Justia Utilities Law Opinion Summaries

PJM is a regional transmission organization that combines multiple utility power grids into a single transmission system to “reduce technical inefficiencies caused when different utilities operate different portions of the grid independently.” PJM coordinates the movement of wholesale electricity in 13 mid-Atlantic states and the District of Columbia. To prevent interruptions to the delivery of electricity, PJM upgrades its system in accordance with its governing agreements: the Regional Transmission Expansion Plan, the Consolidated Transmission Owners Agreement, and the PJM Open Access Transmission Tariff. The petitioners, incumbent owners, challenged orders in which the Federal Energy Regulatory Commission (FERC) concluded that they had no right of first refusal for proposed expansions or upgrades and that PJM may designate third-party developers to construct transmission facilities within incumbent members’ zones. While their petition was pending, FERC directed PJM to remove or revise “any provision that could be read as supplying a federal right of first refusal for any type of transmission project that is selected in the regional transmission plan for purposes of cost allocation.” The D.C. Circuit dismissed the petition, concluding that there is no live controversy between adverse parties, so that any decision would constitute an impermissible advisory opinion.it View "Pub. Serv. Elec. & Gas Co. v. Fed. Energy Regulatory Comm'n" on Justia Law

The TMP is a 5.6-mile stretch of pipeline, connecting Missouri with Illinois beneath the Mississippi River. Under the Natural Gas Act, 15 U.S.C. 717f, the Federal Energy Regulatory Commission issued MoGas a certificate of public convenience and necessity for a project that included using the TMP for natural gas service for the first time. On remand, the Commission approved inclusion of the acquisition cost in MoGas’s rate base because the TMP had been devoted to a new use, transporting natural gas instead of oil, and the cost of new construction would have been greater. Objectors challenged the Commission’s determination that the company had shown that the acquisition of pipeline facilities provided specific benefits in accordance with Commission precedent. Although acknowledging that a lower acquisition cost can produce benefits to customers in some cases, they argued the Commission failed to examine whether there were actual quantifiable dollar benefits for Missouri customers. The D.C. Circuit affirmed, deferring to the Commission’s benefits exception, which allows an acquisition premium to be included in a pipeline’s rate base when the purchase price is less than the cost of constructing comparable facilities, the facility is converted to a new use, and the transacting parties are unaffiliated. View "Mo. Pub. Serv. Comm'n v. Fed. Energy Regulatory Comm'n" on Justia Law

Federal Energy Regulatory Commission (FERC) orders issued in 2013 and 2014 approved the New York Independent System Operator’s (NYISO) creation of a new wholesale electric power “capacity zone” comprising areas of Southeastern New York, including the lower Hudson Valley. The orders followed NYISO’s identification of areas in which customers received power from suppliers located on the other side of a “transmission constraint” in the electrical grid. Because of the way New York’s capacity markets work, NYISO concluded that financial incentives for capacity resources in the transmission‐constrained area that became the Valley Zone were inadequate, jeopardizing the reliability of the grid. FERC’s approval of the Zone, with a new “demand curve” to set capacity prices, were designed to address the reliability problem by providing more accurate price signals to in‐zone resources, but were expected to result in higher prices to customers. Utilities, the state, and the New York Public Service Commission alleged that FERC failed adequately to justify the expected higher prices, particularly without a “phase‐in” of the new zone and its demand curve, in violation of FERC’s statutory mandate to ensure that rates are “just and reasonable,” 16 U.S.C. 824d(a). The Second Circuit rejected the challenge. FERC adequately justified its decisions. View "Cent. Hudson Gas & Elec. Corp. v. Fed. Energy Regulatory Comm'n" on Justia Law

LaPSC sought review of FERC's order denying refunds to certain Louisiana-based utility companies for payments they made pursuant to a cost classification later found to be unjust and unreasonable. In denying LaPSC's refund request, the Commission relied on precedent it characterized as a policy to deny refunds in cost allocation cases, yet the precedent on which it relied is based largely on considerations the Commission did not find applicable. The Commission otherwise relied on the holding company's inability to revisit past decisions, a universally true circumstance. Because the line of precedent on which the Commission relied involved rationales that it concluded were not present in LaPSC's case, and because the existence of the identified equitable factor is unclear and its relevance inadequately explained, the court granted the petition and remanded for the Commission to consider the relevant factors and weigh them against one another. View "Louisiana Public Service Comm'n v. FERC" on Justia Law

Petitioners sought review of an order issued by FERC directing Midland, an Iowa electric utility, to reconnect to a wind generator within its territory. Because FERC never purported to adopt a general rule on disconnections by utilities whose customers refused to pay their bills, and because prior decisions addressing jurisdiction to review FERC's orders under section 210 of the Public Utility Regulatory Policies Act , 16 U.S.C. 824a-3, have repeatedly emphasized Congress's decision to leave section 210's enforcement to the district court, the court lacked jurisdiction to review the orders. View "Midland Power Cooperative v. FERC" on Justia Law

