Justia Government & Administrative Law Opinion Summaries

The Alaska Oil & Gas Conservation Commission denied an individual’s request for a hearing regarding a reported natural gas leak and whether the leak constituted “waste” under Alaska law. The agency concluded it had no jurisdiction over the matter because it previously had investigated and had concluded the leak did not constitute “waste.” The individual appealed to the superior court, which affirmed the agency’s decision. The Alaska Supreme Court reversed, finding the individual's request for a hearing was improperly denied: "The Commission has jurisdiction over waste determinations, and substantial evidence does not support its assertion that it investigated and concluded this leak was not waste." View "French v. Alaska Oil & Gas Conservation Commission" on Justia Law

Several utilities that are managed by the Southwest Power Pool (SPP), a regional transmission operator, paid for upgrades to the transmission grid. The operative tariff required other utilities who benefitted from these upgrades to share the costs of the expanded network. The tariff, however, also required SPP to invoice the charges monthly and to make adjustments within one year. The reimbursement calculation proved complicated. It took SPP eight years to implement it, during which time SPP did not invoice for the upgrade charges. FERC initially granted SPP a waiver of the tariff’s one-year time bar but later determined it lacked the authority to waive this provision retroactively. FERC’s revised determination meant the utilities that had made substantial outlays for upgrades were denied reimbursement for the eight years that had elapsed.The D.C. Circuit denied petitions for review filed by SPP and a company that sponsored upgrades and has been denied reimbursement. Once a tariff is filed, FERC has no statutory authority (16 U.S.C. 824d(d)) to provide equitable exceptions or retroactive modifications to the tariff. SPP may impose only those charges contained in the filed rate. Because the one-year time bar for billing is part of the filed rate, FERC could not retroactively waive it, even to remedy a windfall for users of the upgraded networks. View "Oklahoma Gas and Electric Co. v. Federal Energy Regulatory Commission" on Justia Law

Entergy, a public utility holding company, owns five operating companies that sell electricity in four states, including Louisiana. The companies have been governed by an agreement requiring them to act as a “single economic unit” and requiring “rough equalization” of their production costs. In 2005, the Federal Energy Regulatory Commission (FERC) determined that the production costs were not roughly equal and imposed a “bandwidth remedy”: Whenever the yearly production costs of an individual operating company deviated from the average by more than 11%, companies with lower costs were required to pay companies with higher costs as necessary to bring all five companies within that range. Entergy filed a tariff establishing a formula to calculate production costs subject to the bandwidth remedy, which FERC largely accepted.Utilities often spread their recovery of large, non-recurring costs by creating a regulatory asset, a type of credit. The company then amortizes the asset in later years, creating debits chargeable to customers. Historically, the Entergy companies recorded regulatory assets and their related amortization expenses in FERC accounts not referenced in the bandwidth formula; this effectively accounted for deferred production costs when they were incurred, rather than when the related amortization expenses were recorded. FERC rejected that approach and excluded purchased-power costs that a Louisiana affiliate incurred in 2005 and amortized in 2008 and 2009.The D.C. Circuit denied the Louisiana Public Service Commission’s petition for review. The Federal Power Act requires electric utilities to charge “just and reasonable” rates. 16 U.S.C. 824d(a). If FERC finds a rate unreasonable, it may establish a just and reasonable rate; FERC may reallocate production costs under the Entergy system agreement, including by ensuring compliance with the bandwidth remedy. View "Louisiana Public Service Commission v. Federal Energy Regulatory Commission" on Justia Law

Allco Renewable Energy Limited & PLH LLC (collectively Allco), appealed the Vermont Public Utility Commission’s (PUC) September 2020 decision awarding two provider-block contracts to Green Mountain Power (GMP). Allco argued the PUC erred in determining the proposals submitted by GMP on behalf of an undisclosed independent developer were proper provider-block projects under 30 V.S.A. 8005a(c)(1)(B). The Vermont Supreme Court deferred to the PUC’s conclusion that the GMP proposals qualified as provider-block projects because Allco did not demonstrate the PUC’s interpretation of section 8005a(c)(1)(B) was either unreasonable or has compelling indications of error. View "In re Investigation to Review the Avoided Costs that Serve as Prices for the Standard-Offer Program in 2020 (Allco Renewable Energy Limited & PLH LLC)" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BOTA) upholding county appraisers' application of the Kansas Oil and Gas Appraisal Guide developed by the Kansas Department of Revenue's Property Valuation Division for valuations given for the 2016 tax year to the working interest of River Rock Energy Co. in 203 gas wells and related equipment, holding that the BOTA did not err.In its dispute, River Rock argued that the Guide produced inflated values for its working gas leases by capping operating expense allowances to arrived at a "working interest minimum lease value." The BOTA upheld the county appraisers' application of the Guide. The court of appeals affirmed in part and reversed in part, holding that the Guide overvalued River Rock's wells. The Supreme Court affirmed in part and reversed in part, holding (1) the county appraisers correctly applied the Guide; and (2) the court of appeals correctly decided that it had jurisdiction to entertain River Rock's challenge to BOTA's order refusing to abate filing fees. View "In re Tax Appeal of River Rock Energy Co." on Justia Law

