Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court dismissed the appeal brought by the Office of Ohio Consumers’ Counsel (OCC) and the Ohio Manufacturers’ Association Energy Group (OMAEG) challenging the Public Utility Commission’s decision to approve the third electric-security plan (ESP) of Ohio Power Company, holding that OCC and OMAEG failed to demonstrate prejudice or harm caused by the ESP order.On appeal, OCC and OMAEG argued that the Commission’s approval of the Power Purchase Agreement Ride as a component of the ESP was reversible error. The Supreme Court dismissed the appeal, holding (1) OCC failed to demonstrate that ratepayers suffered actual harm or prejudice from the ESP order; and (2) this Court declines to address the claims that ratepayers were at risk of imminent or future harm rising from the ESP order. View "In re Application of Ohio Power Co." on Justia Law

The Supreme Court reversed the court of appeals’ judgment that the statute of limitations barred a claim for breach of a recorded right of first refusal to purchase a mineral interest and reinstated the judgment of the trial court rendering judgment for the rightholders, holding that the discovery rule applied to defer accrual.The grantors of the right of first refusal to purchase the mineral interest in this case conveyed the mineral interest to a third party without notifying the rightholders. More than four years later, the holders sued the third party for breach, seeking specific performance. The trial court rendered judgment for the holders. The court of appeals reversed, holding (1) the rightholders’ cause of action accrued when the grantors conveyed the property without notice, and (2) the discovery rule did not apply to defer accrual. The Supreme Court reversed, holding that a grantor’s conveyance of property in breach of a right of first refusal, where the rightholder has no notice of the grantor’s intent to sell, is inherently undiscoverable and that the discovery rule applies to defer accrual of the holder’s cause of action until he knew or should have known of the injury. View "Carl M. Archer Trust No. Three v. Tregellas" on Justia Law

Sunoco blends ethanol with gasoline to create alcohol fuel mixtures. Sunoco filed consolidated tax returns, 2004-2009, claiming the Mixture Credit under 26 U.S.C. 6426 as a credit against its gasoline excise tax liability for the years 2005-2008. In 2013, Sunoco changed its tax position by submitting both informal and formal claims with the IRS to recover over $300 million based on excise-tax expenses for the years 2005-2008, claiming that it erroneously reduced its gasoline excise tax by the amount of Mixture Credit it received, which had the effect of including the Mixture Credit in its gross income. In its view, Sunoco was entitled to deduct the full amount of the gasoline excise tax under section 4081— without regard to the Mixture Credit—and keep the Mixture Credit as tax-free income. In 2015, the IRS issued a statutory notice of disallowance denying Sunoco’s claims. Sunoco filed a refund suit. The Federal Circuit affirmed the Claims Court in upholding the disallowance. The alcohol fuel mixture credit must first be applied to reduce a taxpayer’s gasoline excise-tax liability, with any remaining credit amount treated as a tax-free payment. View "Sunoco, Inc. v. United States" on Justia Law

The Natural Gas Act (NGA), 15 U.S.C. 717f(h) gives natural gas companies that hold certificates of public convenience and necessity from the Federal Energy Regulatory Commission (FERC) the power of eminent domain but does not provide for “quick take” to permit immediate possession. Transcontinental is building a natural gas pipeline through Pennsylvania, Maryland, Virginia, North Carolina, and South Carolina and needed rights of way. Transcontinental met the requirements of section 717f(h). The administrative review leading up to the certificate of public convenience and necessity lasted almost three years and included extensive outreach and public participation and an Environmental Impact Statement. Transcontinental extended written offers of compensation exceeding $3000 to each Landowner, but these offers were not accepted. The Landowners had all participated in the FERC administrative process. Transcontinental, planning to begin construction in fall 2017, filed condemnation suits The district court granted Transcontinental summary judgment, effectively giving it immediate possession, concluding that the Landowners had received “adequate due process.” The Third Circuit affirmed, rejecting an argument that granting immediate possession violated the separation of powers because eminent domain is a legislative power and the NGA did not grant “quick take.” Transcontinental properly obtained the substantive right to the property by following the statutory requirements, which are not similar to “quick take” procedures, before seeking equitable relief to obtain possession. View "Transcontinental Gas Pipe Line Co., LLC v. Permanent Easements for 2.14 Acres" on Justia Law

The district court awarded summary judgment to the state and entered an injunction that required DOE to remove not less than one metric ton of defense plutonium from the State within two years. The Fourth Circuit held that the district court properly enforced the statutory responsibilities imposed on the DOE by Congress and that it also appropriately crafted and entered the injunction. The court rejected the DOE's contention that the principles governing mandamus proceedings, as well as fundamental principles of injunctive relief, control the award of an injunction under the Administrative Procedure Act. The court held that the district court, in carefully crafting the injunction, gave full consideration to the positions of the parties and the record. Therefore, the district court did not abuse its discretion or improperly burdened the DOE by imposing 50 U.S.C. 2566(c)'s two-year removal time frame. View "South Carolina v. United States" on Justia Law

