Justia Utilities Law Opinion Summaries

Articles Posted in US Court of Appeals for the District of Columbia Circuit
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Several utilities that are managed by the Southwest Power Pool (SPP), a regional transmission operator, paid for upgrades to the transmission grid. The operative tariff required other utilities who benefitted from these upgrades to share the costs of the expanded network. The tariff, however, also required SPP to invoice the charges monthly and to make adjustments within one year. The reimbursement calculation proved complicated. It took SPP eight years to implement it, during which time SPP did not invoice for the upgrade charges. FERC initially granted SPP a waiver of the tariff’s one-year time bar but later determined it lacked the authority to waive this provision retroactively. FERC’s revised determination meant the utilities that had made substantial outlays for upgrades were denied reimbursement for the eight years that had elapsed.The D.C. Circuit denied petitions for review filed by SPP and a company that sponsored upgrades and has been denied reimbursement. Once a tariff is filed, FERC has no statutory authority (16 U.S.C. 824d(d)) to provide equitable exceptions or retroactive modifications to the tariff. SPP may impose only those charges contained in the filed rate. Because the one-year time bar for billing is part of the filed rate, FERC could not retroactively waive it, even to remedy a windfall for users of the upgraded networks. View "Oklahoma Gas and Electric Co. v. Federal Energy Regulatory Commission" on Justia Law

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Entergy, a public utility holding company, owns five operating companies that sell electricity in four states, including Louisiana. The companies have been governed by an agreement requiring them to act as a “single economic unit” and requiring “rough equalization” of their production costs. In 2005, the Federal Energy Regulatory Commission (FERC) determined that the production costs were not roughly equal and imposed a “bandwidth remedy”: Whenever the yearly production costs of an individual operating company deviated from the average by more than 11%, companies with lower costs were required to pay companies with higher costs as necessary to bring all five companies within that range. Entergy filed a tariff establishing a formula to calculate production costs subject to the bandwidth remedy, which FERC largely accepted.Utilities often spread their recovery of large, non-recurring costs by creating a regulatory asset, a type of credit. The company then amortizes the asset in later years, creating debits chargeable to customers. Historically, the Entergy companies recorded regulatory assets and their related amortization expenses in FERC accounts not referenced in the bandwidth formula; this effectively accounted for deferred production costs when they were incurred, rather than when the related amortization expenses were recorded. FERC rejected that approach and excluded purchased-power costs that a Louisiana affiliate incurred in 2005 and amortized in 2008 and 2009.The D.C. Circuit denied the Louisiana Public Service Commission’s petition for review. The Federal Power Act requires electric utilities to charge “just and reasonable” rates. 16 U.S.C. 824d(a). If FERC finds a rate unreasonable, it may establish a just and reasonable rate; FERC may reallocate production costs under the Entergy system agreement, including by ensuring compliance with the bandwidth remedy. View "Louisiana Public Service Commission v. Federal Energy Regulatory Commission" on Justia Law

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Spire planned to build a St. Louis-area pipeline and unsuccessfully solicited natural gas “shippers” to enter into preconstruction “precedent agreements.” Spire later entered into a precedent agreement with its affiliate, Spire Missouri, for 87.5 percent of the pipeline’s projected capacity. Spire applied to the Federal Energy Regulatory Commission (FERC) for a certificate of public convenience and necessity (Natural Gas Act, 15 U.S.C. 717f(c)(1)(A)), conceding that the proposed pipeline was not needed to serve new load but claiming other benefits. As evidence of need, Spire relied on its precedent agreement with Spire Missouri. FERC released an Environmental Assessment, finding no significant environmental impact. EDF challenged Spire’s application, arguing that the precedent agreement should have limited probative value because the companies were corporate affiliates. The Order approving the new pipeline principally focused on the precedent agreement.The D.C. Circuit vacated the approval. FERC may issue a Certificate only if it finds that construction of a new pipeline “is or will be required by the present or future public convenience and necessity.” Under FERC’s “Certificate Policy Statement,” if there is a need for the pipeline, FERC determines whether there will be adverse impacts on existing customers, existing pipelines, or landowners and communities. If adverse stakeholder impacts will result, FERC balances the public benefits against the adverse effects. FERC’s refusal to address nonfrivolous arguments challenging the probative weight of the affiliated precedent agreement did not evince reasoned and principled decision-making. FERC ignored evidence of self-dealing and failed to thoroughly conduct the interest-balancing inquiry. View "Environmental Defense Fund v. Federal Energy Regulatory Commission" on Justia Law

