Justia Government & Administrative Law Opinion Summaries

Two development companies owned land in Johnson County, Texas, within the extraterritorial jurisdiction of the City of Mansfield but outside the city’s corporate boundaries. To develop this land, the companies needed access to retail water services, which, under state law, could be provided only by the Johnson County Special Utility District (“JCSUD”) because it held the exclusive certificate of convenience and necessity (CCN) for the area. However, a contract between JCSUD and the City of Mansfield required JCSUD to secure Mansfield’s written consent, which could be withheld at the City’s discretion, before providing water services within the city’s extraterritorial jurisdiction. The developers’ efforts to obtain water service were unsuccessful, as Mansfield demanded annexation and additional fees, ultimately refusing to formalize an agreement.After unsuccessful negotiations and attempts to compel service through the Texas Public Utility Commission, the developers sued the City of Mansfield in the United States District Court for the Northern District of Texas. They alleged violations of the Sherman Act and brought state-law claims. The district court, adopting a magistrate judge’s recommendation, dismissed the antitrust claims with prejudice, holding that Mansfield was entitled to state-action antitrust immunity under Texas law, and declined to exercise supplemental jurisdiction over the state-law claims.The United States Court of Appeals for the Fifth Circuit reviewed whether Mansfield was entitled to state-action immunity. The Fifth Circuit held that, although Texas law authorizes monopolies for water utilities through CCNs, it does not clearly articulate or authorize the City of Mansfield to act anticompetitively concerning the area in question, since the CCN belonged to JCSUD. Therefore, the court reversed the district court’s grant of state-action immunity and remanded the case for further proceedings. View "Megatel v. Mansfield" on Justia Law

Several rural electricity distribution cooperatives entered into long-term, all-requirements contracts with a generation-and-transmission cooperative, requiring them to purchase nearly all of their electric service from the cooperative through 2050. Some of these distribution cooperatives later sought to terminate their memberships and contracts early. In response, the generation-and-transmission cooperative proposed a methodology for calculating an exit fee and submitted it to the Federal Energy Regulatory Commission (FERC) for approval.FERC initiated hearing procedures to determine a just and reasonable exit-fee methodology. In those proceedings, both the cooperative and FERC’s Trial Staff presented different approaches: the cooperative advocated a lost-revenues approach, while Trial Staff proposed a balance-sheet approach. An administrative law judge found that the cooperative’s methodology was not just and reasonable, but that the balance-sheet approach, with modifications, was. The cooperative sought review from FERC, which agreed with the administrative law judge, rejecting the lost-revenues approach and directing the cooperative to adopt the modified balance-sheet methodology.The cooperative then sought review in the United States Court of Appeals for the Tenth Circuit, arguing that FERC’s adopted methodology was arbitrary and capricious. The Tenth Circuit reviewed FERC’s orders under the standards of the Administrative Procedure Act. The court held that FERC did not act arbitrarily or capriciously in rejecting the lost-revenues approach, adopting the balance-sheet approach, implementing a transmission-crediting mechanism, or applying the methodology to certain members despite existing contracts. The Tenth Circuit concluded that FERC engaged in reasoned decisionmaking, supported by substantial evidence, and denied the petitions for review. View "Tri-State Generation and Transmission Association, v. FERC" on Justia Law

A company was certified by the state regulator to operate as both a competitive retail electric and natural gas service provider. After receiving multiple consumer complaints, including allegations of unauthorized enrollments, deceptive sales practices, and improper telemarketing and door-to-door solicitation during a pandemic, the regulator initiated a formal investigation. The investigation uncovered evidence that the company and its vendors engaged in misleading marketing, falsified call recordings, forged consumer signatures, spoofed caller identification to appear as a utility or other trusted source, and failed to maintain required records. The company also solicited customers in violation of specific pandemic-related commission orders. The company argued that it lacked responsibility for vendors’ actions and had relied on the advice of counsel, and it challenged procedural aspects of the investigation.The Public Utilities Commission of Ohio conducted an evidentiary hearing and found the company had committed numerous violations of statutes and commission rules. It rescinded the company’s operating certificates, ordered it to cease operations in Ohio, imposed a $1.44 million forfeiture, and required the company to “rerate” affected consumers, providing restitution for the difference between the company’s rates and the utility’s default rates. The company’s application for rehearing was granted for further consideration but ultimately denied, and the company then appealed to the Supreme Court of Ohio.The Supreme Court of Ohio affirmed the rescission of the company’s operating certificates, holding that the commission provided adequate notice and opportunity for hearing and that the findings of statutory and rule violations were supported by the evidence. However, the court found the commission failed to sufficiently explain the basis for the forfeiture amount, violating statutory requirements for reasoned decision-making. The court also determined the rerating order was unclear as to which consumers were affected. The court reversed the forfeiture and rerating orders and remanded the matter for the commission to clarify and support its decisions. View "In re RPA Energy, Inc." on Justia Law

