Articles Posted in Utilities Law

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Petitioners seek review of FERC's determination that various energy companies committed tariff violations in California during the summer of 2000. As part of a deregulation program, California created two nonprofit entities: the California Power Exchange Corporation (“CalPX”) and the California Independent System Operator Corporation (“Cal-ISO”). Both entities were subject to FERC jurisdiction, with CalPX operating pursuant to a FERC-approved tariff and wholesale rate schedule. The Cal-ISO tariff comprehensively regulated California’s power markets, and incorporated the Market Monitoring and Information Protocol (“MMIP”), which set forth rules for identifying and protecting against abuses of market power. The court concluded that FERC’s determination that Shell, MPS, and Illinova (“sellers”) violated the Cal-ISO tariff and MMIP during the Summer Period was not arbitrary, capricious, or an abuse of discretion. In this case, FERC reasonably interpreted the Cal-ISO tariff and the MMIP according to the plain text of those documents. Therefore, the court rejected the sellers’ claims that the tariff and MMIP did not proscribe the practices identified by the agency. Furthermore, FERC’s interpretation of the Cal-ISO tariff and the MMIP finds support not only in text, but in policy as well. The court concluded that FERC reasonably interpreted the Cal-ISO tariff and the MMIP to prohibit the practices of False Export, False Load Scheduling and Anomalous Bidding. In addition, the agency reasonably concluded that the tariff and MMIP sufficed to put sellers on notice that such practices were not permitted. The court also concluded that FERC reasonably concluded that the sellers engaged during the Summer Period in the practices deemed tariff violations by the orders on review. Finally, the court concluded that FERC’s Summer Period determinations regarding APX and BP were not arbitrary, capricious, or an abuse of discretion. Accordingly, the court denied the petitions for review in part and dismissed in part. View "MPS Merchant Serv. v. FERC" on Justia Law

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Petitioners challenged several FERC orders that were issued following the court's remand in Port of Seattle v. FERC. The key issue on appeal is the applicability of the Mobile-Sierra doctrine, which requires FERC to “presume that the rate set out in a freely negotiated wholesale-energy contract meets the ‘just and reasonable’ requirement” imposed by law. The court concluded that it has jurisdiction only as to the issue of whether FERC erred by invoking the Mobile-Sierra doctrine and that it lacks jurisdiction to review FERC’s evidentiary orders. The court held that FERC reasonably applied Mobile-Sierra to the class of contracts at issue and that FERC's interpretation is reasonable. In this case, FERC’s baseline assumption that the presumption applies to the contracts at issue is not unreasonable in light of Morgan Stanley Capital Grp., Inc. v. Pub. Util. Dist. No. 1. Accordingly, the court denied the petition with respect to petitioners' claim that the Mobile-Sierra presumption cannot apply to the spot sales at issue and dismissed the evidentiary challenges for lack of jurisdiction. View "State of California v. FERC" on Justia Law

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IDACORP submitted proposed settlements to FERC involving the FERC proceeding related to electricity sales in the Pacific Northwest in 2000 and 2001. At issue was whether FERC abused its discretion in considering these proposed settlements. The court concluded that the agency departed from its rules and precedent without explanation when it treated the first proposed settlement as uncontested. In this case, FERC abused its discretion by foregoing the Trailblazer Pipeline Co. analysis and merits analysis dictated by FERC’s regulations. The court granted both petitions for review and remanded for further proceedings because the settlements and petitions are inextricably intertwined. View "Idaho Power Co. v. FERC" on Justia Law

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Petitioners, wholesale electricity customers, challenged FERC's orders requiring the Bonneville Power Administration to provide transmission services on terms "not unduly discriminatory or preferential." Petitioners are wholesale electricity customers of Bonneville. The court concluded that petitioners have Article III standing by demonstrating that they have an injury in fact, causation, and redressability. The court concluded, however, that petitioners failed to demonstrate statutory standing, which requires them to be "aggrieved" within the meaning of the Federal Power Act section 313(b) (FPA), 16 U.S.C. 8251(b), and the Administrative Procedure Act section 10, 5 U.S.C. 702. In this case, the zone-of-interests test was not satisfied where petitioners' interests are not arguably protected by section 211A of the FPA. Accordingly, the court denied the petitions for review. View "NRU V. FERC" on Justia Law

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In 2004, the Ninth Circuit decided California ex rel. Lockyer v. FERC, which held that FERC may authorize market-based energy tariffs so long as that regulatory framework incorporates both an ex ante market power analysis and enforceable post-approval transaction reporting. In the instant case, Petitioners, the people of the state of California and related parties, sought review of a series of orders issued by the Federal Energy Regulatory Commission (FERC) on remand following the Court’s decision in Lockyer, arguing that FERC failed to follow Lockyer and violated the Federal Power Act by requiring proof of excessive market share as a necessary condition for relief for transaction reporting violations. The Ninth Circuit granted the petition for judicial review, holding that FERC structured the remand proceedings in a manner contrary to the terms of the Lockyer decision. Remanded to FERC for further proceedings. View "People of State of Cal. v. FERC" on Justia Law

