Energy

Jennings Strouss has been advising utility clients on regulatory and business issues for over 70 years. The firm’s experience includes advising governmental utility clients on compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and rules of the Commodity Futures Trading Commission (CFTC) and FERC affecting energy trading.

Following the issuance of temporary no-action relief by the CFTC, reporting obligations applicable to end-users are beginning to take effect for energy commodity swaps. There are three basic types of transactional reporting requirements imposed by the CFTC in regulations implementing the Dodd-Frank Act, including reporting of historical swaps, new swaps, and commodity trade options.

We provide guidance on:

• criteria that must be met to qualify as an “eligible contract participant,” which can trade swaps bilaterally or to elect the end-user exception to the mandatory clearing requirement for swaps
• the International Swaps and Derivatives Association (ISDA) DF Supplements to the standard form ISDA contract, as well as amended versions developed by the International Energy Credit Association (IECA)
• the establishment of a governmental utility’s own “qualified independent representative” to advise it on transactions with swap dealers and related policies, procedures, and legal agreements
• requests for no-action letters and petitions for exemptive relief from the CFTC

Our services include a compliance readiness assessment and recommendations on specific steps that governmental utilities must take to comply with CFTC’s rules. We also assist governmental utilities with updates to their energy risk management policies, document retention policies, and controls to mitigate risks of noncompliance.

We begin with a comprehensive assessment of the current compliance status of a utility client’s trading and hedging activities under the Dodd-Frank Act and the rules of the CFTC implementing that Act. Our services include an analysis of strategies, contracts, and data from the utility’s trade capture systems, as well as the utility’s financial investments, to:

• determine whether the utility meets the definition of an Eligible Contract Participant (ECP), which can engage in bilateral swap transactions conducted off of a regulated exchange
• confirm that the utility does not fall within the CFTC’s definition of a Swap Dealer or Major Swap Participant

This type of assessment is essential even for governmental utilities that engage in relatively little or no financial swap transactions because the CFTC has interpreted the definition of a swap broadly to include many types of physical transactions, including options.

We then present the utility client with a legal analysis of any compliance gaps and recommend practical guidance on steps the utility should take so that it is, or will be, in full compliance with all applicable legal requirements by the deadlines established by the CFTC. We also classify contracts/transactions and provide rationales for those classifications to be included in governmental utilities’ files, including grounds for finding a contract/transaction to be a swap or to qualify as an exempt commodity trade option, an exempt transaction between 201(f) entities, or exempt RTO/ISO transaction. Our analysis includes:

• whether the utility’s contracts/transactions may qualify for the forward contract exclusion from the definition of a swap, rendering them exempt from the Dodd-Frank Act and CFTC rules, except for limited authority the CFTC possesses over fraud and manipulation of the price of any commodity, including a physical commodity, in interstate commerce
• whether the utility’s contracts/transactions may qualify for the physical commodity trade option exemption, rendering them partially exempt from the CFTC’s rules
• whether the utility’s swap transactions may qualify as hedging, rendering them eligible for the end-user exception to the mandatory clearing requirement, or whether they may instead be viewed by the CFTC as speculation, trading or investing, rendering them ineligible for the end-user exception to the mandatory clearing requirement

Along with such classifications, we provide guidance on reporting processes, as well as representations and warranties to be included in contracts to qualify for an exclusion or exemption.

After the analysis is complete, our attorneys provide the client with a summary of all CFTC rules applicable to the utility and the deadlines for complying with those rules. They also offer a legal opinion on what steps the utility must take to comply with those rules, along with recommendations on changes or enhancements to the utility’s recordkeeping and data retention policies and procedures, risk management policies and procedures, and operational support systems and processes, such as deal capture, tagging, bookouts, etc.

Jennings Strouss also provides comprehensive compliance training on the Dodd-Frank Act and CFTC rules to utility managers and staff onsite at their offices.

The firm’s attorneys that serve clients in the electric sector of the energy industry are professionals with extensive operational and management experience. They are experienced in virtually all aspects of the electric industry and focus on practical, workable commercial solutions that further their clients’ business and operational objectives.

In the ever-evolving commercial, technological, and regulatory environment of the industry, Jennings Strouss is always working to shape policies affecting the industry to be compatible with our clients’ needs. At the same time, we work with our clients to develop optimal business strategies under the laws and operating parameters as they exist and develop.

Our clients are joint action agencies, generation and transmission cooperatives, individual public power systems (municipal and cooperative), independent power producers, governmental and quasi-governmental utilities, developers, and large end-users. We are proud of our long-term relationships with our clients — our representation of public power organizations of all sizes and types around the country includes our more than seventy-year representation of one of the largest public power entities in the United States and thirty-plus years with other public power clients.

