Justia Utilities Law Opinion Summaries

A private utility company entered into an agreement to purchase a township’s wastewater system, which served nearly 3,900 residents. The parties used a statutory procedure to determine the fair market value of the system’s assets, arriving at a purchase price of approximately $54.9 million. The utility, already certified to provide water and wastewater services in other areas, applied to the Pennsylvania Public Utility Commission (PUC) for a Certificate of Public Convenience (CPC) to acquire and operate the system. As part of the process, the utility agreed to maintain current rates for three years.An administrative law judge at the PUC recommended denying the utility’s application, finding that the township was already providing safe, reliable, and financially viable service, and that the acquisition would result in substantial rate increases for customers, outweighing any potential benefits. The PUC, however, rejected the judge’s recommendation and granted the CPC, finding that the utility’s expertise, financial resources, and the policy goal of consolidating systems provided substantial affirmative public benefits. The PUC also found that potential rate increases were not certain harms, as increases might occur regardless of the transaction and could be mitigated over a larger customer base.On appeal, the Commonwealth Court of Pennsylvania reversed the PUC’s decision, holding that benefits arising from the acquiring utility’s size and fitness were not sufficient to satisfy the statutory standard for public benefit, particularly when the existing service was adequate and the transaction would likely cause rate increases. The Supreme Court of Pennsylvania reversed the Commonwealth Court’s decision, holding that the PUC could consider benefits derived from the utility’s size and expertise in its affirmative public benefits analysis and that the lower court erred by reweighing the evidence and categorizing potential rate increases as “known harms.” The case was remanded for further proceedings on whether the PUC’s findings were supported by substantial evidence. View "Consum Adv v. PUC" on Justia Law

An energy developer proposed to construct a solar facility in Bennington, Vermont, near an existing solar facility that it had previously built. Both the new and existing facilities were located on adjacent parcels, shared similar ownership structures, and would use connected infrastructure to access the electric grid. The developer submitted bids for three projects; only the first was initially awarded a contract and then built. Later, the developer resubmitted bids for the other two projects, which were awarded contracts. When the developer sought a Certificate of Public Good (CPG) for the second facility, concerns were raised about whether this new facility and the existing one constituted a “single plant” under state law, which would make them ineligible for the state’s Standard Offer Program due to a cap on plant capacity.The Vermont Public Utility Commission reviewed the CPG application for the new facility. It held evidentiary hearings and ultimately concluded that, under the statutory definition, the two facilities were a single plant because they had common ownership, were developed in a contiguous timeframe, were physically proximate, and shared necessary grid infrastructure. This meant the combined facility exceeded the program’s capacity limit. The Commission denied the CPG and rejected the developer’s motion for reconsideration, prompting an appeal.The Vermont Supreme Court reviewed the Commission’s decision. It affirmed, holding that the Commission applied the correct two-prong “single plant” test as previously explained in its own precedents, properly considered all statutory factors, and acted within its discretion in finding the facilities to be a single plant. The Court rejected arguments about due process violations, claim and issue preclusion, and the application of alternative legal standards. The Supreme Court also found no error in the procedures followed by the Commission and did not grant a remand or new hearing. The decision of the Public Utility Commission was affirmed. View "In re Petition of Otter Creek Solar LLC" on Justia Law

