Supreme Court Rules On Out-Of-State Diversions Of Water

Jun 13: In the case of Tarrant Regional Water District. v. Herrmann, in the U.S. Supreme Court, Case No. 11-889. Appealed from the U.S. Court of Appeals, Tenth Circuit [See WIMS 9/27/11]. In this important, unanimous opinion for the High Court, involving out-of-state diversions of water, the Justices indicate that, "The Red River Compact, (or Compact), 94 Stat. 3305, allocates water rights among the States within the Red River basin as it winds through Texas, Oklahoma, Arkansas, and Louisiana. Petitioner Tarrant Regional Water District (Tarrant), a Texas agency, claims that it is entitled to acquire water under the Compact from within Oklahoma and that therefore the Compact preempts several Oklahoma statutes that restrict out-of-state diversions of water. In the alternative, Tarrant argues that the Oklahoma laws are unconstitutional restrictions on interstate commerce. We hold that Tarrant's claims lack merit.    

    The High Court points out that absent an agreement among the States, disputes over the allocation of water are subject to equitable apportionment by the courts, Arizona v. California, 460 U. S. 605, 609 (1983), which often results in protracted and costly legal proceedings. In 1955, to forestall future disputes over the River and its water, Congress authorized the States of Arkansas, Louisiana, Oklahoma, and Texas to negotiate a compact to apportion the water of the Red River basin among themselves. The negotiations lasted over 20 years and finally culminated in the signing of the Red River Compact in 1978. Congress approved the Compact in 1980, transforming it into federal law.

    At issue in this case are rights under the Compact to water located in Oklahoma's portion of subbasin 5 of Reach II. Reach II posed the greatest difficulty to the parties' efforts to reach agreement. The problem was that Louisiana, the farthest downstream State, lacks suitable reservoir sites and therefore cannot store water during high flow periods to meet its future needs. The upstream States (Texas, Oklahoma, and Arkansas), which control the River's flow, were unwilling to release water stored within their own reservoirs for the benefit of any downstream States, like Louisiana. Without any such release, there would be no guaranteed flow of water to Louisiana.

 

    The provisions of the Compact relating to Reach II were crafted to address this problem. Subbasins 1-4 ended in last downstream major damsites controlled by the individual states. Subbasin 5, instead required that water be allowed to flow to Louisiana through the main stem of the River at certain minimum levels, assuring Louisiana an allocation of the River's waters and solving its flow-through problem.

 

    The provision of the Compact central to the present dispute is §5.05(b)(1), which sets the following allocation during times of normal flow: "(1) The Signatory States shall have equal rights to the use of runoff originating in subbasin 5 and undesignated water flowing into subbasin 5, so long as the flow of the Red River at the Arkansas-Louisiana state boundary is 3,000 cubic feet per second [hereinafter CFS] or more, provided no state is entitled to more than 25 percent of the water in excess of 3,000 [CFS]."

 

    Tarrant proposed to divert the Kiamichi River, at a point located in subbasin 5 of Reach II, before it discharges into the Red River and applied to Oklahoma Water Resources Board (OWRB, the respondent in this case) for a permit. Tarrant knew, however, that Oklahoma would likely deny its permits because various state laws (collectively, the Oklahoma water statutes) effectively prevent out-of-state applicants from taking or diverting water from within Oklahoma's borders.

 

    When Tarrant filed its permit application, it also filed suit against respondents in Federal District Court. Tarrant sought to enjoin enforcement of the Oklahoma water statutes by the OWRB. Tarrant argued that the statutes, and the interpretation of them adopted by Oklahoma's attorney general, were preempted by Federal law and violated the Commerce Clause by discriminating against interstate commerce in water.

 

    The District Court granted summary judgment for the OWRB on both of Tarrant's claims. The Tenth Circuit affirmed. 656 F. 3d 1222, 1250 (2011). The Supreme Court, in its current opinion now affirms the judgment of the Tenth Circuit. The High Court rules, "The Red River Compact does not preempt Oklahoma's water statutes because the Compact creates no cross-border rights in its signatories for these statutes to infringe. Nor do Oklahoma's laws run afoul of the Commerce Clause. We affirm the judgment of the Court of Appeals for the Tenth Circuit."

