The electric utility industry continues to confront a period of change. Competitive markets continue to evolve, restrictions on utility mergers and transactions have been eased, reliability issues have been increasingly emphasized with mandatory and enforceable reliability standards, and the oversight and enforcement powers of federal regulators have been greatly enhanced.
Our Electric Energy Practice understands the changing electric industry and is uniquely positioned to develop commercial, regulatory, and litigation strategies that address the emerging demands, risks, and complexities of competition and accomplish the business objectives of our electric industry clients.
Morgan Lewis provides comprehensive regulatory, transactional, and litigation services to a wide array of electric industry participants. We work with our clients on:
- Federal and state regulation
- Compliance audits and investigations
- Power contracts
- Regional transmission markets and structures
- Transmission access and pricing
- Corporate restructuring alternatives
Our electric industry lawyers represent clients on energy-related regulatory matters before the Federal Energy Regulatory Commission (FERC), state public service commissions, and state and federal courts.
Enforcement
In a number of regions, imbalances between supply and demand, combined with flaws in market structures have led many market participants to demand expanded regulatory oversight on issues of alleged affiliate abuse, market power, and alleged manipulation of markets. Congress gave FERC expanded powers to monitor markets, enforce market rules, and penalize misbehavior. FERC, through its Office of Enforcement (OE), has responded by providing significant resources to support an increasing number of investigations.
We integrate the legal, regulatory, and litigation skills necessary to achieve a favorable resolution to these investigations. Our team includes a number of attorneys that have led OE audits and investigations. We have successfully represented utility clients in North American Electric Reliability Corporation (NERC) and Regional Entity (RE) audits and investigations. We successfully concluded a state regulatory investigation into an electric utility’s participation in capacity markets and have assisted in successfully discharging show cause orders relating to market manipulation allegations. Morgan Lewis represented the interests of clients in the investigations of the 2000–01 market disruptions in California, the Northwest, and the West, and in related litigation and refund proceedings. We also participated in responding to challenges to the 2006 Illinois wholesale power auctions.
Federal Regulation
The attorneys in our Electric Energy Practice are skilled and knowledgeable in the full range of regulatory issues, including market-based and cost-based ratemaking, tariff design and implementation, regulatory compliance, and administrative litigation. We represent an array of electric utilities, transmission entities, power marketers, and others in the electric power industry on a range of federal economic regulatory matters, including:
- open access;
- generator interconnection;
- wholesale power purchase arrangements; and
- corporate restructuring.
We prepare market-based rate filings and address market power issues, including market screens, delivered price tests, and market mitigation. We provide significant assistance to clients in advising on Codes of Conduct, Standards of Conduct, and other affiliate rules. When required, we also provide training on these issues.
Reliability Standards Compliance
Morgan Lewis has worked with REs and NERC to develop the compliance and enforcement framework used by NERC to gauge compliance with Reliability Standards. We drafted the pro forma Delegation Agreement used by NERC and the REs and developed the hearing procedures used by NERC and the REs in contested proceedings. Morgan Lewis represents several clients in reliability-related investigations and audits. We assist clients in identifying compliance issues as well as help them resolve these issues quickly and efficiently.
Mergers, Transactions, and Corporate Restructuring
We blend our knowledge of the regulated electric business with experience in business and finance, antitrust, employment, and other relevant specialties, advising clients as they evaluate existing business structures and explore the advantages of mergers, acquisitions, and other transactions and structures, including the divestiture or reorganization of assets.
Our clients depend on us for direction during mergers, consolidations, and acquisitions, some involving novel industry structure, antitrust, labor relations, and related business and regulatory matters. We successfully represent merging utilities where transmission constraints require a hearing on market power issues, and have avoided hearings due to cutting edge analysis and presentation of market power issues. We have also assisted international utilities in connection with the acquisition of interests in U.S. electric generating facilities.
Merchant Plants
We aid our clients both within and outside the United States, developing and financing projects fueled by natural gas, coal, waste coal, trash, wood, biomass, and synthetic gas, as well as geothermal, hydroelectric, and wind projects. We have represented lenders, borrowers, equity investors, project sponsors, suppliers, financial intermediaries, and multilateral agencies. We also represent generators and power marketers in an array of activities, such as power sales, power exchanges, tolling agreements, power contract buydowns and buybacks, interconnection agreements, and transmission agreements.
State Regulation
We regularly assist clients with market investigations by state regulatory authorities. Our lawyers also advise on market participation rules, codes of conduct including trading practices and affiliate relationships, and implementation of state restructuring plans. To deal with the issue of “stranded costs,” we developed some of the first securitization filings in the nation.
Our lawyers also represent utilities in the more traditional regulatory areas, including rate- and fuel-adjustment cases, prudence proceedings involving the operation of nuclear and fossil fuel power plants, certificate proceedings, and investigations into the operation of retail markets. We also handle litigation involving transmission line siting and electromagnetic field issues.
State and Federal Legislation
Because so many trends in the electric industry are driven by state and federal legislation, we maintain a real-time oversight of these legislative initiatives, counsel clients on their effects and practical business significance, and offer advice on the relative merits of legislative proposals. We also assist utilities and energy industry trade associations in creating regulatory, legislative, and commercial approaches to the restructuring of the electric business.
Practice Accolades
- Senior team members listed as leading energy attorneys in Chambers USA
- Senior team members listed as leading energy attorneys in Best Lawyers