In 2016, the City of Los Angeles established new tiered water rates for residential customers of its Department of Water and Power (LADWP). These rates included a charge that funded a low-income subsidy, which was paid by customers who did not qualify for the subsidy, and utilized progressively increasing charges based on water usage tiers. Stephen and Melinda Dreher, LADWP customers, challenged the constitutionality of two aspects of these rates under article XIII D, section 6 of the California Constitution: (1) the inclusion of a low-income subsidy charge in the rates of non-subsidized customers, and (2) the structure of the tiered rates themselves, arguing they exceeded the proportional cost of water service to each parcel.The Superior Court of Los Angeles County ruled in favor of the Drehers regarding the low-income subsidy charge, finding it unconstitutional and issuing a writ to prevent the City from including this charge in future rates. However, the court denied the Drehers’ request for a refund of previously paid charges, concluding that such a claim was barred because the Drehers had not paid under protest, as required by Health and Safety Code section 5472. The court also found that, aside from the invalid low-income subsidy, the City’s tiered rates complied with constitutional proportionality requirements.On appeal, the California Court of Appeal, Second Appellate District, Division One, affirmed the trial court’s judgment. The appellate court held that the payment under protest requirement of Health and Safety Code section 5472 applies to claims seeking refunds of water delivery charges fixed by city ordinance, and that the Drehers’ failure to comply with this requirement barred their retrospective refund claim. The court further held that the City met its burden to demonstrate that its tiered water rates (excluding the invalid subsidy) did not exceed the proportional cost of service attributable to each parcel, as required by article XIII D, section 6(b)(3). Thus, the judgment was affirmed. View "Dreher v. City of Los Angeles" on Justia Law

A company sought approval to construct a 500 kW solar-energy project in Randolph, Vermont. The proposed project required a certificate of public good (CPG) from the Vermont Public Utility Commission (PUC). A portion of the project's infrastructure, such as its access road and interconnection line, would be located on land with slopes exceeding 25%. Local and regional planning commissions, as well as the Town of Randolph Selectboard, initially supported the project and jointly requested the site be designated as a “preferred site.” After neighbors raised concerns that some panels would be located on steep slopes in conflict with the Town Plan, the applicant agreed to revise the project so that no panels would be built on slopes over 25%. The Town conditioned its continued support on this revision and on receiving the final site plan.The PUC’s hearing officer initially recommended denying the CPG due to uncertainty about whether the Town’s conditions regarding slope measurement had been met. The PUC rejected this recommendation, refocusing on whether the Town itself was satisfied with the conditions. The applicant subsequently provided a letter from the Town confirming its support and satisfaction with the conditions. The PUC found the project's compliance with soil-erosion control measures sufficient, particularly in light of a stormwater permit issued by the Agency of Natural Resources (ANR), and ruled that the project would not unduly interfere with the region’s orderly development. The PUC granted the CPG; the neighbors’ motion for reconsideration was denied, and they appealed.The Vermont Supreme Court reviewed the case, giving deference to the PUC’s expertise and factual findings. The Court affirmed the PUC’s grant of the CPG, holding that the PUC correctly applied the legal standards under 30 V.S.A. § 248, properly considered the Town Plan’s land-conservation measures, reasonably relied on the Town’s assurances and ANR’s permit, and did not misapply its own rules regarding “preferred site” status. View "In re Petition of Randolph Davis Solar LLC" on Justia Law

PacifiCorp, a utility company operating a natural gas power plant in Chehalis, Washington, supplies electricity to customers in Idaho. Washington enacted the Climate Commitment Act (CCA), requiring greenhouse gas emitters to purchase emissions allowances. PacifiCorp sought to recover $2.3 million from Idaho customers, representing their share of the costs for these allowances needed to operate the Chehalis plant. The CCA provides “no-cost” allowances exclusively to Washington customers, shielding them from these costs, while PacifiCorp’s Idaho customers would bear the expense for electricity exported from Washington.The Idaho Public Utilities Commission reviewed PacifiCorp’s application under the Energy Cost Adjustment Mechanism (ECAM). The Commission approved recovery of over $60 million in other costs but denied the $2.3 million in CCA allowance costs. It reasoned that, under the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol, state-specific energy and climate policy costs should be borne by the state enacting them. The Commission also found that passing CCA costs to Idaho customers would violate Idaho Code section 61-502, which requires rates to be just, reasonable, and sufficient, and would create discriminatory customer classes. PacifiCorp’s petition for reconsideration was denied, with the Commission reaffirming its decision on both Protocol and statutory grounds.On appeal, the Supreme Court of the State of Idaho considered whether the Commission’s orders violated PacifiCorp’s constitutional rights, were unsupported by evidence, or were outside the regular pursuit of its authority. The Court held that the Commission acted within its statutory powers and that its decision to disallow recovery of CCA allowance costs from Idaho customers was supported by the record and consistent with its mandate under Idaho Code section 61-502. The Court affirmed the Commission’s orders. View "Pacificorp v. IPUC" on Justia Law

