Justia Energy, Oil & Gas Law Opinion Summaries

The Federal Energy Regulatory Commission (“FERC” or “Commission”) required Midcontinent Independent System Operator, Inc.’s (“MISO”) to institute reforms to its interregional planning process and directed MISO to propose a cost allocation method for its share of certain interregional project costs. Since that time, MISO has twice submitted proposals for such cost allocation. Both times, FERC rejected the proposals, finding that they were not just and reasonable as required by the Federal Power Act (the “Act”), because they were inconsistent with the cost causation principle. After the second rejection, FERC, on its own initiative, established a cost allocation method for certain MISO-PJM projects.   Petitioners challenged FERC’s rejection of MISO’s second proposal and FERC’s corresponding implementation of a cost allocation method. The DC Circuit denied the petitions and affirmed FERC’s orders in all respects. The court explained that according to MISO’s own representations to FERC in its filings, the Second Interregional Filing was “designed to work seamlessly with the revisions proposed in the [Second Regional Filing]” and relied on definitions and provisions in the Second Regional Filing As such, it was appropriate and well within FERC’s discretion to reject MISO’s Second Interregional Filing based on its rejection of the Second Regional Filing, as it would obviously suffer from the same critical flaw.   Further, as FERC noted, it made clear that its Third Regional Order was only addressing regional projects, not interregional ones. Thus, because MISO’s SPP Metric would identify regional benefits, disregarding such known benefits in cost allocation is inconsistent with the cost causation principle. Accordingly, FERC reasonably rejected MISO’s Second Interregional Filing. View "Entergy Arkansas, LLC v. FERC" on Justia Law

The Federal Energy Regulatory Commission (“FERC”) granted NEXUS Gas Transmission, LLC (“Nexus”) a certificate of public convenience and necessity to construct and operate a natural gas pipeline from Ohio to Michigan. After FERC granted Nexus the certificate, the City of Oberlin (“City”) petitioned for review claiming, among other things, that FERC did not adequately justify its reliance on agreements to transport gas ultimately bound for export to Canada as evidence of need for the pipeline.   The DC Circuit denied the petition, explaining that the FERC’s explanation on remand from was reasonable and because its decision comported with the Natural Gas Act and the Takings Clause. The court wrote FERC’s justification for considering the agreements to transport gas bound for export is well reasoned and comports with both the Natural Gas Act and the Takings Clause. FERC’s alternative explanation that it would have granted Nexus a certificate even without considering the export agreements also passes muster. View "City of Oberlin, Ohio v. FERC" on Justia Law

The Supreme Court reversed the order of the Florida Public Service Commission denying Duke Energy Florida, LLC's (DEF) request to recover approximately $16 from its customers for costs DEF incurred to meet its customers' demand for electricity, holding that the cost recovery should have been allowed.The costs at issue were incurred when a 420-megawatt (MW) steam-powered generating unit went offline at DEF's Bartow plant and was placed back in service at a derated capacity of 380 MW. After a hearing, an administrative law judge entered a recommended order denying cost recovery. The commission adopted the ALJ's recommendation in the final order on appeal. The Supreme Court reversed, holding that the factual findings forming the basis for the ALJ's ultimate causation determination were not supported by competent, substantial evidence. View "Duke Energy Florida, LLC v. Clark" on Justia Law

The Supreme Court affirmed the order of the North Carolina Utilities Commission addressing Dominion Energy North Carolina's application for a general increase in its North Carolina retail rates, holding that Dominion's challenges to the Commission's order were unavailing.In the order at issue, the Commission authorized Dominion to calculate its North Carolina retail rates by, inter alia, amortizing certain costs. Dominion appealed, arguing that the Commission acted capriciously and arbitrarily in failing to follow applicable precedent. The Supreme Court affirmed, holding that the Commission's order was supported by competent, substantial evidence and that the Commission adequately explained the basis for the portions of its decision that Dominion challenged on appeal. View "State ex rel. Utilities Commission v. Virginia Electric & Power Co." on Justia Law

The Supreme Court affirmed the order of the Energy Facility Siting Board (the board or EFSB) concerning the relocation of power lines across the Providence and Seekonk Rivers, holding that Petitioners had standing and that review of the Board's decisions was timely.Petitioners in this case were the City of Providence, Friends of India Point Park, The Hilton Garden Inn, and The R.I. Seafood Festival. Petitioners sought review of a January 17, 2018 order in which the Board stated that the "bridge alignment north" and the "underground alignment" were not feasible but approved the "bridge alignment south." Respondents - EFSB, the City of East Providence, and National Grid - sought review of the order. The Supreme Court affirmed, holding (1) all Petitioners except for Hilton lacked standing in this matter; and (2) while the Board's order was deficient, the next preferred alignment was the bridge alignment south, and therefore, the order of the Board is upheld. View "In re Narragansett Electric Co." on Justia Law

