Articles Posted in Energy, Oil & Gas Law

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The Illinois Commerce Commission granted a certificate of public convenience and necessity to Rock Island for construction of a high voltage electric transmission line between O’Brien County, Iowa, and a converter station adjacent to Commonwealth Edison Company’s Grundy County, Illinois substation. Rock Island is a wholly owned subsidiary of Wind Line, which is a wholly owned subsidiary of Clean Line, which is owned in part by Grid America, a subsidiary of National Grid, which owns and operates more than 8600 miles of high-voltage transmission facilities. Rock Island has never constructed a high voltage transmission line and does not yet own, control, operate, or manage any plants, equipment, or property used or to be used in the transmission of electricity or for any other purpose related to utilities; it has an option to purchase real property in Grundy County. The appellate court reversed, holding that the Commission had no authority under the Public Utilities Act, 220 ILCS 5/1-101, to consider Rock Island’s application because the company did not qualify as a public utility under Illinois law. The Illinois Supreme Court affirmed. Whatever Rock Island’s motives for seeking a certificate of public necessity and convenience, it does not qualify as a public utility; eligibility for a certificate of public convenience and necessity unambiguously requires present ownership, management, or control of defined utility property or equipment. View "Illinois Landowners Alliance, NFP v. Illinois Commerce Commission" on Justia Law

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Zahn is a residential consumer, decided to purchase electricity from North American Power & Gas (NAPG), an alternative retail electric supplier (ARES) under the Electric Service Customer Choice and Rate Relief Law , 220 ILCS 5/16-102. NAPG sent Zahn a letter stating that she would receive its “New Customer Rate” of $0.0499 per kilowatt-hour during her first month of service and a “market based variable rate” thereafter. NAPG's “Customer Disclosure Statement” indicated a month-to-month term and that “[o]ther than fixed and/or introductory/promotional rates, all rates shall be calculated in response to market pricing, transportation, profit and other market price factors” and that its prices were “variable” based on “market prices for commodity, transportation, balancing fees, storage charges, [NAPG] fees, profit, [and] line losses ... may be higher or lower than your [local public utility].” Zahn never received the $0.0499 per kilowatt-hour rate. During her first two months of service, NAPG charged her $0.0599 per kilowatt-hour. Thereafter, the rate it charged her was always higher than what she would have paid her local public utility. Zahn filed a class action, alleging Consumer Fraud and Deceptive Business Practices Act violations (815 ILCS 505/1), breach of contract, and unjust enrichment. Zahn appealed dismissal of the case to the Seventh Circuit, which certified a question of Illinois law: Does the Illinois Commerce Commission (ICC) have exclusive jurisdiction over a reparation claim, as defined in precedent in Sheffler v. Commonwealth Edison, brought by a residential consumer against an ARES? The Illinois Supreme Court responded that the ICC does not have exclusive original jurisdiction over such claims. The claims may be pursued through the courts. View "Zahn v. North American Power & Gas, LLC" on Justia Law

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FutureGen was created to research and develop near-zero emissions coal technology and sought to use carbon capture and storage to develop the world’s first near-zero emissions coal power plant. The proposed retrofitted “clean coal” electric energy generating facility, known as “FutureGen 2.0,” was to be located in Meredosia, Illinois, and scheduled to begin operating in 2017. To secure private investment for FutureGen 2.0, the Illinois Commerce Commission issued an order finding that it has the authority to force public utility companies and smaller, privately owned and competitively operated Area Retail Electric Suppliers (ARES) to purchase all of FutureGen 2.0’s electrical output over a 20-year term. The appellate court affirmed the order. In 2015, while appeal was pending, the U.S. Department of Energy suspended funding for the FutureGen 2.0 project. The FutureGen Alliance board of directors approved a resolution in January 2016 ceasing all FutureGen 2.0 project development efforts and indicated its intention to terminate the sourcing agreements. The Illinois Supreme Court dismissed the appeal as moot, vacating the decision of the appellate court. View "Commonwealth Edison Co. v. Ill. Commerce Comm'n" on Justia Law

