by Carrie Tournillon

The Louisiana Public Service Commission (“LPSC”) and the State Legislature are conflicted over regulation of motor carriers of waste in Louisiana.  While the Louisiana Constitution grants the LPSC the authority to regulate common carriers, and the LPSC oversees the certification and permitting of such carriers, in the 2017 Regular Session the Legislature enacted Senate Bill 50 (Act 278) that changes the statutory requirements for a carrier to become an approved motor carrier of waste in the State.  Act 278 was signed into law by Governor Edwards on June 15, 2017.

Under the LPSC rules, carriers of waste must prove “public convenience and necessity,” which requires contracts with shippers for contract carrier permits and testimony or affidavits from shippers for common carrier certificates, in support of need for the requested new or expanded authority.  An applicant also must prove fitness to operate.

However, Legislative Act 278 eliminates the requirement to prove “public convenience and necessity” to obtain authority from the LPSC to operate as a common or contract carrier of waste within the state.  An applicant only must prove fitness to operate.

At the LPSC’s Business & Executive Session last month, there was much discussion regarding whether the new legislation is an unconstitutional infringement on the jurisdiction of the LPSC over common carriers. Ultimately, the LPSC directed its Staff to file suit challenging Act 278 and to take all action necessary to protect the LPSC’s jurisdiction.

At the same meeting, the Commissioners also considered but declined to adopt new rules for obtaining authority to haul waste within Louisiana. The LPSC Staff’s proposed rules would have set forth guidelines for certification of common and contract carriers and created a rebuttal presumption that granting the certificate was in the public interest if the applicant met the application requirements.  While considered to be an improvement over current LPSC rules, the Staff’s proposed rules still required applicants to prove “public convenience and necessity,” including having shippers provide affidavits in support of the need for the certificate.

The LPSC Commissioners disagreed over whether the Staff’s proposed new rules went far enough to change the standard for obtaining authority to haul waste within the state.  One Commissioner offered a motion to approve the Staff proposal, supporting it as an industry solution developed with stakeholders in the trucking business.  Another Commissioner argued extensively in favor of opening up the market for hauling waste in Louisiana and urged as a substitute motion that the LPSC adopt new rules based on the Legislative Act 278, which would eliminate the “public convenience and necessity” requirement.  Both motions failed 2-2.

While the LPSC Staff’s proposed rules were not adopted by the LPSC in June, it is expected that there will be additional discussion of changes to the rules, and that the constitutional issues raised by Act 278 will be pursued by the LPSC in the courts.

For more information, contact a member of the Kean Miller Utilities Regulatory Team.

 

power

President Obama’s centerpiece of his climate policy agenda, the “Clean Power Plan,” has become one of the most heavily litigated environmental regulations ever. Twenty-seven states and numerous industry groups have filed more than fifteen separate lawsuits challenging the Environmental Protection Agency’s (“EPA”) statutory authority to promulgate the regulations.   Seventeen states, the District of Columbia, the cities of New York, Boulder, Chicago, Philadelphia, and South Miami, as well as Broward County, Florida and a number of public interest groups have intervened to support EPA.

The final rule[1] was published in Federal Register on October 23, 2015 titled “Standards of Performance for Greenhouse Gas Emission from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units”.[2] The rule sets carbon dioxide emissions performance rates for affected power plants that reflect the “best system of emission reduction” (BSER), and requires each states to develop its own plan that will achieve those rates. However, if states do not submit approvable plans, EPA will substitute its own plan. Compliance is not required until 2030, although there are interim goals that must be met at 3 interim periods.

The Environmental Protection Agency refers to this regulation package as the “Clean Power Plan” and states that it is a “commonsense approach to cut carbon pollution from power plants.”[3] And that the “Clean Power Plan for Existing Power Plants and the Carbon Pollution Standards for New Power Plants” will maintain an affordable, reliable energy system, while cutting pollution and protecting our health and environment now and for future generations.”[4] However, many dispute whether the Clean Power Plan will have such positive effects, arguing instead concerns of economic feasibility with currently available technology, conflicting provisions, assumptions about renewable energy production that does not currently exist and potential for large loss of employment. “Every company that depends on electricity will be affected by this rule. It is fair to say that every American industry will be affected by this rule.” Karen Harbert of the U.S. Chamber of Commerce stated. The Clean Power Plan poses significant challenges for coal-fired power plants in particular, and the majority of states challenging the rule are coal producing states or rely heavily on coal-fired power plants.

