Articles Posted in Energy, Oil & Gas Law

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Federal Energy Regulatory Commission Order 1000 encourages the development of “interregional” electricity transmission projects, calling for regional providers to jointly evaluate interregional projects. Poviders must adopt cost-allocation methodologies for dividing up the costs of a joint project to assure that the relative costs borne by a particular transmission provider be commensurate with the relative benefits gained by the provider. MISO, which operates transmission facilities on behalf of providers across 15 midwestern states, proposed to conduct cost allocation for interregional projects using a “cost-avoidance” method. The share of costs allocated to MISO under that method corresponds to the benefits to MISO of its regional projects that would be displaced by the interregional project. In identifying which regional projects should be regarded as displaced, MISO proposed to exclude any project that had already been approved by the MISO board. The Commission rejected MISO’s cost-allocation approach, reasoning that excluding approved regional projects would fail to account for the full potential benefits of an interregional project. The D.C. Circuit denied a petition for review. Although MISO had standing and its claims were ripe, one claim was not properly presented to the agency in a request for rehearing. On the merits of the other claims, the court held that the Commission adequately responded to concerns about the possible effects of including approved regional projects in the cost-allocation calculation. View "Ameren Services Co. v. Federal Energy Regulatory Commission" on Justia Law

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The DC Circuit denied Duke's petition for review of the Commission's denial of Duke's complaint against PJM under the Federal Power Act (FPA), 16 U.S.C. 825e. To prepare for a bitterly cold day during the January 2014 polar vortex, Duke purchased expensive natural gas which it ended up not needing. Duke then claimed that PJM, its regional transmission organization, directed it to purchase the gas and that the governing tariff provided for indemnification. The court held that the Commission's finding that PJM never directed Duke to buy gas was supported by substantial evidence on the record. Therefore, the court had no need to address Duke's remaining argument that, had such a directive been issued, the tariff would have authorized indemnification. View "Duke Energy Corp. v. FERC" on Justia Law

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After Old Dominion found that its operational costs during the January 2014 polar vortex outstripped the amounts it could charge for electricity under the governing tariff, it asked the Commission to waive provisions of the governing tariff retroactively so that it could recover its costs. The DC Circuit denied Old Dominion's petition for review of the Commission's denial of Old Dominion's request based on the ground that such retroactive charges would violate the filed rate doctrine and the rule against retroactive ratemaking. In this case, the court afforded the Commission's interpretation of the filed tariff and the PJM Operating Agreement substantial deference where there was no dispute that the PJM Tariff's filed rate did not allow the cost recovery that Old Dominion sought. The court also denied the motion of Independent Market Monitor to intervene, but accorded it amicus curiae status. View "Old Dominion Electric Cooperative v. FERC" on Justia Law

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At issue in this case are the ramifications of a utility filing more than one rate with FERC during the time in which the utility negotiates an agreement with a prospective customer. The DC Circuit denied the petition for review and upheld FERC's determination that the governing rate was the rate in effect at the time the agreement was completed. Because the court found that FERC properly considered the court's findings on remand, adequately explained its decision, and properly considered the evidence, FERC did not act arbitrarily and capriciously in interpreting the new rate. View "ESI Energy, LLC v. FERC" on Justia Law

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The DC Circuit denied the Arkansas Commission's petition for review of a final FERC order. The FERC order held that an operating company withdrawing from a multi-state energy system must continue to share the proceeds of a pre-departure settlement with the other member companies. The court held that FERC had a lawful basis to order the sharing of the benefits of the settlement and was reasoned in its allocation methodology. Therefore, FERC's order for Entergy Arkansas to share the Union Pacific Settlement benefits and its method for allocating the settlement was not arbitrary, capricious, or contrary to law. View "Arkansas Public Service Comm. v. FERC" on Justia Law

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The DC Circuit granted a petition for review of FERC's assertion of Natural Gas Act (NGA) jurisdiction over the transportation and sale of natural gas for resale from the City of Clarksville, Tennessee to the City of Guthrie, Kentucky. As a preliminary matter, the court rejected FERC's standing and ripeness challenges to the court's authority to hear the petition for review. On the merits, the court saw no reason to deviate from the clear and unambiguous language of the statute, as well as FERC precedent, and held that Clarksville was a municipality that was exempt from regulation under NGA Section 7. The court also rejected FERC's alternative argument and held that the articulation of the scope of FERC's jurisdiction did not mean that Congress gave FERC jurisdiction over everything within the three areas listed by FERC. Therefore, the court vacated FERC's order. View "City of Clarksville, Tennessee v. FERC" on Justia Law

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NorthWestern challenged FERC's determination that its proposed rate was not just and reasonable. The DC Circuit held that FERC's decision in this case was reasonable and reasonably explained where FERC reasonably modified NorthWestern's proposed cost-calculation ratio by excluding the megawatts associated with "regulation down" from the numerator; FERC did not arbitrarily increase the denominator of NorthWestern's proposed cost-calculation ratio; FERC's decision on fuel costs was reasonable and reasonably explained; and FERC acted reasonably by requiring NorthWestern to make separate Section 205 filings. The court also held that FERC properly decided to treat this case like an ordinary over-collection case and ordered a refund. Therefore, the court denied the petition for review. View "NorthWestern Corp. v. FERC" on Justia Law

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In 2004, the Commission found that certain of Entergy's rates were unjust and unreasonable. On a challenge by the LPSC, the DC Circuit remanded the case to the Commission because it had adequately failed to explain its reasoning in departing from its general policy of ordering refunds when consumers have paid unjust and unreasonable rates. The Commission, on remand, clarified that it actually has no general policy of ordering refunds in cases of rate design. After the Commission's correction of its characterization of its own precedent, the court found that the Commission's denial of refunds accords with its usual practice in cost allocation cases such as this one. The court also found that the Commission adequately explained its conclusion that it would be inequitable to award refunds in this case. Therefore, because the Commission did not abuse its discretion, the court denied the petition for review. View "Louisiana Public Service Commission v. FERC" on Justia Law

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Anticipating the expiration of the fifty-year license for the Catawba-Wateree Project, Duke Energy petitioned for review of FERC's grant of a forty-year license. At issue was whether the Commission reasonably found that the measures required by the hydroelectric license it issued to Duke Energy were "moderate," warranting a forty-year license term under the Commission's precedents. The DC Circuit denied the petition for review and accorded due deference to the Commission's expertise in determining whether measures under a license were moderate or extensive and to its interpretation of its precedent and policy choices. View "Duke Energy Carolinas, LLC v. FERC" on Justia Law

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The DC Circuit denied petitions for review challenging FERC's orders approving PJM's tariff that determined the rates paid to energy providers for providing electric capacity in the broad mid-Atlantic region. Petitioners argued that FERC lacked substantial evidence to approve the estimates of labor costs that formed part of the calculation of the cost of new entry; FERC should have accepted the labor-cost calculations of petitioners' expert; and FERC erred in approving another input to the estimated cost of new entry. The court held that petitioners' objections failed to undermine the substantial evidence supporting FERC's figure for the cost of new entry and failed to overcome the court's deferential standard of review. View "PJM Power Providers Group v. FERC" on Justia Law