With a flurry of major new environmental regulations, the Environmental Protection Agency (EPA) is altering the power generation landscape. But will the new federal rules survive court challenges—...
- is regulated or competitive. It said the legislation was unclear on the distinction between "essential" and "nonessential" services..
Road Construction. In a case of first impression, a New York court ruled that electric utilities must pay their own costs when public road construction projects interfere with utility facilities located within the right-of-way under a private easement granted by a private landowner before the road was constructed. It upheld a statute that overturned the common law rule that the city pays costs. .
Hinshaw Gas Pipelines. A federal appeals court struck down an order by the Federal Energy Regulatory Commission, explaining that the FERC could not expand its limited authority over intrastate "Hinshaw" pipelines for forcing them to file periodic cost reports under Section 4 of the Natural Gas Act to justify rates for incidental interstate services.
The court conceded that the FERC could require cost reports under NGA Section 5, but suggested the FERC was trying to "slide through" Section 4 to expand its jurisdiction. It added, "[T]his is one of those peculiar cases in which it is not easy to understand what the litigants are disputing." .
Hydropower Entitlements. A federal appeals court reversed a 1999 decision by the U.S. Court of Federal claims that struck down the method adopted by the federally owned Western Area Power Authority to refund excess revenues collected for sales of power from Hoover Dam after unexpected high rainfall increased runoff and plant output in the mid-1980s. .
Purchased Power Costs. In reversing a trial court, and thus affirming a state PUC order that disallowed recovery of purchased power costs incurred by TXU Electric following an accident at a power plant, a Texas appeals court said it was bound to defer to the PUC, since the agency ruling was a matter of policy and administrative discretion, not a matter of tort law or determining the proximate cause of the accident. .
Merger Savings. Reversing a trial court order, the Louisiana Supreme Court ruled that Entergy could not take expenses disallowed by state regulators in a current rate case and then treat them as ratepayer "savings" under a savings tracking ratemaking clause approved years earlier that allowed utility shareholders to keep 60 percent of savings generated by Entergy's takeover of Gulf States Utilities.
The court also agreed with regulators that weather data gathered statewide was too unreliable to justify a weather normalization clause to adjust test-year revenues for Entergy's specific service territory. But it said regulators erred by adopting a range of authorized returns on common equity (between 10.31 and 11.34 percent) without specifying a single approved point within the range. .
Nuclear Waste Claims. In two companion cases, a federal appeals court ruled that electric utilities may proceed in a damage suit based on breach of contract to recover costs incurred to dispose of nuclear waste temporarily at power plant sites because of the delays by the federal government in arranging for permanent disposal. .
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