Experience

Our work covers a wide range of electric industry matters, including:

• RTO development and implementation, including advice regarding:
  • energy market tariffs and business practices
  • cost of service rate-making matters
  • market-based wholesale power sales
  • transmission pricing and operations matters
  • revenue distribution agreements
  • joint pricing zone development
• Renewable and conventional generating resource and transmission management, operation, and regulation for electric utilities, including:
  • development
  • joint ownership arrangements
  • governance issues
  • power purchase and sale contracts
  • interconnection agreements
  • transmission service agreements
  • tolling agreements
• Representing clients before the FERC and state utility commissions with matters concerning:
  • regulatory proceedings (rates, transmission, mergers, interconnections, rulemakings, tariffs, complaints, contract enforcement)
  • tariff and other rate filings
  • merger proceedings
  • contractual matters and disputes
• NERC reliability standards compliance and audit matters, related FERC challenges
• Bulk power supply arrangements
• Joint Action Agency operations and formation
• Court litigation (state and federal, trial level and appellate)

Jennings Strouss has a rich history of representing the business needs of electric, hydroelectric, natural gas, water, and telecommunication utilities, public power and investor-owned utilities, and large end-users of electric power and natural gas. The firm provides a rare combination of a comprehensive Washington D.C.-based energy practice, broad experience in state and local regulatory and legislative issues, technical and analytical expertise, and the capability to handle the business needs of its energy and utility clients.

We understand that today’s complex legal, financial, and regulatory environment often requires multi-dimensional solutions to the challenges faced by businesses and utilities. We use our broad legal experience to interact and coordinate with client personnel and consultants to achieve practical and workable outcomes.

Consulting Services

• RTO energy market expertise, including operational strategies and approaches, energy market tariff matters, and overall implementation and interpretation
• Assistance with reliability standard compliance, including review and preparation of compliance and mitigation plans
• Electric generating resource acquisition, including screening analysis and review and negotiation of supply and ownership agreements
• Energy market and transmission service-related overviews for state regulatory commissions and consumer advocate groups
• Bulk electric power supply agreement review, analysis, and negotiations
• Transmission and interconnection agreement negotiations
• Transmission expansion system planning, cost recovery mechanisms, and pricing proposal consulting

Jennings Strouss attorneys are experienced in all facets of hydroelectric representation and advise clients from the early planning stages to the development, construction, and operation stages. They understand the complex and political nature of energy regulatory proceedings, including license application phases, pre- and post-licensing environmental consultation and study phases, public hearings, administrative hearings, and issues relating to competing inter-agency interests.

Our attorneys coordinate and lead teams of multidisciplinary experts, including engineering, environmental, rate, accounting, and financial consultants. As FERC practitioners, they regularly interact with FERC staff. Also, they communicate with the United States Army Corps of Engineers on matters that involve work in navigable waterways and management of projects located at Corps-managed locks and dams.

Relevant Experience

• Compliance with applicable sections of the Federal Power Act, the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act
• FERC preliminary permitting
• FERC licensing and relicensing proceedings
• License transfer proceedings
• United States Army Corps of Engineers permitting
• Environmental consultation, study, mitigation, and compliance
• Operations/safety compliance
• FERC annual charges and headwater benefits assessments
• Joint project development arrangements
• Joint ownership and operating arrangements
• Power purchase and sales contracts
• Renewable energy credits
• Administrative and court litigation

Representative Engagements

• Secured first-in-time status in a competitive licensing proceeding
• Representation of municipal licensee in negotiations to transfer a license to a municipal joint venture group
• Provided counsel concerning compliance and rehabilitation of project facilities following high water breach incident
• Prepared preliminary permit applications, license applications, and license amendment applications
• Secured USACE Section 404 permit applications
• Secured Water Quality Certificates
• Environmental, tribal, and public consultations/hearings
• Project counsel for several hydroelectric projects
• Counseled municipal agency regarding exploration of joint ownership rights of a hydroelectric facility

Jennings, Strouss & Salmon’s Washington D.C.-based energy practice includes attorneys with extensive experience in the natural gas industry, including representation before the Federal Energy Regulatory Commission (FERC) U.S., Department of Energy, U.S. Department of Transportation (PHMSA), state public utility commissions, and the courts.

Relevant Experience

• FERC proceedings (including rates, certificates, rulemakings, complaints, contract enforcement)
• Resolution of pipeline tariff issues
• Negotiation and enforcement of precedent agreements, transportation contracts, and interconnection agreements
• Negotiation of gas purchase contracts
• Appellate court litigation
• Direct connect proceedings
• Pipeline safety matters

Representative Engagements

• Represents Salt River Project (SRP), one of the largest public power entities in the United States, before the FERC related to interstate pipeline rate, tariff and certificate issues affecting the transportation of natural gas to their multiple electric generating facilities
• Represents individual and groups of large industrial and commercial natural gas end-users across the U.S., as well as a major Northeast local distribution company, in interstate pipeline natural gas certificate, tariff, and general rate proceedings before the FERC
• Represents one of the largest U.S. manufacturers of natural gas distribution pipe couplings before the U.S. Department of Transportation (PHMSA), FERC and state commissions

Jennings Strouss is committed to providing legal services in support of renewable energy and clean technology. Our attorneys have experience representing clients in the alternative fuel and power industries, providing a wide-range of services to meet the unique needs of companies dedicated to producing “green” technology.

Relevant Experience

We represent clients in various sectors within the renewable energy and clean technology industries, including Wind, Solar, Geothermal, Biomass, and Biofuels. Our services include:

• Sustainability standards
• Environmental law compliance
• Fuel prepayment programs
• Renewable energy projects on Indian lands
• Metering technology
• Energy efficiency programs
• Prepay metering
• Smart grid
• Green building
• Licensing and permitting
• Power purchase agreements (PPA)
• Real estate, land use, zoning, land lease agreement, easements
• Energy facility siting and permitting
• Public land leases
• Interconnection agreements