Practice/Industry Group Overview
The Husch Blackwell energy marketing and trading team has broad expertise in the marketing and trading of energy and energy-related commodities and products. As part of the firm’s Energy Industry team, our attorneys actively participate in the constantly evolving energy and energy-related commodity markets and are intimately familiar with the contractual, credit and regulatory aspects of long- and short-term transactions from producer to end user.
Our clients include investor-owned utilities and utility cooperatives, independent power companies, energy commodity producers and processors, energy and energy-related product marketing and trading companies, and interstate and intrastate pipeline companies.
Physical Long-Term Supply, Purchase and Processing Agreements
We routinely develop and negotiate power purchase agreements, tolling agreements, take-or-pay agreements, and spot purchases of energy for investor-owned and cooperative utilities, independent power producers, and cogeneration facilities, covering coal and gas-fired generation and wind and other renewable sources.
We also routinely develop and negotiate long-term agreements for the supply, purchase, processing and exchange of natural gas, coal, oil, landfill gas and a variety of mid-stream and other products, including nitrogen, butane, propane, natural gasoline, and ethanol, on behalf of energy commodity producers and marketers, traditional and renewable fuel refineries, and major industrial plants. In addition to single product and single service agreements, we have developed customized agreements that bundle multiple commodities and services to coordinate services, aggregate billings, net payments and reduce credit risk.
Transmission, Transportation, Storage and Related Agreements
Our attorneys are experienced negotiators of electric power transmission, interconnection and wheeling agreements, and are well versed in the tariffs, participant agreements and other requirements of independent system operators, power pools, hubs, and interchanges. Among our considerable pipeline and gas storage related work, we routinely develop and negotiate pipeline transportation, balancing and parking agreements, pipeline capacity leases and other marketing arrangements, and natural gas storage and peaking service agreements.
Physical and Financial Energy Trading and Hedging
Members of our Energy Industry team negotiate, customize and counsel clients with respect to industry-based and proprietary agreements for physical and financial settlement of energy and energy-related transactions, and have extensive expertise with respect to the credit issues that are critical to these transactions. In addition to bilateral transactions, we have negotiated agreements to transact business on major futures exchanges and internet trading platforms.
Our documentation experience is broad and includes, among others, the Edison Electric Institute (EEI) Master Agreement, the North American Energy Standards Board (NAESB) Agreement and its predecessor, the Gas Industry Standards Board (GISB) Agreement, International Swaps and Derivatives Association (ISDA) master agreements and applicable annexes, as well as various regional documentation. We also assist clients in the development of customized swap, option, cap, collar, floor, and forward contracts and long-form confirmations for risk management and derivative trading transactions, including weather, credit, emissions and other energy-related derivative products.
We routinely negotiate industry-standard and custom netting agreements, bridge agreements, credit annexes and supplements, and other support, collateral and margin agreements. We also work with clients to customize or develop proprietary credit and collateral documentation to meet their specific needs, and routinely prepare and review parent company guarantees, escrow agreements, standby letters of credit, and other transaction-specific or counterparty-specific support arrangements.
Our front-end credit expertise is informed by our active participation as creditors’ counsel in numerous energy company bankruptcies, including the most significant cases in recent years. We have served on, and chaired, ad hoc and official creditors' committees in the Calpine, Enron, Mirant, North American Energy Corporation, and Kimball Trading Company proceedings, as well as those of smaller industry participants. Our attorneys were instrumental in developing case law that created the basis for the Bankruptcy Code amendments that established the special rights accorded to forward contracts, repurchase agreements, and netting agreements.
Renewable Energy Credits and Emissions Allowances
We work with multiple clients in connection with the purchase and sale of renewable energy credits, or “green certificates,” and have developed customized documentation for these transactions. Our attorneys closely follow developments with respect to carbon credits and are knowledgeable with respect to the Chicago Climate Exchange as well as the Regional Greenhouse Gas Initiative and comparable regional efforts. We also are involved in the transfer and trading of NOx and SO2 emissions allowances, including direct and brokered transactions. We have worked with custom documentation for the purchase, sale and escrow of allowances and are familiar with the Environmental Markets Association (EMA) Master Agreement for emissions products.
FERC and Other Regulatory Matters
Our energy regulation attorneys provide a full range of legal services and guidance to clients subject to government regulation of energy. We advise on issues pending before the FERC, state regulatory agencies, legislative bodies and courts. We represent clients in proceedings before the FERC involving rates for wholesale sales of electricity as well as rates and terms and conditions of service for transmission service. In addition, our attorneys have acted on behalf of marketers, end-users, interstate and intrastate pipelines and distribution systems in numerous cases involving new pipeline and storage service and facilities.
Novations and Other Acquisition and Disposition Transactions
Our energy marketing and trading attorneys partner with Energy Industry team members in our Mergers and Acquisitions group in connection with significant acquisitions and dispositions of energy commodity contracts and derivative assets. In addition to energy asset transactions valued in the tens of billions of dollars, in recent years we have assisted clients in multiple acquisitions and dispositions of a variety of energy marketing and trading contracts and rights, including the sale and novation of multiple energy-related financial derivative transactions, the sale and novation of a significant weather derivative transaction, the auction of a portfolio of long-term gas supply agreements, the buy-out of long-term tolling agreements and merchant generation power purchase and marketing agreements, and the assignment of power pool transmission rights and reservations.
Litigation and Dispute Resolution
Our litigation and dispute resolution attorneys advise our clients in the resolution of disputes concerning conflicting trade confirmations and interpretive disagreements, and have a wide array of experience in the energy marketing field. Among recent matters, we successfully defended a $9 million claim for breach of contract arising out of the termination of the sale of a significant long-term natural gas supply contract and associated package of energy derivative financial transactions, involving complex economic damages issues. In addition, we represented a major segment of the natural gas pipeline industry in a nationwide class action alleging gas mismeasurement, and currently serve as Defendants’ Liaison Counsel on behalf of our client and more than 140 additional defendants in a multi-district litigation proceeding challenging motor fuel temperature sales practices.