Justia Utilities Law Opinion Summaries

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

The City of Newport’s Utility Department, Water Division (Newport Water) filed a rate application with the Public Utilities Commission (PUC) requesting a revenue increase. The PUC issued an order in docket No. 3818 ordering that money Newport Water owed to the City be paid back to the City under certain conditions. Newport Water subsequently filed another application for a rate increase - docket No. 4025. The PUC issued an order concluding that Newport Water had commenced the required repayment of its debt owed to the City. Portsmouth Water and Fire District (Portsmouth) petitioned the Supreme Court for a writ of certiorari. The Supreme Court vacated the PUC’s order, concluding that the PUC order failed to enforce the order in docket No. 3818, and remanded to the PUC with directions to make more specific findings of fact to support the PUC’s conclusion that Newport Water complied with the order in docket No. 3818. This appeal concerned the PUC’s order on remand. The Supreme Court (1) affirmed the PUC’s order in regard to its definition, identification, and quantification of “efficiencies” as it relates to the order in docket No. 3818; and (2) vacated the PUC’s order to the extent it allowed Newport Water to use $191,997 in excess revenues to pay down its debt to the City. View "Portsmouth Water and Fire District v. Rhode Island Public Utilities Commission" on Justia Law

Zahn is a residential consumer, decided to purchase electricity from North American Power & Gas (NAPG), an alternative retail electric supplier (ARES) under the Electric Service Customer Choice and Rate Relief Law , 220 ILCS 5/16-102. NAPG sent Zahn a letter stating that she would receive its “New Customer Rate” of $0.0499 per kilowatt-hour during her first month of service and a “market based variable rate” thereafter. NAPG's “Customer Disclosure Statement” indicated a month-to-month term and that “[o]ther than fixed and/or introductory/promotional rates, all rates shall be calculated in response to market pricing, transportation, profit and other market price factors” and that its prices were “variable” based on “market prices for commodity, transportation, balancing fees, storage charges, [NAPG] fees, profit, [and] line losses ... may be higher or lower than your [local public utility].” Zahn never received the $0.0499 per kilowatt-hour rate. During her first two months of service, NAPG charged her $0.0599 per kilowatt-hour. Thereafter, the rate it charged her was always higher than what she would have paid her local public utility. Zahn filed a class action, alleging Consumer Fraud and Deceptive Business Practices Act violations (815 ILCS 505/1), breach of contract, and unjust enrichment. Zahn appealed dismissal of the case to the Seventh Circuit, which certified a question of Illinois law: Does the Illinois Commerce Commission (ICC) have exclusive jurisdiction over a reparation claim, as defined in precedent in Sheffler v. Commonwealth Edison, brought by a residential consumer against an ARES? The Illinois Supreme Court responded that the ICC does not have exclusive original jurisdiction over such claims. The claims may be pursued through the courts. View "Zahn v. North American Power & Gas, LLC" on Justia Law

In 2013, the City of Detroit filed for chapter 9 bankruptcy protection, facing problems “run[ning] wide and deep”—including the affordable provision of basic utilities. In 2014, plaintiffs, customers, and the purported representatives of customers, of the Detroit Water and Sewerage Department (DWSD), filed an adversary proceeding, based on DWSD’s termination of water service to thousands of residential customers. Citing 42 U.S.C. 1983 and the Supreme Court holding in Monell v. Department of Social Services, plaintiffs sought injunctive relief. The Sixth Circuit affirmed dismissal. Section 904 of the Bankruptcy Code explicitly prohibits this relief. Whether grounded in state law or federal constitutional law, a bankruptcy court order requiring DWSD to provide water service at a specific price, or refrain from terminating service would interfere with the City’s “political [and] governmental powers,” its “property [and] revenues,” and its “use [and] enjoyment of . . . income-producing property,” 11 U.S.C. 904. Plaintiffs’ due process and equal protection claims were inadequately pled. View "Lyda v. City of Detroit" on Justia Law

In 2000, the Public Utilities Commission of Ohio first approved a corporate separation plan for Cincinnati Gas & Electric Company, now known as Duke Energy Ohio, Inc. Over the next decade, the Commission approved a series of amendments to the plan. In 2014, Duke filed an application for approval of a fourth amended corporate separation plan, which sought approval to commence offering nonelectric products and services to its customers. The Commission approved Duke’s application. Interstate Gas Supply, Inc. appealed, arguing, inter alia, that the Commission’s orders violated Ohio Rev. Code 4903.09, a statute requiring the Commission to file written opinions setting forth the reasons for its decision in all contested cases. The Supreme Court agreed and reversed, holding that the Commission violated section 4903.09 by failing to set forth in its order its reasons in sufficient details to enable the Supreme Court to determine how it reached its decision. Remanded. View "In re Application of Duke Energy Ohio, Inc., for Approval of its Fourth Amended Corporate Separation Plan" 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

