Justia Utilities Law Opinion Summaries

An electric utility company operating both within and outside Oregon was subject to central assessment for property tax purposes. For the 2020-21 tax year, the company and the Oregon Department of Revenue disagreed on the company’s overall value and the portion attributable to Oregon. The dispute centered on the methods used to determine real market value, specifically whether certain deductions and valuation models used by the company’s appraiser were consistent with the Department’s adopted standards. The Department relied on an administrative rule that incorporated the Western States Association of Tax Administrators (WSATA) Handbook, which prescribes valuation methods for centrally assessed properties.The Oregon Tax Court heard the case and considered expert testimony from both parties. The Department argued that the WSATA Handbook, as adopted by administrative rule, was binding and should control the valuation methods used. The company contended that the Tax Court, conducting a de novo review, was not bound by the Handbook. The Tax Court agreed with the company, holding that it was not required to defer to the Department’s rule and could determine real market value using other methods if it found them more accurate. The court ultimately adopted some of the company’s valuation approaches and set a value lower than the Department’s assessment.The Supreme Court of the State of Oregon reviewed the case on appeal. It held that, absent a finding that the Department’s rule is invalid on its face or as applied, the rule has the force of law and must be given legal effect by the Tax Court. The Supreme Court found that the Tax Court erred by not treating the Department’s rule as binding unless its application would conflict with constitutional or statutory definitions of real market value. The Supreme Court reversed the Tax Court’s judgment and remanded the case for further proceedings under the correct legal standard. View "PacifiCorp v. Dept. of Rev." on Justia Law

A condominium association in Southwest Washington, D.C., which owns a large complex of over 200 townhomes, challenged the way the District of Columbia Water and Sewer Authority (D.C. Water) calculates a stormwater runoff fee known as the Clean Rivers Impervious Area Charge (CRIAC). The association is classified as a multi-family customer because its water is supplied through several master-metered service lines, rather than each townhome having an individual meter. This classification results in the CRIAC being calculated based on the total impervious surface area of the property, rather than using a tiered system that applies to individually metered residential properties. The association argued that this method, which ties the fee calculation to how the property is metered, is arbitrary and capricious, as the metering method does not affect the amount of stormwater runoff.The Superior Court of the District of Columbia granted summary judgment to D.C. Water. The court found that D.C. Water’s classification and billing methodology were reasonable and consistent with industry standards, relying on declarations from D.C. Water officials and legislative history. The court also rejected the association’s constitutional and equal protection claims, which were not pursued on appeal.The District of Columbia Court of Appeals reviewed the case. It affirmed the trial court’s summary judgment on the constitutional claims, as those were not contested on appeal. However, the appellate court vacated the summary judgment on the claim that D.C. Water’s use of metering as a factor in CRIAC calculation was arbitrary and capricious. The court held that D.C. Water had not provided an adequate explanation for why metering should affect the fee, and remanded the case for further proceedings on that issue. View "Capitol Park IV Condo. Ass'n, Inc. v. District of Columbia Water and Sewer Authority" on Justia Law

A company sought approval to construct electricity transmission lines in Pennsylvania as part of a larger project selected through a federally supervised regional planning process. The project was designed to alleviate regional congestion on the electricity grid, which would lower wholesale electricity costs in certain states but increase costs for some Pennsylvania consumers. The regional transmission organization (PJM), acting under Federal Energy Regulatory Commission (FERC) rules, selected the project using a benefit-cost methodology approved by FERC.The Pennsylvania Public Utility Commission (PUC) reviewed the company’s applications for siting and eminent domain authority. After an evidentiary hearing, an administrative law judge recommended denial, finding that the project was no longer needed due to decreased congestion and that the benefit-cost analysis used by PJM was deficient under Pennsylvania law. The PUC adopted this recommendation, denied the applications, and rescinded the company’s provisional certificate of public convenience. The company appealed to the Pennsylvania Commonwealth Court, which affirmed the PUC’s decision. The company then pursued federal constitutional claims in the United States District Court for the Middle District of Pennsylvania, reserving those issues in state court.The United States Court of Appeals for the Third Circuit reviewed the case. It held that the PUC’s order was preempted under the Supremacy Clause of the U.S. Constitution because it posed an obstacle to federal objectives established by Congress and implemented by FERC—specifically, the regional planning and congestion-reduction process. The court found that the PUC’s independent “need” determination, which second-guessed PJM’s FERC-approved methodology, impermissibly conflicted with federal law. The Third Circuit affirmed the District Court’s judgment for the company and did not reach the dormant Commerce Clause issues. View "Transource Pennsylvania LLC v. DeFrank" on Justia Law

