Justia Energy, Oil & Gas Law Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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The Bonneville Power Administration (BPA) is a federal agency tasked with selling the power generated at various hydroelectric facilities in the Pacific Northwest. In the decision on review, BPA set its rates for the 2022–2023 fiscal period. Environmental groups now petition for a review of that decision, arguing that BPA failed to comply with a pair of statutory duties in the Northwest Power Act relating to fish and wildlife.   The Ninth Circuit denied the petition. The panel held that petitioners had Article III standing. First, petitioners have alleged injury, in fact where they are interested in the fish populations in the Columbia River Basin, and ongoing harm to these fish populations inflicts an injury on petitioners’ members. Second, any harm to the fish populations is traceable to BPA’s BP-22 ratemaking. Third, Petitioners have adequately alleged redressability where it is a reasonable inference from the historical record that Petitioners’ injuries would be at least partially redressed by a favorable decision on the merits. Turning to the merits, the panel held that the text and structure of the NWPA as a whole convincingly provide that NWEPA Section 4(h)(11)(A) does not apply to rate making where that provision does not mention ratemaking, and other features of the statutory scheme buttress this conclusion. View "IDAHO CONSERVATION LEAGUE, ET AL V. BPA" on Justia Law

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This case involves rules adopted by the Federal Energy Regulatory Commission to implement the Public Utility Regulatory Policies Act of 1978 (PURPA). Congress enacted PURPA to encourage the development of a new class of independent, non-utility-owned energy producers known as “Qualifying Facilities,” or “QFs.” PURPA tasks FERC with promulgating rules to implement the statute. In 2020, FERC revised its rules to alter which facilities qualify for PURPA’s benefits and how those facilities are compensated. The new rules make it more difficult to qualify for treatment as a QF, and they also make QF status less advantageous.The Ninth Circuit granted in part and denied in part a petition for review brought by the Solar Energy Industries Association and several environmental organizations challenging Orders 872 and 872-A (collectively, “Order 872”). The panel rejected Petitioners’ argument that Order 872 as a whole is inconsistent with PURPA’s directive that FERC “encourage” the development of QFs. Applying the two-step framework of Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837 (1984), the panel held that (1) PURPA on its face gives FERC broad discretion to evaluate which rules are necessary to encourage QFs and which are not, and (2) FERC’s interpretation was not unreasonable. Next, the panel rejected Petitioners’ challenges to four specific provisions of Order 872. First, the panel held that the modified Site Rule—which modified the rules for determining when facilities are deemed to be located at the same or separate sites—survives Chevron, is not arbitrary and capricious under the Administrative Procedure Act (APA), and is not unlawfully retroactive. View "SEIA V. FERC" on Justia Law

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The Ninth Circuit affirmed the district court’s order denying Vitol, Inc.’s motion to dismiss, as untimely under the applicable statute of limitations, a complaint filed by the Federal Energy Regulatory Commission (FERC) that sought an order affirming the assessment of a civil penalty against Vitol and one of its traders for making unlawful manipulative trades in the California energy market.   The court explained that in measuring the limitations period, the critical question is when FERC’s claim “accrues.” Vitol contended that FERC’s federal district court action was untimely because FERC’s claim accrued as soon as the allegedly unlawful trading occurred. The panel rejected Vitol’s contention and held that FERC’s claim accrued on the date that FERC assessed a civil penalty. The panel reasoned that FERC’s claim arises under 16 U.S.C. Section 823b(d)(3)(B), which gives the agency a cause of action in federal court for “affirming the assessment of the civil penalty,” and that claim does not accrue until FERC has assessed a penalty. The panel also agreed with the district court’s conclusion that FERC’s administrative process for assessing a civil penalty is itself a “proceeding” that is subject to the five-year statute of limitations in 28 U.S.C. Section 2462, and therefore FERC must initiate the proceeding by issuing a notice of proposed penalty within five years of any alleged wrongdoing. View "FERC V. VITOL INC., ET AL" on Justia Law

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The Energy Policy and Conservation Act (“EPCA”), expressly preempts State and local regulations concerning the energy use of many natural gas appliances, including those used in household and restaurant kitchens. Instead of directly banning those appliances in new buildings, the City of Berkeley took a more circuitous route to the same result. It enacted a building code that prohibits natural gas piping into those buildings, rendering the gas appliances useless. The California Restaurant Association (“CRA”), whose members include restaurateurs and chefs, challenged Berkeley’s regulation, raising an EPCA preemption claim. The district court dismissed the suit.   The Ninth Circuit reversed the district court’s dismissal. The panel held that the CRA demonstrated that (1) at least one of its members had suffered an injury in fact, that was (a) concrete and particularized and (b) actual or imminent rather than conjectural or hypothetical; (2) the injury was fairly traceable to the challenged action; and (3) it was likely, not merely speculative, that the injury would be redressed by a favorable decision. The panel held that, by its plain text and structure, the Act’s preemption provision encompasses building codes that regulate natural gas use by covered products. By preventing such appliances from using natural gas, the Berkeley building code did exactly that. The panel reversed and remanded for further proceedings. View "CRA V. CITY OF BERKELEY" on Justia Law