The power companies allege that they were overcharged for electricity during several months in 2000–2001 and sought to recover the overcharges from the federal government based on sales by the federal Western Area Power Administration (WAPA) and Bonneville Power Administration (BPA). The California Power Exchange (Cal-PX) and the California Independent System Operator (Cal-ISO) were responsible for acquiring and distributing electricity between producers and consumers in California and setting prices for the electricity. The power companies argued that a contract existed between all consumers of electricity (including themselves) and all producers of electricity (including the government agencies) in California. The government argued that the contracts were only between the middleman entities—Cal-PX and Cal-ISO—and the consumers and producers individually. The Claims Court dismissed for lack of standing. The Federal Circuit affirmed. The companies lack privity of contract or any other relationship with the government that would confer standing. Under the Tucker Act, the Claims Court has jurisdiction over contract cases in which the government is a party, 28 U.S.C. 1491(a)(1); normally a contract between the plaintiff and the government is required to establish standing. The court noted that the companies may have claims against the parties with whom they are in contractual privity, the electricity exchanges. View "Pacific Gas & Elec. Co. v. United States" on Justia Law

This matter involved a challenge to the final order of the Montana Public Service Commission disallowing $1,419,427 in claimed excess electric regulation costs and adjusted energy efficiency savings calculations. NorthWestern Corporation - doing business as NorthWestern Energy, the Natural Resources Defense Council, and Human Resources Council, District XI appealed the Commission’s decision. The district court affirmed the Commission’s final order. The Supreme Court affirmed, holding (1) the Commission used the correct legal standard in reviewing NorthWestern’s claim for excess outage costs; and (2) the “free ridership” and “spillover” calculations adopted by the Commission were supported by substantial evidence. View "Northwestern Corp. v. Dep’t of Pub. Serv. Regulation" on Justia Law

Plaintiffs, “telephone corporations” require installation of wireless facilities, including antennas, transmitters, and power supplies, on existing utility poles in the city’s rights-of-way. In 2011, San Francisco adopted an ordinance, requiring Plaintiffs to obtain a permit before installing or modifying any wireless facility in the public right-of-way, citing the need “to regulate placement … that will diminish the City’s beauty.” The ordinance required a showing of technological or economic necessity and created three “Tiers” of facilities based on equipment size. It conditioned approval for Tiers II and III on aesthetic approval; locations designated “Planning Protected” or “Zoning Protected,” or “Park Protected,” triggered different aesthetic standards. Any Tier III facility required a finding that “a Tier II Facility is insufficient to meet the Applicant’s service needs.” “Any person” could protest tentative approval of a Tier III application. The trial court held that the modification provisions violated the Middle Class Tax Relief and Job Creation Act; provisions conditioning approval on economic or technological necessity, were preempted by section 7901. The aesthetics-based compatibility standards were not preempted. An amended ordinance, enacted in response, retained the basic permitting structure, but removed the size-based tiers, requiring compliance with aesthetics-based standards based on location. The court of appeal reversed, finding that the ordinance was not preempted. View "T-Mobile W., LLC v. City & Cnty. of. San Francisco" on Justia Law

Petitioners seek review of FERC's determination that various energy companies committed tariff violations in California during the summer of 2000. As part of a deregulation program, California created two nonprofit entities: the California Power Exchange Corporation (“CalPX”) and the California Independent System Operator Corporation (“Cal-ISO”). Both entities were subject to FERC jurisdiction, with CalPX operating pursuant to a FERC-approved tariff and wholesale rate schedule. The Cal-ISO tariff comprehensively regulated California’s power markets, and incorporated the Market Monitoring and Information Protocol (“MMIP”), which set forth rules for identifying and protecting against abuses of market power. The court concluded that FERC’s determination that Shell, MPS, and Illinova (“sellers”) violated the Cal-ISO tariff and MMIP during the Summer Period was not arbitrary, capricious, or an abuse of discretion. In this case, FERC reasonably interpreted the Cal-ISO tariff and the MMIP according to the plain text of those documents. Therefore, the court rejected the sellers’ claims that the tariff and MMIP did not proscribe the practices identified by the agency. Furthermore, FERC’s interpretation of the Cal-ISO tariff and the MMIP finds support not only in text, but in policy as well. The court concluded that FERC reasonably interpreted the Cal-ISO tariff and the MMIP to prohibit the practices of False Export, False Load Scheduling and Anomalous Bidding. In addition, the agency reasonably concluded that the tariff and MMIP sufficed to put sellers on notice that such practices were not permitted. The court also concluded that FERC reasonably concluded that the sellers engaged during the Summer Period in the practices deemed tariff violations by the orders on review. Finally, the court concluded that FERC’s Summer Period determinations regarding APX and BP were not arbitrary, capricious, or an abuse of discretion. Accordingly, the court denied the petitions for review in part and dismissed in part. View "MPS Merchant Serv. v. FERC" on Justia Law