Justia Energy, Oil & Gas Law Opinion Summaries

In October 2008, the Idaho Power Company (Company) filed an application with the Idaho Public Utilities Commission (IPUC) seeking to modify its âline extensionâ tariff that applied to requests for electrical service that required the installation, alteration, relocation, removal or attachment of company-owned distribution facilities. As homes are constructed in a subdivision, the homeowner requests to be connected to power, and the Company installs wiring from a transformer to the house at no cost to the homeowner. The cost of constructing new distribution facilities had been paid partially from up-front capital contributions from developers, and partially from electric rates charged to all customers. Under the old tariff, the Company gave developers a âline installation allowanceâ to offset a portion of the developersâ costs in having the Company construct distribution facilities. The allowance was equal to the Companyâs cost of providing and installing transformers within the subdivision. Per-lot refunds were refunded to the developer when a permanent residence connected to electrical service and occupied a lot within five years. The per-lot refunds could be as much as $800 each. In this proceeding, the Company sought to change line installation allowances to fixed sums. It also wanted to eliminate the per-lot refunds. The Building Contractors Association of Southwestern Idaho filed a petition to intervene in the proceeding. The Contractors sought to increase per-lot refunds. The IPUC granted the Companyâs request to change the line extension allowance to a fixed sum. The Contractors asked the IPUC to reconsider tariff change, but the IPUC denied the request. On appeal to the Supreme Court, the Contractors challenged the sufficiency of the evidence presented by the Power Company to support the tariff change. Finding the evidence sufficient to support the IPUCâs decision, the Supreme Court affirmed the IPUCâs decision to change the power companyâs tariff.

In October 2008, the Idaho Power Company filed an application with the Idaho Public Utilities Commission (IPUC) to modify its tariff. Some of the proposed amendments applied to the relocation of utilities facilities within public rights-of-way. The City of Nampa and the Association of Canyon County Highway Districts intervened in the proceedings, and each objected to the Companyâs proposed amendments to the tariff. The IPUC approved the amendments, and Ada County Highway District (ACHD) filed a petition or reconsideration and clarification. Specifically, ACHD argued that the IPUC exceeded its authority in approving the amendments and that portions of the amended tariff were âan unlawful attempt to amend or abrogate the common law rule requiring a utility to relocate its facilities placed in a public right-of-way at its expense.â Upon review, the Supreme Court found that the IPUC exceeded its authority in determining utilities relocation within public rights-of-way. The Court set aside the amended tariff.

The Ohio Public Utilities Commission approved a âprogram portfolio planâ proposed by Appellee American Electric Power (SEP). The plan contained a variety of programs designed to increase energy efficiency and reduce peak demands on AEPâs system. Appellant Industrial Energy Users-Ohio (IEU) challenged the PUCâs approval of the plan to the district court, arguing that the plan was too costly, was not energy-efficient, and did not meet the requirements imposed under the applicable state laws. The Supreme Court reviewed the record and found that IEUâs challenges âall lack merit.â The Court affirmed the lower courtâs and PUCâs decisions approving the plan.

The Ohio Public Utilities Commission (PUC) approved âreasonable arrangementsâ between American Electric Power Company (AEP) and two manufacturing firms, Ormet Primary Aluminum (Ormet) and Eramet Marietta, Inc. (Eramet). The arrangements gave substantial price discounts on electric service. The PUC approved the arrangements and allowed AEP to collect from other customers most of the revenue foregone to the discounts. Ormet asked the commission to approve an arrangement linking Ormetâs electric rate to the market price of aluminum; Eramet asked for a fixed discounted rate. The PUC held public hearings to consider the manufacturersâ applications, and numerous parties intervened, including Industrial Energy Users-Ohio (IEU). Disagreements regarding both applications centered on the amount of the discount and who should pay for it. The PUC issued orders permitting discounted rates to the manufacturers, but the PUCâs plan was not exactly what AEP had proposed. AEP appealed the PUCâs decision, arguing that the discounts do not allow the power company to recoup its losses from the plan discounts. The Supreme Court found that state law âaffirmatively gives the commissionânot the utilitiesâfinal say over arrangementsâ like the ones decided for Ormet and Eramet. The Court affirmed the PUCâs decisions regarding the manufacturing companiesâ arrangements.