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In consolidated appeals, two groups challenged the BPA's decision to forgo refunds after the court invalidated three sets of contractual arrangements in which BPA agreed to subsidize certain longtime industrial customers rather than sell them power directly. The court held that these subsidy arrangements were unreasonable and were contrary to BPA's authority. The court remanded to BPA regarding whether it could or should seek refunds of the improper subsidies. BPA concluded that it was contractually barred from seeking refunds as to some of the invalidated contracts; it had no legal or equitable basis for seeking refunds as to the others; and if it did pursue recovery of the subsidies, it might become mired in counterproductive, protracted litigation. Petitioners' core argument is that their power costs have been impermissibly raised by BPA's decision because, if BPA did seek refunds of the subsidies, it could pass the recovered funds to its customers as lower rates. The court rejected petitioners' contention that BPA has a duty, under either the Constitution's Appropriations Clause or BPA's governing statutes, to seek all refunds to which it may be entitled. The court concluded that BPA's decisions in most respects sufficiently and reasonably balanced its competing obligations to merit the court's deference, except in one respect. The court denied the petition for review with regard to the decision not to seek refunds with respect to the 2007 Block Contracts and the Port Townsend Contract. The court granted the petition and remanded to BPA for further proceedings with regard to recovery of subsidies paid under the Alcoa Amendment.View "ICNU v. BPA" on Justia Law

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The Canal Authority appealed the district court's decision to grant summary judgment in favor of Interior, Bureau, San Luis, and Wetlands, in a suit to establish priority water rights under Central Valley Project (CVP) water service contracts. The district court granted summary judgment for defendants, holding that all claims arising before February 11, 2004 were time-barred and that Canal Authority was not entitled to priority water allocation under the CVP contracts. The court affirmed the district court's decision on the alternative basis that California Water Code 11460 did not require the Bureau to provide CVP contractors priority water rights, because contracts between the Canal Authority and Bureau contained provisions that specifically address allocation of water during shortage periods. View "Tehama-Colusa Canal Auth. v. U.S. Dept. of Interior" on Justia Law

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Defendants, PG&E and Pacific Bell, own and maintain utility poles throughout the San Francisco Bay Area. Plaintiff filed this action against both companies, alleging that the poles discharged wood preservative into the environment in violation of the Clean Water Act (CWA), 33 U.S.C. 1251-1387, and the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901-6992k. The court affirmed the district court's dismissal of the action under Rule 12(b)(6) where plaintiff failed to state a claim under the CWA because discharges of stormwater from the utility poles were neither a "point source discharge" nor "associated with industrial activity" and where plaintiff failed to state a claim under the RCRA because wood preservation that escaped from the utility poles was not a "solid waste." The court also held that the district court did not abuse its discretion in denying plaintiff leave to amend. View "Ecological Rights Foundation v. PG&E" on Justia Law

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These consolidated petitions for review challenged a contract between the BPA and one of its long-time customers, Alcoa. BPA's preference customers and others filed this petition for review, requesting that the court hold that the contract was unlawful because it was inconsistent with the agency's statutory mandate to act in accordance with sound business principles. Petitioners claimed, among other things, that instead of entering into a contract to sell power to Alcoa at the statutorily required Industrial Firm power (IP) rate, BPA should sell to other buyers at the market rate. The court denied the petitions for review insofar as they pertained to the Initial Period. Because the potential for BPA and Alcoa to enter into the Second Period of the contract was no longer before the court, the court dismissed those portions of the petitions. Finally, the court held that because BPA relied on a categorical exclusion to the National Environmental Policy Act's (NEPA), 42 U.S.C. 4321-4347, requirements, declining to complete an Environmental Impact Statement was not arbitrary and capricious. Accordingly, the court denied petitioner's NEPA claim. View "Alcoa Inc. v. BPA, et al" on Justia Law

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Petitioners, a group of municipal and federal government entities, which sold electricity in the affected markets at issue but who were outside of FERC's refund jurisdiction, appealed FERC's order of refunds for electricity rates that were above what FERC determined to be the just and reasonable rate. The court did not agree with FERC's assertion that it had broad authority under section 206 of the Federal Power Act (FPA), 16 U.S.C. 824e, to retroactively reset rates that were charged in the California electricity markets during the time in question. Nonetheless, the court concluded that the specific FERC Orders that were challenged in the current petitions for review did not exceed the limits on FERC's authority. Consequently, the court denied the petitions. View "Modesto Irrigation District, et al. v. FERC" on Justia Law