Several electricity generators challenged a change in how they are compensated for producing reactive power, a component of electricity necessary for grid stability but not directly consumed by end users. For many years, the Midcontinent Independent System Operator (MISO) provided generators with cost-based compensation for reactive power, in addition to market-based payments for real power. In 2022, MISO amended its tariff to eliminate separate compensation for reactive power, meaning neither transmission owners nor independent generators would receive payment for producing it within a standard range. This change was approved by the Federal Energy Regulatory Commission (FERC) and given immediate effect, despite objections from generators who argued they had made investments and entered contracts in reliance on the prior compensation structure.FERC approved MISO’s tariff amendment and denied requests for rehearing, concluding that the comparability standard justified the change and that generators’ reliance interests were either unsupported or outweighed by other considerations. FERC reasoned that generators should not have expected compensation for reactive power to continue indefinitely, especially since prior orders had made such compensation contingent on similar treatment for transmission owners. Generators petitioned the United States Court of Appeals for the District of Columbia Circuit for review, arguing that FERC failed to adequately consider their short-term financial reliance on the previous compensation scheme.The United States Court of Appeals for the District of Columbia Circuit held that FERC acted arbitrarily and capriciously by failing to adequately consider the generators’ short-term reliance interests before allowing the tariff change to take immediate effect. The court did not address the substantive validity of the tariff amendment itself but found that FERC’s explanation was insufficient regarding the abrupt elimination of compensation. The court granted the petitions for review, set aside FERC’s orders, and remanded the matter for further proceedings. View "Capital Power Corp. v. Federal Energy Regulatory Commission" on Justia Law

Several utility companies operating in California, including in Ventura County, challenged the property tax rates applied to their state-assessed utility property. They argued that the method used to calculate the debt service component of their property tax rate resulted in a higher rate than that applied to locally assessed, nonutility property (referred to as “common property”). The utilities claimed this disparity violated section 19 of article XIII of the California Constitution, which states that utility property “shall be subject to taxation to the same extent and in the same manner as other property.”The utilities filed suit in the Ventura County Superior Court against the County of Ventura and the California State Board of Equalization, seeking partial refunds for property taxes paid between 2018 and 2023. The County demurred, relying on recent appellate decisions that had rejected similar claims. The parties stipulated that the decision in County of Santa Clara v. Superior Court was binding for purposes of this case, and the trial court sustained the demurrer, entering judgment in favor of the County and the Board.On appeal, the California Court of Appeal, Second Appellate District, Division Six, reviewed the case de novo. The court affirmed the trial court’s judgment, holding that article XIII, section 19 does not require that utility property be taxed at the same or a comparable rate as nonutility property. Instead, the provision is an enabling clause that allows utility property to be subject to property taxation, but does not mandate rate equivalence. The court also found that the general uniformity requirement in article XIII, section 1 does not override the Legislature’s authority to implement reasonable distinctions in tax treatment for utility property. The judgment in favor of the County and the Board was affirmed. View "Pacific Bell Telephone Co. v. County of Ventura" on Justia Law

Several companies that supply electricity generation services in Pennsylvania challenged a billing practice used by a regional electric distribution company (EDC), FirstEnergy. FirstEnergy, which is responsible for delivering electricity to customers, offered its own customers the option to pay for non-commodity goods and services—such as smart thermostats and surge protection—through their regular utility bills, a practice known as “on-bill billing.” However, FirstEnergy did not allow competing electric generation suppliers (EGSs) to use this billing method for their own non-commodity goods and services. The EGSs argued that this practice was unlawfully discriminatory under Section 1502 of the Public Utility Code and Section 2804(6) of the Electricity Generation Customer Choice and Competition Act, which prohibit unreasonable preferences or advantages in utility service.An administrative law judge initially found in favor of the EGSs, concluding that FirstEnergy’s practice gave it a significant competitive advantage and violated the anti-discrimination provisions. However, the Pennsylvania Public Utility Commission (PUC) reversed this decision, reasoning that discrimination only occurs if the EDC provides the billing service to third parties but not to EGSs, which was not the case here. The PUC also determined that the relevant statutes did not require EDCs to offer on-bill billing for non-commodity goods and services to EGSs.The Commonwealth Court of Pennsylvania affirmed the PUC’s decision, holding that the statutory provisions at issue did not obligate EDCs to provide on-bill billing for non-commodity goods and services to EGSs. The Supreme Court of Pennsylvania reviewed the case and agreed with the lower courts. The Court held that EDCs have no statutory duty to provide on-bill billing for non-commodity goods and services to EGSs, and that such billing does not constitute “service,” “electric services,” or “transmission and distribution service” under the relevant statutes. The Court affirmed the order of the Commonwealth Court. View "Interstate Gas Supply, Inc. v. Public Utility Commission" on Justia Law

