Water

The water supply industry is undergoing dramatic structural change fueled by a greater focus on replacing aging infrastructure, meeting evolving drinking water standards, developing new supply sources, and addressing security concerns raised by the events of September 11, 2001. Morgan Lewis offers businesses involved in the water supply industry comprehensive legal support-from matters involving transactions, water utility securities, and regulatory issues (economic and environmental) to industry-specific labor and employment matters.

Morgan Lewis represents an array of water industry clients including investor-owned companies, municipal water systems, and both domestic and overseas corporations involved in outbound and inbound investment.

Mergers and Acquisitions

Morgan Lewis's lawyers have represented clients in many of the largest water utility mergers and acquisitions in recent years, including:

• A $400 million purchase of water utility assets
• A merger requiring the regulatory approval of 11 states
• A proposed privatization of the water and wastewater systems of a major U.S. city
• The acquisition and subsequent divestiture of the country's largest investor-owned water provider

Securities

Morgan Lewis represents investor-owned companies, municipalities, and financial institutions in the issuance of water utility securities. Our team also has helped two publicly traded water companies develop innovative customer stock purchase plans.

Economic Regulation

For more than 50 years, Morgan Lewis attorneys have represented investor- and municipality owned entities in all aspects of rate application, complaint, rulemaking, and certificate proceedings before state public service commissions and in related litigation before state courts.

Recent cases have focused on:

• The recovery of merger-related costs and post-September 11, 2001 security expenses
• The reliability of certain equity cost rate methods under current market conditions
• The reasonableness of main extension rules requiring customers to fund, in part, the investment needed to bring them service
• The permissible use of competitive rate riders to attract new industrial and sales for resale load.

We also helped two companies design and obtain regulatory approval of a groundbreaking surcharge mechanism to finance infrastructure replacement projects.

As counsel to a water utility trade association, our team has participated in numerous commission and appellate proceedings involving utilities' rights to retain gains derived on the sale of watershed land and the proper methods of valuing utility property (including contributed plant) in municipal condemnations.

Environmental Regulation

Morgan Lewis regularly counsels water supply industry clients on environmental issues, ranging from compliance with the Safe Drinking Water Act and the Clean Water Act to the disposal of treatment plant residues. We have taken a leading role in appellate court challenges to rules adopted by the Environmental Protection Agency and various state regulatory bodies. We also represented a major municipal water system when its water rights were threatened by actions brought under the Endangered Species Act and other environmental statutes.

Labor and Employment

The firm represents numerous private and public water suppliers in a wide array of labor and employment law matters, including collective bargaining negotiations, grievances, and Occupational Safety and Health Administration and Equal Employment Opportunity Commission compliance. We have extensive experience in the drafting and negotiation of labor relations agreements for large water supply construction projects. We also advised a major water utility in connection with union representation elections by employees of an acquired company.

International Investment

Morgan Lewis has advised foreign-based multinational corporations that have become involved in the domestic water supply industry on a variety of finance, tax, and regulatory matters. Firm lawyers have also been active in foreign markets, particularly Latin America, representing investors in water infrastructure projects and counseling clients on privatization options.