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Energy and Utilities

McCarter & English provides a full range of legal counsel to its energy and telecommunications clients. Services include transactional representation; regulatory advice; litigation; appeals; and representation before regulatory agencies.

In the dynamic energy industry, our clients operate fossil or nuclear power plants; transmit and deliver energy through local electric, natural gas or water distribution utilities; or engage in competitive retail sales of electricity and natural gas. Manufacturers and other large commercial customers of utilities are finding that for cost or reliability reasons, prudent risk management requires inside-the-fence development of distribution facilities like cogeneration or sustainable facilities such as solar, sometimes using a power purchase agreement with a third-party equity or tax investor.

McCarter & English represents such diverse interests before the Federal Energy Regulatory Commission (FERC), public utility commissions and facility siting boards and supports project development, merger, acquisition, divestiture and other transactional strategies. It provides advice on issues such as compliance, licensing, restructuring, disclosure and due diligence, and litigates before federal and state agencies and courts. The firm's attorneys have counseled investor-owned and municipal utilities through state regulatory review proceedings, facilitated electric and natural gas licensing, advised on contracts, counseled on watershed issues and advised major manufacturers on cogeneration and energy/utility contract matters.

On behalf of its energy and utilities clients, McCarter & English:

  • Counsels utility holding companies on merger and asset acquisition issues, including a full range of transactional advice; 

  • Advises competitive natural gas marketers in administrative litigation with incumbent natural gas utilities; 

  • Represents clients on permitting and licensing issues before local, state and federal regulatory authorities; 

  • Advises on compliance with self-audit and disclosure requirements, including the disclosure regime applicable to public companies’ post enactment of the Sarbanes-Oxley Act of 2002; 

  • Performs due diligence evaluations of energy regulatory issues in the negotiation of merger, acquisition and divestiture agreements; 

  • Provides facility siting advice and secures regulatory approvals on a range of projects including undersea electric transmission cables, marine liquefied natural gas import terminal facilities, fossil-fueled power plants and wireless telecommunications towers; 

  • Assists competitive market participants in connection with auctions for standard offer generation services; and 
  • Defends water utilities, power plant operators and owners of resource recovery facilities against civil and criminal claims including radiation injury claims, labor and employment litigation, and environmental enforcement proceedings.

Specifically, the firm has:

  • Represented an energy industry aggregator on natural gas and electric licensing matters in multiple states; 

  • Acted as bond and securities counsel to facilitate utilities' access to public and private capital markets and tax-exempt financings, including underwriters' counsel for offerings by Elizabethtown Water Company; 

  • Counseled investment bankers with substantial energy infrastructure holdings in connection with project acquisitions; and 

  • Advised private clients developing power plants with government entities on matters including power purchase arrangements, management contracts and hedging transactions.

ELECTRICITY

Our attorneys are experienced in all aspects of the electric power industry – regulatory issues as well as technical matters related to the generation, transmission, and distribution of power.

Our clients include both owners of substantial generating capacity and wholesale customers of other utilities.

We represent our clients in negotiations with other utilities, and before federal and state agencies and courts, on a broad range of regulatory, operational, and business matters, including:

  • Integration of generation resources into overall power supply, including interconnection arrangements and transmission access; 

  • Joint ownership of generating facilities and development of independent power supply and transmission resources; and 

  • Federal and state regulation of bulk power supply and planning.

FERC Proceedings

We are frequently involved in proceedings before the FERC in matters concerning rates, certificates, and terms and conditions of service. We make every effort to resolve these matters through negotiation, although we are prepared to litigate if the need arises.

Deregulated Transactions

Deregulation adds unique risks to bulk power supply. Negotiating good supply arrangements for our clients is critical, and so is preserving their rights if a supplier merges or files for bankruptcy.

Cogeneration and Small Power Production

  • Obtainment of facility certifications and negotiate interconnection and power purchase agreements.