The Fifth Circuit affirmed the district court's dismissal of 104 plaintiffs' claims related to the Deepwater Horizon oil spill. Plaintiffs, individuals and associations located in Mexico that rely on the fishing industry as a primary source of income, argued that the district court abused its discretion in making dismissal with prejudice the remedy for failing to comply with pretrial order (PTO) 60.The court held that plaintiffs' failure to comply with PTO 60 constituted a clear record of delay considering the number of opportunities the district court gave plaintiffs to either comply with PTO 60, explain why they could not do so, or show documentation of their attorneys' efforts. The court also held that the district court's explicit warnings and second chances illustrated that lesser sanctions would not serve the best interests of justice. View "Barrera v. BP, PLC" on Justia Law

Applicant LK Holdings, LLC appealed the Public Utility Commission’s dismissal of its application for a certificate of public good for a proposed group net-metered photovoltaic electric power system. The Commission dismissed the petition as incomplete because applicant failed to provide notice to adjoining landowners that its application had been filed. Finding no reversible error, the Vermont Supreme Court affirmed. View "In re Petition of LK Holdings, LLC" on Justia Law

The Supreme court affirmed the judgment of the district court granting summary judgment to NorthWestern Corporation, doing business as NorthWestern Energy (NWE), on Boulder Hydro LP’s (Boulder) complaint, holding that the district court’s decision was not in error or an abuse of discretion.At issue in this contract pricing dispute was how to move forward after the Dow Jones Mid-C price index ceased publication in September 2013 and could no longer serve as the price setting reporting term in the parties’ power purchase agreement (PPA). The district court concluded that the Dow should be replaced with a reasonable market rate reporting substitute and held Boulder to its fifteen-year, market rate PPA. The Supreme Court affirmed, holding that the district court correctly interpreted the PPA between NWE and Boulder, properly granted summary judgment for NWE, and did not err in finding that a reasonable price reporting index should replace the Dow Mid-C index under the parties’ PPA. View "Boulder Hydro Limited Partnership v. NorthWestern Corp." on Justia Law

In 1999, after deregulation of the energy industry in Illinois, Exelon sold its fossil-fuel power plants to use the proceeds on its nuclear plants and infrastructure. The sales yielded $4.8 billion, $2 billion more than expected. Exelon attempted to defer tax liability on the gains by executing “like-kind exchanges,” 26 U.S.C. 1031(a)(1). Exelon identified its Collins Plant, to be sold for $930 million, with $823 of taxable gain, and its Powerton Plant, to be sold for $870 million ($683 million in taxable gain) for exchanges. Exelon identified as investment candidates a Texas coal-fired plant to replace Collins and Georgia coal-fired plants to replace Powerton. In “sale-and-leaseback” transactions, Exelon leased an out-of-state power plant from a tax-exempt entity for a period longer than the plant’s estimated useful life, then immediately leased the plant back to that entity for a shorter sublease term. and provided to the tax-exempt entity a multi-million-dollar accommodation fee with a fully-funded purchase option to terminate Exelon’s residual interest after the sublease. Exelon asserted that it had acquired a genuine ownership interest in the plants, qualifying them as like-kind exchanges.The Commissioner disallowed the benefits claimed by Exelon, characterizing the transactions as a variant of the traditional sale-in-lease-out (SILO) tax shelters, widely invalidated as abusive tax shelters. The tax court and Seventh Circuit affirmed, applying the substance over form doctrine to conclude that the Exelon transactions failed to transfer to Exelon a genuine ownership interest in the out-of-state plants. In substance Exelon’s transactions resemble loans to the tax-exempt entities. View "Exelon Corp. v. Commissioner of Internal Revenue" on Justia Law

Robert Post Johnson and A.V.M., Inc. ("Johnson and A.V.M.") appealed the district court's grant of summary judgment in favor of Statoil Oil & Gas LP and others ("Statoil"). Johnson and A.V.M. argued the district court incorrectly determined the primary three-year terms of two oil and gas leases were extended by continuous drilling operations clauses within the lease agreements. The North Dakota Supreme Court concluded the Pugh clauses in the pertinent leases at issue here were irreconcilable with the habendum and continuous drilling operations clauses, and the Pugh clauses controlled: the Pugh clauses terminated the leases with regard to the disputed units at the end of the primary three-year period because of the lack of oil or gas production in paying quantities within those units. The Court therefore found the district court's determination that the leases could be extended by drilling was not correct. The Supreme Court reversed the judgment of the district court. View "Johnson v. Statoil Oil & Gas LP" on Justia Law