Justia Utilities Law Opinion Summaries

Plaintiffs, LSP Transmission Holdings II, LLC, and affiliates, sought to build and operate interstate electricity transmission lines in Indiana. An Indiana statute granted incumbent electric companies the right of first refusal to build and operate new interstate transmission facilities connecting to their existing facilities. Plaintiffs argued that this statute violated the dormant commerce clause of the U.S. Constitution. The district court issued a preliminary injunction preventing the Indiana Utility Regulatory Commission (IURC) Commissioners from enforcing the statute.The IURC Commissioners and several intervening defendants appealed the injunction. They argued that the IURC did not enforce the rights of first refusal and that the injunction would not redress plaintiffs' injuries. The district court had found that plaintiffs had standing because it believed the IURC enforced the rights of first refusal and that an injunction would prevent MISO from recognizing the statute.The United States Court of Appeals for the Seventh Circuit vacated the preliminary injunction, finding that plaintiffs lacked standing. The court concluded that the IURC had no relevant responsibilities for enforcing the challenged statute and that any genuine redress would have to operate against MISO, a non-governmental entity not party to the lawsuit. The court noted that MISO had made clear it would not respond to the preliminary injunction as plaintiffs and the district court expected. The court also rejected a dissenting opinion's novel theory of standing, which was not presented by plaintiffs or adopted by the district court. The case was remanded to the district court for further proceedings. View "LSP Transmission Holdings II, LLC v Commonwealth Edison Company of Indiana, Inc." on Justia Law

Until 1997, Illinois residents could only purchase power from a public utility, with rates regulated by the ICC. The Electric Service Customer Choice and Rate Relief Law allows residents to buy electricity from their local public utility, another utility, or an Alternative Retail Electric Supplier (ARES). The ICC was not given rate-making authority over ARESs, but was given oversight responsibilities. The Law did not explicitly provide a mechanism for recovering damages from an ARES related to rates. Zahn purchased electricity from NAPG, after receiving an offer of a “New Customer Rate” of $.0499 per kilowatt hour in her first month, followed by a “market-based variable rate.” Zahn never received NAPG’s “New Customer Rate.” NAPG charged her $.0599 per kilowatt hour for the first two months, followed by a rate higher than Zahn’s local public utility charged. Zahn filed a class-action complaint, claiming violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, breach of contract, and unjust enrichment. The court dismissed for lack of subject-matter jurisdiction, or for failure to state a claim. After the Illinois Supreme Court answered a certified question, stating that the ICC does not have exclusive jurisdiction to hear Zahn’s claims, the Seventh Circuit reversed. The district court had jurisdiction and Zahn alleged facts that, if true, could constitute a breach of contract or a deceptive business practice. View "Zahn v. North American Power & Gas, LLC" on Justia Law

In 2005, Duke Energy bought, from Benton, renewable energy at a price high enough to enable construction of wind turbines, and acquired tradeable renewable‑energy credits. The contract requires Duke to pay Benton for all power delivered during the next 20 years. When Benton's 100-megawat facility started operating in 2008 it was the only area wind farm. Duke paid for everything Benton could produce. The regional transmission organization, Midcontinent Independent System Operator (MISO), which implements a bidding system for the network, cleared the power to the regional grid. By 2015, aggregate capacity of local wind farms reached 1,745 megawatts, exceeding the local grid’s capacity. At times, would‑be producers must pay MISO to take power; buyers get free electricity. Initially, MISO allowed wind farms to deliver to the grid no matter what other producers (coal, nuclear, solar, hydro) were doing, which meant that such producers had to cut back. On March 1, 2013, the rules changed to put wind farms on a par with other producers. Under MISO’s new system, with Duke’s responsive bid, Benton has gone from delivering power 100% of the time the wind allowed to delivering only 59% of the time. The district court agreed with Duke that, when MISO tells Benton to stop delivering power, it does not owe Benton anything, rejecting Benton’s claim that Duke could put Benton’s power on the grid by bidding to displace other power, and that when Duke does not, it owes liquidated damages. The judge found that bidding $0 is “reasonable” cooperation. The Seventh Circuit reversed; the contract implies that Duke must do what is needed to make transmission capacity available. View "Benton County Wind Farm LLC v. Duke Energy Indiana, Inc." on Justia Law

