Justia Government Contracts Opinion Summaries

Articles Posted in Utilities Law
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The Supreme Court affirmed the order of the district court vacating and modifying the orders of the Montana Public Service Commission (PSC) reducing standard-offer contract rates and maximum contract lengths for small solar qualifying facilities (QFs), holding that the district court did not err.Specifically, the Supreme Court held (1) the district court did not err in determining that the PSC's calculation of the avoided-cost rate was arbitrary and unlawful; and (2) the district court did not err in concluding that the PSC arbitrarily and unreasonably calculated QF capacity contribution values and arbitrarily and unreasonably reduced maximum-length QF-1 contracts to fifteen years. View "Vote Solar v. Montana Department of Public Service Regulation" on Justia Law

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Plaintiffs Startley General Contractors, Inc. ("Startley"), and Mandy Powrzanas, appealed the denial of their renewed motion to have Jefferson Circuit Court Judge Robert Vance, Jr. recuse himself from the underlying action the plaintiffs filed against the Water Works Board of the City of Birmingham ("BWWB"), Board members, Jones Utility and Contracting Co., Inc., and Richard Jones (collectively, “defendants.”). Plaintiffs alleged the defendants conspired to violate Alabama's competitive-bid law in ways that resulted in financial harm to the plaintiffs. Plaintiffs contended that Judge Vance had received monetary contributions to his 2018 campaign for Chief Justice of the Alabama Supreme Court from law firms and attorneys representing the defendants. The Alabama Supreme Court concluded the renewed motion to recuse did not fall under the auspices of section 12–24–3, Ala. Code 1975, because it was not based on campaign contributions in "the immediately preceding election." Moreover, “even if [section] 12–24–3 did apply, the plaintiffs failed to establish a rebuttable presumption for recusal because, in order to meet the required threshold, the plaintiffs: (1) included contributions from law firms and individuals who were not ‘parties,’ as that term is defined in 12–24–3(c), to the case; (2) aggregated campaign contributions from multiple parties in contravention to 12–24–3(b) addressing campaign contributions made by ‘a party to the judge or justice’; and (3) incorrectly assumed that ‘total campaign contributions raised during the election cycle’ refers to one-month totals for campaign contributions rather than the ordinary meaning of an ‘election cycle,’ which concerns a longer period.” The Court concluded plaintiffs did not establish that a single, actual "party" to this case gave a "substantial campaign contribution" that would give rise to the conclusion that "[a] reasonable person would perceive that [Judge Vance's] ability to carry out his ... judicial responsibilities with impartiality is impaired." View "Startley General Contractors, Inc. v. Water Works Board of the City of Birmingham et al." on Justia Law

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The pro-forma provision in the tariff in this case, which set the rates and terms for a utility’s relationship with its retail customers, did not conflict with a prior franchise agreement, which reflected the common law rule requiring utilities to pay public right-of-way relocation costs, or the common law, and the franchise agreement controlled as to the relocation costs at issue.At issue was whether the City of Richardson or Oncor Electric Delivery Company must pay relocation costs to accommodate changes to public rights-of-way. The City negotiated a franchise agreement with Oncor requiring Oncor to bear the costs of relocating its equipment and facilities to accommodate changes to public rights-of-way, but Oncor refused to pay such costs. While the relocation dispute was pending, Oncor filed a case with the Public Utility Commission (PUC) seeking to alter its rates. The case was settled, and the resulting rate change was filed as a tariff with the PUC. The City enacted an ordinance consistent with the tariff, which included the pro-forma provision at issue. The Supreme Court held that the provision in the tariff did not conflict with the franchise contract’s requirement that Oncor pay the right-of-way relocation costs at issue. View "City of Richardson v. Oncor Electric Delivery Co." on Justia Law

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In a 2005 Cooperation and Option Agreement to facilitate Russell's construction and operation of the Energy Center, a natural gas-fired, combined cycle electric generating facility in Hayward, the city granted Russell an option to purchase 12.5 acres of city-owned land as the Energy Center's site and promised to help Russell obtain permits, approvals, and water treatment services. Russell conveyed a 3.5-acre parcel to the city. The Agreement's “Payments Clause” prohibited the city from imposing any taxes on the “development, construction, ownership and operation” of the Energy Center except taxes tethered to real estate ownership. In 2009, Hayward voters approved an ordinance that imposes “a tax upon every person using electricity in the City. … at the rate of five and one-half percent (5.5%) of the charges made for such electricity” with a similar provision regarding gas usage. Russell began building the Energy Center in 2010. In 2011, the city informed Russell it must pay the utility tax. The Energy Center is operational.The court of appeal affirmed a holding that the Payments Clause was unenforceable as violating California Constitution article XIII, section 31, which provides “[t]he power to tax may not be surrendered or suspended by grant or contract.” Russell may amend its complaint to allege a quasi-contractual restitution claim. View "Russell City Energy Co. v. City of Hayward" on Justia Law

