Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court reversed the decision of the Nebraska Power Review Board (Board) transferring two newly annexed territories from the Elkhorn Rural Public Power District (ERPPD) to the City of Neligh’s electrical service area and assessing the economic impact at $490,445.90. At issue on appeal was what compensation was owed to ERPPD for reintegration costs under Neb. Rev. Stat. 70-1010(2)(b). The Court held that the Board’s actions were arbitrary, capricious, and unreasonable because the Board erred in failing to award compensation for reintegration costs under section 70-1010(2)(b) to ERPPD for the lost substation unit. View "In re Application of City of Neligh" on Justia Law

The Supreme Court reversed the decision of the Nebraska Power Review Board (Board) transferring two newly annexed territories from the Elkhorn Rural Public Power District (ERPPD) to the City of Neligh’s electrical service area and assessing the economic impact at $490,445.90. At issue on appeal was what compensation was owed to ERPPD for reintegration costs under Neb. Rev. Stat. 70-1010(2)(b). The Court held that the Board’s actions were arbitrary, capricious, and unreasonable because the Board erred in failing to award compensation for reintegration costs under section 70-1010(2)(b) to ERPPD for the lost substation unit. View "In re Application of City of Neligh" on Justia Law

NorthWestern challenged FERC's determination that its proposed rate was not just and reasonable. The DC Circuit held that FERC's decision in this case was reasonable and reasonably explained where FERC reasonably modified NorthWestern's proposed cost-calculation ratio by excluding the megawatts associated with "regulation down" from the numerator; FERC did not arbitrarily increase the denominator of NorthWestern's proposed cost-calculation ratio; FERC's decision on fuel costs was reasonable and reasonably explained; and FERC acted reasonably by requiring NorthWestern to make separate Section 205 filings. The court also held that FERC properly decided to treat this case like an ordinary over-collection case and ordered a refund. Therefore, the court denied the petition for review. View "NorthWestern Corp. v. FERC" on Justia Law

FERC issued a series of orders empowering incoming generators within the Midcontinent Independent System Operator (MISO) region to elect to self-fund this new construction, or to seek financing from third parties, regardless of whether the current grid owners wish to fund the construction themselves. The DC Circuit vacated the orders, holding that there was neither evidence nor economic logic supporting FERC's discriminatory theory as applied to transmission owners without affiliated generation assets. The court also held that FERC did not adequately respond to petitioners' argument that involuntary generator funding compelled them to construct, own, and operate facilities without compensatory network upgrade charges – thus forcing them to accept additional risk without corresponding return as essentially non-profit managers of these upgrade facilities. Accordingly, the court remanded for further proceedings. View "Ameren Services Co. v. FERC" on Justia Law

The DC Circuit denied petitions for review challenging FERC's orders approving PJM's tariff that determined the rates paid to energy providers for providing electric capacity in the broad mid-Atlantic region. Petitioners argued that FERC lacked substantial evidence to approve the estimates of labor costs that formed part of the calculation of the cost of new entry; FERC should have accepted the labor-cost calculations of petitioners' expert; and FERC erred in approving another input to the estimated cost of new entry. The court held that petitioners' objections failed to undermine the substantial evidence supporting FERC's figure for the cost of new entry and failed to overcome the court's deferential standard of review. View "PJM Power Providers Group v. FERC" on Justia Law

Petitioners challenged two sets of orders issued by the Commission regarding a scarcity pricing mechanism in the New England power market. The DC Circuit held that the exhaustion requirements of the Federal Power Act (FPA), 16 U.S.C. 824d, deprived it of jurisdiction over the petition to review the Tariff Order. Therefore, the court dismissed the petition in Case No. 16-1023. The court held, on the merits, that the Commission was not arbitrary or capricious in denying petitioners' complaint and thus denied the petition in Case No. 16-1024 seeking review of the Complaint Order. View "New England Power Generators Association v. FERC" on Justia Law

The Ninth Circuit granted CPUC's petition for review of FERC's determination that PG&E was eligible for an incentive adder for remaining a member of the California Independent System Operator Corporation (Cal-ISO) when state law prevented PG&E's departure without authorization. The panel held that FERC's determination that PG&E was entitled to incentive adders for remaining in the Cal-ISO was arbitrary and capricious, because FERC did not reasonably interpret Order 679 as justifying summary grants of adders for remaining in a transmission organization. The panel explained that, because FERC's interpretation was unreasonable, FERC's grants of adders to PG&E were an unexplained departure from longstanding policy. Furthermore, FERC created a generic adder in violation of the order. View "CPUC V. FERC" on Justia Law

AOPL petitioned for review of FERC's issuance of an order adopting the index formula to govern oil pipeline rates for the 2016 to 2021 period. The DC Circuit denied the petition for review, holding that there was no merit to AOPL's claim that FERC impermissibly relied solely on the middle 50 percent of pipeline cost-change data and failed to incorporate the middle 80 percent of cost-change data, and that FERC impermissibly used "Page 700" cost-of-service data to calculate the index level. The court held that the record makes it plain that the Commission adequately and reasonably explained its decision not to consider the middle 80 percent of pipelines' cost-change data; nothing in any of FERC's past index review orders bound the agency to use the middle 80 percent of pipelines' cost-change data; the Commission's rationale for utilizing the cost-of-service data from Page 700 was clear and reasonable; and there was nothing in the record to support AOPL's claim that FERC's decision to use Page 700 data indicates an unexplained shift in its measurement objective. View "Association of Oil Pipe Lines v. FERC" on Justia Law

SPP, a regional transmission organization (RTO), filed with FERC revisions to its tariff that reflected an agreement with Integrated System entities to integrate their facilities. Pursuant to the requirements of section 205 of the Federal Power Act, 16 U.S.C. 824d, SPP filed with FERC revisions to its tariff that reflected the parties' agreement. FERC approved the revisions over the objections of Kansas. The DC Circuit denied Kansas' petition for review, holding that FERC accurately described the agreement as reciprocal; Kansas misread various precedents and the court rejected its contention that the arrangement violated critical norms of ratemaking; the court saw no basis for a claim of undue discrimination; and the court rejected Kansas' arguments regarding SPP's reliance on a study commissioned by the IS Parties. Finally, FERC did not abuse its discretion by deciding not to hold an evidentiary hearing on the disputed features of the record underlying its approval of the merger. View "State Corp. Commission of KS v. FERC" on Justia Law

The Illinois Commerce Commission granted a certificate of public convenience and necessity to Rock Island for construction of a high voltage electric transmission line between O’Brien County, Iowa, and a converter station adjacent to Commonwealth Edison Company’s Grundy County, Illinois substation. Rock Island is a wholly owned subsidiary of Wind Line, which is a wholly owned subsidiary of Clean Line, which is owned in part by Grid America, a subsidiary of National Grid, which owns and operates more than 8600 miles of high-voltage transmission facilities. Rock Island has never constructed a high voltage transmission line and does not yet own, control, operate, or manage any plants, equipment, or property used or to be used in the transmission of electricity or for any other purpose related to utilities; it has an option to purchase real property in Grundy County. The appellate court reversed, holding that the Commission had no authority under the Public Utilities Act, 220 ILCS 5/1-101, to consider Rock Island’s application because the company did not qualify as a public utility under Illinois law. The Illinois Supreme Court affirmed. Whatever Rock Island’s motives for seeking a certificate of public necessity and convenience, it does not qualify as a public utility; eligibility for a certificate of public convenience and necessity unambiguously requires present ownership, management, or control of defined utility property or equipment. View "Illinois Landowners Alliance, NFP v. Illinois Commerce Commission" on Justia Law