  • Representation on federal power marketing issues and in federal and state regulatory and judicial proceedings regarding rates, certification of facilities, transmission access and joint ownership issues. 

  • Litigation and Arbitration of rates and agreements concerning transmission access, supply of partial requirements service, and matters related to joint ownership of generation facilities.

Hydroelectric Experience

  • Representation of clients in permit and license proceedings and in matters pertaining to the operation of hydroelectric facilities.

  • Advice and counsel regarding the planning, financing, ownership and operation of electric supply facilities, and the provision of new services by consumer-owned electric utilities. 

  • Negotiation of wholesale power purchases, transmission services and the sale and purchase of generating and transmission facilities.

NATURAL GAS

McCarter & English attorneys are experienced in the legal and regulatory aspects of every phase of the natural gas industry including production, transportation, local distribution and wholesale and retail rate design.

Our clients include more than 300 natural gas distribution systems, most of which are owned and operated by municipalities, counties and gas districts. Our practice continues to grow town by town and pipeline by pipeline, as utility managers and community leaders learn about us from neighboring systems. We also represent public agencies and often help local officials form associations and ad hoc groups of consumer-owned gas distribution systems.

FERC Proceedings

We represent clients on more than 15 interstate pipelines and are regularly involved in proceedings before the FERC –in rate and certificate matters, as well as matters involving "open access" transportation, take-or-pay billings, gas inventory charges and restructuring of pipeline services. We strive to resolve these matters successfully through negotiation, but we are prepared to litigate when necessary.

Transactions

Communities call on us to help them in a wide range of transactions –from renegotiating franchises for provision of gas service to providing legal advice on construction of new facilities, to organizing gas purchasing authorities.

Supply Contracts

  • Preparation and negotiation of gas supply contracts and transportation agreements with producers, marketers and pipelines. As gas supply options have increased, our attorneys have often been instrumental in obtaining contracts that permit our clients to reduce their gas costs.

  • Representation before the FERC, state regulatory agencies and federal and state courts in rate, certificate, contract, bankruptcy and rulemaking proceedings. 

  • Negotiation of gas supply contracts, franchise agreements and transportation agreements with producers, brokers and pipelines, as well as negotiation and settlement of matters before various regulatory agencies.

Legislation

  • Identification of common interests and forging of alliances to achieve legislative objectives before the U.S. Congress, made possible by our contacts throughout the gas industry. 

  • Advice and counsel regarding planning, financing, rate design and operation of gas distribution systems.

  • Litigation and arbitration of rates and agreements concerning all aspects of natural gas production, transportation and sales.

     


ENERGY TRANSACTIONS

McCarter & English assists energy and utility clients in addressing the difficult regulatory issues that frequently arise from complex business transactions. The firm advises major industrial corporations, financial institutions; and developers in mergers and acquisitions, financings and real estate conveyances, including energy projects on brownfields.

Our lawyers are experienced in performing due diligence evaluations; assessing energy regulatory risk; formulating the energy-related terms of merger, acquisition, purchase and sale agreements; obtaining project development permits; and reviewing energy-related disclosures in publicly held companies' filings with the SEC.

The firm serves as bond counsel to the New Jersey Environmental Infrastructure Trust, which provides loans to a variety of borrowers, including private water companies, for the purpose of financing infrastructure improvements. Its attorneys advise energy companies on environmental risk in transactions, including proposed acquisitions of natural gas pipeline assets, power plants, electric transmission infrastructure and wireless telecommunications facilities.

The group has substantial experience applying the New Jersey Industrial Site Recovery Act and the Connecticut Transfer Act to energy clients' transactions. To ensure that clients achieve all their business objectives in energy transactional matters, the group's attorneys also leverage the experience and skills of the firm's Corporate, Construction, Tax & Employee Benefits, Real Estate, Environmental, Labor/Employment and Public Finance practices.

In addition, the group has substantial experience in a wide variety of energy transactions in the natural gas and electric industries.