The State of Louisiana and the Louisiana Department of Environmental Quality, are among the challengers to the rule. Petitioners argue that the final rule is in excess of the EPA statutory authority and otherwise is arbitrary, capricious, and abuse of discretion and not in accordance with the law. Among the primary arguments is that the rule may require states to mandate energy efficiency measures in addition to or in lieu of regulation of actual emissions limits. Other challenges include whether the rule will affect stability of the electrical grid.

The most recent notable ruling in the pending litigation is the recent Order denying the Motion for a Stay of the rule filed by several states, requesting that the Court halt the implementation of the Clean Power Plan until the pending litigation on the review of the final rule has concluded. On January 21, 2016 a three judge panel of the US Court of Appeals for the District of Columbia Circuit denied the motions to stay the implementation of the rule. The ruling is a victory for the EPA, which sought to begin implementation of the federal carbon regulations while they are under review in the courts. All U.S. states will now have until September 6, 2016[5] to submit preliminary strategies on cutting carbon emissions from their electrical power systems by thirty-two percent on average below 2005 levels – essentially mandating a massive conversion from coal-fired power generation to lower emitting natural gas and renewable energy sources as well as mandating some energy efficiency measures. EPA has published for comment, model state plans to assist the states, as well as versions of a proposed federal plan that will be implemented if states do not submit approvable measures.

The three judge panel that recently denied the request for a stay of the final rule includes the honorable Sri Srinivasan, Judith Roberts, and Karen Henderson, appointed by Presidents Obama, Clinton and Bush, respectively. The panel further ordered expedited review of the case, setting the matter for oral argument on June 2, 2016 at 9:30a.m. June 3, 2016 has also been reserved by the Court should oral arguments extend into the next day. The deadline for briefing is April 15, 2016 for initial briefs and final briefs to be filed by April 22, 2016.

Due to the complexity of the cases and the hundreds of parties involved, attorneys participating in the litigation do not expect a ruling on the merits until late 2016 or even 2017. Regardless of when the D.C. Circuit rules, observers widely expect that the case eventually will reach the Supreme Court. The high court may not rule until 2018. This is also complicated by the upcoming presidential election. Should a Republican take the White House, the new administration may direct the EPA to rescind the Clean Power Plan.

[1] 40 CFR Parts 60, 70, 71 and 98.

[2] Federal Register at 80 Fed. Reg. 64,510 (October 23, 2015). https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22837.pdf.

[3] http://www.epa.gov/cleanpowerplan/fact-sheet-clean-power-plan-carbon-pollution-standards-key-dates.

[4] http://www.epa.gov/cleanpowerplan/fact-sheet-clean-power-plan-carbon-pollution-standards-key-dates.

[5] http://www3.epa.gov/airquality/cpptoolbox/technical-summary-for-states.pdf.

 

pwr

By Katherine King, Randy Young, Carrie Tournillon, and Mallory McKnight

This report was last updated on November 4, 2015

The following is prepared by the Kean Miller LLP Utilities Regulation team on important topics affecting consumers of electrical power in Louisiana.  For more information, please contact us at client_services@keanmiller.com

LPSC Approval of Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. Merger:  The Louisiana Public Utility Commission (“LPSC”) approved a joint application of Entergy Gulf States Louisiana, L.L.C. (“EGSL”) and Entergy Louisiana, LLC (“ELL”) to combine the two operating companies subject to the terms of a stipulated settlement.  The merger transaction closed on October 1, 2015, and the new combined company is called Entergy Louisiana, LLC.  The new Entergy Louisiana company will assume all assets, liabilities and obligations of the legacy companies and will provide retail electric service to more than 1 million customers currently served by legacy ELL and EGSL. The terms of the stipulated settlement provide protections to retail customers with respect to certain rate credits and commitments to maintain certain contracts, tariffs and rates, among other provisions.

