Justia Utilities Law Opinion Summaries

Petitioner Daufuskie Island Utility Company ("DIUC") appeals an order of the South Carolina Public Service Commission ("Commission") granting only thirty-nine percent of the additional revenue requested in its application. DIUC applied to the Commission for approval of a new rate schedule which would provide a 108.9% revenue increase. Due to the substantial increase in its tax liability and its inability to seek further revenue increases until July 2014, DIUC entered into an agreement with Beaufort County to pay the back taxes for years 2012, 2013, 2014, and the projected tax for 2015. Critical to this case was the ownership of an elevated water tank, well, water pump, system pipes, and other DIUC equipment located on a site which was sold at a tax sale in 2010 (“Elevated Tank Site”). Due to a clerical error, tax on the property was not paid, and DIUC did not discover the property had been sold until 2012. Although the tax deed purported to convey the property "all and singular . . . with the appurtenances," DIUC presented testimony from the Beaufort County Treasurer, Maria Walls, that the tax deed did not convey "the elevated water tank, the well, the water pump, system pipes, or other DIUC property located on the Elevated Tank[] Site." Despite providing no evidence to the contrary to support its recommendation, ORS proposed excluding the value of the utility equipment located on the property when calculating DIUC's rate base and property taxes. A hearing on the merits of DIUC's application was held in October 2015. The day before the hearing, several intervening property owner associations (POAs) filed a Settlement Agreement they had entered with ORS for the Commission's consideration. Pursuant to the Agreement, ORS and the POAs stipulated to each party's testimony and exhibits in the record, and the parties agreed to accept all of ORS's adjustments and recommendations, with the exception of the bad debt expense for which they agreed to adopt DIUC's proposal.5 At the hearing, DIUC objected to the admission of the Settlement Agreement, arguing it was irrelevant and prejudicial because it bolstered ORS's recommendations without providing any new or additional evidence to support them. Over DIUC's objection, the Commission admitted the Agreement, reasoning it was more probative than prejudicial. The South Carolina Supreme Court found the Commission erred in admitting evidence of the POA settlement; and the Commission’s findings and conclusions with respect to DIUC’s property taxes were not supported by substantial evidence. The Court remanded for a new hearing. View "Daufuskie Island v. Regulatory Staff" on Justia Law

Orangeburg challenged the Commission's approval of an agreement between two utilities, alleging that the approval constituted an authorization of the North Carolina Utilities Commission's (NCUC) unlawful regime. The DC Circuit held that Orangeburg has standing to challenge the Commission's approval because, among other reasons, the city has demonstrated an imminent loss of the opportunity to purchase a desired product (reliable and low-cost wholesale power), and because that injury was fairly traceable to the Commission's approval of the agreement at issue. On the merits, the court held that the Commission failed to justify its approval of the agreement's disparate treatment of wholesale ratepayers; to justify the disparity, the Commission relied exclusively on one line from a previous FERC order that, without additional explication, appeared either unresponsive or legally unsound. Accordingly, the court vacated in part the orders approving the agreement and denying rehearing, and remanded. View "Orangeburg, South Carolina v. FERC" on Justia Law

Over the last 10 years, the Federal Communications Commission has established rules governing how local governments may regulate cable companies. In 2007, the FCC barred franchising authorities from imposing unreasonable demands on franchise applicants or requiring new cable operators to provide non-cable services. The FCC also read narrowly the phrase “requirements or charges incidental to the awarding . . . of [a] franchise” (47 U.S.C. 542(g)(2)(D)), with the effect of limiting the monetary fees that local franchising authorities can collect. A petition for review was denied. Meanwhile, the FCC sought comment on expanding the application of the First Order’s rules—which applied only to new applicants for a cable franchise—to incumbent providers. In its Second Order, the FCC expanded the First Order’s application as proposed. Local franchising authorities again objected. The FCC finally rejected objections after seven years; the FCC clarified that the Second Order applied to only local (rather than state) franchising processes and published a “Supplemental Final Regulatory Flexibility Act Analysis.” Local governments sought review, arguing that the FCC misinterpreted the Communications Act, and failed to explain the bases for its decisions. The Sixth Circuit granted the petition in part; while “franchise fee” (section 542(g)(1)) can include noncash exactions, the orders were arbitrary to the extent they treat “in-kind” cable-related exactions as “franchise fees” under section 541(g)(1). The FCC’s orders offer no valid basis for its application of the mixed-use rule to bar local franchising authorities from regulating the provision of non-telecommunications services by incumbent cable providers. View "Montgomery County. v. Federal Communications Commission" on Justia Law

Section 205 of the Federal Power Act does not allow FERC to make modifications to a proposal that transform the proposal into an entirely new rate of FERC's own making. Electricity generators petitioned for review of FERC's decision modifying PJM's proposed changes to its rate structure. FERC's modifications created a new rate scheme that was significantly different from PJM's proposal and from PJM's prior rate design. The D.C. Circuit held that FERC contravened the limitation on its Section 205 authority. Therefore, the court granted the petitions for review and vacated FERC's orders with respect to several aspects of PJM's proposed rate structure -- the self-supply exemption, the competitive entry exemption, unit-specific review, and the mitigation period. The court remanded to FERC. View "NRG Power Marketing, LLC v. FERC" on Justia Law

