The United States District Court for the District of Massachusetts recently a dismissed lawsuit filed by PNE Energy Supply LLC against Eversource Energy and Avangrid, Inc. (Defendants) alleging violations of the Sherman Act, 15 U.S.C. § 2, and various state consumer protection and antitrust laws. D.

Similar to an ongoing suit brought by consumers (Breiding v. Eversource Energy et al.), PNE alleged that Defendants manipulated pipeline capacity for natural gas transmission and, as a result, artificially inflated the price of natural gas and electricity at wholesale in New England. Id.

The Court dismissed the case for reasons similar to an order of dismissal issued last year in Breiding; specifically, that the filed rate doctrine bars PNE’s claims. The issue of the field rate doctrine is on appeal in Breiding and was recently briefed before United States Court of Appeals for the First Circuit

In PNE, the District Court noted that that, "This Court recently held that the filed rate doctrine bars federal and state law claims premised on the alleged abuse of Avangrid and Eversource’s right to adjust and withhold excess natural gas transmission capacity pursuant to no-notice contracts approved by FERC, even where such conduct allegedly resulted in increased prices in downstream wholesale and retail electricity markets."

In PNE, the District Court held that the filed rate doctrine bars PNE’s challenge to no-notice contract rights approved by FERC

The Court further said that the filed rate doctrine prohibits setting aside wholesale electric rates

PNE argued that it does not seek the adjustment of wholesale electric rates; rather, it challenged 'fuel cost' overcharges that were passed on to PNE as a component of wholesale electric rates.

However, the Court said that, "To ascertain whether and to what extent fuel costs were artificially inflated by Defendants’ alleged anticompetitive conduct, the Court would be required to determine the difference between wholesale electric rates during the class period and hypothetical rates that would have been charged but for Defendants’ conduct. The filed rate doctrine prohibits this analysis."

As summarized by the Court, "Here, PNE 'seeks a refund of some portion of [FERC-approved] rates,' but has 'failed to explain how the court could calculate their damages award without first determining the natural gas rate they would have faced' given that FERC 'precludes the court from making such a determination.'"

Addressing anti-trust claims, the Court said that, even assuming that PNE could establish antitrust injury and the remaining antitrust standing analysis, "PNE’s failure to allege plausibly that Eversource and Avangrid each had monopoly power in the relevant market is fatal to the claims alleged here."

"The complaint’s vague assertion that 'Eversource and/or Avangrid could possess the vast majority of excess Pipeline capacity' when 'capacity was already scarce,' without more, does not constitute a plausible allegation regarding the Defendants’ individual monopoly power in the secondary capacity market, especially where the gravamen of PNE’s complaint turns on Defendants’ alleged refusal to participate in that market in the first instance," the Court said

See the court's opinion for further details

Tags:
Litigation   New England   Natural gas  

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