Justia Energy, Oil & Gas Law Opinion Summaries

The 1987 Public Utilities Act, 220 ILCS 5/8-403.1, was intended to encourage development of power plants that convert solid waste to electricity. Local electric utilities were required to enter into 10-year agreements to purchase power from such plants designated as “qualified” by the Illinois Commerce Commission, at a rate exceeding that established by federal law. The state compensated electric utilities with a tax credit. A qualified facility was obliged to reimburse the state for tax credits its customers had claimed after it had repaid all of its capital costs for development and implementation. Many qualified facilities failed before they repaid their capital costs, so that Illinois never got its tax credit money back. The Act was amended in 2006, to establish a moratorium on new Qualified Facilities, provide additional grounds for disqualifying facilities from the subsidy, and expand the conditions that trigger a facility’s liability to repay electric utilities’ tax credits. The district court held that the amendment cannot be applied retroactively. The Seventh Circuit affirmed. The amendment does not clearly indicate that the new repayment conditions apply to monies received prior to the amendment and must be construed prospectively. View "Illinois v. Chiplease, Inc." on Justia Law

Control of most of the U.S. electrical grid is divided among Regional Transmission Organizations, voluntary associations of utilities that own interconnected transmission lines. Power plants and other electrical companies involved with the regional grid can also be RTO members. An RTO sought approval from the Federal Energy Regulatory Commission (FERC) to impose a tariff on its members to pay for construction of new high-voltage power lines that will primarily transmit electricity generated by remote wind farms. Every state in the region, except Kentucky, encourages or mandates that utilities obtain a percentage of their electricity supply from renewable sources. The cost of the project is to be shared by utilities drawing power from the grid according to each utility’s share of the region’s total wholesale consumption of electricity. The RTO previously allocated the cost of expanding or upgrading the grid to utilities nearest a proposed transmission line, on the theory that they would get the most benefit. FERC approved the rate design and pilot projects. The RTO negotiated a rate with another RTO to share the costs of some upgrades with mutual benefits. Members of the RTO challenged the approval and the agreement and some announced their departure from the RTO. The Seventh Circuit affirmed the orders, but dismissed as premature the claims of departing members concerning their liability and remanded with respect to export pricing in connection with the agreement. View "Am. Mun. Power, Inc. v. Fed. Energy Regulatory Comm'n" on Justia Law

The Clean Air Act New Source Review program forbids construction of new pollution sources without a permit, 42 U.S.C. 7475. Operators of major pollutant-emitting sources who plan construction must make a preconstruction projection of the increase in emissions following construction, to determine whether the project constitutes a “major modification,” requiring a permit. DTE planned on replacing 2,000 square feet of tubing, the economizer, and large sections of reheater piping; installing a new nine-ton device that provides voltage that creates the electromagnetic field needed for the rotor to produce electricity; and refurbishing boiler feedwater pumps at its power plant. The project required 83 days and $65 million. DTE performed required calculations and projected an emissions increase of 3,701 tons per year of sulfur dioxide and 4,096 tons per year of nitrogen oxides. Under the regulations, an increase of 40 tons per year of either substance is significant. DTE determined that the increase fell under the demand growth exclusion. The Michigan Department of Environmental Quality took no action and construction began. The U.S. EPA filed notice of violation. The district court granted DTE summary judgment. The Sixth Circuit reversed. While the regulations allow operators to undertake projects without having EPA second-guess their projections, EPA is not categorically prevented from challenging blatant violations until after modifications are made. View "United States v. DTE Energy Co." on Justia Law

Wabash is a power generation cooperative. Northeastern purchases electricity from Wabash and resells it. In 1977, they entered into a contract: Northeastern agreed to purchase electricity from Wabash for 40 years at rates to be set by the Wabash board of directors “[s]ubject to the approval of the Public Service Commission of Indiana.” Revised rates would not be effective unless approved by the “applicable regulatory authorities,” and the federal Rural Electrification Administration. In 2012 Northeastern sought a state court declaratory judgment that Wabash breached the contract by taking action in 2004 that had the effect of transferring regulation of its rates from the Indiana Commission to the Federal Energy Regulatory Commission. Wabash removed the case under 28 U.S.C. § 1441(a), arguing that the claim arises under the Federal Power Act, 16 U.S.C. 791a. The district court denied remand and granted a preliminary injunction. The Seventh Circuit vacated, holding that federal courts lack subject matter jurisdiction. Northeastern’s claim is limited to construction of the contract and does not necessarily raise a question of federal law. While Northeastern may eventually use a favorable state court judgment to seek permission to terminate its obligations under the tariff filed with FERC,that cannot be achieved in this suit View "NE Rural Elec. Membership Corp. v. Wabash Valley Power Assoc." on Justia Law