 

    [Note: The decision supports the rights of states to protect their own water rights and could have important ramifications in existing and future water disputes over Great Lakes water use and out-of-state diversions]. In fact, a number of states concerned about protecting their water rights via various compacts, particularly against Commerce Clause claims, filed an amicus brief in support of OWRB. The states included: CO, ID, IN, MI, NV, NM, and UT.

 

    Access the complete opinion (click here). Access the Supreme Court docket (click here). Access the merit and amicus briefs, including the one from the states above (click here). Access the complete Tenth Circuit opinion (click here). Access more information and analysis on the opinion from the SCOTUS blog (click here). [#Water, #GLakes]

 

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American Trucking Association v. Los Angeles

Jun 13: In the U.S. Supreme Court, Case No. 11-798. Appealed from the U.S. Court of Appeals, Ninth Circuit [See WIMS 9/27/11]. In this unanimous High Court decision, the Justices consider whether Federal law preempts certain provisions of an agreement that trucking companies must sign before they can transport cargo at the Port of Los Angeles. The Supreme Court concludes that "the Federal Aviation Administration Authorization Act of 1994 (FAAAA) expressly preempts two of the contract's provisions, which require such a company to develop an off-street parking plan and display designated placards on its vehicles." However, the High Court declines "to decide in the case's present, pre-enforcement posture whether, under Castle v. Hayes Freight Lines, Inc., 348 U. S. 61 (1954), federal law governing licenses for interstate motor carriers prevents the Port from using the agreement's penalty clause to punish violations of other,non-preempted provisions."

 

    Explaining further, the unanimous Court says, ". . .the kind of enforcement ATA [American Trucking Association] fears, and believes inconsistent with Castle, might never come to pass at all. In these circumstances, we decide not to decide ATA's Castle-based challenge. That claim, by its nature, attacks the Port's enforcement scheme. But given the preenforcement posture of this case, we cannot tell what that scheme entails. It might look like the one forbidden in Castle (as ATA anticipates), or else it might not (as the Port assures us). We see no reason to take a guess now about what the Port will do later. There will be time enough to address the Castle question when, if ever, the Port enforces its agreement in a way arguably violating that decision. " The Court said, ". . .the Castle question because the case's pre-enforcement posture obscures the nature of the agreement's remedial scheme, rendering any decision at this point a shot in the dark." 

 

    The Castle v. Hayes Freight Lines, Inc., case of 1954 held that Illinois could not bar a Federally licensed motor carrier from its highways for prior violations of state safety regulations. The parties here dispute whether Castle restricts the Port's remedial authority. The Port echoes the Ninth Circuit's view that banning a truck from "all of a State's freeways" is meaningfully different from denying it "access to a single Port." ATA responds that because the Port is a "crucial channel of interstate commerce," Castle applies to it just as much as to roads.

 

    ATA President and CEO Bill Graves hailed the opinion and said, "We are gratified that, at the conclusion of many years of litigation, the highest court in the land unanimously agreed with ATA on these rules. Our position has always been that the Port's attempt to regulate drayage operators -- in ways that had nothing to do with its efforts to improve air quality at the Port -- was inconsistent with Congress' command that the trucking industry be shaped by market forces, rather than an incompatible patchwork of state and local regulations. The decision is sure to send a signal to any other cities who may have been considering similar programs which would impermissibly regulate the port trucking industry."

 

    ATA characterized the case saying, at issue was the Port's attempt to impose so-called "concession agreements" on drayage operators wishing to move goods in and out of the Port. The Federal Aviation Administration Authorization Act prohibits the enforcement of any state or local "law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier." The question before the Supreme Court was whether certain provisions of the concession agreements that undisputedly "related to a price, route, or service" of motor carriers nevertheless escaped preemption because the Port asserted that it imposed these requirements to serve its "business interest" in expanding the Port, rather than in an effort to regulate the drayage market.

