Justia Utilities Law Opinion Summaries

This case involves five large water utilities and an association representing investor-owned water utilities' interests, collectively referred to as the Water Companies. The Water Companies sought to overturn an order by the Public Utilities Commission (Commission) that eliminated a conservation-focused ratesetting mechanism known as the Water Revenue Adjustment Mechanism (WRAM). The WRAM was designed to encourage water conservation by decoupling a water company's revenue from the amount of water sold. The Commission's order to eliminate the WRAM was not based on the merits of the mechanism but on procedural issues.The Commission's decision to eliminate the WRAM was made in a proceeding that was ostensibly focused on improving the accuracy of water sales forecasts. The Water Companies argued that the Commission did not provide adequate notice that the elimination of the WRAM was one of the issues to be considered in the proceeding.The Supreme Court of California agreed with the Water Companies. The court found that the Commission's scoping memos, which are supposed to outline the issues to be considered in a proceeding, did not provide adequate notice that the WRAM's elimination was on the table. The court concluded that the Commission's failure to give adequate notice required the order to be set aside. The court did not rule on the merits of the WRAM itself. View "Golden State Water Co. v. Public Utilities Com." on Justia Law

The Supreme Court held, in response to a request by the United States Court of Appeals for the Ninth Circuit, that Cal. Publ. Util. Code 1759 bars a lawsuit that seeks damages resulting from public safety power shutoffs (PSPS) events where the suit alleges that a utility's negligence in maintaining its grid necessitated shutoffs but does not allege that the shutoffs were unnecessary or violated the regulations of the California Public Utilities Commission (PUC).To reduce the risk that its utility infrastructure would ignite a wildfire during extreme weather conditions Pacific Gas and Electric Company (PG&E) conducted a series of emergency power shutoffs that Plaintiff alleged were necessitated by PG&E's negligence in maintaining its power grid. Plaintiff filed a class action complaint against PG&E requesting class damages of $2.5 billion. At issue before the Supreme Court was whether section 1759 barred this lawsuit. The Supreme Court answered the question in the positive, holding that allowing suit under the circumstances here would interfere with the PUC's comprehensive regulatory and supervisory authority over PSPS. View "Gantner v. PG&E Corp." on Justia Law

The Supreme Court held that the exemption in Cal. Const. art. II, 9, subd.(a) applies to measures setting municipal water rates, and therefore, municipal water rates and other local utility charges are not subject to referendum.To prevent the referendum process from disrupting essential governmental operations, the California Constitution exempts "statutes providing for tax levies or appropriations for usual current expenses" of the government. See Cal. Const. art. II, 9, subd.(a). After the City of Dunsmuir passed Resolution 2016-02 establishing a five-year plan for a $15 million upgrade to the City's water storage and delivery infrastructure Plaintiff submitted a petition for a referendum seeking to overturn the Resolution. The City declined to place the referendum on the ballot, and Plaintiff filed a petition for writ of mandate seeking to compel the City to place the referendum on the ballot. The trial court denied the petition. The Court of Appeal reversed, concluding that the exemption did not apply because the water charges were a "property-related fee" and not a "tax." The Supreme Court reversed, holding that the City's water rates, adopted in the Resolution, fall within the exemption for "tax levies" and therefore are not subject to referendum. View "Wilde v. City of Dunsmuir" on Justia Law

The Supreme Court affirmed the judgments of the trial court and court of appeal rejecting Plaintiffs' facial challenge to the ordinance adopted by the City and County of San Francisco (the City) requiring wireless telephone service companies to obtain permits to install and maintain lines and equipment in public rights-of-way, holding that the lower courts properly found that ordinance was lawful.Specifically, Plaintiffs argued that the ordinance was preempted by Cal. Pub. Util. Code 7901 and that the ordinance violated Cal. Pub. Util. Code 7901.1. The trial court ruled that section 7901 did not preempt the challenged portions of the ordinance and rejected Plaintiffs' claim that it violated section 7901.1. The court of appeal affirmed. The Supreme Court affirmed, holding (1) section 7901 does not preempt the ordinance based on aesthetic considerations; and (2) the ordinance does not violate section 7901.1 by singling out wireless telephone corporations for regulation. View "T-Mobile West LLC v. City & County of San Francisco" on Justia Law

The Supreme Court held that voter approval was not required for a transfer from a utility’s enterprise fund to the city’s general fund.Cal. Const. art. XIIIC prohibits local governments from imposing or increasing any tax without voter approval. Any charge imposed for a service or product that does not exceed the reasonable costs of providing it is excepted from the definition of tax. The City of Redding operated an electric utility as a department of its city government. At issue was whether an annual interfund transfer from the utility’s enterprise fund to the city’s general fund required voter approval where the transfer was intended to compensate the general fund for costs of services that other city departments provide to the utility. The Supreme Court held that because neither the budgetary transfer nor the rate the city charged its utility customers constituted a tax, voter approval was not required. View "Citizens for Fair REU Rates v. City of Redding" on Justia Law

Charges that constitute compensation for the use of government property are not subject to Proposition 218’s voter approval requirements. To constitute compensation for a property interest, however, the amount of the charge must bear a reasonable relationship to the value of the property interest, and to the extent the charge exceeds any reasonable value of the interest, it is a tax and requires voter approval.Plaintiffs contended that a one percent charge that was separately stated on electricity bills issued by Southern California Edison (SCE) was not compensation for the privilege of using property owned by the City of Santa Barbara but was instead a tax imposed without voter approval, in violation of Proposition 218. The City argued that this separate charge was the fee paid by SCE to the City for the privilege of using City property in connection with the delivery of electricity. The Supreme Court held that the complaint and stipulated facts adequately alleged the basis for a claim that the surcharge bore no reasonable relationship to the value of the property interest and was therefore a tax requiring voter approval under Proposition 218. The court remanded the case for further proceedings. View "Jacks v. City of Santa Barbara" on Justia Law

Monterey Peninsula Water Management District, a public agency, undertook work to mitigate environmental damage caused by California-American Water Co. (Cal-Am), a public utility, and then assessed a fee on the utility’s customers for the work. The fee was charged as a line item on Cal-Am’s bill and was collected by the Cal-Am on behalf of the District. In the underlying proceedings, Cal-Am filed an application with the Public Utilities Commission (PUC) for authorization to collect the District user’s fee. Before the PUC responded, Cal-Am, the District, and the PUC’s Division of Ratepayer Advocates entered into a settlement agreement under which the parties agreed that the District’s requested user fee was appropriate. The PUC denied Cal-Am’s application and rejected the settlement agreement. The Supreme Court set aside the PUC decisions rejecting Cal-Am’s application for authorization to collect the District’s user fee, holding that the PUC did not have the power to regulate the District’s user fee. View "Monterey Peninsula Water Mgmt. Dist. v. Pub. Utils. Comm’n" on Justia Law