Proposed Acquisition of Cleco Power LLC by Cleco Partners L.P.:  Cleco Power LLC and Cleco Partners L.P. have requested authorization from the LPSC for Cleco Partners to acquire ownership and control of Cleco Power.  The transaction would result in public shareholder ownership of Cleco Corporation being replaced with a group of institutional investors (primarily pension funds) seeking long-term investments in infrastructure assets. Cleco Partners, which is comprised of MIP Cleco Partners L.P. (54%), bcIMC investment vehicles (37%), and John Hancock Financial (9%), would acquire all stock of Cleco Corporation and will become the new owner of Cleco Corporation via an intermediate holding company, Cleco Group LLC.  [MIP Cleco Partners is owned by Macquarie Infrastructure Partners III, an unlisted fund, and other investors and will be managed by Macquarie Infrastructure & Real Assets (“MIRA”).]   A hearing on the application is scheduled for November 2015.

LPSC Approval of EGSL Acquisition of Blocks 3 and 4 of the Union Power Station: The LPSC approved EGSL’s acquisition of Union Blocks 3 and 4 – – 990 MW for $505M ($510/kW), pursuant to a settlement agreement and conditions therein. Union has four combined cycle gas turbine (“CCGT”) units totaling 1,980 MW (495 MW per unit).  Union is located in El Dorado, Arkansas, and it is currently owned by Entegra Power.  Entergy agreed to buy the power plant in response to an unsolicited offer. The purchase price is $1.010 billion for all four units ($510/kW). The transaction requires a complete sale and closing on all four units.  Power Blocks 1 and 2 are expected to be acquired by Entergy New Orleans and Entergy Arkansas, Inc., respectively. Decisions in the regulatory proceedings in New Orleans and Arkansas on Power Blocks 1 and 2 are anticipated in November 2015, and the purchase transaction is anticipated to close by the end of 2015.

Entergy Application for Approval of Self-Build 980 MW Power Plant in St. Charles Parish: Entergy is proposing to construct a 980 MW CCGT unit located in Montz, La (near New Orleans), at a site adjacent to the existing Little Gypsy generation units.  The project was selected from among bidders in Entergy’s 2014 Request for Proposal (“RFP”) for resources in Amite South (Southeast Louisiana area).  June 2019 is the projected in-service date.  Entergy has designated the project cost as confidential, and has indicated it will publicly disclose the cost information in mid-December, after the bid deadline for its RFP for the WOTAB region (Lake Charles area). A hearing on the application is currently scheduled for April 2016.

Entergy Issuance of Request for Proposal for Up to 1000 MW of Long-Term Capacity and Energy Products in “WOTAB” (Lake Charles area):  Entergy has issued an RFP notice for resource options in the WOTAB planning region, and will market test self-build construction of an 800-1,000 MW CCGT unit at its Nelson plant site.  The RFP, as updated, allows bids by existing resources from 250-1,000 MW CCGT or CT, allows developmental CCGT proposals between 650-1,000 MW, and allows Qualifying Facilities (“QFs”) to participate.  Initially Entergy’s RFP was limited to developmental CCGT proposals of between 800 and 1000 MW.    Bids in response to the RFP are due in December 2015, and selection is scheduled for April 2016.

Entergy Advance Notice of Request for Proposal of 200 MW Renewable Project: Entergy has given notice of its intent to issue an RFP for up to 200 MW of renewable resources. Entergy indicates the draft RFP would issue no earlier than February 17, 2016, and the final RFP at least 60 days thereafter.

Entergy Application for Approval of $141 Million in Cost Overruns for Nuclear Plant Project:  Entergy Louisiana is requesting to recover from customers $141 million in additional costs relating to a steam generator replacement project at its Waterford 3 nuclear unit. The $141 million cost overrun resulted from a cladding disbonding during fabrication. The ability of Entergy to recover the additional $141 million from ratepayers is currently being disputed in a proceeding at the LPSC.  A hearing was held in December 2014, and a recommendation is pending from the Administrative Law Judge.