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In 2016, the Federal Energy Regulatory Commission approved, as just and reasonable, cost allocations filed by PJM, the Mid–Atlantic’s regional transmission organization, for a project to improve the reliability of three New Jersey nuclear power plants. The Commission denied a complaint lodged by Delaware and Maryland alleging a large imbalance between the costs imposed on the Delmarva transmission zone and the benefits that zone would accrue from the project. On rehearing in 2018, the Commission reversed course, concluding that application of PJM’s cost–allocation method to the project violated cost–causation principles and was therefore unjust and unreasonable under the Federal Power Act, 16 U.S.C. 824e. The Commission’s replacement cost–allocation method shifted primary cost responsibility for the project from the Delmarva zone to utilities in New Jersey.The New Jersey Agencies argued that the Commission departed from precedent without adequate explanation, made findings that are unsupported by substantial evidence, and failed to respond meaningfully to objections raised during the proceedings. The D.C. Circuit denied their petitions for review. The Commission reasonably decided to adopt a different cost–allocation method for the type of project at issue here and adequately explained its departure from the cost allocations it had approved in 2016. View "Public Service Electric and Gas Co. v. Federal Energy Regulatory Commission" on Justia Law

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The Communications Act of 1934 restricts the rates that telecommunications carriers may charge for transmitting calls across their networks, 47 U.S.C. 201(b). Iowa-based Aureon is a joint venture through which local carriers connect to long-distance carriers such as AT&T and has “subtending” agreements with participating local carriers. AT&T alleged that Aureon imposed interstate and intrastate access charges that violated the Federal Communications Commission (FCC) transitional pricing rules; improperly engaged in access stimulation (enticing high call volumes to generate increased access charges); committed an unreasonable practice by agreeing with subtending carriers to connect calls involving access stimulation; and billed for service not covered by its 2013 interstate tariff. The FCC found that Aureon violated the transitional rule.The D.C. Circuit reversed in part. The transitional rule applies to all “competitive local exchange carriers,” and Aureon falls into that category but the rule applies to intrastate rates so Aureon’s 2013 increase of its interstate rate was not covered. The court remanded the question of whether Aureon’s subtending agreements qualify as access revenue sharing agreements. The court affirmed the FCC’s determination that Aureon’s interstate tariffs apply to traffic involving any local carriers engaged in access stimulation. The FCC erred in refusing to adjudicate AT&T’s unreasonable-practices claim. View "AT&T Corp. v. Federal Communications Commission" on Justia Law

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Virginia power wholesalers who buy electricity from Dominion challenged the Commission's conclusion that Dominion's Virginia customers, but not its North Carolina customers, should bear the costs of undergrounding new transmission wires.The DC Circuit denied the petitions for review and rejected petitioners' claim that the Commission did not properly invoke its power under section 206 of the Federal Power Act; held that petitioners were provided adequate notice of the Commission's intent to modify Dominion's filed rate; and held that the ALJ did not misinterpret a Commission order and thereby improperly cabined the scope of an evidentiary hearing. Finally, the court rejected petitioners' claim that the Commission acted arbitrarily by requiring Dominion's Virginia customers to bear the costs of undergrounding. View "Northern Virginia Electric Cooperative, Inc. v. FERC" on Justia Law

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Petitioner, owner of a number of electric generation resources in New England, challenged FERC's adoption of changes to the Transmission, Markets, and Services Tariff proposed by the Independent System Operator for New England (ISO-NE). The DC Circuit held that the parties' dispute may be illusory and thus remanded the record for the agency to sort out what it really means. In this case, at oral argument, counsel for FERC suggested that FERC interpreted the tariff rules in a way that largely squares with Exelon's view of its rights. View "Exelon Corp. v. FERC" on Justia Law

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The DC Circuit granted ANR's petition for review challenging FERC's decision refusing to allow ANR to charge market-based rates, as opposed to cost-based rates, for its natural gas storage services. The court held that FERC acted arbitrarily and capriciously because it did not provide any reasonable justification for allowing DTE affiliates but not ANR to charge market-based rates. Furthermore, FERC's market-power analysis was internally inconsistent. The court also held that ANR's remaining contentions lacked merit. The court remanded for further proceedings. View "ANR Storage Co. v. FERC" on Justia Law

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The DC Circuit held that FERC did not adequately justify its approval of the tariff amendment at issue here, which prohibited cost sharing for a category of high-voltage projects conceded to have significant regional benefits, and which did so only because those projects reflected the planning criteria of individual utilities. The court granted the petitions for review, holding that the Commission acted arbitrarily and capriciously in approving the tariff amendment and applying it to the Elmont-Cunningham and Cunningham-Dooms projects. The court set aside the orders under review to the extent that they approved the amendment and applied it to the two projects, and remand for further proceedings View "Old Dominion Electric Coop. v. FERC" on Justia Law

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The DC Circuit denied a petition for review challenging FERC's orders approving an exemption to the minimum offer price rule in the ISO New England forward capacity market for a limited amount of qualifying renewable energy. The court held that FERC engaged in reasoned decisionmaking to find that the renewable exemption to the minimum offer price rule resulted in a just and reasonable rate. The court also held that FERC did not abuse its discretion by denying petitioners' request for a hearing and the Commission did not abuse its discretion by relying on the written record to resolve disputes of material fact. View "NextEra Energy Resources, LLC v. FERC" on Justia Law