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The power companies allege that they were overcharged for electricity during several months in 2000–2001 and sought to recover the overcharges from the federal government based on sales by the federal Western Area Power Administration (WAPA) and Bonneville Power Administration (BPA). The California Power Exchange (Cal-PX) and the California Independent System Operator (Cal-ISO) were responsible for acquiring and distributing electricity between producers and consumers in California and setting prices for the electricity. The power companies argued that a contract existed between all consumers of electricity (including themselves) and all producers of electricity (including the government agencies) in California. The government argued that the contracts were only between the middleman entities—Cal-PX and Cal-ISO—and the consumers and producers individually. The Claims Court dismissed for lack of standing. The Federal Circuit affirmed. The companies lack privity of contract or any other relationship with the government that would confer standing. Under the Tucker Act, the Claims Court has jurisdiction over contract cases in which the government is a party, 28 U.S.C. 1491(a)(1); normally a contract between the plaintiff and the government is required to establish standing. The court noted that the companies may have claims against the parties with whom they are in contractual privity, the electricity exchanges. View "Pacific Gas & Elec. Co. v. United States" on Justia Law

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The Nuclear Waste Policy Act of 1982 authorized the Department of Energy (DOE) to contract with power utilities for a planned national nuclear waste disposal system, 42 U.S.C. 10222. Utilities were to pay into a Nuclear Waste Fund; the government was to dispose of their spent nuclear fuel beginning by January 31, 1998.. Under the Standard Contract, utilities must provide “preparation, packaging, required inspections, and loading activities necessary for the transportation … to the DOE facility.” DOE is responsible for “arrang[ing] for, and provid[ing], a cask(s) and all necessary transportation … to the DOE facility.” In 1983, System Fuels entered Standard Contracts concerning the Grand Gulf and Arkansas Nuclear One power stations. The government has yet to begin accepting spent nuclear fuel. System Fuels obtained damages for costs incurred through August 31, 2005 (Grand) and June 30, 2006 (Arkansas), including costs to construct Independent Spent Fuel Storage Installations (ISFSIs) and later successfully sought damages for continued breach. The Claims Court denied costs incurred to load spent fuel into storage casks at the ISFSIs by first loading it into canisters, then loading those canisters into dry fuel storage casks and welding the casks closed. The Federal Circuit reversed, noting that under the Standard Contracts, DOE cannot accept any of the canistered fuel as is, so System Fuels will incur costs to unload the casks and canisters and to reload fuel into transportation casks if and when DOE performs. View "System Fuels, Inc. v. United States" on Justia Law

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A trade association of California unions, contractors’ associations and contractors filed suit. Following discovery and a contested hearing, the court ruled that defendant Ross Valley Sanitary District lacked authority under Public Contract Code 20803 to engage its own workforce to complete a sewer system improvement project costing more than $15,000 without putting the project out for competitive bid and contract. The trial court ordered the District to cease and desist from taking further action with respect to about 139 miles of its small diameter sewer pipe with in-house workers, and to conduct all future replacement of this pipe through competitive bid and contract. The court of appeal reversed. Section 20803 applies when a district contracts with a third party for public work, and not when a district relies on force account (in-house) work. View "Constr. Indus. Force Acct. Council, Inc. v. Ross Valley Sanitation Dist." on Justia Law

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PegaStaff is a temporary staffing agency. A large part of PegaStaff’s business was providing staffing to PG&E) The California Public Utilities Commission (PUC) adopted General Order 156 (GO 156) to implement Public Utilities Code Article 5, the purpose of which is to encourage and develop the use of women-, minority-, and disabled veteran-owned business enterprises within the public utility sector. PegaStaff is not a minority enterprise, and after PG&E adopted a program to increase the utilization of minority enterprises, PegaStaff’s provision of labor to PG&E was substantially reduced. PegaStaff attributes this reduction to the implementation of a tier system preferential to minority enterprises and the transfer of many of its contingent workers to minority enterprises. PegaStaff filed suit, alleging constitutional challenges to Article 5 and GO 156. The trial court determined that it did not have subject matter jurisdiction to consider PegaStaff’s constitutional challenges and granted the PUC’s motion for judgment on the pleadings. The court of appeal affirmed. Remaining defendants also sought and obtained judgment on the pleadings. The court of appeal reversed, finding that the trial court erred in determining that it lacked subject matter jurisdiction to consider its claims against PG&E and another staffing agency. The suit will not interfere with PUC’s regulatory authority. View "Pegastaff v. Pac. Gas & Elec. Co." on Justia Law

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Bay County Utilities provides water and sewer services. The County Commissioners establish rates. In 1966, the U.S. Air Force contracted with the County for water services at Tyndall Air Force Base. The parties entered into a sewer services contract in 1985. Both required the parties to renegotiate any new rates. In 1994, Federal Acquisition Regulations were amended to require standardized clauses in utility service contracts. When the government is contracting with an unregulated utility or the utility is subject to non-independent oversight, the parties must negotiate new rates. If the utility is overseen by an independent regulatory body, no further negotiations are required. In 2007 and 2009, Bay County increased water rates. The Air Force ignored those increases, but, in 2009 and 2010, unilaterally modified the water contract, with new rates, lower than the rates set by Bay County. In 2009 Bay County increased sewer rates. The Air Force refused to pay those higher rates, and instituted a unilateral contract modification to moderately increase sewer rates. Bay County submitted unsuccessful Contract Disputes Act claims to recover the unpaid balance of approximately $850,000. The Federal Circuit affirmed the Court of Federal Claims, holding that Bay County is an independent regulatory body and may revise rates in utility contracts without resorting to negotiations with the Air Force. View "Bay Cnty., Fla. v. United States" 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