LPSC Approval of Termination of Entergy System Agreement:  The LPSC approved a proposed settlement agreement in FERC Docket No. ER14-75 through which the Entergy System Agreement and certain cross-Purchase Power Agreements (“PPAs”) between EGSL and Entergy Texas (“ETI”) will terminate effective August 31, 2016.  The settlement also includes creation of a separate transmission pricing zone (“TPZ”) for Entergy New Orleans (“ENO”), with ENO payments to ELL/EGSL of $2.2M for 15 years.

EPA’s Rulemaking on CO2 Emissions (“Clean Power Plan”):  In August 2015, The Environmental Protection Agency (“EPA”) issued a final version of its rule regulating CO2 emissions from electric generating units.  The LPSC received comments from stakeholders on whether the rule, the “Clean Power Plan,” will impact reliability and the LPSC’s least-cost planning principles; whether the Louisiana-specific baseline data revisions included in the final rule are appropriate; whether and to what extent there will be potential rate impacts; what administrative actions the LPSC should take; and whether the LPSC should develop a State Implementation Plan (“SIP”), among other topics.  The LPSC also recently retained counsel to assist Staff with work on a possible appeal of the EPA Clean Power Plan.  The impact and legal aspects of the Clean Power Plan have been challenged by a number of states.

Entergy Application for Certification of $57M Economic Transmission Project in Southeast Louisiana:  ELL and EGSL filed an application with the LPSC seeking approval to build a $57 million transmission project in SE Louisiana identified by the Midcontinent Independent System Operator, Inc., or “MISO,” as a “Best Fit” economic project.  Parties to the LPSC proceeding have indicated support for the project, subject to certain conditions, and settlement negotiations are ongoing.

Entergy Application for Certification of $187M Reliability Transmission Project in Lake Charles, Louisiana:  ELL and EGSL filed an application with the LPSC seeking certification of a transmission project to meet reliability needs in the Lake Charles area.  ELL/EGSL indicate the project will be necessary to serve forecasted load growth. The LPSC Staff has indicated support for the project, subject to certain conditions.  Evaluation of the project is still ongoing by other parties to the proceeding.

LPSC Approval of Rule for Examination of Natural Gas Hedging Opportunities for Electric Utilities:  The LPSC approved a rule to require electric public utilities to evaluate long-term natural gas hedging proposals as part of a pilot program.  The adopted General Order includes a number of protections for ratepayers recommended by stakeholders. The LPSC has scheduled a technical conference in December 2015.

Entergy, Cleco and SWEPCO – Integrated Resource Planning Process in Louisiana:   ELL/EGSL, Cleco Power, and Southwest Electric Power Company (“SWEPCO”) are each undertaking the two-year process of developing an Integrated Resource Plan “IRP” for their respective electric utility retail operations.  The objective of the IRP is generally to evaluate a set of potential resource options that offer the most economical and reliable approach to satisfy future load requirements of the utility.  ELL/EGSL, Cleco and SWEPCO have each filed their Final IRP Reports, identifying a range of supply and demand side resources that could be used to provide the most cost-effective solutions to meet any future needs that are ultimately identified.  The IRP process does not result in approval of a proposed resource plan or approval of construction or acquisition or any particular resources.

LPSC Rulemaking – Adoption of Service Quality Program for Cleco Power:  The LPSC initiated a proceeding to develop a Service Quality Program (“SQP”) for Cleco Power.  The LPSC has indicated that it would like the SQP to be approved prior to a vote on the proposed acquisition of Cleco Power by Cleco Partners.  The proposed schedule for the SQP proceeding anticipates a Commission decision in January 2016.

LPSC Approval of Entergy Rate Change and Formula Rate Plan Extension:  ELL and EGSL each received approval from the LPSC for Formula Rate Plans (“FRPs”), and to recover certain costs directly associated with the utilities’ joining and operating in MISO.  ELL/EGSL’s Return-on-Equity under the FRP is 9.95%, with an earnings bandwidth of 80 basis points.

