Articles Posted in Utilities Law

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This matter involved a challenge to the final order of the Montana Public Service Commission disallowing $1,419,427 in claimed excess electric regulation costs and adjusted energy efficiency savings calculations. NorthWestern Corporation - doing business as NorthWestern Energy, the Natural Resources Defense Council, and Human Resources Council, District XI appealed the Commission’s decision. The district court affirmed the Commission’s final order. The Supreme Court affirmed, holding (1) the Commission used the correct legal standard in reviewing NorthWestern’s claim for excess outage costs; and (2) the “free ridership” and “spillover” calculations adopted by the Commission were supported by substantial evidence. View "Northwestern Corp. v. Dep’t of Pub. Serv. Regulation" on Justia Law

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The Water Court is adjudicating the existing water right claims of all appropriators in the Teton River Basin and issued a temporary preliminary decree for Basin 41O. Eldorado, which distributes water to shareholders from the Teton River northwest of Choteau, owns water rights that historically have been administered under the 1908 Perry Decree by a water commissioner (MCA 85-5-101). In 2014, the Water Court addressed objections to Eldorado’s existing water right claims as established under the temporary preliminary decree. The Montana Supreme Court, in Eldorado I, upheld the Water Court’s determinations that Eldorado’s claims required a volume quantification and that Eldorado historically put to beneficial use 15,000 acre-feet of water under its existing rights. The Joint Objectors later informed the water commissioner that Eldorado was approaching the volumetric quantification established by that order and requested that he cap the distribution of Eldorado’s water. Eldorado petitioned the Water Court to stay the volume quantification order pending the Eldorado I appeal. The Water Court denied Eldorado’s request and the commissioner ceased delivering water to Eldorado. Eldorado filed a dissatisfied water user complaint (MCA 85-5-301). The Montana Supreme Court affirmed denial of that complaint. Eldorado participated in every step of the process that resulted in the establishment of its rights under the modified temporary preliminary decree. View "Eldorado Coop Canal Co. v. Hoge" on Justia Law

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The Montana Public Service Commission determined that Whitehall Wind, LLC had not established a legally enforceable obligation during contract negotiations with NorthWestern Energy for the sale and purchase of electric energy generated by a proposed wind facility. The district court reversed, determining that NorthWestern’s refusal to negotiate created a legally enforceable obligation entitling Whitehall to a long-term avoided cost rate. The Supreme Court reversed the district court’s decision and order and remanded for reinstatement of the Commission’s order, holding that the Commission did not exceed its statutory authority in concluding that evidence of a utility’s refusal to negotiate, without more, is insufficient to establish that a qualifying facility has committed itself to the proposed project. View "Whitehall Wind, LLC v. Mont. Pub. Serv. Comm’n" on Justia Law

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NorthWestern Energy (NWE) disconnected electric service to Plaintiff's residence based on an outstanding balance on Plaintiff's utility bill. Plaintiff filed an action alleging property damage due to NWE's negligence and negligence per se, claiming that the termination of his electric service caused his furnace to fail, which led to water pipes freezing and bursting. NWE filed a motion to dismiss based on lack of subject-matter jurisdiction for Plaintiff's failure to exhaust administrative remedies before the Public Service Commission (PSC). The district court granted NWE's motion and dismissed the action. The Supreme Court reversed, holding that the PSC had no authority to adjudicate Plaintiff's damage claim, and a negligence action seeking damages could be maintained against the power company in district court. View "Schuster v. NorthWestern Energy Co." on Justia Law

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Petitioners filed a complaint with the Montana Public Service Commission (PSC), alleging that Northwestern Energy had been overcharging consumes for its street lighting services. The PSC dismissed the petition. The Supreme Court affirmed but remanded with instructions to remand the case to the PSC for a redetermination of whether to allow the filing of an amended complaint. On remand to the district court, Petitioners filed a motion seeking $1,137 in costs incurred while responding to objections before the PSC and courts. Petitioners also renewed a motion asking the district court to initiate an immediate rate reduction pending the PSC's final decision. The district court denied both of the Petitioners' requests and remanded to the PSC. The Supreme Court affirmed that order, holding that the district court did not err in (1) denying Petitioners their costs for the initial proceedings in district court and first appeal to the Supreme Court, and (2) denying Petitioners' request for a temporary rate decrease, pending the PSC's decision on remand. View "Williamson v. Mont. Pub. Serv. Comm'n" on Justia Law

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Appellants, a group of individuals, filed a complaint with the Montana Public Service Commission (PSC) against NorthWestern Energy (NWE) concerning NWE's provision of street lighting services. The PSC dismissed the complaint on the ground that the four named complainants lacked standing under Mont. Code Ann. 69-3-321. Appellants then filed an amended complaint in which they named four additional complainants. The PSC concluded (1) Appellants were procedurally barred from amending their complaint, and (2) the court would not reconsider its earlier ruling on standing in any event. The district court affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) the original complainants lacked standing to pursue their complaint in the PSC under section 69-3-321; but (2) the PSC's and district court's rationales for rejecting the amended complaint were incorrect as, in this case, there was not a categorical procedural bar to the filing of an amended complaint following an order of dismissal for lack of standing. View "Williamson v. Mont. Pub. Serv. Comm'n" on Justia Law

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The City of Dillon entered an agreement with the McNeills allowing them to connect to a water main for their domestic water supply. Later, the City granted permission to the McNeills to activate an existing water service to their property. The Conners bought the McNeills' subdivided lot, and the City billed and collected for the water that was furnished to the Conners. The water main subsequently froze solid, leaving the Conners without water service for weeks. The Conners sued the City for breach of contract and negligence. The district court entered summary judgment for the City, concluding (1) there was no implied contract between the Conners and the City, and therefore, the Conners' water use was unlawful; and (2) the negligence claim was barred by City Ordinance 13.04.150, which provides that the City is not liable for claims from interruption of water service resulting from shutting off the water in its mains. The Supreme Court reversed, holding (1) the City had a legal obligation to provide water to the Conners under an implied contract; and (2) section 13.04.150 did not bar the Conners' claims because the City did not decide to shut off the water service. View "Conner v. City of Dillon" on Justia Law

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Appellant, a Montana limited partnership which owned an electrical generating plant in Rosebud County, appealed the district court's order denying its motion to vacate the arbitration award ("Final Award") in its dispute with appellee, a Delaware corporation and a regulated public utility conducting business in Montana. At issue was whether the district court abused its discretion when if failed to vacate, modify, or correct the arbitration award. The court held that the district court did not abuse its discretion in denying appellant's motion where Montana's Uniform Arbitration Act, 27-5-311 MCA, did not permit a court to vacate an arbitration award in part; where Montana law was clear that a non-breaching party was still required to prove its damages; where the district court correctly noted in its order confirming the Final Award that the legal precedent on which appellant relied for its request to modify or correct the Final Award applied only to motions to vacate an award; and where the district court correctly determined that it lacked the authority to vacate the Final Award.

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The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.