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• Sales Tax and Fees: Insureds Prevail in Class Certification and Merits Decisions
• Total Loss Valuation: Projected Sales Adjustment Class Certified
• Labor Depreciation: Texas Claims Survive Pleading Stage, but Other Claims Falter Due to Appraisal
• Automobile Insurance Coverages: New Case Filed Challenging Insurer’s Failure to Offer Comp/Collision Coverage
• Privacy: Dismissal of Claims Challenging Transmittal of PHI to ISO
• Medical Payments: Medical Bill Audit Class Action Survives Motion to Dismiss

Sales tax and fee cases continued the trend in favor of insureds, with a merits victory in the Sixth Circuit and a class certification victory in an Ohio state court.

On the labor depreciation front, Texas proved to be the active jurisdiction this quarter. One Texas federal court followed the Fifth Circuit’s ruling in Mitchell (a case under Mississippi law), suggesting labor depreciation is similarly inappropriate under Texas law. In another Texas federal court, an insurer used the appraisal process to score summary judgment victories against some of the named plaintiffs.

Privacy class actions continue to persist, but an insurer achieved a victory in a case challenging the transmittal of personal health information.

Read more.

In this Issue:

• PJM
• State Regulatory Developments
• Nuclear
• Energy Industry in Transition
• Emerging Risks

PJM

PJM advances transmission plan for grid reliability

PJM made its final presentation of recommended transmission projects aimed at boosting grid reliability to one of its advisory panels, and the proposals now move on to the RTO’s full board. The plan addresses multiple issues, including accelerated load growth and changes in the generation mix. The expected investment is between $5.9 billion and $6.3 billion.

PJM reaches deal to lower capacity auction price cap

PJM reached a settlement with Pennsylvania Gov. Josh Shapiro aimed at avoiding a “runaway auction price” that would have sharply raised bills. The deal sets a $325 per megawatt-day price cap and a $175/MW-day floor for PJM’s 2026-2027 and 2027-2028 delivery year capacity auctions – down from the current cap of over $500/MW-day.

State Regulatory Developments

Appeals court says FERC erred in not stripping two ROE transmission adders

A U.S. appeals court ruled that the Federal Energy Regulatory Commission erred in declining to remove an extra 0.5 percent return on equity from the Duke Energy and FirstEnergy Ohio utilities as an incentive to join an RTO. At the same time, the court also upheld FERC’s ruling that ended the extra ROE for American Electric Power and Dayton Power.

AEP, Ohio regulators agree on smart grid plan

American Electric Power reached a settlement with Ohio regulators on its latest plan to improve grid reliability and prevent or shorten power outages. The plan includes installing or improving technologies on up to 412 circuits in its territory that detect outages and automatically reroute the power to minimize the number of affected customers.

With 1.4 million panels, Ohio’s largest solar farm comes online

Ohio’s largest solar farm, consisting of 1.4 million solar panels, has come online. The project, which was completed in three phases, can produce enough clean power to serve the equivalent of 118,000 households, but its full capacity will be delivered to Amazon through power purchase agreements. However, its status as the state’s biggest will be short-lived.

Nuclear

NextEra takes steps toward restarting shuttered nuclear plant

NextEra is moving to potentially revive a nuclear plant as soon as 2028. It filed a request with the Nuclear Regulatory Commission to seek a licensing change for the facility, which it shut down in 2020; this is a significant step toward a possible restart. NextEra also signed a partnership with GE Vernova to develop gas power projects that will serve, among other customers, data centers.

Abandoned South Carolina nuclear project may be resurrected

A partially built but abandoned nuclear project in South Carolina could see a new life. Santee Cooper, the state-owned utility, has begun a process seeking proposals to acquire and finish, or propose other options for, two partially constructed generating units at the V.C. Summer Station. The utility said multiple factors drove its decision.

Its climate goals threatened, New York rethinks nuclear

As greenhouse gas emissions increase and threaten its ambitious climate goals, New York is rethinking nuclear power. When the Indian Point nuclear plant closed two years ago, it was considered a win for public safety and environmental protection. But today, with concerns that gas, wind and solar may not be enough to meet demand, nuclear is getting another look.

Report identifies 8 Indiana coal sites having potential for nuclear plants

A new report from Purdue University concluded small nuclear reactors (SMRs) could have “substantial” potential for Indiana, and identified eight coal sites that could represent coal-to-nuclear opportunities. In the long term, researchers said, SMRs can “mitigate the economics” of coal plant closures and foster “significantly cheaper” and cleaner energy.