LPSC Approval of Cleco Power Rate Change and Formula Rate Plan Extension:  Cleco Power received approval from the LPSC to change and restructure its rates, extend its FRP and recover certain costs related to its joining and operating in MISO.   The new rates were approved pursuant to a settlement agreement and took effect in July 2014.  Cleco’s Return-On-Equity under the FRP is 10.0%.

LPSC Approval of ELL/EGSL and Cleco Power Integration into MISO:  On December 18, 2013, ELL and EGSL and Cleco Power integrated their transmission and generation assets into MISO – a Regional Transmission Organization (“RTO”).  ELL/EGSL and Cleco, along with several other Louisiana electric utilities and Entergy’s other retail operating companies in Mississippi, Texas, and Arkansas, form the new MISO-South. MISO serves as the Transmission Provider for the RTO, evaluating transmission needs.   In addition, MISO operates a Day 2 Market that includes Real Time and Day Ahead Markets that allow Market Participants, including utilities and other Generation Owners, to offer in their generation and source energy.  Short-term capacity needs can also be met through MISO’s capacity auctions.  The actual benefits of ELL/EGSL and Cleco’s joining MISO have not yet been studied.  The utilities, along with the LPSC Staff and other stakeholders, are scheduled to develop a cost-benefit analysis to determine whether there are net benefits to operating in MISO and ultimately whether the utilities should be permitted to continue operating in MISO beyond an initial five-year period.

Entergy Louisiana Fuel Adjustment Clause Audit for 2005-2009:  In January 2013, the LPSC Staff issued an audit of ELL’s $7 billion in fuel and purchased power costs over the period of 2005-2009.  The Staff Audit Report shows that in 2007 and 2008, when gas prices were high, ELL increased its use of its legacy gas generation and decreased its purchase of lower cost power from the market.  Discovery is currently ongoing in the audit proceeding.

LPSC Dismissal of Entergy and ITC Application to Transfer Ownership of Entergy’s Bulk Electric Transmission System:  In September 2012, Entergy proposed the transfer of its bulk electric transmission system to ITC Holdings, Inc. (“ITC”) – an independent transmission owner with operations in seven states.  The ITC acquisition would have unbundled Entergy’s transmission operations from its generation and distribution operations in each of its retail jurisdictions, including Louisiana, Texas, Mississippi and Arkansas.  As a result, retail customers’ transmission rates would have been subject to Federal Energy Regulatory Commission (“FERC”) jurisdiction and the FERC regulatory construct that allows the transmission owner a higher return on equity, as well as the use of a forecasted test year, an imputed 60 percent equity ratio, and formula rates.  Ultimately, in December 2013, Entergy’s Mississippi regulators denied the proposed transfer of Entergy’s Mississippi transmission assets to ITC for many of the same reasons the transfer was being opposed by parties in Louisiana.  Subsequently, Entergy and ITC announced it was terminating its proposed merger transaction and filed to withdraw its applications for merger pending before Entergy’s state regulators.  The Louisiana transfer proceeding was dismissed with prejudice in February 2014.

LPSC Rulemaking – Net Metering:  The LPSC is in the process of evaluating a report on the costs and benefits of solar net metering in Louisiana in order to determine if changes are necessary to the rate structure of net metering customers of LPSC-jurisdictional public utilities.  Based on a study performed by LPSC Staff’s outside consultant, there are significant benefits associated with solar net metering, but the costs of solar net metering in Louisiana materially outweigh those relatively large benefits.

LPSC Rulemaking – Renewable Energy: The LPSC determined that Louisiana investor-owned electric utilities adequately complied with the requirements of a three-year Renewable Energy Pilot Program (“REPP”) and that no further requests for proposals (“RFPs”) are required at this time.  The LPSC also determined that both SWEPCO and Entergy’s Standard Offer Tariff programs shall remain in place until either the 30 MW capacity caps have been reached or until the LPSC determines that it is in the public interest to modify or terminate the tariffs

LPSC Rulemaking – Energy Efficiency: Phase I Quick Start Energy Efficiency Programs are in the process of being implemented.

