Justia Energy, Oil & Gas Law Opinion Summaries

The Federal Power Act, 16 U.S.C. 824d(c), requires regulated utilities to file with the Commission, as a matter of open and accessible public record, any rates and charges they intend to impose for sales of electrical energy that are subject to the Commission's jurisdiction. Consequently, utilities are forbidden to charge any rate other than the one on file with the Commission, a prohibition known as the "filed rate doctrine." At issue on appeal was, when a utility filed more than one rate with the Commission during the time it was negotiating an agreement with a prospective customer, which of the two filed rates governs: the rate at the time negotiations commenced or the rate at the time the agreement was completed? The Commission is of the view that it can pick and choose which rate applies on a case-by-case basis. Because the Commission has provided no reasoned explanation for how its decision comports with statutory direction, prior agency practice, or the purposes of the filed rate doctrine, the court vacated the Commission's orders in part and remanded. View "West Deptford Energy, LLC v. FERC" 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

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

CenterPoint Energy Resources Corporation, a gas utility that distributes natural gas, sought to raise its rates. CenterPoint’s proposed rate schedule included a “cost of service adjustment” (COSA) clause. The Railroad Commission of Texas approved a rate increase, including a revised COSA clause that provided for automatic annual adjustments based on increases or decreases in CenterPoint’s cost of service. On judicial review, the district court held that the Commission lacked the statutory authority to adopt the COSA clause as part of CenterPoint’s rate schedule. The court of appeals reversed. The Supreme Court affirmed, holding that the Commission had the authority to enter the final order in this case, including the COSA clause. Remanded.View "Tex. Coast Utils. Coal. v. R.R. Comm’n of Tex." on Justia Law

Eagle Point Solar proposed to enter into a long term financing agreement with the City of Dubuque that would provide the City with renewable energy. Under the agreement, Eagle Point would construct a solar energy system, and the City would purchase all of the electricity generated by the system. However, if Eagle Point was a “public utility” under Iowa Code 476.1 or an “electric utility” under Iowa Code 476.22 it would be prohibited from serving customers, such as the City, who were located within the exclusive service territory of Interstate Power and Light Company, another electric utility. The Iowa Public Utilities Board (IUB) concluded that Eagle Point would be a public utility under the proposed business arrangement. The district court reversed, concluding that Eagle Point’s proposed arrangement with the City did not make it an electric utility for purposes of the statutes. The Supreme Court affirmed, holding that Eagle Point was not a public utility under section 476.1 or section 476.22. View "SZ Enters., LLC v. Iowa Utils. Bd." on Justia Law

A Regional Transmission Organization is a voluntary association primarily of utilities that either own electrical transmission lines that comprise a regional electrical grid or generate electricity that is transmitted to the customers in the region. Members of a Regional Transmission Organization and the Illinois Commerce Commission, on behalf of the largest electrical utility in Illinois, (collectively PJM) obtained a remand of an order of the Federal Energy Regulatory Commission in 2009. That order allocated costs for certain new high‐voltage network transmission lines that are part of a regional grid that includes the western utilities, but are all located in PJM’s eastern region and primarily benefit that region. Unhappy with the order issued on remand, PJM returned to court. The Seventh Circuit again remanded, acknowledging that the benefits of new facilities to the utilities may be unquantifiable because they depend on the likelihood and magnitude of outages and other contingencies. The order should not shift a grossly disproportionate share of costs to western utilities, given that the projects will confer only future, speculative, and limited benefits to those utilities.View "IL Commerce Comm'n v. Fed. Energy Regulatory Comm'n" on Justia Law

Power Survey Company sought a writ of certiorari before the Supreme Court contending that the Public Utilities Commission improperly interpreted and applied the Contact Voltage Statute when it approved the portion of the Narragansett Electric Company’s (NEC) contact voltage program providing for the issuance of a request for proposal for the purpose of choosing a vendor to provide the technology for the NEC’s contact voltage testing. The Supreme Court issued the writ. Respondents, the NEC and the Division of Public Utilities and Carriers, moved to quash the writ on the grounds that it was not timely filed. The Supreme Court granted Respondents’ motions, holding that, under the facts of this case, Power Survey’s petition was untimely. View "In re Proceedings to Establish a Contact Voltage Detection & Repair Program" on Justia Law

Prairie Land Electric Cooperative, Inc. (Prairie Land), which purchases wholesale electricity from various suppliers and distributes that electricity to retail customers, entered into temporally overlapping, long-term all-requirements contracts with two different wholesale electricity suppliers, Sunflower Electric Power Corporation (Sunflower) and Kansas Electric Power Cooperative, Inc. (KEPCo). After a dispute arose regarding which supplier had the right to serve a certain pumping station delivery point, Prairie Land filed a petition for declaratory judgment asking the district court to determine which supplier was entitled to serve the new delivery point. The district court ruled in favor of Sunflower, which entered into the first all-requirements contract with Prairie Land. The court of appeals reversed. The Supreme Court reversed the court of appeals’ decision and affirmed the district court’s judgment, holding that under the facts of this case, Prairie Land must meet its obligations under its contract with Sunflower, the first supplier, before it may comply with any obligations under its contract with KEPCo, the second supplier. View "Prairie Land Elec. Coop., Inc. v. Kan. Elec. Power Coop., Inc." on Justia Law

Appellants, the New Mexico Attorney General and New Mexico Industrial Energy Consumers, asked the Supreme Court to vacate and annul the final order in PRC Case No. 11-00308-UT (Case 308 Final Order) because it permitted Public Service Company of New Mexico (PNM) to earn returns on the operating expenses incurred from energy efficiency programs. Appellants argue that such returns are inconsistent with New Mexico law. Upon review, the Supreme Court held that Case 308 Final Order was consistent with the PRC’s ratemaking authority under the New Mexico Public Utility Act, the New Mexico Efficient Use of Energy Act, and with the Court's holding in "Attorney General v. New Mexico Public Regulation Commission" (258 P.3d 453). Furthermore, the Court held that Case 308 Final Order was supported by substantial evidence and was neither arbitrary nor capricious. Accordingly, the Court affirmed the Case 308 Final Order.View "NMAG v. NMPRC" on Justia Law