Justia Utilities Law Opinion Summaries

A city-owned utility charges rates to its customers that do not "exceed the reasonable costs" of providing the utility service, but at the end of each fiscal year, the city routinely invokes its power under the city's charter to, via multiple steps, transfer the "surplus" in the utility's revenue fund—the amount left over after paying all "outstanding demands and liabilities" which, if transferred, will not have a "material negative impact" on the utility's "financial condition" (L.A. Charter, section 344(b))—to the city's general fund. Plaintiff filed suit against the city defendants, alleging that this routine practice by the city constitutes a "tax" that requires voter approval.The Court of Appeal affirmed the trial court's dismissal of the action challenging the practice as being an unlawful "tax." The court held that the city's alleged, ongoing practice of transferring a “surplus” from the DWP's revenue fund to the city's General Fund where, as also alleged, the rates charged by the DWP to its customers nevertheless do not exceed the costs of providing electricity to them, does not constitute a "tax" for three reasons. First, the practice does not satisfy the definition of a "tax" under the plain language of the California Constitution. Second, this conclusion is the one that best accords with the purpose behind the Constitution's restrictions on local taxation, namely to stop local governments from extracting even more revenue from California taxpayers. Third, Citizens for Fair REU Rates v. City of Redding (2018) 6 Cal.5th 1, strongly suggests that the city's yearly transfers of surplus funds do not constitute a "tax" when they do not cause the DWP's rates to exceed its costs of providing electricity. In this case, because plaintiff will be bound in any future amended complaints by the same verified allegations that doom his claims now, the court concluded that he cannot cure these defects by amendment and the trial court properly sustained the demurrer without leave to amend. View "Humphreville v. City of Los Angeles" on Justia Law

The Supreme Court reversed the orders of the Public Utilities Commission finding that intervening appellee Ohio Edison Company's 2017 earnings were not significantly excessive, holding that the Commission's decision to exclude revenue resulting from Ohio Edison's Distribution Modernization Rider (DMR) from the earnings test was not reasonable.Electric distribution utilities that opt of provide service under an electric security plan must undergo an annual earnings review by Commission. If the Commission finds that the plan resulted in significantly excessive earnings compared to similar companies, the utility must return the excess to its customers. The Office of the Ohio Consumers' Counsel appealed from the Commission's orders finding that Edison's 2017 earnings were not significantly excessive. The Supreme Court reversed, holding that the Commission's exclusion from the earnings test revenue resulting from the DMR, which was approved as part of Edison's electric security plan, was not reasonable. View "In re Determination of Existence of Significantly Excessive Earnings for 2017 Under the Electric Security Plan of Ohio Edison Co." on Justia Law

Environmental groups challenged the constitutionality of Public Resources Code section 25531, which limits judicial review of decisions by the Energy Resources Conservation and Development Commission on the siting of thermal power plants. Section 25531(a) provides that an Energy Commission siting decision is “subject to judicial review by the Supreme Court of California.” The plaintiffs contend this provision abridges the original jurisdiction of the superior courts and courts of appeal over mandate petitions, as conferred by California Constitution Article VI, section 10. Section 25531(b) provides that findings of fact in support of a Commission siting determination “are final,” allegedly violating the separation of powers doctrine by depriving courts of their essential power to review administrative agency findings (Cal. Const., Art. III, section 3; Art. VI, section 1).The court of appeal affirmed summary judgment in favor of the plaintiffs. The Article VI grant of original jurisdiction includes the superior courts and courts of appeal and may not be circumscribed by statute, absent some other constitutional provision. Legislative amendments to section 25531 have broken the once-tight link between the regulatory authority of the Public Utilities Commission (PUC) and Energy Commission power plant siting decisions, such that the plenary power Article XII grants the Legislature over PUC activities no longer authorizes section 25531(a). Section 25531(b) violates the judicial powers clause by preventing courts from reviewing whether substantial evidence supports the Commission’s factual findings. View "Communities for a Better Environment v. Energy Resources Conservation & Development Commission" on Justia Law