The Supreme Court answered certified questions seeking to clarify whether, in payment of royalties under an oil and gas lease, the lessor may be required to bear a portion of the post-production costs incurred in rendering the oil and gas marketable.Specifically, the district court asked whether Estate of Tawyne v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (W. Va. 2006) is still good law in West Virginia and then asked the Supreme Court to expound upon its holding in Tawney. The Supreme Court answered (1) Tawney is still good law; and (2) this Court defines to answer the reformulated question of what level of specificity Tawney requires of an oil and gas lease to permit the deduction of post-production costs from a lessor's royalty payments. View "SWN Production Co., LLC v. Kellam" on Justia Law

Crown Energy Company ("Crown") brought suit against Mid-Continent Casualty Company ("Mid-Continent") seeking declaratory judgment that two commercial general liability policies issued to Crown provided coverage for claims of property damage brought against Crown in a separate action. The claims arose out of seismic activity allegedly caused by Crown's use of waste water disposal wells in its oil and gas operations. Mid-Continent filed a counterclaim, seeking declaratory judgment that the claims were not covered under the policies because the seismic activity did not constitute an "occurrence" and that the claims fell within a pollution exclusion to the policies. The trial court granted summary judgment in favor of Crown. Mid-Continent appealed, and the Court of Civil Appeals affirmed the trial court's judgment. After its review, the Oklahoma Supreme Court found that the seismic activity did constitute an occurrence under the policies, and that the pollution exclusion did not bar coverage. The Court of Civil Appeals’ judgment was reversed and the trial court affirmed. View "Crown Energy Co. v. Mid-Continent Casualty Co." on Justia Law

William Danks appealed a district court judgment affirming the Public Utilities Commission’s (“PUC’s” or “Commission’s”) decision that a gas-gathering system operated by DCP Operating Company, L.P. (“DCP”) did not meet the statutory definition of a public utility and therefore was not subject to the PUC’s jurisdiction. After review, the Colorado Supreme Court concluded the PUC regularly pursued its authority in reaching this decision, that the decision was just and reasonable, and that the PUC’s conclusions were in accordance with the evidence. View "Danks v. Colorado Public Utilities Commission" on Justia Law

The City of Salisbury, North Carolina relies on the Yankin River for its drinking water. The City constructed a pump station on the Yankin River, which the City believed was threatened by a plan proposed by the operator of a nearby hydroelectric damn and approved by FERC. The City challenged the plan and FERC's approval.The D.C. Circuit dismissed the City's petition, finding that the proposed rule was within the license granted to the dam operator and was not arbitrary. The operator of the dam was required to implement a flood protection plan, including 1.) physical modifications to the facilities such as a protective dike for the pump station, 2.) improved access to the pump station with the road consistent with the City of Salisbury’s design or 3.) other feasible options for achieving the same benefits. The proposed plan meets the requirement of the flood protection plan. Additionally, the court determined that FERC's approval of the plan was not arbitrary. View "City of Salisbury, North Carolina v. FERC" on Justia Law

The Court of Appeals affirmed the decisions of the lower courts affirming a general permit that the Maryland Department of the Environment issued for operators of thirty-five small municipal separate storm sewer systems (MS4s) in Maryland, including Petitioner Queen Anne's County, which operated a small MS4, holding that conditions based on regulations of the Environmental Protection Agency (EPA) in the general permit for small MS4s are not unlawful simply because they may exceed the minimum requirements of the Clean Water Act.In Maryland Department of the Environment v. County Commissioners of Carroll County, 140 S. Ct. 1265 (2020), the Court of Appeals held that permits issued to counties that operated MS4s were lawful even if some permit conditions exceeded the minimum requirements of the Act. In the instant case, the circuit court for Queen Anne's County concluded that the decision in Carroll County addressed the issues raised by the County and affirmed the permit. The court of special appeals affirmed. The Court of Appeals affirmed, holding (1) the holdings of Carroll County applied in this case; and (2) an impervious surface restoration requirement in the permit, which was similar to but less onerous than a permit requirement assessed in Carroll County, did not unlawfully make the County responsible for discharges by third parties. View "Small MS4 Coalition v. Department of Environment" on Justia Law