markets at artificially low prices would, with some exceptions, be required to be raised to a competitive level (mitigation). In 2011, FERC altered the 2006 Order: eliminating a mitigation exemption for resources built under state mandate; eliminating a provision that guaranteed that LSEs would be able to use “self-supply” to satisfy capacity obligations; and changing factors used in determining whether an offer was subject to mitigation. Objectors argued that the changes amounted to direct regulation of power facilities in violation of the FPA, and that FERC arbitrarily eliminated the mitigation exemption for state-mandated resources. Electric utilities challenged elimination of self-supply assurances for LSEs. Others challenged new rules governing calculation of a resource’s net cost of new entry (for determining whether an offer for sale of capacity will be mitigated) and FERC’s determination that a new generation resource must clear only one capacity auction to avoid further mitigation. The Third Circuit rejected all of the challenges.View "NJ Bd. of Pub. Utils. v. Fed Energy Regulatory Comm'n" on Justia Law

Black Beauty contested a citation issued by an inspector of the Mine Safety and Health Administration, but the ALJ upheld the citation. Black Beauty now petitions for review of the ALJ's order again upholding the citation on remand. The court found substantial evidence to credit the ALJ's conclusion that Black Beauty violated 30 C.F.R. 77.1605(k) by failing to maintain a berm on two tenths of a mile of a bench; there was no reason to disturb the ALJ's conclusion that Black Beauty's violation was significant and substantial; and substantial evidence supported the ALJ's conclusion that Black Beauty's failure to follow the regulation constituted more than ordinary negligence and was thus "unwarrantable." Accordingly, the court denied the petition for review. View "Black Beauty Coal Co. v. Secretary of Labor, et al." on Justia Law

In 2009, the Energy Facilities Siting Board approved the petition of Brockton Power Company, LLC to build and operate a combined-cycle energy generating facility powered by natural gas and ultra-low sulfur distillate in the City of Brockton. The City, the Town of West Bridgewater, and a group of residents of the City and Town, all intervenors in the proceedings below, filed appeals of the decision. The Supreme Judicial Court affirmed the decision of the Board, holding (1) the Intervenors’ contention that the Board’s failure to apply unspecified “substantive equal protection” principles to its review of the proposed facility was without merit, as there was no requirement in the 2002 environmental justice policy to do so; (2) the Board did not abuse its discretion by relying on the National Ambient Air Quality Standards for fine particulate matter; (3) the Board did not erroneously accept Logan Airport weather data as representative of the proposed facility site; (4) the Board did not abuse its discretion in determining that Brockton Power’s evidence regarding the facility’s impact on the Town’s water supply was accurate and complete; and (5) the Board did not improperly designate delivery routes to and from the facility. View "City of Brockton v. Energy Facilities Siting Bd." on Justia Law

In 2009, the Energy Facilities Siting Board approved the petition of Brockton Power Company LLC to build and operate a combined-cycle energy generating facility powered by natural gas and ultra-low sulfur distillate in the City of Brockton. The Supreme Judicial Court affirmed the Board’s decision. In 2009, while the consolidated appeal was pending, Brockton Power submitted a project change filing (PCF) to the Board seeking approval of three changes to its project. The Board denied one of Brockton Power’s proposed changes but approved the two other project changes. Both Brockton Power and the City appealed. The Supreme Judicial Court affirmed the Board’s PCF decision in all respects, holding (1) the procedure the Board adopted to review potentially material changes to Brockton Power’s project did not constitute an abuse of its discretion; (2) the Board’s approval of Brockton Power’s proposed use of water from the City’s advanced wastewater reclamation facility for the facility’s cooling tower was not invalid; and (3) the Board did not err by concluding that the CO emissions from a gas-only plant satisfied statutory standards. View "Brockton Power Co. LLC v. Energy Facilities Siting Bd." on Justia Law