This case involves a challenge to a tariff adopted by the California Public Utilities Commission (Commission) that significantly reduced the compensation utilities pay to customers who generate electricity through rooftop solar panels and export excess energy to the grid. Petitioners, including environmental organizations, argued that the Commission’s tariff was inconsistent with Public Utilities Code section 2827.1, which requires the Commission to ensure that compensation for customer-generators reflects the costs and benefits of renewable generation and supports sustainable growth, particularly among disadvantaged communities.The First Appellate District, Division Three, of the California Court of Appeal granted a writ of review and affirmed the Commission’s decision. In doing so, the Court of Appeal applied a highly deferential standard of review derived from the California Supreme Court’s decision in Greyhound Lines, Inc. v. Public Utilities Com., asking only whether the Commission’s interpretation of the statute bore a reasonable relation to statutory purposes and language. The court concluded that the Commission’s approach satisfied this standard and declined to engage in a more searching review of the statutory interpretation.The Supreme Court of California reviewed the case to determine whether the deferential Greyhound standard remains appropriate following legislative amendments to the Public Utilities Code. The Supreme Court held that, for Commission decisions not pertaining solely to water corporations, the deferential Greyhound standard no longer applies. Instead, courts must independently review the Commission’s statutory interpretations under the standards set forth in Public Utilities Code sections 1757 and 1757.1, which parallel the review of other administrative agencies. The Supreme Court reversed the judgment of the Court of Appeal and remanded the case for further proceedings consistent with this less deferential standard. View "Center for Biological Diversity, Inc. v. Public Utilities Com." on Justia Law

Three public interest organizations brought suit against a utility company that provides natural gas services in the District of Columbia, alleging that the company violated the Consumer Protection Procedures Act (CPPA) by making false and misleading statements about the environmental effects of its natural gas. The organizations claimed these statements appeared in customer bills, on the company’s website, and in other public documents. They sought declaratory and injunctive relief to address the alleged unfair and deceptive trade practices.The utility company responded by filing a special motion to dismiss under the District’s Anti-SLAPP Act, followed by a motion to dismiss under Superior Court Civil Rules 12(b)(1) and 12(b)(6). The company argued that the CPPA does not create a right of action against entities regulated by the Public Service Commission (PSC), citing D.C. Code § 28-3903(c)(2)(B) and the District of Columbia Court of Appeals’ decision in Gomez v. Independence Management of Delaware, Inc., 967 A.2d 1276 (D.C. 2009). The public interest organizations countered that the statutory limitation only applied to the Department of Licensing and Consumer Protection, not to private actors like themselves, and that subsequent amendments to the CPPA had rendered Gomez obsolete. The Superior Court granted the utility’s motion to dismiss, finding that Gomez remained controlling and that the CPPA’s exemptions for PSC-regulated entities had not been altered by later amendments.On appeal, the District of Columbia Court of Appeals affirmed the Superior Court’s dismissal. The court held that, although the plain text of the CPPA does not expressly bar private suits against PSC-regulated entities, binding precedent from Gomez requires that the limitations in D.C. Code § 28-3903(c)(2) apply to private actions as well. Therefore, public interest organizations may not sue entities regulated by the PSC under the CPPA. View "Client Earth v. Washington Gas Light Company" on Justia Law

