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Power & Pipes

FERC, CFTC, and State Energy Law Developments

California Utility Shielded From Blackout Negligence Lawsuit in Ninth Circuit

By J. Daniel Skees and Robert P. Goldfin
// January 29, 2024
The US Court of Appeals for the Ninth Circuit dismissed a class action lawsuit claiming a California utility was liable for blackouts that were allegedly caused by inadequate electric system maintenance.
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Topics: Energy, Federal Courts, Preemption, State Issues

DC Circuit Upholds Cost-Causation Principle

By J. Daniel Skees and Robert P. Goldfin
// January 08, 2024
The DC Circuit has affirmed FERC’s application of the “cost causation” principle to prevent a public utility (the Utility) from allocating costs for facilities to customers that did not benefit from the facilities. The Utility had asked the court to overturn FERC’s order preventing the Utility from recovering transmission costs from customers located near the facilities because those facilities were built and intended to serve solely a separate group of customers located 300 miles away.
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Topics: Electric Generation, Electric Transmission, Federal Courts, FERC, RTOs

Sixth Circuit Closes the Floodgates on Tort Suits Against FERC for Dam Licensing Decisions

By J. Daniel Skees and Patrick R. Pennella
// October 06, 2023
In a per curiam decision on October 3, 2023, the US Court of Appeals for the Sixth Circuit affirmed that the Federal Power Act prevents tort suits against the United States relating to damage caused by dams that are licensed by the Federal Energy Regulatory Commission (FERC). That is, liability for any injuries or damages caused by any dam licensed by FERC is solely the responsibility of the licensee, and liability cannot flow to the United States, even after dam failures. 
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Topics: Federal Courts, FERC, Licensing, Renewable Energy

US Supreme Court Case Questions Extent of EPA’s Authority to Regulate Greenhouse Gas Emissions

By Michelle Pector
// April 12, 2022
The US Supreme Court recently heard oral arguments in West Virginia v. the Environmental Protection Agency (EPA), a major environmental case questioning the extent of the EPA’s authority to regulate greenhouse gas emissions.
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Topics: Clean Power Plan, Climate Change, EPA, Federal Courts

District Court Ruling Would Impute Liability to Employer in Nearly All FERC Enforcement Matters

By J. Daniel Skees , Levi McAllister , and Pamela T. Wu
// December 28, 2021
A recent district court order highlights the importance of maintaining a strong compliance program with effective compliance controls and practices, while highlighting the risk of employee misconduct for the enterprise itself. Specifically, on December 20, a California district court denied a motion to dismiss a FERC complaint that seeks to enforce a penalty against a company and one of its traders. In addition to finding that FERC’s claims were not time barred, the court also found that the employer can be held liable for the trader’s actions even though the trader withheld information from the company regarding the trading activity at issue. However, in a win for the company, the court limited the civil penalties that may be sought in a complaint to the proposed penalty set forth in FERC’s order to show cause. This limits FERC’s ability to penalize a defendant for choosing to contest a proposed sanction in district court.
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Topics: Enforcement, Federal Courts, Market Manipulation

Another Guilty Plea in Insider Trading Case Under CFTC’s Anti-Manipulation Rule

By Levi McAllister and Patrick R. Pennella
// February 11, 2021
A natural gas trader pleaded guilty in federal district court last week to conspiring to commit commodities fraud and wire fraud in an insider trading scheme over natural gas futures. His co-conspirator had pleaded guilty last July to conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act and the Commodity Futures Trading Commission’s (CFTC) anti-manipulation rule. This case represents part of the US Department of Justice's new effort to prosecute insider trading in the commodity markets under the CFTC’s anti-manipulation rule.
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Topics: CFTC, Dodd-Frank Act, Federal Courts, Market Manipulation, Oil & Gas

Supreme Court to Review Third Circuit’s ‘Disruptive’ NGA Decision on Pipeline’s Power to Acquire Right-of-Way over State Lands

By Katherine A. Vaky and John K. Gisleson
// February 09, 2021
The US Supreme Court granted certification on February 3 to review the US Court of Appeals for the Third Circuit’s decision in In re PennEast Pipeline Co. in order to resolve an important question: Does the Natural Gas Act (NGA) delegate authority to exercise the federal government’s eminent domain power to condemn land in which a state claims an interest when FERC grants a certificate of public convenience and necessity for an interstate pipeline project?
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Topics: Federal Courts, Natural Gas, Oil & Gas

The Hits Keep Coming: DC Circuit Vacates Dakota Access Pipeline’s Federal Easement

By Kirstin E. Gibbs and Patrick R. Pennella
// January 29, 2021
It’s been a difficult several days for the oil industry. First, the Biden administration revoked the border-crossing permit for the Keystone XL pipeline on January 20. Another executive order, among other things, directed the secretary of the US Department of the Interior to pause oil and natural gas leases on public lands and offshore waters pending a review of leasing practices. And on January 26, the US Court of Appeals for the DC Circuit affirmed a district court’s decision to vacate an easement vital to the Dakota Access Pipeline (DAPL or the pipeline) that had been granted by the Army Corps of Engineers (Corps). But the court, however, reversed the lower court’s order that required the pipeline to cease operations. Accordingly, the pipeline may continue to operate while the Corps decides what to do about Dakota Access’s trespass. Separately, however, local Native American tribes have sought an injunction before the district court, the briefing for which ended earlier this month.
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Topics: Federal Courts, National Environmental Policy Act, Oil & Gas

Lawflash: DC Circuit Vacates Affordable Clean Energy Rule, Revives Clean Power Plan

January 28, 2021
Our colleagues in the environmental practice explain the DC Circuit’s recent decision vacating the Environmental Protection Agency’s Affordable Clean Energy (ACE) rule and discuss the implications for the Clean Power Plan.
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Topics: Clean Power Plan, Electric Generation, EPA, Federal Courts

FERC’s Energy Storage Rule Upheld on Appeal

By Levi McAllister , Neeraj Arora , and Arjun Prasad Ramadevanahalli
// July 13, 2020
On July 10, the US Court of Appeals for the DC Circuit found that the Federal Energy Regulatory Commission was well within its rights to prevent states from prohibiting energy storage resources from participating in wholesale (i.e., sales for resale) energy markets. The court’s order is the latest judicial affirmation of FERC’s authority to regulate activities on wide portions of the electric grid, including facilities reserved to state regulators, if those activities affect wholesale rates.
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Topics: Distributed Generation, Electric Generation, Federal Courts, FERC, Renewable Energy, Rulemaking, State Issues, Storage
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