A company sought approval from the Illinois Commerce Commission (ICC) to construct and operate a high-voltage transmission line for renewable energy, running from Kansas through parts of Illinois to Indiana. The applicant, a special purpose entity owned by Invenergy, did not have existing utility assets in Illinois and planned to use a common energy industry “project finance” model—securing long-term contracts and commercial agreements after regulatory approval to finance construction through a combination of debt and equity. The applicant presented testimony regarding its management’s extensive experience with large-scale energy projects and relationships with major lenders, but did not submit traditional financial statements.The ICC reviewed the application, accepted evidence about the applicant’s financing strategy and experience, and imposed a condition that required the applicant to secure full financing for the entire project before beginning any construction on Illinois easement property. The ICC found that the applicant satisfied the statutory requirement to be “capable of financing the proposed construction without significant adverse financial consequences” for the utility or its customers, and issued the certificate of public convenience and necessity (CPCN).On direct administrative review, the Appellate Court of Illinois, Fifth District, reversed the ICC’s grant of the CPCN. The appellate court concluded that the applicant failed to show it could currently finance the project at the time of the certificate’s issuance, and characterized the project finance method as speculative. It held that section 8-406.1(f)(3) of the Public Utilities Act required proof of present financing capability as a condition precedent to granting a CPCN.The Supreme Court of Illinois reversed the appellate court’s judgment and affirmed the ICC’s decision. The court held that section 8-406.1(f)(3) does not require an applicant to prove current, present financing capability at the time of certificate issuance. Instead, it requires a showing of capacity to finance without significant adverse financial consequences, which may be established by substantial evidence of future financing ability and industry practices. The case was remanded to the appellate court for further proceedings on unaddressed issues. View "Concerned Citizens & Property Owners v. Illinois Commerce Comm'n" on Justia Law

A water authority was originally created by a single municipality to serve local water needs but over time expanded its service area to include numerous communities in two counties. The authority’s board was initially appointed solely by the founding municipality. In response to changes in the demographics of its customer base, the Pennsylvania General Assembly enacted a statutory amendment requiring equal board representation for the founding municipality and the two counties served. After the restructured board rejected a purchase offer from a private company, the authority attempted to transfer its assets into a trust. The founding municipality and the private bidder objected, asserting the municipality retained sole statutory power to convey the authority’s assets.The Delaware County Court of Common Pleas, Orphans’ Division, denied motions by the municipality and the private bidder for judgment on the pleadings in both the trust and declaratory judgment actions. The court held that any conveyance of the authority’s assets under the Municipality Authorities Act required the unanimous consent of the governing bodies now represented on the authority’s board. On appeal, the Commonwealth Court reversed, finding that the statutory change to board composition did not alter the founding municipality’s unilateral power to convey assets under the Act.The Supreme Court of Pennsylvania reviewed the Commonwealth Court’s decision. It held that the plain text of the relevant statute does not grant perpetual unilateral conveyance authority to the founding municipality, especially after legislative restructuring of the board. The court found that the right to effect a conveyance now rests collectively with the three municipalities represented on the board. The Supreme Court reversed the Commonwealth Court’s decision and remanded for further proceedings. View "In Re: Chester Water Authority Trust" on Justia Law

