Justia Utilities Law Opinion Summaries

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

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

In this dispute, two renewable-energy generating companies, Tyngsboro Sports II Solar, LLC and 201 Oak Pembroke Solar LLC, appealed to the United States Court of Appeals for the First Circuit after their class-action lawsuit was dismissed by the District Court for the District of Massachusetts due to lack of subject-matter jurisdiction. The plaintiffs had a longstanding disagreement with defendants, utility companies National Grid USA Service Company, Inc. and Massachusetts Electric Company, over certain tax-related fees charged to them. The plaintiffs sought redress in federal court after unsuccessful petitions to state authorities.The plaintiffs argued that the district court had jurisdiction due to the case's connection to federal tax law, however, the appellate court disagreed, stating that the plaintiffs' complaint did not bring any claim that arose under federal law. The plaintiffs had brought forth four claims against National Grid, including a request for declaratory relief, a state-law claim for a breach of the covenant of good faith and fair dealing, a state-law claim for restitution and unjust enrichment, and a state-law claim for violating a statutory requirement that public utilities assess only just and reasonable charges.The appellate court affirmed the district court's dismissal of the case, finding that the plaintiffs could not establish federal-question jurisdiction simply by asserting a state-law claim to which there was a federal defense. The court noted that the state-law claims did not necessarily raise a federal issue, and to the extent that one did, the issue was not substantial. As such, the court concluded that the district court lacked jurisdiction over the claims. View "Tyngsboro Sports II Solar, LLC v. National Grid USA Service Co., Inc." on Justia Law

The Supreme Court held, in response to a request by the United States Court of Appeals for the Ninth Circuit, that Cal. Publ. Util. Code 1759 bars a lawsuit that seeks damages resulting from public safety power shutoffs (PSPS) events where the suit alleges that a utility's negligence in maintaining its grid necessitated shutoffs but does not allege that the shutoffs were unnecessary or violated the regulations of the California Public Utilities Commission (PUC).To reduce the risk that its utility infrastructure would ignite a wildfire during extreme weather conditions Pacific Gas and Electric Company (PG&E) conducted a series of emergency power shutoffs that Plaintiff alleged were necessitated by PG&E's negligence in maintaining its power grid. Plaintiff filed a class action complaint against PG&E requesting class damages of $2.5 billion. At issue before the Supreme Court was whether section 1759 barred this lawsuit. The Supreme Court answered the question in the positive, holding that allowing suit under the circumstances here would interfere with the PUC's comprehensive regulatory and supervisory authority over PSPS. View "Gantner v. PG&E Corp." on Justia Law

Petitioner Liberty Utilities (EnergyNorth Natural Gas) Corp., d/b/a Liberty (Liberty), appealed a New Hampshire Public Utilities Commission order denying Liberty’s request to recover development costs related to a proposed natural gas pipeline and tank system, the Granite Bridge project. This case arose from an unrealized construction project. Liberty relied solely on Tennessee Gas Pipeline Co., LLC (Tennessee Gas Pipeline) for its gas supply in southern and central New Hampshire. Liberty executives testified that Liberty sought more supply from Tennessee Gas Pipeline because Liberty was facing increased demand. Liberty and Tennessee Gas Pipeline agreed to an arrangement whereby Liberty would receive additional gas from a second pipeline, but Tennessee Gas Pipeline cancelled that arrangement. In response, Liberty began to explore other options, and eventually decided to construct its own pipeline and tank system, the Granite Bridge project. Liberty estimated that $7.5 million of that amount consisted of engineering, environmental, consulting, internal labor, commission related costs, and land costs. Despite those costs, according to Liberty, it would have been years before Liberty broke ground on Granite Bridge. Later, Tennessee Gas Pipeline offered Liberty more space on its pipeline at a cheaper rate than the projected cost of Granite Bridge. Liberty accepted that offer, and then cancelled the Granite Bridge project. The New Hampshire Supreme Court concluded Liberty could not recover its costs when it cancelled the project and consumers derived no benefit. The Commission's order was thus affirmed. View "Appeal of Liberty Utilities (EnergyNorth Natural Gas) Corp., D/B/A Liberty" on Justia Law