Cbeyond provides telecommunications service to small businesses using telephone lines. AT&T Illinois provides similar service on a larger scale. Their networks are interconnected; a new entrant (Cbeyond) may connect with existing local exchange carriers, 47 U.S.C. 251; if the parties are unable to agree on terms the issue is referred to arbitration. In 2004, the Illinois Commerce Commission (ICC) approved the agreement between Cbeyond and AT&T. In 2012 Cbeyond complained to the ICC: when Cbeyond leases new digital signal level loop circuits, AT&T charges a separate price for “Clear Channel Capability” (CCC) for the loops. CCC codes the electrical pulses in a line to improve data streaming. Cbeyond argued that there was no extra work involved. The Seventh Circuit affirmed rejection of Cbeyond’s claims, noting that the parties’ agreement designates CCC as an “optional feature” available “at an additional cost” and that some of the loops did not have CCC built in. The court noted the lack of information about how AT&T charges others for CCC or whether AT&T’s charges are inconsistent with 47 C.F.R. 51.505, which constrains incumbent carriers to lease network elements to newcomers at a price slightly higher than the incumbent’s marginal cost. Finding no violation of federal law, the court called the claim “a dispute over a price term in a contract,” a matter of state law. “Cbeyond has imposed an excessive and unnecessary burden on the district court by bringing this sloppy lawsuit.” View "Cbeyond Communications, LLC v. Sheahan" on Justia Law

Pike County's Sny Island Levee Drainage District was organized in 1880 to protect from Mississippi River flooding and runoff. The Kansas City Southern and the Norfolk Southern operate main line railways over the District's flood plain. Illinois law permits the District to assess properties within its territory in order to maintain the levees. A new method, ​adopted in 2009, purported to calculate assessments based on the benefits the District conferred on each property, rather than based on acreage. After the Seventh Circuit enjoined use of the methodology, the District discontinued collecting annual assessments and implemented a one-time additional assessment, 70 ILCS 605/5. The District filed an assessment roll based on new benefit calculations, identifying the tax on KC as $91,084.59 and on Norfolk as $102,976.18, if paid in one installment..The Railroads again filed suit, alleging that the District used a formula that discriminated against them in violation of the Railroad Revitalization and Regulatory Reform Act, 49 U.S.C. 11501. The Seventh Circuit affirmed judgment in favor of the District. The court rejected an argument that the comparison class against which their assessment should be measured is all other District properties, instead of the narrower class of commercial and industrial properties used by the district court. There was no clear error in the court’s assessment of a “battle of the experts.” View "Kansas City S. Ry. v. Sny Island Levee Drainage Dist" on Justia Law

MISO, a regional association, monitors and manages the electricity transmission grid in several midwestern and southern states, plus Manitoba, Canada, balancing the load, setting competitive prices for transmission services, and planning and supervising expansion of the system. Until 2011, if MISO decided that another transmission facility was needed in the region, the MISO member that served the area in which the facility would be built had the right of first refusal to build it, pursuant to the contract among the MISO members. Federal Energy Regulatory Commission (FERC) Order No. 1000 required transmission providers to participate in regional transmission planning to identify worthwhile projects, and to allocate the costs of the projects to the parts of the region that would benefit the most from the projects. To facilitate its implementation, the order directed providers “to remove provisions from [FERC] jurisdictional tariffs and agreements that grant incumbent transmission providers a federal right of first refusal to construct transmission facilities selected in a regional transmission plan for purposes of cost allocation.” FERC believed that competition would result in lower rates to consumers of electricity. The Seventh Circuit denied petitions for review of the order. The electric companies did not show that the right of first refusal was in the public interest View "MISO Transmission Owners v. Fed. Energy Regulatory Comm'n" on Justia Law

Until 1997, Illinois residents could only purchase power from the local public utility, whose rates were regulated by the Commerce Commission (ICC). The 1997 Electric Service Customer Choice and Rate Relief Law allows residents to buy electricity from their local public utility, another utility, or an Alternative Retail Electric Supplier (ARES). The ICC was not given rate-making authority over ARESs, but was given certain oversight responsibilities, 220 ILCS 5/16-115. The Law did not explicitly provide a mechanism for recovering damages from an ARES related to the rates. In 2012, Zahn began purchasing electricity from NAPG, after receiving an offer of a “New Customer Rate” of $.0499 per kilowatt hour in her first month of service, followed by a “market-based variable rate.” Zahn never received NAPG’s “New Customer Rate.” NAPG charged her $.0599 per kilowatt hour for the first two months, followed by a rate higher than Zahn’s local public utility charged. Zahn filed a class-action complaint, claiming violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, breach of contract, and unjust enrichment. The court dismissed for lack of subject-matter jurisdiction, or for failure to state a claim. The Seventh Circuit certified, to the Illinois Supreme Court, the question of whether the ICC has exclusive jurisdiction to hear Zahn’s claims, noting that Illinois appellate courts are in conflict. View "Zahn v. N. Am. Power & Gas, LLC" on Justia Law