PJM Interconnection, LLC, which manages electricity transmission across several Mid-Atlantic and Midwestern states, conducted its 2024/2025 capacity auction based on certain published parameters intended to ensure sufficient capacity for future electricity needs. After bidding closed, PJM discovered an error in the Locational Delivery Area Reliability Requirement for the Delmarva Power & Light Company South Zone, which would result in inflated auction prices and excess capacity charges for consumers. PJM sought to amend its tariff to correct this issue before finalizing the auction results, and the Federal Energy Regulatory Commission (FERC) approved PJM's request.Capacity suppliers challenged FERC’s approval in the United States Court of Appeals for the Third Circuit, which vacated the decision, finding that the amendment was retroactive and violated the filed-rate doctrine. FERC, complying with the Third Circuit’s mandate, directed PJM to proceed with the unamended tariff, resulting in higher costs for consumers. Following this, agencies, customers, and entities representing customers’ interests filed a complaint under section 206 of the Federal Power Act, seeking modification of the auction outcome. FERC denied the complaint, stating that the Third Circuit’s ruling foreclosed any relief.The United States Court of Appeals for the District of Columbia Circuit reviewed FERC’s orders. The court held that FERC’s denial of the complaint was legally erroneous because the Third Circuit’s decision did not address whether FERC could use its section 206 authority to modify the auction result. The D.C. Circuit clarified that section 206(b) of the Federal Power Act provides a statutory exception to the general prohibition on retroactive rate changes. The court granted the petition for review, vacated FERC’s orders denying the complaint, and remanded the case to FERC for further proceedings. View "Maryland Office of People's Counsel v. FERC" on Justia Law

A private utility company entered into an agreement to purchase a township’s wastewater system, which served nearly 3,900 residents. The parties used a statutory procedure to determine the fair market value of the system’s assets, arriving at a purchase price of approximately $54.9 million. The utility, already certified to provide water and wastewater services in other areas, applied to the Pennsylvania Public Utility Commission (PUC) for a Certificate of Public Convenience (CPC) to acquire and operate the system. As part of the process, the utility agreed to maintain current rates for three years.An administrative law judge at the PUC recommended denying the utility’s application, finding that the township was already providing safe, reliable, and financially viable service, and that the acquisition would result in substantial rate increases for customers, outweighing any potential benefits. The PUC, however, rejected the judge’s recommendation and granted the CPC, finding that the utility’s expertise, financial resources, and the policy goal of consolidating systems provided substantial affirmative public benefits. The PUC also found that potential rate increases were not certain harms, as increases might occur regardless of the transaction and could be mitigated over a larger customer base.On appeal, the Commonwealth Court of Pennsylvania reversed the PUC’s decision, holding that benefits arising from the acquiring utility’s size and fitness were not sufficient to satisfy the statutory standard for public benefit, particularly when the existing service was adequate and the transaction would likely cause rate increases. The Supreme Court of Pennsylvania reversed the Commonwealth Court’s decision, holding that the PUC could consider benefits derived from the utility’s size and expertise in its affirmative public benefits analysis and that the lower court erred by reweighing the evidence and categorizing potential rate increases as “known harms.” The case was remanded for further proceedings on whether the PUC’s findings were supported by substantial evidence. View "Consum Adv v. PUC" on Justia Law

A company sought approval to construct a 500 kW solar-energy project in Randolph, Vermont. The proposed project required a certificate of public good (CPG) from the Vermont Public Utility Commission (PUC). A portion of the project's infrastructure, such as its access road and interconnection line, would be located on land with slopes exceeding 25%. Local and regional planning commissions, as well as the Town of Randolph Selectboard, initially supported the project and jointly requested the site be designated as a “preferred site.” After neighbors raised concerns that some panels would be located on steep slopes in conflict with the Town Plan, the applicant agreed to revise the project so that no panels would be built on slopes over 25%. The Town conditioned its continued support on this revision and on receiving the final site plan.The PUC’s hearing officer initially recommended denying the CPG due to uncertainty about whether the Town’s conditions regarding slope measurement had been met. The PUC rejected this recommendation, refocusing on whether the Town itself was satisfied with the conditions. The applicant subsequently provided a letter from the Town confirming its support and satisfaction with the conditions. The PUC found the project's compliance with soil-erosion control measures sufficient, particularly in light of a stormwater permit issued by the Agency of Natural Resources (ANR), and ruled that the project would not unduly interfere with the region’s orderly development. The PUC granted the CPG; the neighbors’ motion for reconsideration was denied, and they appealed.The Vermont Supreme Court reviewed the case, giving deference to the PUC’s expertise and factual findings. The Court affirmed the PUC’s grant of the CPG, holding that the PUC correctly applied the legal standards under 30 V.S.A. § 248, properly considered the Town Plan’s land-conservation measures, reasonably relied on the Town’s assurances and ANR’s permit, and did not misapply its own rules regarding “preferred site” status. View "In re Petition of Randolph Davis Solar LLC" on Justia Law