 

    ATA indicates that the Court concluded that, whatever the Port's asserted motivation, the concession agreements amounted to "classic regulatory authority" and thus fell within the scope of the FAAAA's preemption provision. It observed that the concession agreements, while technically contracts between the Port and trucking companies, were not the "result merely of the parties' voluntary commitments."  Rather, the Port compelled trucking companies to enter into the contracts as a condition of access to the Port, by "wielding coercive power over private parties, backed by the threat of criminal punishment."  By imposing the concession agreements through coercion rather than "ordinary bargaining," Los Angeles was "performing its prototypical regulatory role."

 

    Access the complete opinion (click here). Access the Supreme Court docket (click here). Access the merit and amicus briefs in the case (click here). Access the complete Ninth Circuit opinion and dissent (click here). Access a release from ATA (click here). [#Air, #Transport, #CA9, #SupCt]

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Conservation Congress v. U.S. Forest Service

Jun 13: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-16452. Appeal from the United States District Court for the Eastern District of California. The Appeals Court explains that the case arises from a Federal agency's authorization of a timber sale, known as the Mudflow Vegetation Management Project (Mudflow Project or Project), and its potential effects on the Northern Spotted Owl's (Owl) critical habitat. Plaintiff-Appellant Conservation Congress (CC) sued Federal Defendants-Appellees, alleging that they had failed to adequately evaluate the effects of the Mudflow Project on the Owl's critical habitat, in violation of section 7(a)(2) of the Endangered Species Act (ESA), among other claims.

 

    CC unsuccessfully sought to enjoin the Mudflow Project based on its ESA claim and appealed the district court's denial of its motion for a preliminary injunction. The Appeals Court concluded that "the district court did not abuse its discretion when it determined CC failed to show a likelihood of success on the merits as to its ESA claim that Defendants arbitrarily or capriciously approved the Mudflow Project and affirmed the district court decision.

 

    CC alleges that: (1) the Forest Service's biological assessment (BA) for the Mudflow Project failed to adequately evaluate the Project's potential effects on the Owl's critical habitat; and (2) the FWS issued an arbitrary concurrence letter accepting the BA's conclusion. A week before oral argument, Defendants filed a Suggestion of Mootness, seeking dismissal of the appeal because of recent events. Defendants argued that a new 2013 habitat designation, and subsequent reinstatement of informal consultation between the Forest Service and the FSW, render this appeal moot; however, the Appeals Court disagreed.

 

    First, CC asserts that the district court committed legal error by disregarding the purported requirement that the Forest Service perform a "cumulative effects" analysis during its informal consultation with the FWS. Second, CC claims that the district court committed clear factual error by ignoring evidence controverting Defendants' conclusion that the Mudflow Project would "degrade" the Owl's critical habitat, but not result in an adverse effect.

 

    The Appeals Court rules, "In essence, CC demands that Defendants conduct a more extensive, NEPA-like cumulative impacts analysis. But NEPA and ESA call for different regulatory review, and we must defer to the procedural mechanisms established by the implementing agency. . . CC's argument also fails because there is simply no statutory mandate to consider cumulative effects during informal consultation. . . under the plain meaning of 50 C.F.R. § 402.12(f), consideration of cumulative effects is permissive, not mandatory. The district court correctly determined that the Forest Service did not abuse its discretion in failing to consider a factor that it was not required to consider in the

first place."

 

    The Appeals Court also ruled, ". . .from the totality of the factors considered, that a thinning of 22 acres, out of a total of 408 acres of the Owl's degraded foraging habitat, to a basal area of 100–125 square feet per acre would necessarily mean that the Owl's total foraging habitat would be 'adversely' modified -- which, in the regulatory context, means appreciably diminished. . . Given the totality of the findings, Defendants reasonably concluded that the Mudflow Project 'may affect, but is not likely to adversely affect' the Owl or its critical habitat. . . Therefore, the district court did not abuse its discretion in deferring to Defendants' determination that the Mudflow Project would not likely adversely affect the Owl or its critical habitat, thus obviating the need for formal consultation."

