Justia Utilities Law Opinion Summaries

This case involves the sale of electricity under the Federal Power Act and the Federal Energy Regulatory Commission's (FERC) efforts to limit the rates at which certain wholesale electricity is traded. For over two decades, FERC has maintained a "soft" price cap for certain short-term electricity sales in parts of the western United States. In August 2020, a heat wave in the western United States led to increased prices in the market for short-term electricity supply. Some of the short-term sales occurred at prices above FERC's soft cap. Sellers who transacted at above-cap prices were required to justify those transactions to FERC or be required to refund sale prices that exceed the cap. After reviewing the sellers' justification filings, FERC determined that some sellers had failed to justify their above-cap sales and ordered partial refunds.The case was brought before the United States Court of Appeals for the District of Columbia Circuit. The court found that FERC should have conducted a Mobile-Sierra analysis, which presumes that contract rates formed through arms-length, bilateral negotiation are reasonable, before ordering refunds. The court agreed with the sellers that FERC erred by failing to conduct this analysis prior to ordering refunds. As a result, the court granted the sellers' petitions for review, vacated the orders they challenged, and remanded for further proceedings. The court dismissed the consumers' petitions for review as moot. View "Shell Energy North America (US), L.P. v. Federal Energy Regulatory Commission" on Justia Law

This case involves five large water utilities and an association representing investor-owned water utilities' interests, collectively referred to as the Water Companies. The Water Companies sought to overturn an order by the Public Utilities Commission (Commission) that eliminated a conservation-focused ratesetting mechanism known as the Water Revenue Adjustment Mechanism (WRAM). The WRAM was designed to encourage water conservation by decoupling a water company's revenue from the amount of water sold. The Commission's order to eliminate the WRAM was not based on the merits of the mechanism but on procedural issues.The Commission's decision to eliminate the WRAM was made in a proceeding that was ostensibly focused on improving the accuracy of water sales forecasts. The Water Companies argued that the Commission did not provide adequate notice that the elimination of the WRAM was one of the issues to be considered in the proceeding.The Supreme Court of California agreed with the Water Companies. The court found that the Commission's scoping memos, which are supposed to outline the issues to be considered in a proceeding, did not provide adequate notice that the WRAM's elimination was on the table. The court concluded that the Commission's failure to give adequate notice required the order to be set aside. The court did not rule on the merits of the WRAM itself. View "Golden State Water Co. v. Public Utilities Com." on Justia Law

The case involves North Farm Home Owners Association, Inc. (North Farm) and the Bristol County Water Authority (BCWA). North Farm, a multi-building condominium complex in Bristol, Rhode Island, had granted several easements to BCWA, a public utility responsible for providing water to residential and commercial customers in Bristol County. From 1975 to 1995, BCWA measured water service to each condominium unit individually. However, between 1993 and 1995, representatives of the parties discussed converting the individual meter system to a centralized, master meter system. This correspondence is at the heart of the dispute.The Superior Court entered partial summary judgment in favor of BCWA on counts three and four of North Farm's third amended complaint. North Farm appealed, arguing that a valid contract was formed through their 1993–1995 correspondence, that the hearing justice ignored allegations that the 2019 pass-through rate was illegal, and that the hearing justice denied North Farm’s motion to amend without a finding of prejudice.The Supreme Court of Rhode Island affirmed the judgment of the Superior Court. The court found that the 1993–1995 correspondence did not establish the existence of a contract as a matter of law. The court held that the letters did not show the parties’ mutual assent to the material contract terms by means of offer and acceptance. The court also found that North Farm failed to produce sufficient evidence that a valid contract for the material terms existed. Therefore, the hearing justice’s grant of summary judgment on count three of the third amended complaint was proper. The court also affirmed the hearing justice's grant of summary judgment on count four, as North Farm did not properly plead any basis for granting injunctive or compensatory relief due to BCWA’s purported unlawful discrimination. View "North Farm Home Owners Association, Inc. v. Bristol County Water Authority" on Justia Law