Several public utility companies challenged the property tax rates imposed by a California county, arguing that the “debt service component” of the county’s property tax rate for utility property was higher than the average rate for non-utility (common) property. The utilities claimed this violated article XIII, section 19 of the California Constitution, which states that utility property “shall be subject to taxation to the same extent and in the same manner as other property.” The utilities sought a partial refund of property taxes for several fiscal years, asserting that the constitutional provision required rate equality between utility and common property.The Superior Court of Riverside County allowed two local water districts to intervene, as they relied on property tax revenue for bond payments. The county demurred, relying on a recent decision from the California Court of Appeal, Sixth Appellate District, which had rejected a similar claim by utilities in another county. The utilities conceded that this precedent was binding on the trial court but preserved their arguments for appeal. The trial court sustained the demurrer without leave to amend and dismissed the case.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. It considered the text, structure, and legislative history of article XIII, section 19, as well as recent appellate decisions from other districts. The court held that the constitutional provision does not require that utility and common property be taxed at the same rates. Instead, it authorizes local ad valorem taxation of utility property, replacing the prior system of state-level in-lieu taxation, but does not impose a rate limitation. The court also found that prior California Supreme Court precedent did not mandate rate equality. The judgment dismissing the utilities’ lawsuit was affirmed. View "Pacific Bell Telephone Co. v. County of Riverside" on Justia Law

A dispute arose when Oklahoma Gas and Electric (OG&E) began providing retail electric service to a large cryogenic natural gas facility, the Chisolm Trail Plant, located in the certified territory of Oklahoma Electric Cooperative (OEC) in rural Grady County, Oklahoma. Under the Retail Energy Supplier Certified Territory Act (RESCTA), OEC holds exclusive rights to serve customers in this area, unless an exception applies. OG&E relied on the "Large Load" exception, which allows another supplier to serve a facility with an initial load of 1,000 kilowatts or more. To serve the Plant, OG&E connected to a third-party transmission line owned by Public Service Company of Oklahoma, rather than extending its own distribution system.After OG&E began service in May 2018, OEC filed an application with the Oklahoma Corporation Commission in August 2019, seeking to enjoin OG&E from serving the Plant, arguing that OG&E’s conduct violated RESCTA. The Commission, however, denied OEC’s request for injunctive relief, not by analyzing the statutory exception, but by finding that OEC’s claim was barred by the equitable defenses of laches, estoppel, and waiver, due to OEC’s delay in objecting and OG&E’s substantial investment in infrastructure.The Supreme Court of the State of Oklahoma reviewed the case and held that, under its recent decision in Oklahoma Gas & Electric Co. v. Oklahoma Corp. Comm’n (People’s), RESCTA’s Large Load exception does not permit a supplier to connect with third-party transmission lines to extend service into another supplier’s certified territory. However, because the holding in People’s applies only prospectively and not to existing service arrangements, OG&E is permitted to continue serving the Plant. The Supreme Court affirmed the Commission’s order allowing OG&E to continue providing retail electric service to the customer in OEC’s territory. View "OKLAHOMA ELECTRIC COOPERATIVE v. STATE ex rel. OKLAHOMA CORPORATION COMMISSION" on Justia Law