Justia Utilities Law Opinion Summaries

Articles Posted in Utilities Law
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In this case before the Maine Supreme Judicial Court, the Office of the Public Advocate (OPA) contested an order by the Public Utilities Commission (Commission) that extended the waiver of the standard depreciation rate for the Maine Water Company - Millinocket Division (MWC). The OPA raised three claims: (1) the Commission erred in applying Chapter 110 of its rules to waive the depreciation rate set in Chapter 68, which according to the OPA already contained a waiver provision; (2) the Commission abused its discretion and set unjust and unreasonable rates by approving an arbitrarily low depreciation expense; and (3) the Commission relied on information that was not included in the evidentiary record.The court disagreed with all three claims raised by the OPA. Regarding the first claim, the court stated that Chapter 68 did not contain a waiver provision and that the Commission rightly applied the general waiver provision contained in Chapter 110. Concerning the second claim, the court found that the Commission did not abuse its discretion when it extended the waiver in anticipation of a gradual return to full depreciation expenses. The court determined that the Commission's decision aligned with the statutory rate-setting goal and prevented rate shock. Lastly, the court determined that the OPA waived its third claim by not raising the issue about the lack of an evidentiary record earlier in the proceedings. As such, the court affirmed the Commission's order. View "Office of the Public Advocte v. Public Utilities Commission" on Justia Law

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In this case, the Court of Appeal of the State of California First Appellate District reviewed a decision by the Public Utilities Commission (PUC) to adopt a new net energy metering (NEM) tariff. The PUC was required by the Legislature to create a successor tariff to the existing NEM scheme, which utilities argued overcompensated owners of renewable energy systems for their exported energy, raising electricity costs for customers without such systems.The petitioners, Center for Biological Diversity, Inc., Environmental Working Group, and The Protect our Communities Foundation, contended that the successor tariff did not comply with various requirements of section 2827.1 of the Public Utilities Code. The petitioners argued that the tariff failed to consider the social benefits of customer-generated power, improperly favored the interests of utility customers who did not own renewable systems, failed to promote sustainable growth of renewable energy, and neglected alternatives to promote the growth of renewable systems among customers in disadvantaged communities.The court affirmed the PUC's decision. It held that the PUC had appropriately balanced the various objectives set out by the Legislature in section 2827.1. The court found that the successor tariff was designed to reduce the financial advantage previously given to owners of renewable energy systems under the NEM tariff, which the court said was consistent with the Legislature's aim of balancing costs and benefits to all customers. The court also noted that the PUC had adopted programs to make renewable energy systems more accessible to low-income customers, satisfying the requirement to ensure growth among residential customers in disadvantaged communities.Lastly, the court concluded that the PUC's decision to apply the same tariff to both residential and nonresidential customers was justified, as the nonresidential NEM 2.0 tariff, while cost-effective for the electrical system as a whole, did not balance costs and benefits among all customers. View "Center for Biological Diversity v. Public Utilities Com." on Justia Law

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This case involves an appeal from the Tenth District Court of Appeals of Ohio. The appellant is the State of Ohio, represented by the Attorney General, and the appellees are FirstEnergy Corporation, Samuel Randazzo, and a consulting company controlled by Randazzo. Randazzo, the former chairman of the Public Utilities Commission of Ohio (PUCO), allegedly received a $4.3 million bribe from FirstEnergy Corporation. The state of Ohio filed a civil action against Randazzo and his consulting company to recover the proceeds of the bribe. The state sought attachment orders to prevent Randazzo from draining his bank and brokerage accounts. The trial court granted the state’s motion ex parte, without notice to Randazzo and his attorneys. After learning about the court's decision, Randazzo requested a hearing and moved to vacate the orders. The court held a hearing with both sides present and declined to discharge the orders of attachment. Randazzo appealed to the Tenth District Court of Appeals, which found the orders of attachment had been improperly granted. The Court of Appeals determined that the state had failed to meet its burden at the ex parte hearing to establish the irreparable injury requirement.Upon appeal by the state, the Supreme Court of Ohio reversed the judgment of the Court of Appeals and reinstated the orders of the trial court. The Supreme Court held that the Court of Appeals erred by basing its decision on the ex parte requirements. The Supreme Court ruled that the court of appeals should have reviewed the trial court's denial of the motion to vacate the attachment rather than the irreparable injury requirement for an ex parte order. The Supreme Court concluded that the proper remedy for a party dissatisfied with an ex parte attachment order is to request a hearing on the order at which both parties may be heard. It also concluded that Randazzo failed to demonstrate any prejudice from the use of improper garnishment forms. View "State ex rel. Yost v. FirstEnergy Corp." on Justia Law