A 2015 auction for electrical capacity (commitments by power plants to provide electricity to utilities in the future) in Illinois produced a striking result. Capacity in neighboring regions uniformly sold for less than $3.50 per megawatt-day; in a region covering much of Illinois, the auction resulted in capacity prices of $150 per megawatt-day, a nearly ninefold increase from the prior year’s price of $16.75. The Federal Energy Regulatory Commission identified numerous problems with the existing auction rules and ordered that the rules be changed prospectively. FERC also launched an investigation into potential market manipulation in the 2015 Auction but later ruled that the identified flaws in the auction rules and the high price range those rules established, plus the allegations of market manipulation, did not call into question the 2015 Auction or the price it produced.The D.C. Circuit granted a petition for review in part. Under the Federal Power Act, 16 U.S.C. 791, FERC need not approve every auction price before it goes into effect. That is not what the market-based rate scheme requires. However, FERC’s analysis of the 2015 Auction, was arbitrary and capricious; it failed to adequately explain why the problems it identified in the existing auction rules affecting pricing— problems it ordered fixed going forward—did not also affect the fairness of the 2015 Auction. View "Public Citizen, Inc. v. Federal Energy Regulatory Commission" on Justia Law

The crux of this interlocutory appeal was whether Plaintiffs, complaining of personal injury and property damage as a result of the alleged improper use of an oil-disposal well, had to exhaust their administrative remedies before the Mississippi State Oil and Gas Board (MSOGB) prior to proceeding on their common-law claims in the circuit court. Because the Mississippi Supreme Court determined the MSOGB could provide no adequate remedy for the Baucums’ personal-injury and property-damage claims, the Baucums were not required to exhaust administrative remedies before proceeding in the circuit court. View "Petro Harvester Oil & Gas Co., LLC, et al. v. Baucum" on Justia Law

The Federal Energy Regulatory Commission authorized the construction and operation of three liquified natural gas (LNG) export terminals on the shores of the Brownsville Shipping Channel in Cameron County, Texas, and the construction and operation of two 135-mile pipelines that will carry LNG to one of those terminals. Objectors filed challenges under the National Environmental Policy Act (NEPA), 42 U.S.C. 4332(2)(C); the Administrative Procedure Act (APA), and the Natural Gas Act (NGA), 15 U.S.C. 717b(a).The D.C. Circuit dismissed the petition concerning the Annova Terminal as moot, and granted the petitions with respect to the Rio Grande and Texas Terminals, without vacatur. The Commission’s analyses of the projects’ impacts on climate change and environmental justice communities were deficient under NEPA and the APA, and the Commission failed to justify its determinations of public interest and convenience under Sections 3 and 7 of the NGA. On remand, the Commission must explain whether 40 C.F.R. 1502.21(c) requires it to apply the social cost of carbon protocol or some other analytical framework, as “generally accepted in the scientific community” within the meaning of the regulation, and if not, why not. View "Vecinos para el Bienestar de la Comunidad Costera v. Federal Energy Regulatory Commission" on Justia Law

The Ninth Circuit concluded that the Commission did not act arbitrarily or capriciously, or abused its discretion, in denying the Association's motion to intervene in post-licensing deadline extension proceedings pertaining to the Eagle Mountain Pumped Storage Hydroelectric Project in California. The panel concluded that the Commission's interpretation of its Rule 214 deserves deference, and thus it may properly limit intervention in post-licensing proceedings. The panel further concluded that the Commission did not abuse its discretion in denying the Association's motion to intervene, where the only change sought by the licensee was an extension of time to commence construction.The panel also concluded that the Commission did not violate the Federal Power Act (FPA) in failing to provide public notice. In this case, based on longstanding interpretative precedent, the Commission determined that Eagle Crest's request was not a significant alteration of the License because the requested extensions were not inconsistent with the Project's plan of development or terms of the License. The panel concluded that the Commission's interpretation of Section 6 of the FPA is sufficiently persuasive as applied to deadline extension requests. Accordingly, the panel denied the petition for review. View "National Parks Conservation Ass'n v. Federal Energy Regulatory Commission" on Justia Law

The Pennsylvania Environmental Defense Foundation (“PEDF”) challenged amendments the Pennsylvania General Assembly made to the state Fiscal Code that diverted to the General Fund revenues generated from oil and gas leases on state forest and game lands. PEDF claimed the legislation was unconstitutional, violating the Environmental Rights Amendment (the “ERA”). When this case returned to the Commonwealth Court, the Pennsylvania Supreme Court held that the ERA created a constitutional public trust subject to private trust principles. Applying trust law, the Supreme Court determined that royalty revenue streams generated by the sale of gas extracted from Commonwealth lands represented the sale of trust assets and had to be returned to the corpus of the trust. To the extent that 72 P.S. sections 1602-E and 1603-E diverted royalties to the General Fund, the Court found the provisions violated the ERA. The Court lacked sufficient advocacy to determine if the remaining three revenue streams, consisting of large upfront bonus payments, yearly rental fees, and interest penalties for late payments that were allocated to the General Fund under Sections 1604-E and 1605-E, as well as Section 1912 of the Supplemental General Appropriations Act of 2009, also constituted the sale of trust assets. Thus the case was remanded to the Commonwealth Court for further proceedings. On remand, the Commonwealth Court, sitting en banc, determined that the three revenue streams did not constitute the sale of trust assets. On return to the Supreme Court, it was determined the Commonwealth Court's holding was at odds with the Supreme Court's holding before remand. Another remand was unnecessary; the Supreme Court determined the record was sufficiently developed, and based upon that record it held the incomes generated under these oil and gas leases had to be returned to the corpus. As a result, the decision of the Commonwealth Court was reversed. View "PA. Environ. Defense Fd. v. Pennsylvania" on Justia Law