Proposition 218, the Right to Vote on Taxes Act, generally required local governments obtain voter approval prior to imposing taxes. Plaintiffs Jess Willard Mahon, Jr. and Allan Randall brought this certified class action against the City of San Diego (City) claiming that the City violated Proposition 218 by imposing an illegal tax to fund the City’s undergrounding program. Specifically, plaintiffs contended the City violated Proposition 218 through the adoption of an ordinance that amended a franchise agreement between the City and the San Diego Gas & Electric Company (SDG&E). The ordinance, together with a related memorandum of understanding, further specifies that part of the money to fund the undergrounding budget will be collected by SDG&E through a 3.53 percent surcharge on ratepayers in the City that will be remitted to the City for use on undergrounding (Undergrounding Surcharge). Plaintiffs claim that the surcharge is a tax. Plaintiffs further claim that the surcharge violates Proposition 218 because it was never approved by the electorate. Plaintiffs note that the City has imposed more than 200 million dollars in charges pursuant to the Undergrounding Surcharge during the class period. Through this action, plaintiffs seek a refund of those amounts, among other forms of relief. The City moved for summary judgment, which the trial court granted on two grounds: (1) the Undergrounding Surcharge constituted compensation for franchise rights and thus was not a tax; alternatively, (2) the Undergrounding Surcharge was a valid regulatory fee and not a tax. After review, the Court of Appeal concluded the trial court properly granted the City’s motion for summary on the ground that the Undergrounding Surcharge was compensation validly given in exchange for franchise rights and thus, was not a tax subject to voter approval. View "Mahon v. City of San Diego" on Justia Law

The California State Lands Commission and Aspen American Insurance Company filed suit against Plains Pipeline and its affiliate, alleging that when Plains's negligent maintenance of a pipeline resulted in disrupting the flow of oil, it also disrupted the payment of royalty income to the Commission, and caused damage to improvements on the Commission's land.The Court of Appeal reversed the trial court's judgment in favor of Plains, holding that Plains is not exempt from liability for the interruption in service. The court explained that no statute grants immunity to public utilities and whether immunity applies is a question of judicial policy. In this case, Plains does not deliver essential municipal services to members of the general public and, although it is called a public utility, it is a private business, entitled to no more immunity from liability than any ordinary private business. The court also held that the complaint alleges sufficient facts to show a special relationship between the parties that allows the Commission to recover purely economic damages. As for the reverse condemnation claim raised for the first time on appeal, the court noted that the proper procedure is to make any motion to amend in the trial court in the first instance. View "State Lands Commission v. Plains Pipeline, L.P." on Justia Law

In September 2012, Steven Mader was working on a project involving repairs to a chimney, fireplace, and front stoop of a home in the North Hills of Pittsburgh, Pennsylvania. After Mader completed the project and his crew was cleaning the premises, his customer asked if he would check the gutters of the home to see if any mortar from the chimney repair had washed into the gutters during a recent rainstorm. Mader, after checking the gutters, was returning to his truck with the ladder. Mader had not noticed that there was an electrical power line only 11 feet from the customer’s home. The top of the ladder made contact with the power line and 13,000 volts of electricity ran down the ladder and through Mader’s body. Mader survived, but had sustained significant injuries to his feet and arms. Mader was eventually able to return to work, but closed his business for good following his final surgery. In April 2013, Mader sued Appellee Duquesne Light Company, the owner of the power line the ladder came into contact with, in the Allegheny County Court of Common Pleas. Mader alleged that Duquesne Light’s negligence in maintaining the electric lines too close to the ground caused his injuries and that Duquesne Light acted with reckless indifference to his safety; he also sought punitive damages. At the conclusion of a trial by jury, Duquesne Light was found to be 60% negligent and Mader was found to be 40% negligent for his injuries. Mader filed a motion for post-trial relief requesting a new trial on the issue of damages. Duquesne Light acknowledged that Mader was entitled to a new trial on damages for pain and suffering until the date his wounds healed, and disfigurement. It denied, however, that Mader was entitled to a new trial on future noneconomic damages or either past or future lost earnings. Nevertheless, the trial court granted Mader’s request for a new trial on all damages. The Pennsylvania Supreme Court agreed with the superior court that the trial court abused its discretion in ordering a new trial on all damages. View "Mader v. Duquesne Light" on Justia Law