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In the case before the United States Court of Appeals for the Sixth Circuit, Brandenburg Telephone Company and Sprint Communications were in disagreement over the interest rate on an award that Sprint Communications conceded it owed to Brandenburg Telephone Company. The $2.2 million award was for unpaid fees that Sprint Communications owed for connecting local telephone calls. The dispute centered on Brandenburg's filed utility tariff which set the interest rate. Sprint argued that the tariff set the rate at 8%, and thus owed $4.3 million in interest, while Brandenburg claimed the tariff imposed a rate of 10.66%, which would result in $7.1 million in interest. The district court ruled in favor of Sprint, and the appeals court affirmed this decision.The court reasoned that the 8% rate set by the Kentucky usury statute was applicable. The court noted that while Brandenburg's tariff offered two alternatives for late payment penalty: (1) the highest interest rate (in decimal value) which may be levied by law for commercial transactions, or (2) a rate of .000292 per day (which works out to an annualized rate of 10.66%); the court interpreted the phrase "levied by law for commercial transactions" to refer to the default rate that Kentucky permits to be collected by law, which is 8%.The court rejected Brandenburg's argument that the 10.66% rate was applicable because the tariff could be viewed as an agreement between the parties and Kentucky law allows for parties to agree on higher interest rates. The court pointed out that tariffs are not freely negotiated contracts, but represent the judgment of regulators about what rates and conditions will prove reasonable and uniform for utility customers. Once regulators approve a tariff, the filed-rate doctrine prevents utilities and their customers from contracting around its terms. In this context, the court determined that the tariff's reference to the maximum rate levied by the General Assembly for general commercial transactions aligned with the filed-rate doctrine, and thus, the 8% default rule of interest applied. View "Brandenburg Telephone Co. v. Sprint Comm'ns Co." on Justia Law

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The United States Court of Appeals for the District of Columbia Circuit examined a case involving the City of Lincoln, also known as Lincoln Electric, a public utility providing electricity to the Lincoln, Nebraska area. Lincoln Electric had invested in the Laramie River Station facilities (LRS) in eastern Wyoming as a source of generation and transmission, despite only serving customers in the Lincoln area.When Lincoln Electric joined the Southwest Power Pool (SPP) in 2009, it transferred control of all its facilities in the Lincoln area to SPP, but retained control of its LRS interest. In 2021, the SPP proposed that Lincoln Electric recover its LRS costs from Zone 19 customers, where LRS is physically located. Other co-owners of the LRS facilities recover their costs from Zone 19 customers.The Federal Energy Regulatory Commission (FERC) rejected the SPP proposal as unjust and unreasonable because Zone 19 customers neither caused Lincoln Electric's LRS investment nor benefited from it, thus violating the cost-causation principle. Lincoln Electric petitioned for review of the relevant FERC orders and the SPP intervened on Lincoln Electric's behalf.The court upheld FERC's decision, ruling that Lincoln Electric failed to demonstrate that the proposed rates were just and reasonable. The court concluded that cost allocation must reflect the costs actually caused by the customer who must pay them. In this case, Lincoln Electric's investment in the LRS was for the benefit of its own Zone 16 customers, not Zone 19 customers. As such, the court found that allocating Lincoln Electric's LRS costs to Zone 19 would violate the cost-causation principle. The petition for review was denied. View "City of Lincoln v. FERC" on Justia Law

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In the case before the Maine Supreme Judicial Court, the Office of the Public Advocate (the appellant) contested a decision by the Public Utilities Commission (PUC) that approved an amended special rate contract between Bangor Natural Gas Company and Bucksport Generation LLC. The appellant argued that the PUC applied the wrong standard in reviewing the contract, which led to unjust or unreasonable rates and undue or unreasonable preference for Bucksport Generation over other Bangor Gas customers. The appellant also argued that the PUC's order should be vacated because it relied on evidence not included in the record.The court disagreed with the appellant's first argument and found the second argument waived, thereby affirming the PUC's order. The court held that the PUC was within its discretion to apply different standards of review for special rate contracts depending on the type of utility service at issue. Given the competitive nature of the natural gas market in Maine, the court deemed the PUC's standard reasonable.Regarding the rates, the court found that the PUC’s approval of the special rate contract did not result in unjust, unreasonable, or discriminatory rates for other Bangor Gas customers. The court noted that incentivizing continued financial contributions from Bucksport Generation to Bangor Gas’s fixed costs was justifiable.Finally, the court ruled that the appellant's argument about the PUC's failure to create an evidentiary record was waived due to the appellant's failure to raise the issue at the PUC level. However, the court acknowledged the appellant's point and advised the PUC to clarify its regulations regarding what materials constitute the evidentiary record in proceedings where an evidentiary hearing is not held. View "Office of the Public Advocate v. Public Utilities Commission" on Justia Law

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The Court of Appeal of the State of California was asked to review a decision by the Public Utilities Commission (PUC) that adopted a new tariff (pricing structure) for utility customers who generate their own power from renewable sources, such as solar panels. This new tariff significantly reduces the price utilities pay for customer-generated power. The petitioners, a group of environmental organizations, argued that the new tariff fails to comply with various requirements imposed by state law, including that it doesn't take into account the societal benefits of customer-generated power, it favors utility customers who don't own renewable systems, it doesn't promote sustainable growth of renewable energy, and it doesn't promote the growth of renewable systems among customers in disadvantaged communities. The court upheld the PUC's decision.The court found that the PUC's decision to base the price paid for exported power on the marginal cost of energy to the utilities served the goal of equity among customers. The court also determined that the PUC's decision complied with the statutory mandate to ensure that the tariff does not grant unwarranted benefits or impose unwarranted costs on any particular group of ratepayers. Lastly, the court found the PUC's efforts to stimulate the adoption of renewable systems in disadvantaged communities sufficient to meet its statutory obligation. View "Center for Biological Diversity v. Public Utilities Com." on Justia Law

