Competitive energy suppliers are infuriated by Michigan’s regulatory framework. The state partially unbundled its utilities, but left generation tied to retail operations. Then it opened the...
Bench Report: Top 10 Groundbreaking Legal Decisions in 2009
one state can’t be forced to pay for new lines built in a far-off region.
By a 2-1 vote, the court endorsed the traditional utility “cost-causer” practice of “beneficiary pays” and struck down a FERC order that had OK’d PJM’s policy of “postage-stamp” funding that had required all RTO members to share costs equally for new transmission lines 500-kV or greater. Writing for the majority, Judge Posner said that Commonwealth Edison, an Illinois utility, should not have to help pay for “Project Mountaineer,” a set of new 500- and 765-kV lines designed to facilitate power imports into the eastern Mid-Atlantic—at least not without a better explanation from FERC. Illinois Comm. Comm’n. v. FERC, Aug. 6, 2009, 576 F.3d 470 (7th Cir.).
4. Connecticut v. AEP: Weighing the Certainty of Climate Change
In September, a federal appeals court in New York City (2nd Circuit) gave the go-ahead to a common law lawsuit filed by eight states, the City of New York, and several private land trusts, against a group of large U.S. utilities operating fossil-fired power plants (including the five largest U.S. CO 2 emitters, according to claims), by which the plaintiffs had sought to force the utilities to cap and then reduce their carbon CO 2 emissions, on the theory that such greenhouse-gas emissions (GHG) represent a public nuisance that has, and will cause, harm to human health and natural resources.
Citing evidence of California water shortages from reduced winter snowpack, plus flooding from earlier and heavier springtime melts, the appeals court found a sufficient allegation of certainty of “injury in fact” to support standing to sue, adding in its 139-page opinion, “there is no probability involved.”
The ruling reversed a 2005 district court order that had dismissed the lawsuit as essentially a political matter better decided by Congress or the president. The appeals court found no example of legislation or federal regulation on GHGs that had usurped the field. Of course, with proposals moving forward in both Congress and EPA, such regulation might arrive soon. Connecticut et al. v. American Elec. Pwr. Co., Inc., et al., Nos. 05-5104-cv, 05-5119-cv, Sept. 21, 2009 (2d Cir.).
5. North Carolina v. TVA: Lawful Emissions Deemed Public Nuisance
As a stand-alone decision, Judge Lacy Thornburg’s ruling opened the door to a possible flood of civil lawsuits challenging power plant operators on environmental grounds. It lays the groundwork for states, cities and other governments to use public-nuisance litigation to force emitters in neighboring jurisdictions to install emissions controls beyond what’s required by statute. But also it could serve to strengthen such cases as Connecticut v. AEP , which demand reductions in GHG emissions to remedy the alleged public nuisance of climate change. In this case, North Carolina alleged TVA coal-fired plants in Tennessee and Alabama emit air toxins that create a public nuisance for North Carolinians. Federal Judge Thornburg, sitting in North Carolina’s western district, agreed and ordered TVA to install and operate scrubbers at four power plants, even though the plants were in compliance with EPA regulations under the Clean Air Act. North Carolina v. Tennessee Valley Authority