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Signal Peak Energy, LLC, an intervenor-appellee, sought to expand its mining operations. The expansion is expected to result in the emission of 190 million tons of greenhouse gases (GHGs). Interior published an Environmental Assessment (EA) in which it explained that the amount of GHGs emitted over the 11.5 years the Mine is expected to operate would amount to 0.44 percent of the total GHGs emitted globally each year. The U.S. Department of the Interior (“Interior”) found that the project’s GHG emissions would have no significant impact on the environment.   The district court granted summary judgment in favor of Interior on all but Plaintiffs’ claim that Interior failed to consider the risk of coal train derailments. The district court vacated the 2018 EA, but not Interior’s approval of the Mine Expansion, and remanded the matter to Interior to consider the risk of train derailment. Interior subsequently published a fourth EA that incorporated the 2018 EA and considered train derailment risks for the first time.   The Ninth Circuit filed (1) an order amending the opinion denying the petition for panel rehearing, and denied the petition for rehearing en banc; and (2) an amended opinion affirming in part and reversing in part the district court’s summary judgment in favor of the Interior on all but one claim. The panel held that Interior violated the National Environmental Policy Act by failing to provide a convincing statement of reasons why the project’s impacts were insignificant. The panel was not persuaded that Interior was required to use the Social Cost of Carbon metric to quantify the environmental harms stemming from the project’s GHG emissions. View "350 MONTANA, ET AL V. DEBRA HAALAND, ET AL" on Justia Law

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In three FERC orders, FERC found that the State Board had engaged in coordinated schemes with the Nevada Irrigation District, the Yuba County Water Agency, and the Merced Irrigation District (“Project Applicants”) to delay certification and to avoid making a decision on their certification requests. According to FERC, the State Board had coordinated with the Project Applicants to ensure that they withdrew and resubmitted their certification requests before the State’s deadline for action under Section 401 in order to reset the State’s one-year period to review the certification requests. FERC held that, because of that coordination, the State Board had “fail[ed] or refuse[d] to act” on requests and therefore had waived its certification authority under Section 401 of the Clean Water Act. See 33 U.S.C. Section 1341(a)(1).The Ninth Circuit granted petitions for review, and vacated orders issued by FERC. The court held that FERC’s findings of coordination were unsupported by substantial evidence. Instead, the evidence showed only that the State Board acquiesced in the Project Applicants’ own unilateral decisions to withdraw and resubmit their applications rather than have them denied. The court held that even assuming that FERC’s “coordination” standard was consistent with the statute, the State Board’s mere acquiescence in the Project Applicants’ withdrawals and resubmissions could not demonstrate that the State Board was engaged in a coordinated scheme to delay certification. Accordingly, FERC’s orders could not stand. The court remanded for further proceedings. View "CALIFORNIA STATE WATER RESOURC V. FERC" on Justia Law

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The Federal Energy Regulatory Commission (FERC) awarded “incentive adders,” upward adjustments to utilities’ rate of return on equity, to three California-based public utilities. FERC regulations allow for incentive adders to induce voluntary membership in independent system operators. The Ninth Circuit previously concluded that FERC improperly awarded incentive adders to PG&E without considering the California Public Utilities Commission’s (CPUC) assertion that PG&E’s membership in the California independent system operator (CAISO) is mandated. The court directed FERC to “inquire into PG&E’s specific circumstances, i.e., whether it could unilaterally leave the C[AISO].” On remand, FERC concluded that membership in CAISO is voluntary.The Ninth Circuit upheld the decision, holding that its previous decision did not resolve whether California law prevented the utilities from leaving CAISO without approval. FERC did not deviate from the mandate on remand. There was no error in FERC’s conclusion that membership in CAISO was voluntary despite a contrary suggestion in a CPUC 1998 Decision. FERC was not required to apply the Erie doctrine and defer to California’s interpretation. The incentive adder and its requirements arose from federal law. The California Supreme Court has not decided whether membership in CAISO is voluntary; no California Code provision mandates CAISO membership, and no case law discusses whether CAISO members must remain such. California courts would not defer to the CPUC’s 1998 Decision because it was inconsistent with the statute. View "California Public Utilities Commission v. Federal Energy Regulatory Commission" on Justia Law

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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

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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

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The Ninth Circuit concluded that the Commission did not act arbitrarily or capriciously, or abused its discretion, in denying the Association's motion to intervene in post-licensing deadline extension proceedings pertaining to the Eagle Mountain Pumped Storage Hydroelectric Project in California. The panel concluded that the Commission's interpretation of its Rule 214 deserves deference, and thus it may properly limit intervention in post-licensing proceedings. The panel further concluded that the Commission did not abuse its discretion in denying the Association's motion to intervene, where the only change sought by the licensee was an extension of time to commence construction.The panel also concluded that the Commission did not violate the Federal Power Act (FPA) in failing to provide public notice. In this case, based on longstanding interpretative precedent, the Commission determined that Eagle Crest's request was not a significant alteration of the License because the requested extensions were not inconsistent with the Project's plan of development or terms of the License. The panel concluded that the Commission's interpretation of Section 6 of the FPA is sufficiently persuasive as applied to deadline extension requests. Accordingly, the panel denied the petition for review. View "National Parks Conservation Ass'n v. Federal Energy Regulatory Commission" on Justia Law