Justia Energy, Oil & Gas Law Opinion Summaries

These consolidated appeals arose from a final determination of the State Corporation Commission in a mandated biennial review of the rates, terms, and conditions for the provision of generation, distribution and transmission services of an electric utility. As pertinent here, commencing in 2011, the Virginia Electric Utility Regulation Act required the Commission to conduct biennial reviews of an electric utility's performance during the two successive twelve-month periods immediately prior to such reviews pursuant to Va. Code Ann. 56-585.1(A). At issue in this appeal was whether in the 2011 biennial review of the performance of Virginia Electric and Power Company in the 2009-2010 test period the Commission erred in determining that the utility's authorized fair rate of return on common equity of 10.9 percent would apply to the entire 2011-2012 test period in the next biennial review in 2013. The Supreme Court affirmed, holding that the Commission's construction of Code 56-585.1 was based upon the proper application of legal principles, and the Commission did not abuse the discretion afforded to it under that statute. View "Va. Elec. & Power Co. v. State Corp. Comm'n" on Justia Law

In this appeal, Appalachian Power Company (APCO) sought rate adjustment clause recovery of $33.3 million in environmental compliance costs that the State Corporation Commission denied. The Supreme Court reversed in part, affirmed in part, and remanded, holding (1) APCO was entitled to a rate adjustment clause for recovery of actual costs it directly incurred for environmental compliance in 2009 and 2010 but did not recover through its base rates, and the portion of the Commission's decision denying recovery of environmental compliance costs on the basis that those costs were connected with projects included in APCO's base rates which APCO had the opportunity to recover was reversed; and (2) the portion of the Commission's decision denying APCO recovery of environmental compliance costs alleged to be embedded in the capacity equalization charges APCO paid to its affiliates in 2009 and 2010 was affirmed. Remanded. View "Appalachian Power Co. v. State Corp. Comm'n" on Justia Law

The Board of Oil, Gas and Mining (Board) affirmed the approval by the Division of Oil, Gas and Mining (Division) of Alton Coal Development's (ACD) mining permit, which allowed ACD to conduct surface coal mining operations at the Coal Hollow Mine. Petitioners appealed, arguing that the Board erred in affirming ACD's permit because the permit application was deficient in several respects. The Supreme Court affirmed the Board's decision, holding (1) the Board properly concluded that the Division gave adequate consideration to cultural and historic resources in the adjacent area; (2) the Board properly concluded that the Division's cumulative hydrological Impact Assessment satisfied Utah's requirements; (3) the Board properly concluded that the hydrologic monitoring plan was adequate; and (4) therefore, the Board acted within its discretion in affirming the Division's conclusions that ACD's mining permit application satisfied all of the statutory and regulatory requirements. View "Sierra Club v. Bd. of Oil, Gas, & Mining" on Justia Law

In consolidated appeals, the Lowell Mountains Group, Inc. (LMG), and the Towns of Albany and Craftsbury, challenged several Public Service Board orders related to the construction of a wind-electric-generation facility and associated facilities on Lowell Mountain in Lowell, Vermont. In May 2010, petitioners Green Mountain Power Corporation (GMP), Vermont Electric Cooperative, Inc. (VEC), and Vermont Electric Power Company, Inc. and Vermont Transco LLC (VELCO) requested a certificate of public good (CPG) to construct a wind-electric-generation facility on Lowell Mountain. On May 31, 2011, following testimony, site visits, a public hearing, and hearings, the Board issued a final order granting a CPG subject to forty-five conditions. Appellants and several other parties moved for reconsideration. On July 12, 2011, the Board modified its final order in certain respects. The Towns and LMG appealed that final order with modifications. The parties also raised compliance issues with the final order that the Board ultimately overruled. Upon review of the Board's orders, the Supreme Court found no abuse of discretion, and deferred to the Board's decisions with regard to the final order. Accordingly, the Court affirmed the Board. View "In re Green Mountain Power Corp." on Justia Law

A quasi-independent governmental agency manages a program designed to improve power generation in small Alaska villages that are located off the electrical grid. One such village believed that the agency did not respect the wishes of village leaders in securing a contract to improve that village's power-generation facility. The village, joined by a company that produces a key component used in improving power generation in village areas, sued the agency. The plaintiffs alleged that the agency erroneously awarded contracts for power generation and that agency employees improperly disclosed the company's trade secrets to its competitor. The superior court dismissed all of the plaintiffs' claims on motions for summary judgment. Because the Supreme Court agreed there were no disputed issues of material fact and the defendants were entitled to judgment as a matter of law, the Court affirmed the decision of the superior court in all respects. View "Powercorp Alaska v. Alaska Energy Authority" on Justia Law