Pusateri, a former employee of Peoples Gas Light and Coke Company (PG) filed a complaint under the False Claims Act, 740 ILCS 175/1, alleging that PG used falsified gas leak response records to justify a fraudulently inflated natural gas rate before the Illinois Commerce Commission. As a customer, the State of Illinois would have paid such fraudulently inflated rates,. The Cook County circuit court dismissed with prejudice, finding that as a matter of law, there was no causal connection between the allegedly false reports and the Commission-approved rates. The appellate court reversed, construing the complaint’s allegations liberally to find PG could have submitted the safety reports in support of a request for a rate increase, despite not being required to do so under the Administrative Code. The Illinois Supreme Court reinstated the dismissal, reasoning that the court lacked jurisdiction to order relief. The legislature did not intend the False Claims Act to apply to a Commission-set rate. The Commission has the duty to ensure regulated utilities obey the Public Utilities Act and other statutes, except where enforcement duties are “specifically vested in some other officer or tribunal.” View "Pusateri v. Peoples Gas Light & Coke Co." on Justia Law

LPSC sought review of FERC's orders relating to the allocation of production costs among Entergy's six operating companies. LPSC argued that certain revenues and expenses should be removed from the bandwidth calculation for 2008 because they were not incurred in that test year and that the production cost formula should account for the mid-year acquisition of generation facilities by Entergy Gulf States Louisiana and Entergy Arkansas on a partial-year basis. The court concluded that FERC reasonably excluded challenges to the "justness and reasonableness" of formula inputs from annual bandwidth implementation proceedings where FERC reasonably interpreted the System Agreement and correctly applied the filed rate doctrine, and FERC's reversal of its initial interpretation of the scope of bandwidth implementation proceedings was not arbitrary. The court also concluded that FERC reasonably required Entergy to include casualty loss Net Accumulated Deferred Income Taxes (ADIT) in its third bandwidth calculation where LPSC had notice of the casualty loss ADIT issue, and FERC's decision to include casualty loss ADIT in the bandwidth formula was rational. Accordingly, the court denied LPSC's petition for review. View "Louisiana Public Svc. Cmsn. v. FERC" on Justia Law

In 2010, a PG&E natural gas pipeline exploded in San Bruno, CA, causing death, great physical injuries, and extensive property damage. Governmental entities investigated the incident and PG&E’s business practices. The Public Utilities Commission retained an independent firm, Overland, to review PG&E’s gas transmission safety-related activities from a financial and regulatory audit prospective. Plaintiffs sued, seeking redress for PG&E’s alleged misappropriation of over $100 million in authorized rates that it should have used for safety-related projects. According to the complaint, PG&E misrepresented and concealed material facts when it used money collected from ratepayers to pay shareholders and provide bonuses to its executives instead of spending the money on infrastructure and safety measures. The complaint alleged that PG&E’s negligent handling of the pipe that exploded in San Bruno was unlawful and arose from PG&E’s corporate culture that valued profits over safety and that PG&E’s actions constituted an unlawful business practice under California Business and Professions Code section 17200. The superior court dismissed without leave to amend, finding the action barred by Public Utility Code section 1759 because it would interfere with the California Public Utilities Commission’s jurisdiction.” The appeals court affirmed. View "Guerrero v. Pacific Gas & Elec. Co." on Justia Law

Smith Lake filed suit against FERC and others, alleging claims related to the Commission's issuance of a license order. Alabama Power intervened and moved to dismiss the petition for review based on lack of jurisdiction. The court granted the motion because the appeal was untimely, concluding that Tennessee Gas Pipeline Co. v. FERC and Clifton Power Corp. v. FERC stand for the proposition that the court will not hear a case if the petitioner has a rehearing petition pending before the Commission at the time of filing in this court, whether it was required or not. Consequently, a party must choose whether to seek an optional petition for rehearing before the Commission, or a petition for review to the court; it cannot proceed simultaneously. View "Smith Lake Improvement v. FERC" on Justia Law

Columbia, an interstate natural gas company subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC), seeks to replace a portion of a natural gas pipeline that runs in and around York County, Pennsylvania. Because the original location of the pipeline has become heavily populated, the replacement will not track the original line but will be outside the existing right of way. To obtain easements necessary to complete construction of the replacement, in 2013, Columbia filed Complaints in Condemnation against four Landowners in federal court. The district court held that Columbia did not have the right of eminent domain required to condemn the easements, reasoning that 18 C.F.R. 157.202(b)(2)(i), was ambiguous. The Third Circuit reversed, finding that the regulation clearly anticipates replacement outside the existing right of way and contains no adjacency requirement. The district court erroneously adopted its own definition of “replace” and concluded that a “notice” of “proposed rulemaking” for “Emergency Reconstruction of Interstate Natural Gas Facilities” promulgated by FERC after 9/11 was relevant.View "Columbia Gas Transmission, LLC v. 1.01 Acres in Penn Twp" on Justia Law