Justia Utilities Law Opinion Summaries

Five months after the Department of Public Utilities ("department") approved the request of Bay State Gas Company ("Bay State") to sell and transfer all the common stock of its subsidiary Northern Utilities, Inc. ("Northern"), Bay State filed a petition for a general increase in its natural gas distribution rates. The department denied that request while allowing Bay State a general rate increase of $19 million. Bay state appealed the department's decision asserting several points of error. The court affirmed the department's decision and held that the department expressly left open the "appropriate ratemaking treatment" to be afforded the operational cost impacts associated with the sale of Northern. Therefore, it was appropriate to address proper treatment of once-shared functions in light of Bay State's assertions during the section 96 Northern proceeding. The court rejected Bay State's other assertions and remanded to the county court where a judgment was to be entered affirming the decisions and order of the department.

Appellant, a Montana limited partnership which owned an electrical generating plant in Rosebud County, appealed the district court's order denying its motion to vacate the arbitration award ("Final Award") in its dispute with appellee, a Delaware corporation and a regulated public utility conducting business in Montana. At issue was whether the district court abused its discretion when if failed to vacate, modify, or correct the arbitration award. The court held that the district court did not abuse its discretion in denying appellant's motion where Montana's Uniform Arbitration Act, 27-5-311 MCA, did not permit a court to vacate an arbitration award in part; where Montana law was clear that a non-breaching party was still required to prove its damages; where the district court correctly noted in its order confirming the Final Award that the legal precedent on which appellant relied for its request to modify or correct the Final Award applied only to motions to vacate an award; and where the district court correctly determined that it lacked the authority to vacate the Final Award.

In consolidated appeals, plaintiff challenged the district court's conclusions that its property was properly included in the South of Laramie Water and Sewer District ("district") and that the district lawfully issued certain general obligation bonds. Plaintiff also challenged the refusal of the Board of County Commissioners of Albany County ("board") to exclude plaintiff's property from the district. The court affirmed Docket No. S-10-0199 and held that plaintiff was barred from challenging the inclusion of its property in the district and found that the district's proposed general obligation bond issue was not unlawful. In Docket No. S-10-0238, the court answered certified questions related to the Wyoming board of county commissioners' power to remove real property from a water and sewer district and the district court's dismissal of plaintiff's claim under W.R.C.P. 12(b)(6). The court affirmed the district court's dismissal of Claim I under section 12(b)(6) where a motion to dismiss under section 12(b)(6) was an appropriate vehicle in which to raise the issue of the passage of a period of limitations; where Wyo. State. Ann 41-10-107(g) unambiguously forbade any "petition in error [or] other appeal" from a board's resolution establishing a water district, and unambiguously stated that the "organization of the district shall not be directly or collaterally questioned in any suit, action or proceeding" except "an action in the nature of a writ of quo warranto, commenced by the attorney general within thirty (30) days after the resolution..."; and where there was no inherent right to appeal from administrative action.

Plaintiff filed suit against defendants, Wayne Hagan and James Joubert, alleging that Joubert was negligently excavating on a backhoe and severed plaintiff's underground fiber-optic cable in violation of the Louisiana Damage Prevention Act, LA. REV. STAT. ANN 40:1749,11 et seq., and that Hagan was vicariously liable because Joubert was acting as his agent at the time. At issue was whether the district court erred when it refused to give the jury plaintiff's proposed instruction on trespass. Also at issue was whether the district court erred when it excluded statements made by Hagan's attorney to plaintiff's employee under Federal Rule of Evidence 408; when it refused to certify plaintiff's witness as an expert; and when it held that defendants were entitled to attorneys' fees and costs. The court certified the first issue where the Louisiana Supreme Court had not previously determined what standard of intent was used for trespass to underground utility cables and the issue was determinative of whether plaintiff was entitled to a new trial on its trespass claim. The court held that the statements made by Hagan's attorney to plaintiff's employer could have been excluded on other grounds given that it was inadmissible hearsay against Joubert and therefore, the court declined to remand for a new trial on this ground. The court also held that the district court did not commit a reversible error where plaintiff did not proffer the substance of plaintiff's witness' excluded testimony. Finally, the court deferred addressing the attorneys' fees issue pending the Louisiana Supreme Court's decision on the first issue.

Plaintiff Great Wolf Lodge of Traverse City, LLC (Lodge) is a water park that sits on former farmland. In 2000, the Lodge annexed a new portion of the former farmland to expand its premises. Defendant Cherryland Electric Cooperative (Cherryland) ran an electric line to the former farm. Cherryland insisted that it had exclusive rights to provide electric service to the Lodge. The Lodge did not protest Cherrylandâs assertion in order to keep its expansion project on track. The new Cherryland contract called for discounted rates. Over the course of the contract, Cherryland unilaterally raised the rates. The Lodge filed suit seeking a refund of excess rates it paid to Cherryland, and to have the ability to choose its own electric service provider. A hearing officer would rule in favor of the Lodge on the rate refund, but would not allow it to choose its own service provider, citing Cherrylandâs âright of first entitlementâ that dated back to when it provided service to the farm. The appellate court reversed the hearing officer. One of the issues on appeal to the Supreme Court was whether Cherrylandâs âright of first entitlementâ stopped when the property ownership changed hands. The Court concluded that the right is not extinguished when ownership changes. The Court reversed the judgment of the appellate court, and reinstated the decision of the hearing officer.

The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.

The Alcoa Power Generating Company ("Alcoa") petitioned for review of two orders of the Federal Energy Regulatory Commission ("Commission") with respect to the relicensing of its Yadkin Project facilities in North Carolina. At issue was whether the petition for review was ripe in light of on-going state administrative review and stay of certification and whether the certifying agency waived its authority by not issuing a certification that was effective and complete within one year under section 401 of the Clean Water Act ("Act"), 33 U.S.C. 1341(a)(1). The court held that the petition was ripe for review where the waiver issue was fit for review and the legally cognizable hardship that Alcoa would suffer from delay sufficed to outweigh the slight judicial interest in the unlikely possibility that the court may never need to decide the waiver issue. The court also held that there was no waiver issue where the "effective" clause would not operate to delay or block the federal licensing proceeding beyond section 401's one-year period.