The case revolves around the use of forecasts in the electric energy industry, specifically in proposing rates for electricity-generating entities. The New York Independent System Operator, Inc., a non-profit entity that operates New York’s electric grid and oversees the state’s wholesale electricity markets, proposed rates for the 2021–2025 period. It shortened the amortization period from twenty years to seventeen years, justifying the change by pointing to the recently enacted New York Climate Leadership and Community Protection Act, 2019. The Act proclaims that by the year 2040, the statewide electrical demand system will be zero emissions.The Federal Energy Regulatory Commission (FERC) initially rejected the System Operator’s submission, deeming the justification for a seventeen-year commercial lifespan “speculative”. Independent Power Producers of New York, Inc., a trade association of electricity generators, sought judicial review of FERC’s rejection. The court granted their petition, holding that FERC failed to sufficiently explain its reasons for rejecting the System Operator’s proposal. On remand, FERC again rejected the System Operator’s analysis as “speculative”. Independent Power Producers sought rehearing before FERC, which granted its request. This time, FERC approved the System Operator’s submission. The Public Service Commission sought (re-)rehearing before FERC, which was denied. The Public Service Commission now petitions for judicial review in this court.The United States Court of Appeals for the District of Columbia Circuit denied the Public Service Commission’s petitions for review. The court found that FERC’s ultimate decision to approve the shortened amortization period satisfied the directives of the court's prior judgment. The court also found that FERC’s decision to not address the cost impact of the change was in line with the court’s precedents. The court concluded that the Public Service Commission can file a separate complaint to argue that the existing rate design is producing rates that are not just and reasonable. View "New York State Public Service Commission v. Federal Energy Regulatory Commission" on Justia Law

The case revolves around the Public Utility Commission of Texas (PUC) and two market participants, RWE Renewables Americas, LLC and TX Hereford Wind, LLC. Following Winter Storm Uri, the Legislature amended the Public Utility Regulatory Act (PURA) to require that protocols adopted by the Electric Reliability Council of Texas (ERCOT) must be approved by the PUC before they take effect. ERCOT then adopted a revision to its protocols, which was approved by the PUC, setting the price of electricity at the regulatory maximum under Energy Emergency Alert Level 3 conditions. RWE challenged the PUC's approval order in the Third Court of Appeals, arguing that the order was both substantively and procedurally invalid.The Third Court of Appeals held that the PUC's order was both substantively invalid—because the PUC exceeded its statutory authority by setting the price of electricity—and procedurally invalid—because the PUC failed to comply with the Administrative Procedure Act’s rulemaking procedures in issuing the order.The Supreme Court of Texas reviewed the case and held that the PUC’s approval order is not a “competition rule[] adopted by the commission” subject to the judicial-review process for PUC rules. The court found that PURA envisions a separate process for ERCOT-adopted protocols, and the statutory requirement that the PUC approve those adopted protocols does not transform PUC approval orders into PUC rules eligible for direct review by a court of appeals. Therefore, the Third Court of Appeals lacked jurisdiction over this proceeding. The Supreme Court of Texas vacated the court of appeals’ judgment and dismissed the case for lack of jurisdiction. View "Public Utility Commission v. RWE Renewables Americas, LLC" on Justia Law

The case revolves around the actions of the Public Utility Commission of Texas (Commission) during Winter Storm Uri, when the Texas electric grid was on the brink of collapse. The Commission issued two orders that effectively raised the market price of electricity to the regulatory ceiling of $9,000/MWh to incentivize generators to add supply and large industrial users to reduce their demand. This led to some market participants going bankrupt and subsequent litigation.The court of appeals held that the Commission’s orders exceeded its authority under Chapter 39 of the Public Utility Regulatory Act (PURA) because the statute prohibits price-setting. The court of appeals did not address whether the Commission complied with the Administrative Procedure Act’s (APA) procedural rulemaking requirements.The Supreme Court of Texas disagreed with the court of appeals' decision. It held that the Commission’s orders did not exceed its authority under PURA. The court also found that the Commission substantially complied with the APA’s procedural rulemaking requirements, an issue the court of appeals did not address. The Supreme Court of Texas reversed the judgment of the court of appeals and rendered judgment affirming the orders. View "Public Utility Commission v. Luminant Energy Co. LLC" on Justia Law

The Supreme Court of New Mexico affirmed the decision of the New Mexico Public Regulation Commission (PRC) to deny Southwestern Public Service Company’s (SPS) application for a financial incentive under the Renewable Energy Act (REA). SPS had proposed to retire renewable energy certificates (RECs) earlier than required to exceed the Renewable Portfolio Standard (RPS), and in return, requested a rate rider that would allow it to charge customers one dollar for each REC retired over the twenty percent standard. The PRC denied the application, finding that SPS’s proposal did not meet the REA’s requirement to “produce or acquire renewable energy” to qualify for an incentive. The court agreed with the PRC’s interpretation of the REA, stating that the act of retiring RECs alone does nothing to further the statute’s objectives. The court also rejected SPS’s challenges to the PRC’s amendments to Rule 572, which governs the award of incentives under the REA. The court found that the amendments did not exceed the scope of the REA, were not arbitrary or capricious, and were not otherwise unreasonable or unlawful. View "S.W. Pub. Serv. Co. v. N.M. Pub. Regul. Comm'n" on Justia Law