 

    Access the complete opinion (click here). [#Wildlife, #Land, #CA9]

 

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Doe Run Resources Corp. v. Lexington Insurance Co.

Jun 13: U.S. Court of Appeals, Eighth Circuit, Case No: 12-2215. Appealed from the U.S. District Court for the Eastern District of Missouri - St. Louis. The Appeals Court explains that Doe Run Resources Corporation (Doe Run), the largest integrated lead producer in the Western Hemisphere, operates the Sweetwater Mine and Mill near Viburnum, Missouri. Doe Run extracts and crushes ore containing lead and other metals at the mine, processes the crushed ore at a mill near the mine, and either sells the resulting lead concentrate on the world market or transports it by truck to Doe Run's smelter for processing into ingots, bars, and other forms. In 2006, Nadist, LLC, a neighboring landowner, sued Doe Run, alleging environmental property damage resulting from the mine and mill operations (the Nadist Lawsuit).

 

    More than three years later, Doe Run tendered defense of the Nadist Lawsuit to Lexington Insurance Company (Lexington) under Commercial General Liability (CGL) policies Doe Run purchased between 1998 and 2006. When Lexington denied coverage on numerous grounds, Doe Run commenced this declaratory judgment action seeking to enforce Lexington's contractual duty to defend Doe Run. The district court granted summary judgment dismissing the complaint, concluding that Lexington had no duty to defend because the policies' absolute pollution exclusions unambiguously bar coverage of all claims asserted in the Nadist Lawsuit. The Appeals Court indicates that, "Missouri law governs the issues raised on appeal in this diversity case."

 

    The Appeals Court rules, "Here, the more specific lead exclusion, if included, would have overlapped the absolute pollution exclusion as it applies to the release of lead "pollutants," but the two exclusions would not have conflicted. The parties' deletion of the lead exclusion left the remainder of the CGL policy in full force and effect, including its absolute pollution exclusion. The judgment of the district court is affirmed."

 

    Access the complete opinion (click here). [#Remed, #CA8]

 

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Organic Seed Growers & Trade Ass'n v. Monsanto Co.

Jun 10: In the U.S. Court of Appeals, Federal Circuit, Case No. 12-1298. Appealed from the United States District Court for the Southern District of New York. Appellants, a coalition of farmers, seed sellers, and agricultural organizations, sought declaratory judgments of non-infringement and invalidity with respect to twenty-three patents owned by Monsanto Co. and Monsanto Technology, LLC (collectively Monsanto). The district court concluded that there was no justiciable case or controversy and dismissed for lack of jurisdiction.

 

    The Appeals Court indicates that, "Because Monsanto has made binding assurances that it will not 'take legal action against growers whose crops might inadvertently contain traces of Monsanto biotech genes (because, for example, some transgenic seed or pollen blew onto the grower's land),' . . . and appellants have not alleged any circumstances placing them beyond the scope of those assurances, we agree that there is no justiciable case or controversy. We affirm."

 

    Among other allegations, ". . .appellants also complain that they are harmed by exposure to the allegedly adverse health effects of genetically modified seeds and glyphosate; longterm environmental impacts of genetically modified seeds; economic costs following from contamination of conventional crops by transgenic seeds and glyphosate; and the costs of anti-contamination precautions taken for purposes other than avoiding suit (i.e., to maintain organic certification). But as the appellants concede, 'a declaratory judgment here would do nothing to eliminate the risk of transgenic seed contamination.' . . . Aside from the risk of suit by Monsanto, none of the alleged harms caused by contamination is traceable to Monsanto's enforcement of its patents, they could not be remedied by a declaratory judgment, and they cannot serve as a basis for jurisdiction in this case.