The Commission determined that Florida Power overcharged Seminole for electricity and ordered a refund. Seminole petitioned for review, claiming that it was entitled to a larger refund. The DC Circuit denied the petition for review, holding that the Commission correctly concluded that the service agreement required Seminole to make any challenge to a bill within 24 months of receiving that bill, and thus limited Florida Power's refund liability. The court also held that, in the face of ambiguity, the Commission reasonably concluded that the tariff allowed transmission providers to use non-apportionment. View "Seminole Electric Cooperative v. FERC" on Justia Law

Charges that constitute compensation for the use of government property are not subject to Proposition 218’s voter approval requirements. To constitute compensation for a property interest, however, the amount of the charge must bear a reasonable relationship to the value of the property interest, and to the extent the charge exceeds any reasonable value of the interest, it is a tax and requires voter approval.Plaintiffs contended that a one percent charge that was separately stated on electricity bills issued by Southern California Edison (SCE) was not compensation for the privilege of using property owned by the City of Santa Barbara but was instead a tax imposed without voter approval, in violation of Proposition 218. The City argued that this separate charge was the fee paid by SCE to the City for the privilege of using City property in connection with the delivery of electricity. The Supreme Court held that the complaint and stipulated facts adequately alleged the basis for a claim that the surcharge bore no reasonable relationship to the value of the property interest and was therefore a tax requiring voter approval under Proposition 218. The court remanded the case for further proceedings. View "Jacks v. City of Santa Barbara" on Justia Law

The Supreme Court affirmed the order of the Public Utilities Commission that authorized Duke Energy Ohio, Inc. to recover costs associated with the environmental remediation of two manufactured-gas-plant (MGP) sites near downtown Cincinnati. The court held that the Commission did not exceed its authority when it allowed Duke to recover the costs incurred to remediate the MGP sites. The court dismissed Appellants’ remaining arguments as moot. Because Appellants did not carry their burden of demonstrating that the Commission’s order was unjust, unreasonable or unlawful, the Supreme Court affirmed the Commission's order. View "In re Application of Duke Energy Ohio, Inc." on Justia Law

LPSC petitioned for review of FERC's rejection of LPSC's request to reform certain depreciation rates. The DC Circuit denied the petition for review and rejected LPSC's claim that FERC failed to confront its asserted evidence of undue discrimination where FERC fulfilled such obligations; FERC precedent did not require the use of FERC's own depreciation standards; and there has been no unlawful subdelegation because FERC has exercised, and intends to continue to exercise, its authority. View "Louisiana Public Service Commission v. FERC" on Justia Law

The trial court held that the rate charged by Metropolitan Water District of Southern California for transporting water (“wheeling”) violated several laws and awarded the San Diego County Water Authority damages for breach of a water exchange agreement between the two agencies. The court held that the Authority lacked standing to challenge a provision in water conservation program contracts between the parties that penalizes the Authority for participating in litigation or supporting legislation to challenge or modify Metropolitan’s existing rate structure. The court of appeal remanded. The trial court erroneously held that although Metropolitan is required to pay its pro rata share of the costs of maintaining the California Aqueduct, these costs may not be considered in calculating Metropolitan’s wheeling charges, essentially because Metropolitan does not own the aqueduct. The inclusion of Metropolitan’s system-wide transportation costs, including transportation charges paid to the State Water Project, in the calculation of its wheeling rate does not violate the wheeling statutes, common law, or the parties’ agreement. The allocation of “water stewardship” charges to the wheeling rate was proper. The Authority has standing to challenge the unconstitutional anti-litigation condition. View "San Diego County Water Authority v. Metropolitan Water District of Southern California" on Justia Law

MISO, a nonprofit association of utilities, manages electrical transmission facilities for its members. Beginning in 2006, the Federal Energy Regulatory Commission (FERC) approved changes to MISO’s Tariff that enabled it to authorize network expansion projects and divide the costs among the member utilities. Duke and American own Ohio and Kentucky utilities. In July 2009, American gave notice that it planned to withdraw from MISO. Duke followed suit in May 2010. Under the Tariff, a utility cannot withdraw from MISO any earlier than the last day of the year following the year it gives notice. Two months after Duke announced its intention to withdraw, MISO proposed a new category of more expensive expansion projects. FERC approved this revision to the Tariff. In August 2010, MISO authorized the first Multi-Value Project. In December 2011, weeks before Duke’s scheduled departure, MISO approved 16 projects, to cost billions of dollars. MISO proposed amending the Tariff, so that ex-members could be charged for the costs of Multi-Value Projects approved before their departure. FERC approved that revision prospectively, holding that the revision imposed new obligations on withdrawing members and could not apply to Duke and American to charge them for the Multi-Value Projects. Other MISO Transmission Owners appealed, claiming that FERC departed from the reasoning of its prior orders. The Sixth Circuit denied a petition for review, stating that there is no presumption that costs for the Multi-Value Projects should be allocated up front. View "MISO Transmission Owners v. Federal Energy Regulatory Commission" on Justia Law