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

These consolidated petitions for review challenged a contract between the BPA and one of its long-time customers, Alcoa. BPA's preference customers and others filed this petition for review, requesting that the court hold that the contract was unlawful because it was inconsistent with the agency's statutory mandate to act in accordance with sound business principles. Petitioners claimed, among other things, that instead of entering into a contract to sell power to Alcoa at the statutorily required Industrial Firm power (IP) rate, BPA should sell to other buyers at the market rate. The court denied the petitions for review insofar as they pertained to the Initial Period. Because the potential for BPA and Alcoa to enter into the Second Period of the contract was no longer before the court, the court dismissed those portions of the petitions. Finally, the court held that because BPA relied on a categorical exclusion to the National Environmental Policy Act's (NEPA), 42 U.S.C. 4321-4347, requirements, declining to complete an Environmental Impact Statement was not arbitrary and capricious. Accordingly, the court denied petitioner's NEPA claim. View "Alcoa Inc. v. BPA, et al" on Justia Law

Robert Madrid worked for Petitioner Public Service Company of New Mexico (PNM) as a bill collector. "Angered by a particularly obstinate customer," and without permission, Madrid drove to the customer's home and disconnected the customer's gas service. It would later be determined that the customer was not a customer of PNM. PNM fired Madrid. Madrid responded by filing a grievance against PNM with his union, arguing that Madrid's termination violated its collective bargaining agreement with the Company. In making its argument, the union hypothesized that PNM treated Madrid more harshly than other employees guilty of similar conduct. The union sent PNM three discovery requests for documents to prove its hypothesis. Those requests became the subject of the appeal before the Tenth Circuit, as PNM refused to comply. An ALJ determined that PNM had engaged in an unfair labor practice, and ordered the Company to comply with the discovery requests. The National Labor Relations board adopted the ALJ's decision. PNM appealed the Board's order, and the Board cross-petitioned to have its order enforced. Upon review, the Tenth Circuit was unpersuaded by PNM's arguments on appeal, and affirmed the Board's decision. View "Public Service CO of NM v. NLRB" on Justia Law

The United States petitioned the district court for an order enforcing a Drug Enforcement Administration (DEA) subpoena served on Golden Valley Electric Association (Golden Valley) for power consumption records concerning three customer residences. The court granted the petition and ordered compliance. Golden Valley complied with the subpoena but appealed the order. The Ninth Circuit Court of Appeals affirmed, holding (1) Golden Valley's compliance with the district court's enforcement order did not moot the appeal; (2) the DEA's subpoena sought information relevant to a drug investigation, was procedurally proper, and was not overly broad; and (3) the subpoena complied with the Fourth Amendment. View "United States v. Golden Valley Elec. Ass'n" on Justia Law

Ed Friedman and others (collectively, Friedman) appealed the Maine Public Utilities Commission's dismissal of their complaint against Central Maine Power Company (CMP) regarding CMP's use of smart-meter technology. Friedman also appealed the Commission's dismissal of those portions of the complaint that were directed at the Commission and raised constitutional concerns regarding orders previously issued by the Commission. Friedman asserted, among other issues, that the Commission erred because its dismissal of his complaint ignored the Commission's statutory mandate to ensure the delivery of safe and reasonable utility services. The Commission and CMP contended that the complaint was properly dismissed in all respects. Because the Supreme Court agreed with Friedman that the Commission should not have dismissed the portion of the complaint against CMP addressing health and safety issues, the Court vacated that portion of the judgment and otherwise affirmed. View "Friedman v. Public Utilities Comm'n" on Justia Law