The Automotive United Trades Organization (AUTO) and Tower Energy Group (Tower) brought an as-applied state constitutional challenge to a tax based on the possession of petroleum as a hazardous substance. AUTO and Tower claimed that the hazardous substances tax (HST) violated article II, section 40 of the state constitution because the revenue from motor vehicle fuel was not being "placed in a special fund to be used exclusively for highway purposes." The trial court held on summary judgment that AUTO's claim was barred because it was not filed within a reasonable time under the Uniform Declaratory Judgments Act (UDJA) and that the HST does not violate article II, section 40. Upon review, the Supreme Court reversed in part and affirmed in part. The Court reversed the trial court in barring AUTO and Tower from bringing their constitutional challenge because to do so would deprive the Supreme Court of its vested power to determine the constitutionality of specific legislation. The Court affirmed the trial court, however, in granting summary judgment to the State because article II, section 40 provides that "this section shall not be construed to include revenue from general or special taxes or excises not levied primarily for highway purposes." View "Auto. United Trades Org. v. Washington" on Justia Law

Defendant-Appellant Tim DeChristopher entered a Bureau of Land Management (BLM) oil and gas lease auction in Salt Lake City, Utah, by representing he was a bidder. His purpose was to disrupt the auction and call attention to the potential environmental harms of drilling on the leases. He proceeded to drive up the auction prices and ultimately won almost $1.8 million in bids, for which he was unable to pay. A jury convicted Defendant of interfering with the provisions of Chapter 3A of the Federal Onshore Oil and Gas Leasing Reform Act, and making a false statement or representation. He appealed, raising eight separate issues related to his conviction. Upon review of each, the Tenth Circuit determined they had no merit and affirmed Defendant's conviction and sentence. View "United States v. DeChristopher" on Justia Law

This case stemmed from a dispute over the proper calculation of royalty payments on state oil and gas leases. Over the years, the Legislature has enacted several versions of the statutory oil and gas lease, and Lessees have entered into “hundreds” of oil and gas leases with the State. Specifically, the New Mexico Legislature enacted statutory oil and gas leases in 1919, 1925, 1927, 1929, 1931, 1945, 1947 and 1984. This appeal concerned the royalty clauses contained in the 1931 and the 1947 statutory lease forms. Both the 1931 lease and 1947 lease specified that the payment of royalty was to be calculated as a percentage of the “net proceeds” resulting from the sale of gas. During 2005 and 2006 Commissioner audited ConocoPhillips Company and Burlington Resources Oil & Gas Company’s royalty payments. Following the Audit, Commissioner notified Lessees that they had been underpaying their royalty obligations and issued them assessments for the underpayment. The Commissioner claimed that pursuant to the terms of the statutory lease forms Lessees could not deduct the post-production costs necessary to prepare the gas for the commercial market when calculating their royalty payments. Commissioner claimed that the improper deductions for post-production costs resulted in ConocoPhillips underpaying royalties by approximately $18.9 million and Burlington underpaying by approximately $5.6 million. In response to Commissioner’s audit and assessments, Lessees filed a complaint in the district court seeking a declaration that Commissioner’s assessment of additional royalty constituted a deprivation of due process, an unconstitutional impairment of contract, and breach of contract. In addition, Lessees claimed that Commissioner had exceeded his constitutional and statutory powers by issuing the assessments and had effectively usurped legislative power by seeking royalty payments under calculation methods not approved by the Legislature. In response, Commissioner alleged a host of counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of the implied covenant to market. This appeal pertained to three orders granting summary judgment on behalf of Lessees and a fourth order denying Commissioner’s motion for reconsideration of the district court’s previous dismissal of his counterclaim for breach of the implied covenant to market. In the first order, the district court granted Lessees’ motion for summary judgment. Upon review of the several orders and claims before the Supreme Court on appeal, the Court affirmed the trial court's grant of summary judgment. View "ConocoPhillips Co. v. Lyons" on Justia Law

The Council of the City of New Orleans and the Louisiana Public Service Commission petitioned for review of an order of the Federal Energy Regulatory Commission (FERC) allowing two companies to withdraw from a regional energy system agreement without paying exit fees. FERC concluded that there was nothing in the agreement that compelled payments prior to withdrawal. FERC found that, under the terms of the agreement, (1) withdrawing companies were not obligated to pay exit fees, and (2) once companies left the agreement, they no longer needed to continue to make rough equalization payments. The D.C. Circuit Court of Appeals denied the petitions for review, holding that FERC's findings were reasonable. View "Council of City of New Orleans v. FERC" on Justia Law

Underlying this appeal was the case of Center for Biological Diversity v. Interior, in which the Court vacated a five-year program for expanding leases for oil and gas development in the coast of Alaska. The U.S. Department of Interior, which approved the program, then issued a new five-year program. Here, the Native Village of Point Hope, Alaska, petitioned the D.C. Circuit Court of Appeals for reimbursement of attorneys' fees and costs it incurred in this matter. The D.C. Circuit allowed reimbursement in the amount of $192,293 in fees and $8,493 in costs, for a total reimbursement of $200,786. View "Ctr. for Biological Diversity v. DOI" on Justia Law