 

    "In sum, Monsanto's binding representations remove any risk of suit against the appellants as users or sellers of trace amounts (less than one percent) of modified seed. The appellants have alleged no concrete plans or activities to use or sell greater than trace amounts of modified seed, and accordingly fail to show any risk of suit on that basis. The appellants therefore lack an essential element of standing. The district court correctly concluded that it lacks Declaratory Judgment Act jurisdiction."

 

    The organization, Beyond Pesticides, summarizes the case saying, ". . .the Federal Circuit ruled Monday that a group of organic and otherwise non-GE farmer and seed company plaintiffs are not entitled to bring a lawsuit to protect themselves from Monsanto's transgenic seed patents after Monsanto made binding assurances that it will not take legal action against growers whose crops might inadvertently be contaminated with traces of Monsanto biotech genes."

 

    While this may seem confusing, Beyond Pesticides explains saying, "Organic farmers and others have worried for years that they will be sued by Monsanto for patent infringement if their crops get contaminated with Monsanto genetically engineered (GE) material from GE crops. Organic and non-GE farms get contaminated when pollen or seed migrate from neighboring GE farms. Even though wind or insect transfer of pollen is a natural process, Monsanto has been suing farmers for infringing on their patents if contamination is found on their farms. Monsanto's history of aggressive investigations and lawsuits brought against farmers is a major source of concern for organic and non-GE agricultural producers since Monsanto's first lawsuit brought against a farmer in the mid-'90s. As of 2012, Monsanto has filed 142 alleged seed patent infringement lawsuits involving 410 farmers and 56 small farm businesses in 27 states." The case was a preemptive effort by plaintiffs to protect themselves from being accused of patent infringement should their crop ever become contaminated by Monsanto's GE seed.

 

    Plaintiffs' attorney, Dan Ravicher of the Public Patent Foundation (PUBPAT), views the decision as a partial victory.  He said, "Before this suit, the Organic Seed plaintiffs were forced to take expensive precautions and avoid full use of their land in order to not be falsely accused of patent infringement by Monsanto. The decision today means that the farmers did have the right to bring the suit to protect themselves, but now that Monsanto has bound itself to not suing the plaintiffs, the Court of Appeals believes the suit should not move forward." Maine organic seed farmer Jim Gerritsen, president of lead plaintiff Organic Seed Growers and Trade Association said, "Even though we're disappointed with the Court's ruling not to hear our case, we're encouraged by the court's determination that Monsanto does not have the right to sue farmers for trace contamination. However, the farmers went to court seeking justice not only about contamination, but also the larger question of the validity of Monsanto's patents. Justice has not been served."

 

    Dave Murphy, founder and executive director of Food Democracy Now!, a co-plaintiff in the lawsuit, "Today's ruling may give farmers a toehold in courts regarding the unwanted contamination of their crops, but it does not protect our food supply from the continued proliferation of Monsanto's flawed technology. The real threat of continued contamination of our nation's food supply was only highlighted last week when Monsanto's unapproved GMO wheat was discovered in an Oregon farmer's field more than 10 years after it was legally planted in that state." Beyond Pesticides indicates, "The decision allows farmers who are contaminated to sue Monsanto and Monsanto's customers for the harm caused by that contamination without fear of a retaliation patent infringement claim against them by Monsanto." Despite this Court of Appeals' decision, the plaintiffs still have the right to ask the Supreme Court to review the Court of Appeals decision and ultimately reinstate the case. Organic Seed plaintiffs are considering such action.

 

    Access the complete opinion (click here). Access lengthy release with links to related information from Beyond Pesticides (click here). [#CAFed, #Agriculture, #Toxics]

 

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Center For International Environmental Law v. U.S. Trade Rep.

Jun 7: In the U.S. Court of Appeals, D.C. Circuit, Case No. 12-5136. Appealed from the United States District Court for the District of Columbia. In this FOIA case, the Appeals Court begins its opinion with a quote from President George Washington, stating in part that, ". . .The nature of foreign negotiations requires caution, and their success must often depend on secrecy. . ." In overturning the district court decision and upholding the Trade Representative's ability to withhold a document that Earthjustice, representing Center For International Environmental Law (CIEL) said,  ". . .set out U.S. positions on the interpretation of international trade laws that affect the environment."