The Supreme Court affirmed the decision of the Public Service Commission allocating partial replacement power costs to Duke Energy Florida, LLC (DEF), holding that the Office of Public Counsel (OPC) waived the arguments it presented on appeal.In its appeal to the Supreme Court for judicial review OPC raised a series of legal challenges to the Commission's authority to assign partial costs and consider mitigating factors when making a determination that DEF's actions were "reasonable and prudent" and argued that the Commission erred in interpreting and applying the burden of proof. DEF argued in response that the issues were not preserved for appellate review. The Supreme Court agreed and affirmed, holding that the issues raised by OPC were not properly preserved and were thus waived. View "Citizens of State of Fla. v. Clark" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment for Defendants and denying relief in this class action, holding that the district court did not err.In 2014, over two-thirds of the members of the Try County Telephone Association, Inc., a Wyoming cooperative utility providing telecommunication services on a non-profit basis, voted to sell the Cooperative, including its for-profit subsidiaries, to entities owned by Neil Schlenker. Schlenker converted the Cooperative into a for-profit corporation (TCT). After the sale, Class Representatives filed a class action lawsuit against TCT, Schlenker and his entities, and others, alleging fraud conversion and other claims and requesting that the sale be set aside. The district court granted summary judgment in favor of Defendants. The Supreme Court affirmed, holding that the district court did nor err in granting summary judgment on all claims. View "Campbell v. Davidson" on Justia Law

The Illinois Cable and Video Competition Law requires operators to obtain statewide authorization and become a “holder” and requires anyone who wants to provide cable or video service to obtain permission from state or local authorities and pay a fee, as a condition of using public rights of way. In recent years traditional cable services have been supplemented or replaced by streaming services that deliver their content through the Internet. East St. Louis, contending that all streaming depends on cables buried under streets or strung over them, sought to compel each streaming service to pay a fee. None of the defendants were “holders.” A magistrate dismissed the complaint, concluding that only the Attorney General of Illinois is authorized to sue an entity that needs but does not possess, “holder” status.The Seventh Circuit affirmed, first concluding that it had jurisdiction under 28 U.S.C. 1332(a). Normally the citizenship of any entity other than a corporation depends on the citizenship of its partners and members but, under section 1332(d), part of the Class Action Fairness Act, an unincorporated entity is treated like a corporation. The court then held that the statutory system applies to any “cable service or video service” and the defendants do not offer either. If “phone calls over landline cables, electricity over wires, and gas routed through pipes are not trespasses on the City’s land— and they are not—neither are the electrons that carry movies and other videos.” View "City of East St. Louis v. Netflix, Inc." on Justia Law

Cal-Am, an investor-owned utility that supplies water to much of the Monterey Peninsula, was subject to a state order to cease its decades-long overuse of certain water sources. Cal-Am sought to comply by drawing seawater and brackish water from coastal aquifers for desalination. The California Public Utilities Commission (CPUC), acting under the California Environmental Quality Act (CEQA, Pub. Resources Code, 21050), certified a final environmental impact report (EIR), and granted Cal-Am a Certificate of Public Convenience and Necessity. The City denied Cal-Am coastal development permits to install the intake wells. Cal-Am appealed to the California Coastal Commission.The County approved a permit to construct the desalination plant in unincorporated Monterey County. Marina Coast Water District challenged that approval, arguing that the County violated CEQA by failing to prepare a subsequent or supplemental EIR and adopting an unsupported statement of overriding considerations, and violated its own general plan by approving a project that lacked a long-term sustainable water supply. The trial court ruled that the County was not required to prepare another EIR and did not violate its own general plan, but unlawfully relied on the water-related benefits of the desalination plant in its statement of overriding considerations without addressing the uncertainty introduced by the City’s denial of the coastal development permit. The court of appeal reversed; the County’s statement of overriding considerations was supported by substantial evidence and any remaining deficiency in the statement was not prejudicial. View "Marina Coast Water District v. County of Monterey" on Justia Law

Over the last five decades, California voters have adopted several initiatives limiting the authority of state and local governments to impose taxes without voter approval, including adding Article XIII C of the California Constitution, which requires local and regional governmental entities to secure voter approval for new or increased taxes and defines taxes broadly to include any charges imposed by those entities unless they fall into one of seven enumerated exceptions. The second exception covers charges for services or products that do not exceed reasonable costs. Boyd contends that the electricity rates charged by a regional governmental entity, 3CE, are invalid because they are taxes under Article XIII C that voters have not approved.The court of appeal affirmed the dismissal of the suit; 3CE’s rates are taxes under Article XIII C’s general definition of taxes, but they fall within the second exception because 3CE proved that its rates do not exceed its reasonable costs. View "Boyd v. Central Coast Community Energy" on Justia Law