The Supreme Court affirmed the decision of the Public Utilities Commission finding that Suburban Natural Gas Company failed to prove the allegation in its complaint that Columbia Gas Company of Ohio, Inc. had improperly used one of its demand-side management (DSM) programs to unlawfully gain an anticompetitive advantage over Suburban, holding that Suburban failed to demonstrate reversible error.Suburban and Columbia each provided natural-gas distribution service to customers in southern Delaware County. Under the DSM program at issue in this case, Columbia was authorized to offer cash incentives directly to residential builders to construct homes that exceeded certain energy efficiency standards. Suburban filed a complaint alleging that Columbia used this program to pay financial incentives to a home builder to displace Suburban as the provider of natural gas to a planned residential subdivision. The Commission entered an order finding that Suburban had failed to prove the allegations in the complaint. The Supreme Court affirmed, holding that Suburban failed to demonstrate that the Commission erred in deciding the complaint in Columbia's favor. View "Surburban Natural Gas Co. v. Columbia Gas of Ohio, Inc." on Justia Law

The Supreme Court held that a common pleas court has subject-matter jurisdiction to determine whether an easement granting a public utility the right to trim, cut and remove trees, limbs, underbrush or other obstructions permits the public utility to use herbicide to control vegetation within the easement.At issue was whether a public utility may remove vegetation from an easement by use of herbicide. The court of common pleas dismissed this matter as falling within the exclusive jurisdiction of the Public Utilities Commission of Ohio (PUCO). The court of appeals reversed. The Supreme Court affirmed in part and reversed in part, holding (1) this case was not within the exclusion jurisdiction of the PUCO and may be heard and decided by the court of common pleas; and (2) the court of appeals went beyond the narrow issue presented on appeal when it examined the merits of the case and determined that the language of the easements was ambiguous. View "Coder v. Ohio Edison Co." on Justia Law

This appeal arose from a consolidated cases filed by plaintiff Northern New England Telephone Operations, LLC d/b/a FairPoint Communications-NNE (FairPoint), against several New Hampshire towns and cities, asserting claims of ultra vires taxation and disproportionate taxation. As “representative municipalities” in the “test cases” established for this litigation, defendants, the Town of Durham and the Town of Hanover (Towns), appealed two superior court orders challenging: (1) the grant of summary judgment on the ultra vires ruling because they contended the agreements authorizing such use or occupation did not satisfy the requirements of RSA 72:23, I(b) (2012) (amended 2017, 2018, 2020); and (2) the superior court’s decision after trial, arguing that the court committed several errors in concluding that FairPoint was entitled to abatements of its tax assessments from the Town of Durham and the Town of Hanover for tax years 2013 and 2011 respectively. The New Hampshire Supreme Court agreed with the Towns that the superior court erred with respect to the tax on the value of FairPoint's use or occupation of municipal rights-of-way was ultra vires. FairPoint’s use or occupation of municipal rights-of-way was not pursuant to a perpetual lease that gave rise to an independently taxable property interest; FairPoint met its burden to prove it was taxed disproportionately by the Towns. Judgment was affirmed in part, reversed in part and consequently abating the two tax assessments at issue. View "Northern New England Telephone Operations, LLC d/b/a FairPoint Communications - NNE v. Town of Acworth" on Justia Law

The Supreme Court affirmed the judgment of the district court concluding that the Montana Public Service Commission (PSC) arbitrarily and unlawfully reduced solar qualifying facility (QF) standard-offer rates by excluding carbon dioxide emissions costs and NorthWestern Energy's avoided costs of operating its internal combustion engine resource units from the avoided-cost rate, holding that the district court did not err.Specifically, the Supreme Court held that the district court did not err in determining that the PSC did not comply with the Public Utility Regulatory Policies Act (PURPA) and Montana's mini-PURPA when it set the standard-offer contract rates and maximum contract lengths for qualifying small (QF-1) solar power producers. The PSC's decision to reduce the standard-offer QF-1 rates was arbitrary and unreasonable because the PSC failed to consider future carbon costs and failed to provide a reasoned decision in departing from its recent precedent. Further, the PSC unreasonably failed to consider NorthWestern's cost of operating its new internal combustion engine resources when setting the avoided-cost rate. View "Vote Solar v. Montana Department of Public Service Regulation" on Justia Law