 

By Angela W. Adolph

The Internal Revenue Service (the “Service”) released a Private Letter Ruling (“PLR”) earlier this year addressing private business use of a mixed-use output facility and whether tax-exempt bonds could be used to finance improvements to the facility.  The Issuer, which is a political subdivision of a state, owns electric generation, transmission and distribution facilities that are managed by a non-governmental electric cooperative (“NGEC”) pursuant to several contractual arrangements.  Under a power sales contract, the Issuer has the right to schedule or take the portion of power generated by the facility equal to the percentage of the facility’s net rated capacity reserved by Issuer for that year.  If the Issuer does not schedule or take all the output from its reserved portion of the facility’s net rated capacity, it must offer the unused output to the NGEC before offering to third parties.   The governing body of the Issuer establishes and approves the rates for power produced from Issuer’s reserved net rated capacity of the facility and sold to the Issuer’s customers. Under an operating agreement with the NGEC, the Issuer reimburses the NGEC for its share of the actual and direct expenditures incurred by the NGEC in the operation and maintenance of the facility.  The Issuer’s share of expenses is determined by its reserved percentage of the facility’s net rated capacity.

The Issuer expects  to finance capital improvements to the facility, the costs for which will be allocated between the  Issuer and the NGEC on the basis of their respective reservations and allocations of the net rated capacity of the facility.  The Issuer intends to issue tax-exempt governmental bonds to finance its portion of the improvement costs.  The Issuer represents that, while the bonds are outstanding, it will (a) maintain its reserved net rated capacity and (b) take a sufficient amount of the total energy generated at the facility so that no more than 10% of the facility’s improvements that are to be financed with the bonds will used for private business use.

The Service first considered whether the facility constitutes public utility property under Section 168(i)(10) of the Code.  “Public utility property” means property used predominantly in the trade or business of the furnishing or sale of electrical energy (among other things) if the rates for such furnishing or sale have been established or approved by a state or political subdivision thereof.  Because the facility consists of property used predominantly in the trade or business of furnishing or sale of electricity and the Issuer establishes and approves rates for electricity provided by the Issuer from its reserved share of the net rated capacity of the facility, then, to the extent of such share, the facility constitutes public utility property. 

Under the Advance Notice of Proposed Rulemaking, 2002-2 C.B. 685 (the “Advance Notice”), tax-exempt  bonds may be issued to finance costs attributable to the government use portion of a mixed-use output facility, plus any costs attributable to permitted de minimis private business use.  The government use portion is determined based on the percentage of the available output of the facility that is not used for a private business use.  The available output is determined by multiplying the number of units produced or to be produced by the facility in one year by the number of years in the measurement period of that facility for that bond issue.    The number of units produced or to be produced in one year is determined by reference to nameplate capacity or its equivalent, which is not reduced for reserves, maintenance or other unutilized capacity.  See Treas. Reg. Sec. 1.141-6 and 7.

The Service noted that the allocation of output based upon reserved net rated capacity under the power sales contract is the equivalent of an allocation based on available output of the facility.  Thus, the government use portion of the facility consists of the Issuer’s portion of the net rated capacity of the facility less the NGEC’s purchases of non-scheduled or taken output and any other private business use.  Therefore, the Issuer may issue bonds in an amount to cover the costs of the government use portion of the facility and its improvements plus any costs attributed to permitted de minimis private business use.

Additionally, since only actual and direct expenses incurred in the operation and maintenance of the Issuer’s share of the facility are payable to the NGEC for its management of such share under the operating agreement, the operating agreement is not treated as a management contract that results in private business use by the NGEC.  See Treas. Reg. Sec. 1.141-3.

 

 

by Gordon D. Polozola

The Louisiana Supreme Court issued a unanimous decision clearing the way for the City of Lafayette to issue bonds to finance its Fiber-to-the-Home (FTTP) Project. As described by the Court, FTTH technology delivers telecommunications services via fiber optic cables to every home and business in the covered area. In contrast, a more traditional system delivers services to a distant point, with the remaining distance to each home and business being covered by technically inferior and bandwidth-limiting copper (telephone) wires. The decision ends eighteen months of litigation, starting after the citizens of Lafayette voted 62% to 38% in a July 16, 2005 election to issue up to $125 million in bonds for the Project. Project opponents filing suit to block the bond issuance included the incumbent cable and telephone companies, as well as two Lafayette residents. For additional news articles relating to the decision, see http://www.theadvertiser.com/apps/pbcs.dll/article?AID=/20070223/NEWS01/702230321/1002 and http://www.2theadvocate.com/news/6008236.html  

Continue Reading Louisiana Supreme Court Approves Lafayette’s Fiber-to-the-Home Bond Ordinance

by Lawrence J. Hand, Jr.