Several electricity generators challenged a change in how they are compensated for producing reactive power, a component of electricity necessary for grid stability but not directly consumed by end users. For many years, the Midcontinent Independent System Operator (MISO) provided generators with cost-based compensation for reactive power, in addition to market-based payments for real power. In 2022, MISO amended its tariff to eliminate separate compensation for reactive power, meaning neither transmission owners nor independent generators would receive payment for producing it within a standard range. This change was approved by the Federal Energy Regulatory Commission (FERC) and given immediate effect, despite objections from generators who argued they had made investments and entered contracts in reliance on the prior compensation structure.FERC approved MISO’s tariff amendment and denied requests for rehearing, concluding that the comparability standard justified the change and that generators’ reliance interests were either unsupported or outweighed by other considerations. FERC reasoned that generators should not have expected compensation for reactive power to continue indefinitely, especially since prior orders had made such compensation contingent on similar treatment for transmission owners. Generators petitioned the United States Court of Appeals for the District of Columbia Circuit for review, arguing that FERC failed to adequately consider their short-term financial reliance on the previous compensation scheme.The United States Court of Appeals for the District of Columbia Circuit held that FERC acted arbitrarily and capriciously by failing to adequately consider the generators’ short-term reliance interests before allowing the tariff change to take immediate effect. The court did not address the substantive validity of the tariff amendment itself but found that FERC’s explanation was insufficient regarding the abrupt elimination of compensation. The court granted the petitions for review, set aside FERC’s orders, and remanded the matter for further proceedings. View "Capital Power Corp. v. Federal Energy Regulatory Commission" on Justia Law

Several companies that supply electricity generation services in Pennsylvania challenged a billing practice used by a regional electric distribution company (EDC), FirstEnergy. FirstEnergy, which is responsible for delivering electricity to customers, offered its own customers the option to pay for non-commodity goods and services—such as smart thermostats and surge protection—through their regular utility bills, a practice known as “on-bill billing.” However, FirstEnergy did not allow competing electric generation suppliers (EGSs) to use this billing method for their own non-commodity goods and services. The EGSs argued that this practice was unlawfully discriminatory under Section 1502 of the Public Utility Code and Section 2804(6) of the Electricity Generation Customer Choice and Competition Act, which prohibit unreasonable preferences or advantages in utility service.An administrative law judge initially found in favor of the EGSs, concluding that FirstEnergy’s practice gave it a significant competitive advantage and violated the anti-discrimination provisions. However, the Pennsylvania Public Utility Commission (PUC) reversed this decision, reasoning that discrimination only occurs if the EDC provides the billing service to third parties but not to EGSs, which was not the case here. The PUC also determined that the relevant statutes did not require EDCs to offer on-bill billing for non-commodity goods and services to EGSs.The Commonwealth Court of Pennsylvania affirmed the PUC’s decision, holding that the statutory provisions at issue did not obligate EDCs to provide on-bill billing for non-commodity goods and services to EGSs. The Supreme Court of Pennsylvania reviewed the case and agreed with the lower courts. The Court held that EDCs have no statutory duty to provide on-bill billing for non-commodity goods and services to EGSs, and that such billing does not constitute “service,” “electric services,” or “transmission and distribution service” under the relevant statutes. The Court affirmed the order of the Commonwealth Court. View "Interstate Gas Supply, Inc. v. Public Utility Commission" on Justia Law