Energy Industry in Transition

DOE: Improved interconnection processes vital to DER

Utilities and grid operators must improve interconnection processes for distributed energy resources if they are to maximize the potential of DER in the next five to 10 years, according to the Department of Energy. Those improvements include increasing access to data, streamlining study workflows and revising approaches to cost allocation.

Solar capacity additions hit second-highest monthly total on record

New U.S. solar capacity added in November was the second-highest monthly total on record. Solar made up 81.4 percent of new capacity in the first 11 months of 2024 – and 98.6 percent in November alone. Additionally, solar additions exceeded capacity from all other resources through November, which was also the 15th straight month they led utility-scale capacity.

MISO lauded for leadership in grid transmission planning

The former chair of the Arkansas Public Service Commission said that the Midwest is poised to build the necessary infrastructure to serve continued economic growth. He pointed to projects by the Midcontinent Independent System Operator as examples of this “build, baby, build” approach, saying the grid operator had emerged as a leader in regional transmission planning.

U.S. power prices flat, but residential prices outpace inflation

A new report found while average U.S. retail power prices have been largely flat in recent years, residential prices are rising faster than inflation. Prices in most states grew by less than 0.5 cents per kilowatt hour per year, but there were differences by state and region: Larger increases were seen in California, Hawaii, the Northeast and parts of the upper Midwest. Only North Dakota declined.

Energy efficiency enters 2025 facing uncertainty

Energy efficiency is expected to face challenges and opportunities this year, driven by rising prices and a new president and Congress. Power usage rose slightly in 2024, but a surge is looming; AI’s strain on systems will grow; Washington policymaking poses threats, but states and localities can step in; and businesses will play a vital role in the energy efficiency sector.

Global corporate spending on solar, storage, grid firms fell in Q4

Global corporate investment in solar, storage and smart grid firms fell in the fourth quarter of 2024. In a slow year overall, venture capital was down 36 percent year over year in solar and 60 percent in storage, and public market funding for solar slid 59 percent. The declines likely reflect uncertainty over the presidential election and President Donald Trump’s approach to clean energy.

Christie named FERC chair, vows to fight ‘excessive power costs’

Trump elevated Mark Christie to replace Willie Phillips as head of the Federal Energy Regulatory Commission. The new chair said he will continue his efforts to “protect consumers from excessive power costs,” deal with a reliability crisis brought on by plant retirements without sufficient replacement capacity and strengthen FERC’s partnership with states.

U.S. policy rollbacks likely won’t slow power demand growth

The power sector is at a “tipping pint,” experts say, as increasing demand pushes consumption growth to levels not seen in decades – highlighting the need for new grid spending and integrated resource planning. While questions have swirled over whether the new Congress and Trump administration might impact these trends, they argue any policy rollbacks won’t stop the growth.

Solar braces for challenges, but continued strong run is predicted

After a series of record-breaking years, the solar sector now faces the possibility the Trump administration might pull back the subsidies that have fueled the boom. But most experts believe the industry can overcome any potential hurdles, as growing power demand, falling deployment costs and more domestic panel manufacturing may support the industry – at least for now.

Emerging Risks

AEP agrees to settle SEC corruption charges for $19 million

American Electric Power agreed to pay $19 million to settle charges it was involved in a corruption scandal over legislation in Ohio. In settling with the Securities and Exchange Commission, AEP did not admit or deny the SEC’s allegations that it took part in public corruption and contributed to a nonprofit lobbying group to get the legislation passed.

Ohio well pad explosion kindles concerns about drilling on public land

A well pad explosion near a state park that was opened to oil and gas exploration in 2022 has raised concerns over drilling on public land in Ohio. While there were no reported injuries or impacts on wildlife or water, critics argued the incident shows the risks that can occur as drilling infrastructure nears state land. The industry pushed back against the claim.

FERC urged to adopt gas pipeline reliability mandates for cold weather

National Grid and Consolidated Edison urged the Federal Energy Regulatory Commission to adopt reliability standards for gas pipeline operators to ensure the availability of fuel supplies in cold weather. They said voluntary efforts were inadequate, and National Grid argued FERC should mandate pipeline reliability reporting, enforcement mechanisms and tariff reforms.