On November 17, 2006, the United States Court of Appeals for the District of Columbia Circuit vacated the Federal Energy Regulatory Commission’s Standards of Conduct as applied to interstate natural gas pipelines. These Standards of Conduct, which are set forth in Order No. 2004 and codified at 18 CFR Part 358, govern the relationship between an interstate natural gas pipeline and various affiliates. The Court found that FERC’s effort to expand the pre-existing standards of conduct beyond relationships between an interstate natural gas pipeline and its marketing affiliates was not supported by record evidence. It is not clear if or when the Commission will revisit Order 2004 and how it will attempt to address the infirmities cited by the Court. It is worth noting that the current Chairman of the Commission, Joseph Kelliher, issued a strong dissent when Order 2004 was originally enacted and argued in favor of keeping the Standards of Conduct applicable only to marketing affiliates of interstate pipelines.

Continue Reading D.C. Court of Appeals Vacates FERC Standards of Conduct for Interstate Natural Gas Pipelines

by Gordon D. Polozola

The Louisiana Supreme Court has affirmed an order of the Louisiana Public Service Commission establishing a state universal service fee for telecommunications service providers operating in the state. T-Mobile, a wireless provider operating in Louisiana, appealed the LPSC’s order, arguing that the USF fee constituted a tax and, thus, the LPSC lacked jurisdictional authority to mandate the charge. The Supreme Court disagreed, finding that the charge constituted a fee, not a tax, and that the LPSC had the jurisdiction to impose a USF fee under both the Telecommunications Act of 1996, and the Louisiana Constitution.  A copy of the decision is available at the following link: http://www.lasc.org/opinions/2006/05ca2578.pdf

by Gordon D. Polozola

Governor Kathleen Blanco has reportedly vetoed the controversial Competitive Cable and Video Services Act, House Bill 699. There has been significant disagreement between BellSouth, the proponent of the bill, cable providers, who appeared to turn neutral as to its passage after the bill was amended, and Parish presidents and mayors, who urged the Governor to veto the bill. Of particular concern was the lack of any requirements for telecommunications companies to provide service to consumers in rural and poor neighborhoods, which cable providers typically must do under current franchise agreements. Local officials also argued that the bill would reduce or eliminate local governments’ authority to manage their rights-of-way. Under Louisiana law, a bill vetoed by the Governor must subsequently be approved in a veto session by two-thirds of the elected members of both the House and Senate to become law. The bill originally passed both houses by a two-thirds vote before being sent to the Governor. For recent new articles regarding this matter, visit http://www.theadvertiser.com/apps/pbcs.dll/article?AID=/20060712/NEWS01/60712013  and http://www.2theadvocate.com/news/3248951.html?showAll=y

by Gordon D. Polozola

To say there has been consolidation in the telecom market over the last decade would obviously be an understatement. Competitive telecom companies, which entered the market by the hundreds after passage of the federal Telecommunications Act, have merged with each other (or have been acquired) as a means of survival or market penetration. The (then) giants of the telecom world have also consolidated into mega-regional communications companies. SBC acquired Pacific Telesis, Southern New England Telephone, Ameritech (which itself acquired Illinois Bell, Indiana Bell, Michigan Bell, Ohio Bell and Wisconsin Bell), and most recently AT&T. The new AT&T became the largest telecom company in the U.S. Now it is proposing to acquire BellSouth, currently the third largest telecom company in the U.S. (For more information on the history of telecom mergers, visit http://www.fcc.gov/wcb/armis/carrier_filing_history/COSA_History/)

Continue Reading Deja Vu? — Courts, Telecom and Anti-Trust