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In a dispute involving a power grid operator, PJM Interconnection, L.L.C., and the Federal Energy Regulatory Commission (FERC), the United States Court of Appeals for the Sixth Circuit ruled that the Chairman of FERC exceeded his authority by seeking a remand of a ratemaking challenge without the support of other Commission members.The case originated when PJM filed a request to modify its existing rates for electricity reserves, arguing that the existing rates were unjust and unreasonable. Initially, FERC agreed and approved the new rates. However, after a change in FERC's composition and a unilateral decision by the Chairman to request a voluntary remand from the D.C. Circuit for reconsideration, FERC reversed its decision and found PJM's evidence insufficient.The Sixth Circuit's ruling focused on the procedural irregularity, specifically the Chairman's unilateral decision to seek a remand, which it deemed exceeded his administrative authority. The court stated that a quorum majority must decide the Commission’s policy and dealings with the outside world, and the Chairman acting alone does not meet this requirement. As such, the court vacated the part of FERC's rehearing order that claimed the Chairman had this unilateral authority and remanded the matter back to FERC to address this issue.The court did not address the substantive issue of whether FERC's reversal on the ratemaking decisions was arbitrary and capricious. It noted that any interested party may renew a petition to challenge that decision after FERC resolves the procedural issue. View "PJM Power Providers Grp. v. FERC" on Justia Law

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In a case involving the Federal Energy Regulatory Commission (FERC) and the Electric Power Supply Association and PJM Power Providers Group (collectively, PJM), the United States Court of Appeals for the Sixth Circuit had to address two questions. The first was whether the Chairman of FERC exceeded his authority when he moved for a remand of a ratemaking challenge without the support of any other members of the Commission, and the second was whether FERC's underlying ratemaking decisions were arbitrary and capricious.The case arose from PJM's request to FERC to raise the reserve price cap for electricity from $850 to $2,000 per megawatt hour and to replace the flat $300 per megawatt hour cap after Step 1 with a downward sloping price schedule. Initially, FERC agreed with PJM that the existing price cap and stepwise demand curve were unjust and unreasonable. However, after a change in the composition of the FERC, the Commission sought a voluntary remand from the D.C. Circuit to reconsider its prior decisions. The D.C. Circuit granted the unopposed motion for remand. On remand, the Commission reversed its previous decision and found PJM's evidence insufficient to show that the price caps for reserves and stepwise demand curve were unjust and unreasonable.PJM and others sought rehearing before the Commission, citing a procedural irregularity - the Chairman had directed FERC's Solicitor to seek remand without first informing the other Commissioners - and challenging the substance of the agency’s shift in views. The Commission rejected the request for rehearing but issued a modified order, reaching the same result, and reasoning that Chairman Glick had the unilateral authority to make the remand motion.The Court of Appeals for the Sixth Circuit held that the Chairman of FERC exceeded his legal authority when he requested a remand in the name of the Commission on his own. The court vacated part of the Commission’s order claiming the Chairman had this unilateral authority and remanded the case back to the Commission to decide what, if anything, it could or would have done differently in response to this legal mistake. The court did not rule on whether FERC's underlying ratemaking decisions were arbitrary and capricious, leaving it to the Commission to first resolve the legal mistake. View "Electric Power Supply Ass'n v. FERC" on Justia Law

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This case involves a dispute over a tariff adopted by the Public Utilities Commission (Commission) of the State of California that affects the compensation utilities provide to customers for excess electricity generated by renewable energy systems. The tariff, known as the net energy metering (NEM) tariff, previously required utilities to purchase excess electricity from renewable systems at the same price customers pay for electricity. However, utilities complained that this overcompensated the owners of renewable systems and raised the cost of electricity for customers without renewable systems. In response, the California Legislature enacted a law requiring the Commission to adopt a successor tariff that promotes the continued sustainable growth of renewable power generation while balancing costs and benefits to all customers.Several environmental groups challenged the Commission's newly adopted successor tariff, asserting that it did not comply with various statutory requirements. The Court of Appeal of the State of California First Appellate District upheld the Commission's tariff. The court found that the Commission's successor tariff adequately served the various objectives of the law and was based on a reasonable interpretation of its statutory mandate. The court also found that the Commission's decision to value exported energy from renewable systems based on the marginal cost of energy to the utilities was a reasonable approach to fulfilling the law's requirement to balance the equities among all customers. The court rejected the plaintiffs' arguments that the Commission had failed to properly account for the costs and benefits of renewable energy, and that it had improperly favored the interests of utility customers who do not own renewable systems. The court also found that the Commission had properly fulfilled the law's requirement to include specific alternatives designed for growth among residential customers in disadvantaged communities. The court affirmed the decision of the Commission. View "Center for Biological Diversity v. Public Utilities Com." on Justia Law