The BakerHostetler Intellectual Property Group has released the second annual edition of its IP Perspectives (BHIPP), an in-depth analysis of the trends and developments in intellectual property, as well as some predictions for the year ahead. Highly anticipated after the success of the 2024 Perspectives, the new edition covered a variety of topics.

The pervasive nature of AI will cause significant shifts in indemnification provisions and enforcement as organizations adapt. With so many changes in the world of IP, including greater exposure to cybersecurity breaches, the ban on employee noncompete agreements and data threats, business need proactive IP strategies to protect their trade secrets. An expert’s testimony can make all the difference in a patent case, but the standards for admissibility are in flux. After reaching the lowest number in 10 years, patent litigation is on a modest upward trend, with the top three districts being the Eastern District of Texas, the Western District of Texas and the District of Delaware. Some of the increase was most likely influenced by changes to district court rules and procedures, making filing in one jurisdiction seem more advantageous than filing in another.

In an unusual ramp-up in activity, the USPTO released new guidance on how patent examiners should evaluate related claims for patent subject matter eligibility and also requested public feedback on a proposed new rule for filing terminal disclaimers to overcome obviousness-type double patenting rejections, which was later withdrawn. Another shake-up in the IP landscape occurred when more than 40 years of precedent was upended as a federal circuit court struck down the Rosen-Durling test for assessing obviousness of design patents. And, in an unusual moment of clarity in 2024, a federal circuit court decision in August 2024 settled certain facts related to obviousness-type double patenting.

Read the 2025 IP Perspectives

In this Issue:

• PJM
• State Regulatory Developments
• Energy Industry in Transition
• Change in Administration
• Emerging Risks

PJM

FERC rejects plan to alter PJM’s regional planning control

The Federal Energy Regulatory Commission rejected proposals that would have given PJM transmission owners more control over the grid operator’s transmission planning. FERC said in response to one set of proposed changes that it was concerned the plans gave owners “undue influence” over planning and expansion, “thereby reducing PJM’s independent governance.”

Industry leader offers approaches for dealing with PJM capacity shortages

The recent PJM capacity auction, which resulted in record-setting prices, signaled the supply of electricity must grow to bring prices down, said the head of a national energy trade group. But the opposite is happening, she added, because coal-fired plants are retiring at an “alarming pace.” She offered five ideas to address capacity shortages and avoid grid reliability problems.

PJM sees summer, winter peak loads climbing through 2045

PJM said it expects summer and winter peak loads to climb by an annual average of 2 percent and 3.2 percent through 2045, respectively, up from its previous outlook of 1.6 percent and 1.8 percent. The revision was driven by “large load adjustments,” mainly from newly planned data centers. The forecast includes roughly 50,000 megawatts in new large loads by around 2032.

PSE&G to pay $6.6M for inaccurate data on PJM transmission line

Public Service Electric and Gas will pay $6.6 million to settle allegations that it gave PJM inaccurate information about the need for a $546 million local transmission project. The fine was assailed by one critic as being “barely a penalty for what remains a highly profitable investment” and indicates that “no one is checking utilities’ work” on these projects.

State Regulatory Developments

Ohio legislators send nuclear, state park fracking bill to governor

Ohio lawmakers sent the governor a bill that adds natural gas as a resource and nuclear reactions to the state’s definition of “green” energy. They also put provisions into the measure that extended the standard terms for hydraulic fracturing under state parks to five years compared to the current three-year time frame.

Landmark greenhouse gas initiative mulls changes, expanded participation

A pioneering regional greenhouse gas initiative on the East Coast is weighing changes or expanding participation to ensure the continued delivery of benefits to its 11 member states. With President-elect Donald Trump’s vow to roll back federal climate action – leaving it up to cities, states and the private sector – the mission of the program has grown even more crucial.

Energy Industry in Transition

‘Shocking’ surge in U.S. power demand forecast

A new report forecast that U.S. power demand will grow 15 percent by 2029, rising by up to 128 gigawatts – representing a fivefold increase in load growth predictions over the past two years. The estimate, which was called “shocking,” was fueled by increased consumption from data centers and manufacturing, and will largely come from six regions of the country.

Duke seeks to change data access rules to help N.C. communities hit climate goals

Duke Energy has proposed a plan to improve data access rules, giving North Carolina customers more access to information that can help their communities meet climate goals. The rules have earned widespread support and potentially have broad application, including for municipalities, large customers, homeowners, solar companies and county officials.