In the natural gas industry, our attorneys pioneered the development of financed natural gas supply acquisition programs and projects. The firm's attorneys are fluent in issues concerning the North American Energy Standards Board (NAESB) "Contract for Sale and Purchase of Natural Gas," as well as the International Swaps and Derivatives Association (ISDA) "Master Form." The firm has negotiated dozens of short- and long-term gas supply contracts for its clients, as well as capacity acquisitions. In addition, the firm has been central in the formation of joint-action agencies by its public gas system clients.

In the electric industry, we have negotiated and prepared power supply, generation interconnection, generation purchase acquisition and tolling agreements. The firm has assisted a client in all phases of the construction of a natural gas-fired electric generation facility. The firm has negotiated gas pipeline and gas supply arrangements for electric power plants, as well as fuel management contracts.

REGULATORY ADVICE AND COUNSELING

Industry deregulation and restructuring have created many new challenges for energy and utility companies and the major manufacturers that enter into transactions with them. State legislatures and regulators have required incumbent utilities to divest themselves of energy assets such as power plants that have led to contractual and regulatory issues. New market participants emerge with regulatory and licensing issues, and they need sophisticated energy counsel to guide them through these inevitable administrative challenges.

Energy impacts are key in today's business and manufacturing arena, and manufacturers are among those to have found that aggressive energy policies and investments in energy infrastructure "inside the fence" of manufacturing facilities can add substantially to companies' balance sheets or enhance reliability for critical operations.

In responding to specific client needs, McCarter & English also addresses energy facility permitting; counsels on rulemaking, compliance, mergers, asset acquisitions and divestitures; and facilitates real property transactions. The firm has counseled water utilities on compliance with requirements for reporting water supply contaminants and providing notice to customers and users. It has also advised clients on the complex federal, state and local regulatory requirements applicable to marine-based liquefied natural gas terminal projects in the Northeast. The firm's attorneys have advised clients, including a western power plant sited on federal lands, on the permitting requirements for major federal energy undertakings subject to the National Environmental Policy Act, and the acquisitions of distressed energy assets from bankrupt merchant power plant operators.

Compliance

Congress has given the FERC, Commodity Futures Trading Commission, and the SEC responsibilities to ensure compliance with federal laws targeting market manipulation. Following the Energy Policy Act of 2005, FERC launched several different compliance initiatives, including increased resources for its Office of Enforcement. FERC has since then instituted numerous investigations of violations of its regulations that have resulted in multi-million-dollar fines.

McCarter & English provides legal advice and assistance in matters related to utility compliance both related to NERC reliability standards and related to FERC's tariff, anti-manipulation, market-based rate, standards of conduct and other requirements. Our group works proactively with its clients to ensure that they satisfy reliability, reporting, and interlocking directorate requirements. The firm assists its clients with the preparation of FERC compliance plans and has conducted trainings for employees of its energy clients. If a client is the target of a FERC investigation, the firm is expert in guiding the client through the process with the Office of Enforcement.

We have represented power generators and natural gas distributors in numerous transactions and proceedings involving compliance with FERC regulatory requirements. McCarter has counseled power generators and gas distributors on compliance with FERC regulations and requirements in power generation and pipeline construction projects and in gas purchase and transportation transactions.

We also assist clients in interpreting the ramifications and requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

LITIGATION

McCarter & English currently defends more than 80% of the U.S. commercial nuclear industry against radiation injury claims. Its attorneys have appeared before federal, state and local administrative bodies regarding contested case proceedings, enforcement actions and regulatory matters. The firm represents several investor-owned electric utilities, defending against mass toxic tort claims including asbestos, radiation, PCBs and MTBE. It is also experienced in litigating major property tax appeals involving watershed and water utility property and nuclear power plants.

The firm frequently assists clients in court or agency-supervised privately arranged arbitrations, mediations or other ADR proceedings. Its lawyers strive to provide clients with forceful and effective courtroom advocacy while recognizing clients' business objectives, and to develop creative, cost-saving solutions to energy and utility disputes.

