Articles Posted in Energy, Oil & Gas 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

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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

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FERC issued a series of orders empowering incoming generators within the Midcontinent Independent System Operator (MISO) region to elect to self-fund this new construction, or to seek financing from third parties, regardless of whether the current grid owners wish to fund the construction themselves. The DC Circuit vacated the orders, holding that there was neither evidence nor economic logic supporting FERC's discriminatory theory as applied to transmission owners without affiliated generation assets. The court also held that FERC did not adequately respond to petitioners' argument that involuntary generator funding compelled them to construct, own, and operate facilities without compensatory network upgrade charges – thus forcing them to accept additional risk without corresponding return as essentially non-profit managers of these upgrade facilities. Accordingly, the court remanded for further proceedings. View "Ameren Services Co. v. FERC" on Justia Law

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Petitioners challenged two sets of orders issued by the Commission regarding a scarcity pricing mechanism in the New England power market. The DC Circuit held that the exhaustion requirements of the Federal Power Act (FPA), 16 U.S.C. 824d, deprived it of jurisdiction over the petition to review the Tariff Order. Therefore, the court dismissed the petition in Case No. 16-1023. The court held, on the merits, that the Commission was not arbitrary or capricious in denying petitioners' complaint and thus denied the petition in Case No. 16-1024 seeking review of the Complaint Order. View "New England Power Generators Association v. FERC" on Justia Law

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AOPL petitioned for review of FERC's issuance of an order adopting the index formula to govern oil pipeline rates for the 2016 to 2021 period. The DC Circuit denied the petition for review, holding that there was no merit to AOPL's claim that FERC impermissibly relied solely on the middle 50 percent of pipeline cost-change data and failed to incorporate the middle 80 percent of cost-change data, and that FERC impermissibly used "Page 700" cost-of-service data to calculate the index level. The court held that the record makes it plain that the Commission adequately and reasonably explained its decision not to consider the middle 80 percent of pipelines' cost-change data; nothing in any of FERC's past index review orders bound the agency to use the middle 80 percent of pipelines' cost-change data; the Commission's rationale for utilizing the cost-of-service data from Page 700 was clear and reasonable; and there was nothing in the record to support AOPL's claim that FERC's decision to use Page 700 data indicates an unexplained shift in its measurement objective. View "Association of Oil Pipe Lines v. FERC" on Justia Law

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SPP, a regional transmission organization (RTO), filed with FERC revisions to its tariff that reflected an agreement with Integrated System entities to integrate their facilities. Pursuant to the requirements of section 205 of the Federal Power Act, 16 U.S.C. 824d, SPP filed with FERC revisions to its tariff that reflected the parties' agreement. FERC approved the revisions over the objections of Kansas. The DC Circuit denied Kansas' petition for review, holding that FERC accurately described the agreement as reciprocal; Kansas misread various precedents and the court rejected its contention that the arrangement violated critical norms of ratemaking; the court saw no basis for a claim of undue discrimination; and the court rejected Kansas' arguments regarding SPP's reliance on a study commissioned by the IS Parties. Finally, FERC did not abuse its discretion by deciding not to hold an evidentiary hearing on the disputed features of the record underlying its approval of the merger. View "State Corp. Commission of KS v. FERC" on Justia Law

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Sierra Club challenged the Commission's decision approving the construction and operation of three new interstate natural-gas pipelines in the southeastern United States. Determining that it has jurisdiction to entertain Sierra Club's claims, the DC Circuit held that the Commission's environmental impact statement did not contain enough information on the greenhouse-gas emissions that will result from burning the gas that the pipelines will carry. However, the Commission acted properly in all other respects. Accordingly, the court granted Sierra Club's petition for review and remanded for preparation of a conforming environmental impact statement. View "Sierra Club v. FERC" on Justia Law

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Sierra Club challenged the Department's grant of an application to export liquified natural gas (LNG) using terminals and liquefaction facilities (Freeport Terminal) on Quintana Island. On the merits, the DC Circuit held that the Department did not fail to fulfill its obligations under the National Environmental Policy Act (NEPA) by declining to make specific projections about environmental impacts stemming from specific levels of export-induced gas production; the Department did not fail to fulfill its obligations with respect to the potential for the U.S. electric power sector to switch from gas to coal in response to higher gas prices; the court rejected Sierra Club's challenges to the Department's examination of the potential greenhouse-gas emissions resulting from the indirect effects of exports; and Sierra Club has given the court no reason to question the Department's judgment that the FLEX application was not inconsistent with the public interest. Accordingly, the court denied the petition for review. View "Sierra Club v. DOE" on Justia Law

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This case involves the allocation of production costs among the Entergy Operation Companies. LPSC petitioned for review of FERC's implementation of its decision to delay the effective date of the Bandwidth Remedy. The DC Circuit denied LPSC's petition with respect to FERC's advancement of the effective date to the 2005 period, and denied its petition as to the application of the Bandwidth Remedy to the 2005 period. The court granted FERC's request to remand to FERC for further consideration of the denial of Section 206 refunds for the September 2001-May 2003 effective period. View "Louisiana Public Service Commission v. FERC" on Justia Law

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Petitioners filed suit challenging EPA's promulgation of a Final Rule setting several renewable fuel requirements for the years 2014 through 2017. The D.C. Circuit rejected all challenges except for one: the court agreed with Americans for Clean Energy that EPA erred in how it interpreted the "inadequate domestic supply" waiver provision. The court held that the "inadequate domestic supply" provision authorizes EPA to consider supply-side factors affecting the volume of renewable fuel that is available to refiners, blenders, and importers to meet the statutory volume requirements. It does not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers. Accordingly, the court granted Americans for Clean Energy's petition for review of the Final Rule, vacated EPA's decisions to reduce the total renewable fuel volume requirements for 2016 through use of its "inadequate domestic supply" waiver authority, and remanded for further consideration. View "Americans for Clean Energy v. EPA" on Justia Law