Oyster Creek in Ocean County, New Jersey was licensed under the Atomic Energy Act, 42 U.S.C. 2133(c) in 1969 for a 40-year term and is the oldest operating commercial nuclear power plant in the country. Objectors claimed that the application for license renewal was deficient with respect to detection of corrosion in a safety structure. The Atomic Safety and Licensing Board rejected the claims; the Nuclear Regulatory Commission granted the license. After examining the objectors' specific technical claims, the Third Circuit denied review. The Board and the NRC provided hundreds of pages detailing their decision-making and gave due consideration to objectors' concerns; the review was well-reasoned and within the realm of the agency's unique expertise.

The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.

The Alcoa Power Generating Company ("Alcoa") petitioned for review of two orders of the Federal Energy Regulatory Commission ("Commission") with respect to the relicensing of its Yadkin Project facilities in North Carolina. At issue was whether the petition for review was ripe in light of on-going state administrative review and stay of certification and whether the certifying agency waived its authority by not issuing a certification that was effective and complete within one year under section 401 of the Clean Water Act ("Act"), 33 U.S.C. 1341(a)(1). The court held that the petition was ripe for review where the waiver issue was fit for review and the legally cognizable hardship that Alcoa would suffer from delay sufficed to outweigh the slight judicial interest in the unlikely possibility that the court may never need to decide the waiver issue. The court also held that there was no waiver issue where the "effective" clause would not operate to delay or block the federal licensing proceeding beyond section 401's one-year period.

The Pacific Regional Director of the Interior Department's Minerals Management Service ("Director") caused four oil and gas leases off the coast of California, for which appellants had originally paid the United States over $140 million, to expire. The Director later testified that he based his decision solely on political considerations and that absent such considerations, he would have extended the leases instead. At issue was whether the Interior Board of Land Appeals ("IBLA") should have adopted the decision the Director said he would have made absent political influence in order to cure the Director's original decision of political taint. The court affirmed the district court's decision and held that the IBLA fulfilled its role and appellants received all they were entitled to, i.e., an agency decision on the merits without regard to extrastatutory, political factors.

The U.S. Department of Energy entered into standard contracts to accept spent nuclear fuel from utility companies by January 1998 and has not yet accepted delivery, resulting in suits by several nuclear utilities. The district court awarded Dominion damages. The Federal Circuit affirmed, first holding that the Nuclear Waste Policy Act, 42 U.S.C. 10222, permitted assignment by Dominion's predecessor, that the assignment complied with the Act and the contract, and that the assignment included the right to pre-assignment damages. The district court properly denied discovery on the government's claim that Dominion has benefited from its breach because it has not yet been required to pay a one-time fee for disposal of waste generated prior to 1983.

In 2008, the Ohio General Assembly enacted Senate Bill 221, which substantially revised the regulation of electric service in Ohio. The cost of electric power generation increased significantly. Faced with a lack of competition, rising electricity prices and unfavorable market-based rates, the commission and utilities responded with various rate plans not expressly contemplated by statute. The state legislature revised its bill to address areas of concern with electric markets, in particular, it established new standards to govern generation rates. This appeal stems from a proceeding in which the Ohio Public Utilities Commission authorized new generation rates for the American Electric Power operating companies (AEP) Columbus Southern Power Company and Ohio Power Company. AEP applied for an "electric security plan" instead of a market-rate offer. Appellants, the Office of the Ohio Consumers' Counsel (OCC) and Industrial Energy Users-Ohio (IEU) raised 13 propositions of law in its suit all relating to purchase of electricity. The Supreme Court found that the commission committed reversible error on three of the thirteen grounds, and affirmed the commission's ruling on all other issues. The case was then remanded to the commission for resolution of three issues: (1) the commission unlawfully granted a retroactive rate increase, but the OCC is not entitled to a refund; (2) in approving a provider-of-last-resort (POLR), the commission relied on a justification lacking any record support; and (3) the commission erred in determining that electric security plans (ESPs) may include items not specifically authorized by statute.