Appellate

Attorneys at McCarter & English have handled many important and precedent-setting energy cases in the appellate courts.

The firm has provided its clients with a range of services relating to appellate legal matters, including:

  • Preparing petitions for review of agency decisions; 

  • Handling motions and prehearing practice in complex, multiparty court appeals of agency rulemakings and orders;  
     
  • Intervening in support of or opposition to appeals by other parties;  
     
  • Briefing and arguing appeals on the merits;   

  • Preparing amicus curiae briefs;   
     
  • Preparing or opposing petitions for review in the Supreme Court of the United States and in state supreme courts;  
     
  • Preparing or opposing petitions for writs of mandamus and other extraordinary judicial relief;  
     
  • Advising on strategic appellate issues, e.g., whether and where to appeal; and  
     
  • Handling appeals before regulatory bodies. 


McCarter & English attorneys combine decades of knowledge of energy law and policy with specialized experience in judicial review of agency decisions and the broader legal and policy perspectives of appellate courts. Several attorneys at the firm have served as judicial law clerks. One of the firm's partners served as an attorney in the Solicitor's office at the FERC, briefing and arguing appeals of energy matters in the federal courts of appeals and at the petition stage in the Supreme Court.

The firm's attorneys keep abreast of legal trends in the federal appeals courts and study the views of individual judges on important issues so that they can best advocate best for their clients in cutting-edge areas of regulatory law. The firm works regularly with trade associations and governmental agencies in order to obtain the support of amicus curiae.

The following are representative matters handled by McCarter & English in the federal appellate courts: 

  • FERC open-access electric transmission rulemaking. The firm represented the National Rural Electric Cooperative Association and a group of rural electric cooperatives in the consolidated appeals of FERC Order No. 888 in the D.C. Circuit.

  • FERC open-access gas transportation rulemaking. The firm represented the American Public Gas Association in the consolidated appeals of FERC Order No. 636 in the D.C. Circuit.  
      
  • Gas pipeline curtailments. The firm represented the City of Mesa, Arizona, and the American Public Gas Association in a successful challenge of FERC orders approving a pipeline's pipeline curtailment plan, on the ground that FERC had not shown that the plan ensured continuous access to gas by high-priority end users such as residential consumers and hospitals.  
     
  • Market power/market-based rates for electricity transmission and sales. The firm represented an electric cooperative in a successful challenge of FERC orders allowing a transmission owning utility the authority to sell electricity to its affiliates at market-based rates and exert market power over purchasers within the transmission-constrained area in which the utility enjoyed a generation monopoly.  

  • Agency ex parte communications. The firm represented municipal electric utilities in working with other parties in a successful challenge to FERC orders allowing FERC to engage in off-the-record ("ex parte") communications with private "market monitors" relating to contested, on-the-record proceedings before FERC.  


GOVERNMENT RELATIONS

When necessary, we help our clients make their case for legislative change to Congress and the Executive Branch. Our contacts throughout the energy industry allow us to identify common interests and to forge alliances to achieve legislative objectives.

Cogeneration and Small Power Production

  • We help obtain facility certifications and negotiate interconnection and power purchase agreements.

  • We represent clients with respect to federal power marketing issues and in federal and state regulatory and judicial proceedings regarding rates, certification of facilities, transmission access and joint ownership issues. 

  • We represent clients in the litigation and arbitration of rates and agreements concerning transmission access, supply of partial requirements service and matters related to joint ownership of generation facilities.

    Hydroelectric Experience 

    • We represent clients in permit and license proceedings and in matters pertaining to the operation of hydroelectric facilities.

    • We provide advice and counsel clients regarding the planning, financing, ownership, and operation of electric supply facilities and the provision of new services by consumer-owned electric utilities. 

    • We negotiate wholesale power purchases, transmission services and the sale and purchase of generating and transmission facilities.