 

    The Appeals Court explains that during the 1990s and early 2000s, the United States and thirty-three other countries participated in negotiations seeking to establish the Free Trade Agreement of the Americas, a proposed agreement that would have governed international trade and investment throughout the Western Hemisphere. In July 2000, the Center for International Environmental Law, a not-for-profit public-interest organization, submitted a Freedom of Information Act, 5 U.S.C. § 552, request to the Office of the United States Trade Representative. The Center sought, among other things, documents circulated or tabled by the United States during sessions of the Free Trade Agreement of the Americas Negotiating Group on Investment held in February and May 2000. The Trade Representative identified forty-six documents responsive to the Center's request but withheld the documents as exempt from disclosure. The Center sued to compel production.

 

    After years of litigation, only one document remains in dispute -- a white paper referred to in the district court proceedings as "document 1." The Trade Representative classified the white paper as "confidential" and invoked FOIA exemption 1, which applies to classified materials, as the basis for withholding it. The district court concluded that the risk of adverse arbitration decisions was "insufficiently substantiated" and said, Arbitrators, "are generally aware of the non-binding, preliminary nature of the interpretive position articulated in [the disputed document]," and "the risk that international arbitrators will adopt the position, much less rely on it to the United States' detriment in arbitration, is too speculative to justify a reasonable expectation of harm to foreign relations."

 

    However, the Appeals Court concluded, ". . .the Trade Representative has satisfied its burden to explain the damage that reasonably could be expected to result from disclosure of the white paper. Because the white paper was properly classified as confidential, the Trade Representative properly withheld the document as exempt from disclosure under FOIA exemption 1. Accordingly, the judgment of the district court is reversed."

 

    CIEL President Carroll Muffett said, "It is with great irony that at a time when reports about government intrusion into individual privacy are escalating by the day, the U.S. government would go to such lengths to protect the confidentiality of its trade negotiations -- the terms of which will have real impacts on its citizens. By denying the public access to these negotiations, the US has created a fundamental barrier to the development of democracy. Most troubling, we have already seen the US aggressively pushing information in a similar black box in other trade negotiations, like the recently announced Transatlantic Trade and Investment Partnership with the European Union." Earthjustice attorney and director of international programs Martin Wagner said, "Transparency and public participation are hallmarks of democracy. If citizens are kept in the dark until negotiations are completed, they will never be able to provide useful advice concerning rules that would directly affect their lives and health. This case was about giving people a role in the creation of the laws that govern their lives."

 

    According to an Earthjustice release, at issue was a document that contains the U.S. Trade Representative's interpretation of "in like circumstances," meaning when the United States must treat foreign investors as favorably as it does domestic ones. CIEL argued that weak provisions in the North American Free Trade Agreement (NAFTA) led to a successful billion-dollar challenge to California's plan to phase out a toxic gasoline additive. Earthjustice indicates, the  Free Trade Area of the Americas (FTAA) "would have extended NAFTA-type rules throughout the Western Hemisphere. The document contains the U.S. interpretation of terms that would determine the extent of government's ability to prevent threats to human health and the environment. . . USTR's refusal prevented the public from having a voice in how much power the United States should surrender in the negotiations."

 

    Access the complete opinion (click here). Access the release from Earthjustice (click here). [#CADC, #All]

 

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Illinois Commerce Commission, Et Al v. FERC

Jun 7: In the U.S. Court of Appeals, Seventh Circuit, Case Nos. 11-3421, 11-3430, 11-3584, 11-3585, 11-3586,11-3620, 11-3787, 11-3795, 11-3806, 12-1027. Petitions to Review Orders of the Federal Energy Regulatory Commission (FERC). The Appeals Court explains that control of more than half the nation's electrical grid is divided among seven Regional Transmission Organizations (RTOs). These are voluntary associations of utilities that own electrical transmission lines interconnected to form a regional grid and that agree to delegate operational control of the grid to the association. Power plants that do not own any part of the grid but generate electricity transmitted by it are also members of these associations, as are other electrical companies involved in one way or another with the regional grid.