The case revolves around a dispute between Southern California Edison Company (SCE) and 21st Century Insurance Company and other insurance companies (plaintiffs). The plaintiffs, who paid policyholders for losses resulting from a fire known as the Creek Fire, sued SCE under a subrogation theory to recover their payments. They alleged that an arc from SCE's electric powerlines caused the fire. During discovery, SCE withheld certain documents, asserting they were generated during an attorney-led internal investigation into the cause of the fire and were protected by attorney-client privilege and the attorney work product doctrine. The plaintiffs moved to compel the production of these documents, arguing that SCE's primary reason for conducting the investigation was to comply with state law requiring it to publicly report any involvement it had in causing the fire. The trial court agreed with the plaintiffs and compelled the production of the documents.The Court of Appeal of the State of California Second Appellate District Division One reviewed the case. The court concluded that the trial court's order improperly invaded the protection afforded by the attorney work product doctrine. Even where the dominant purpose of an attorney-directed internal investigation is to comply with a client's public reporting requirement, attorney work product generated in connection with gathering facts to assist counsel in advising the client on how to comply with that statutory or regulatory reporting requirement remains protected. As the plaintiffs did not show grounds for the production of their adversary's work product, the trial court erred in compelling its production. The court did not address whether the order also violated the attorney-client privilege. The court granted SCE's petition and directed the trial court to vacate its order and issue a new order denying the plaintiffs' motion to compel. View "Southern California Edison Co. v. Superior Court" on Justia Law

Duke Energy Indiana, a regulated electric utility, planned to build new facilities in Noblesville, Indiana, to meet increased customer demand. The project involved demolishing an abandoned house and garage and constructing a new substation, transmission lines, and a garage. The City of Noblesville insisted that Duke comply with its unified development ordinance before proceeding with the demolition, requiring Duke to obtain multiple permits. Duke declined, arguing that the city had no power to regulate a public utility's service-related projects through local permitting requirements. Despite not obtaining the permits, Duke began demolition.In response, Noblesville issued a stop-work order and sued Duke in the Hamilton Circuit Court seeking declaratory and injunctive relief to enforce its ordinance. Duke counterclaimed, arguing that Noblesville lacked jurisdiction and authority to regulate its activities. The trial court found in favor of Noblesville, ordering Duke to comply with the ordinance and obtain the permits. The court also imposed a $150,000 penalty against Duke for starting demolition without the required permits and awarded Noblesville $115,679.10 in attorneys’ fees, expert fees, and costs. The court of appeals affirmed the trial court's decision.The Indiana Supreme Court reversed the lower courts' decisions, holding that while the trial court had jurisdiction over Noblesville’s enforcement action against Duke, only the Indiana Utility Regulatory Commission could decide whether Noblesville’s ordinance interfered unreasonably with Duke’s utility functions. The court reasoned that the commission had both the fact-finding expertise and the broader non-local focus necessary to balance the competing interests of public utilities and municipalities in deciding such disputes. The case was remanded for further proceedings consistent with the court's opinion. View "Duke Energy Indiana LLC v. City of Noblesville" on Justia Law

The City of Carmel, Indiana, enacted two ordinances in 2019, one prohibiting the construction of above-ground utility lines unless authorized by the city, and another outlining procedures for relocating utility facilities due to city projects. The ordinances placed all costs on the utilities unless the city agreed otherwise. When the city began two improvement projects requiring Duke Energy to relocate its facilities underground, a dispute arose over who should bear the costs, estimated to exceed $500,000. The city filed a complaint with the Indiana Utility Regulatory Commission, asking it to uphold the ordinances as reasonable and order Duke to pay the relocation costs.The Commission, after a hearing, found the ordinances unreasonable and void. The city appealed this decision. The Court of Appeals reversed the Commission's order, dismissing the Commission as a party to the appeal. Both the Commission and Duke sought transfer to the Indiana Supreme Court.The Indiana Supreme Court affirmed the Commission's decision, finding that the Commission was a proper party on appeal and that its findings of fact were supported by substantial evidence. The court concluded that the ordinances were unreasonable because they threatened to impose unreasonable expenses on Duke, which would in turn impact all Duke customers throughout Indiana. The court also found that the Commission's order declaring the ordinances void was within its statutory power. View "City of Carmel v. Indiana Utility Regulatory Commission" on Justia Law