Recovery by utilities of expenditures on manufactured gas plant claims: Recent developments regarding insurance coverage and rate relief

Abstract

Utilities are increasingly seeking to recover from their insurers and ratepayers the costs associated with environmental claims at sites of former manufactured gas plants. This article examines the legal issues that arise when utilities pursue such cost recovery. A review of judicial decisions in insurance coverage cases involving manufactured gas plant cleanup costs reveals that courts have generally been ruling in favor of utilities seeking coverage for such costs. Similarly, a review of decisions in rate cases reveals that utilities have generally been successful in recovering through rates some or all of their manufactured gas plant cleanup costs.