 

    Two Regional Transmission Organizations are involved in this case -- Midwest Independent Transmission System Operator, Inc. (MISO) and PJM Interconnection, LLC (PJM). MISO operates in the midwest and in the Great Plains states while PJM operates in the mid-Atlantic region but has midwestern enclaves in and surrounding Chicago and in southwestern Michigan. Each RTO is responsible for planning and directing expansions and upgrades of its grid. It finances these activities by adding a fee to the price of wholesale electricity transmitted on the grid. The Federal Power Act requires that the fee be "just and reasonable," and therefore at least roughly proportionate to the anticipated benefits to a utility of being able to use the grid. 

 

    The Appeals Court continues the case explanation saying in 2010 it sought FERC's approval to impose a tariff on its members to fund the construction of new high-voltage power lines that it calls "multi-value projects" (MVPs), beginning with 16 pilot projects. The tariff is mainly intended to finance the construction of transmission lines for electricity generated by remote wind farms. Every state in MISO's region except Kentucky (which is barely in the region) encourages or even requires utilities to obtain a specified percentage of their electricity supply from renewable sources, mainly wind farms. Indiana, North Dakota, and South Dakota have aspirational goals; the rest have mandates. The details vary but most of the states expect or require utilities to obtain between 10 and 25 percent of their electricity needs from renewable sources by 2025 -- and by then there may be federal renewable energy requirements as well.

 

    MISO identified what it believes to be the best sites in its region for wind farms that will meet the region's demand for wind power. Most are in the Great Plains, because electricity produced by wind farms there is cheaper despite the longer transmission distance; the wind flow is stronger and steadier and land is cheaper because population density is low (wind farms require significant amounts of land). Among other benefits, MISO has estimated that the cost of the transmission lines necessary both to bring electricity to its urban centers from the Great Plains and to integrate the existing wind farms elsewhere in its region with transmission lines from the Great Plains -- transmission lines that the multi-value projects will create -- will be more than offset by the lower cost of electricity produced by western wind farms. FERC approved (with a few exceptions) MISO's rate design and pilot projects.

 

    The Appeals Court indicates that six issues are presented: (1) the proportionality of benefits to costs; (2) the procedural adequacy of the Commission's treatment of proportionality; (3) the propriety of apportioning the cost of the multi-value projects among utilities on the basis of their total power consumption while allocating no MVP costs to the plants that generate the power; (4) whether MISO should be permitted to add the MVP fee to electricity transmitted to utilities that belong to the PJM Regional Transmission Organization rather than to MISO; (5) whether MISO should be permitted to assess some of the multi-value projects' costs on departing members of MISO; (6) and whether the Commission's approval of the MVP tariff -- which if implemented will influence decisions by state utility commissions regarding the siting of transmission lines -- violates the Tenth Amendment to the Constitution by invading state prerogatives.

 

    The Appeals Court immediately dispatches the Tenth Amendment issue calling it "frivolous" and then addresses each of the other five. On the issue of Proportionality and Procedure which the Panel discusses together, and says the petitioners' objections fall into two groups -- One consists of objections lodged by the Michigan utilities and their regulator (i.e. Michigan objectors) and the other, led by the Illinois Commerce Commission (i.e. Illinois objectors). [Note: The issues are far too complicated to adequately summarize here. The reader is referred to the complete opinion for a full explanation.]

 

    The Appeals Court concludes, "In summary, the challenged orders are affirmed, except that the challenge by the departing MISO members is dismissed as premature and the determination regarding export pricing to PJM is remanded for further analysis by the Commission in light of the discussion of the issue in this opinion."

 

    Access the complete opinion (click here). [#Energy/Wind, #Energy/Grid, #CA7]

 

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