A group of single-family residential (SFR) water customers challenged the City of San Diego’s tiered water rate structure, which imposed higher rates for increased water usage, arguing that these rates exceeded the proportional cost of service attributable to their parcels as required by California Constitution article XIII D, section 6(b)(3) (enacted by Proposition 218). The City’s water system serves a large population and divides customers into several classes, but only SFR customers were subject to tiered rates; other classes paid uniform rates. The City’s rates were based on cost-of-service studies using industry-standard methodologies, including “base-extra capacity” and “peaking factors,” but the plaintiffs contended these methods did not accurately reflect the actual cost of providing water at higher usage tiers.The Superior Court of San Diego County certified the case as a class action and held a bifurcated trial. In the first phase, the court found that the City failed to demonstrate, with substantial evidence, that its tiered rates for SFR customers complied with section 6(b)(3), concluding the rates were not based on the actual cost of service at each tier but rather on usage budgets and conservation goals. The court also found the City lacked sufficient data to justify its allocation of costs to higher tiers and that the rate structure discriminated against SFR customers compared to other classes. In the second phase, the court awarded the class a refund for overcharges, offset by undercharges, and ordered the City to implement new, compliant rates.On appeal, the California Court of Appeal, Fourth Appellate District, Division Two, affirmed the trial court’s judgment with directions. The appellate court held that the City bore the burden of proving its rates did not exceed the proportional cost of service and that the applicable standard was not mere reasonableness but actual cost proportionality, subject to independent judicial review. The court found substantial evidence supported the trial court’s findings that the City’s tiered rates were not cost-based and thus violated section 6(b)(3). The court also upheld class certification and the method for calculating the refund, and directed the trial court to amend the judgment to comply with newly enacted Government Code section 53758.5, which affects the manner of refunding overcharges. View "Patz v. City of San Diego" on Justia Law

One Power Company challenged two orders issued by the Public Utilities Commission of Ohio (PUCO) regarding Ohio Power Company’s fifth electric-security plan. The first issue concerned a protective agreement governing access to confidential discovery materials. One Power argued that the agreement unreasonably prevented its chief executive officer and expert witness, an employee, from accessing all discovery, which allegedly disadvantaged its ability to litigate. The second issue involved the commission’s decision to continue a nonbypassable basic-transmission-cost rider, meaning all customers—including those who purchase generation service from competitive suppliers—must pay the charge.After AEP Ohio filed its application for the fifth electric-security plan, One Power intervened and sought broader access to confidential materials. The PUCO’s attorney examiner denied One Power’s motion for a more permissive protective agreement, finding the proposed limits reasonable. One Power’s interlocutory appeal was also denied. At the evidentiary hearing, One Power renewed its objections, but the commission affirmed the examiner’s rulings and later denied rehearing. Regarding the transmission rider, the commission maintained its nonbypassable status, citing the need for further study before making major changes and noting consistency with prior practice. One Power’s rehearing application on this issue was also denied.On appeal, the Supreme Court of Ohio reviewed whether the PUCO’s orders were unlawful or unreasonable. The court held that One Power failed to demonstrate particularized harm from the protective agreement and that the commission acted within its statutory and regulatory authority in continuing the nonbypassable rider. The court found no violation of state electric policy or commission precedent. Accordingly, the Supreme Court of Ohio affirmed the PUCO’s orders. View "In re Application of Ohio Power Co." on Justia Law