U.S. energy storage is surging, but can the pace be maintained?

The United States added 3,806 megawatts and 9,931 megawatt hours of energy storage in the third quarter of 2024 – a Q3 record and an increase of 80 percent and 58 percent, respectively, year over year. Utility-connected batteries led the growth, bringing on 3,431 MW/9,188 MWh. But as storage booms and battery costs drop, a question lingers: Can this pace be maintained?

‘All-the-above’ strategy urged for Midwest transmission grid

Two energy experts argue that the Midwestern transmission grid must adopt an “all-the-above” focus in order to withstand extreme weather, support rapid demand growth and ensure reliable, low-cost power. They argue that deploying advanced grid technologies can help meet near-term demand growth while new regional and interregional lines are being planned and built.

Duke Energy to knock down coal-fired plant, build large battery on the site

Duke Energy is set to knock down a coal plant and build its largest grid battery on the same site. When completed, the new system – expected to be completed by October 2027 – will deliver 167 megawatts/668 megawatt hours, matching the instantaneous capacity of the demolished coal-fired unit. The move further signals that big batteries are coming to North Carolina.

Xcel seeks to raise evening time-of-use rates in Colorado

Xcel Energy is asking Colorado regulators to increase its time-of-use rates for consumption in the evening. If the increase is approved, customers would pay the higher rates from 3 p.m. to 9 p.m. on non-holiday weekdays in the summer and from 5 p.m. to 9 p.m. in the winter. Ratepayer advocates criticized the effort and proposed an alternative plan.

U.S. solar manufacturing capacity sets record

Solar manufacturing capacity in the United States set a record in the third quarter, according to a new report, in part due to new or expanded factories in four states. Capacity rose by 9.3 gigawatts and is now almost 40 GW. The report added that at full capacity, solar factories can now produce enough equipment to serve almost all U.S. demand for the resource.

Biden orders tariffs of up to 50 percent on some Chinese solar components

The Biden administration ordered tariffs of up to 50 percent on some solar energy components from China. Solar wafers and polysilicon imports will be subject to a 50 percent tariff rate while tungsten products – including steel bars and sheets – will face a 25 percent rate. The increases will go into effect on Jan. 1.

Required disclosures of scope 3 emissions urged

The U.N.-convened Net-Zero Asset Owner Alliance called for mandated scope 3 emissions disclosures. Scope 3 emissions, which are indirect and occur in the value chain, and include upstream and downstream releases, make up around 75 percent of all company emissions across sectors. A goal is to enable alliance members to better assess and decarbonize their portfolios.

Change in Administration

Downside of eliminating green energy tax credits starts to sink in with GOP

As the reality settles in that billions of dollars in the Inflation Reduction Act’s energy and climate subsidies may be cut, Republican lawmakers and business groups are raising concerns over the wisdom of the move. GOP leaders may ultimately have to convince their members to back the eliminations of tax incentives that benefit their districts.

Trump campaign vow could put independence of FERC at risk

In his campaign, Donald Trump vowed to bring independent government regulatory agencies under White House control. If the president-elect follows through on his promise, the Federal Energy Regulatory Commission – long an example of nonpartisan oversight – could be at risk. Trump has multiple options at his disposal that would have the effect of influencing FERC.

Emerging Risks

N.C. town sues Duke Energy, charging climate ‘deception’

The Town Council of Carrboro, N.C., filed the first climate “deception” lawsuit against an electric utility in the country, accusing Duke Energy of undertaking a campaign to deny and cover up the dangers of fossil fuel emissions. The suit alleges Duke knowingly spread false information and thus “materially slowed the transition” to renewables.

States sue three large asset managers, calling them a ‘cartel to rig the coal market’

A group of Republican-led states filed a lawsuit against the three largest U.S. asset managers, alleging they are “conspiring to artificially constrict” the coal market. They accused the firms of purchasing “substantial” holdings in public coal companies and then pressuring those firms to cut production, with one attorney general calling it a “cartel to rig the oil market.”

FERC levels $27M penalty in MISO demand response fraud

The Federal Energy Regulatory Commission ordered a Texas-based company and its owner to pay roughly $27 million for using fraudulent demand response resources to make offers into the Midcontinent Independent System Operator’s capacity market. FERC estimated that the bogus offers caused $17.6 million in losses and “potentially risked the reliability of the MISO grid.”