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Pusateri, a former employee of Peoples Gas Light and Coke Company (PG) filed a complaint under the False Claims Act, 740 ILCS 175/1, alleging that PG used falsified gas leak response records to justify a fraudulently inflated natural gas rate before the Illinois Commerce Commission. As a customer, the State of Illinois would have paid such fraudulently inflated rates,. The Cook County circuit court dismissed with prejudice, finding that as a matter of law, there was no causal connection between the allegedly false reports and the Commission-approved rates. The appellate court reversed, construing the complaint’s allegations liberally to find PG could have submitted the safety reports in support of a request for a rate increase, despite not being required to do so under the Administrative Code. The Illinois Supreme Court reinstated the dismissal, reasoning that the court lacked jurisdiction to order relief. The legislature did not intend the False Claims Act to apply to a Commission-set rate. The Commission has the duty to ensure regulated utilities obey the Public Utilities Act and other statutes, except where enforcement duties are “specifically vested in some other officer or tribunal.” View "Pusateri v. Peoples Gas Light & Coke Co." on Justia Law

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WRB owns the Wood River Petroleum Refinery in Madison County. Following major renovations, WRB applied to the Illinois Environmental Protection Agency under the Property Tax Code (35 ILCS 200/11-25) to have 28 of the refinery’s systems, methods, devices, and facilities certified as “pollution control facilities” for preferential tax assessment. IEPA recommended approval of two of the requests by the Pollution Control Board (PCB), which accepted the IEPA’s recommendations. The Board of Education sought to intervene in the proceedings where certification had been granted, arguing that it had a legally cognizable interest because the certifications would ultimately deprive it of tax revenue. PCB denied the petitions as moot. While requests to reconsider were pending, the IEPA recommended that the PCB approve WRB’s applications to certify the remaining 26 systems. Before PCB took action on those cases, the Board of Education sought to intervene. PCB denied the motion and granted certification in each case. The appellate court dismissed the Board of Education’s consolidated appeal for lack of jurisdiction under section 41 of the Illinois Environmental Protection Act, under which the Board of Education sought review The court noted the specific provision for appeals in proceedings involving PCB’s “issuance, refusal to issue, denial, revocation, modification or restriction of a pollution control certificate,” contained in the Property Tax Code,35 ILCS 200/11-60. That provision requires that proceedings originate in the circuit court, rather than by direct administrative review in the appellate court. The Illinois Supreme Court affirmed. View "Bd of Educ. of Roxana Cmty. Unit Sch. Dist/ No. 1 v. Pollution Control Bd." on Justia Law

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WRB owns the Wood River Petroleum Refinery in Madison County. Following major renovations, WRB applied to the Illinois Environmental Protection Agency under the Property Tax Code (35 ILCS 200/11-25) to have 28 of the refinery’s systems, methods, devices, and facilities certified as “pollution control facilities” for preferential tax assessment. IEPA recommended approval of two of the requests by the Pollution Control Board (PCB), which accepted the IEPA’s recommendations. The Board of Education sought to intervene in the proceedings where certification had been granted, arguing that it had a legally cognizable interest because the certifications would ultimately deprive it of tax revenue. PCB denied the petitions as moot. While requests to reconsider were pending, the IEPA recommended that the PCB approve WRB’s applications to certify the remaining 26 systems. Before PCB took action on those cases, the Board of Education sought to intervene. PCB denied the motion and granted certification in each case. The appellate court dismissed the Board of Education’s consolidated appeal for lack of jurisdiction under section 41 of the Illinois Environmental Protection Act, under which the Board of Education sought review The court noted the specific provision for appeals in proceedings involving PCB’s “issuance, refusal to issue, denial, revocation, modification or restriction of a pollution control certificate,” contained in the Property Tax Code,35 ILCS 200/11-60. That provision requires that proceedings originate in the circuit court, rather than by direct administrative review in the appellate court. The Illinois Supreme Court affirmed. View "Bd. of Educ. of Roxana Cmty. Unit Sch. Dist. No. 1 v. Pollution Control Bd." on Justia Law

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The trial court dismissed a third amended class action complaint filed in connection with power outages during severe storms. The complaint alleged negligence, breach of contract, and violation of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1). The appellate court and Illinois Supreme Court affirmed. The electric utility's tariff precludes an award of damages; even if such claims were not barred, jurisdiction over matters relating to the utility's service and infrastructure lies with the Illinois Commerce Commission. The Consumer Fraud Act claim alleged that that the company knew or should have known that it failed to sufficiently establish policies and procedures to prevent controllable interruptions of power and to timely respond to those interruptions, in order to protect the health, safety, comfort and convenience of its customers, including those on the life support registry. The claim failed because the company is not required to prioritize those on the life support registry and does not intend that those on the registry rely on it doing so. View "Sheffler v. Commonwealth Edison Co." on Justia Law