Dayton Power and Light Company (DP&L), operating as AES Ohio, sought approval from the Public Utilities Commission of Ohio (PUCO) regarding whether its electric security plan (ESP) resulted in significantly excessive earnings for the years 2018 and 2019. The ESP is a mechanism for setting the standard generation rate for customers who do not choose a competitive supplier. During this period, DP&L also transitioned from its third ESP (ESP III) back to its first ESP (ESP I) after the commission invalidated a similar rider in another utility’s plan, following a decision by the Supreme Court of Ohio. DP&L’s parent company, AES Corporation, made substantial capital contributions to support future investments in grid modernization.PUCO consolidated several related cases and found that DP&L’s ESP resulted in excessive earnings of $3.7 million in 2018 and $57.4 million in 2019. However, PUCO determined that DP&L could offset these excessive earnings with its commitment to future capital investments, and therefore, no refund to consumers was required. PUCO also found that DP&L’s ESP passed the required quadrennial review tests, including a prospective analysis of earnings and a comparison to market-rate offers. The Office of the Ohio Consumers’ Counsel (OCC) appealed, challenging the refusal to order refunds and the continued collection of a rate-stabilization charge. DP&L filed a protective cross-appeal, asserting alternative grounds for affirmance.The Supreme Court of Ohio reviewed the case and held that PUCO was not authorized under R.C. 4928.143(F) to allow DP&L to retain significantly excessive earnings based solely on its commitment to future investments. The court reversed PUCO’s orders and remanded the case for a new significantly excessive earnings test analysis. The court rejected OCC’s challenge to the rate-stabilization charge, finding its legality was not at issue in this appeal, and also rejected DP&L’s alternative grounds for affirmance. View "In re Application of Dayton Power & Light Co." on Justia Law

Two electric utility companies merged in 1998, with federal approval conditioned on their participation in a regional grid operator to prevent customers from paying multiple, overlapping transmission fees (“pancaked” rates). Several years later, the merged company was allowed to leave the grid operator, but only if it continued to protect certain customers from redundant fees through a special rate schedule. In 2019, the company sought to end this obligation, arguing that continued protection was no longer necessary. The Federal Energy Regulatory Commission (FERC) granted this request, but the United States Court of Appeals for the District of Columbia Circuit vacated that order, finding FERC had failed to consider the impact on customer rates.On remand, FERC issued a new order denying the company’s request to end the fee protection, concluding that removing the protection would adversely affect rates for certain customers and that the benefits of removal did not outweigh these harms. FERC also denied rehearing, maintaining that the company had not shown sufficient alternative protections for affected customers. The company then petitioned the United States Court of Appeals for the District of Columbia Circuit for review, arguing that FERC’s orders were arbitrary, capricious, and inconsistent with law and precedent.The United States Court of Appeals for the District of Columbia Circuit held that FERC did not violate its statutory mandate or precedent in its general approach. However, the court found that FERC failed to adequately consider whether alternative customer protections, such as transition agreements, could mitigate the adverse rate impacts. The court therefore granted the petitions for review, vacated FERC’s orders, and remanded the matter for further consideration of whether such protections would suffice to offset the adverse effects on rates. View "Louisville Gas and Electric Company v. Federal Energy Regulatory Commission" on Justia Law

This case involves a dispute over the compensation structure for utility customers who generate their own electricity, such as through rooftop solar panels, and export excess energy to the power grid. The California Legislature has required utilities to compensate these “customer-generators” since 1995, but concerns arose that the original compensation method overpaid such customers and shifted costs to those without solar systems. In 2013, the Legislature directed the Public Utilities Commission to reassess the compensation framework, resulting in a 2022 tariff that significantly reduced payments for customer-generated power. Environmental groups challenged the new tariff, arguing it failed to account for all societal benefits of renewable energy and did not adequately promote growth among disadvantaged communities.The First Appellate District, Division Three, reviewed the challenge after the petitioners sought a writ of review. The Court of Appeal affirmed the Commission’s decision, applying a highly deferential standard from Greyhound Lines, Inc. v. Public Utilities Com., which upheld Commission interpretations unless they lacked a reasonable relation to statutory purposes and language. The appellate court concluded that the Commission’s approach met this deferential standard and declined to engage in further inquiry.The Supreme Court of California granted review to determine whether the deferential Greyhound standard remains appropriate following legislative amendments to the Public Utilities Code. The Supreme Court held that, due to statutory changes in the 1990s and 2000s, the Greyhound standard no longer applies to most Commission decisions, including those involving energy. Instead, courts must now independently review the Commission’s statutory interpretations, consistent with the approach outlined in Yamaha Corp. of America v. State Bd. of Equalization. The Supreme Court reversed the Court of Appeal’s judgment and remanded the case for further proceedings under the correct standard of review. View "Center for Biological Diversity, Inc. v. Public Utilities Com." on Justia Law