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Services Available
Representative Regulatory Engagements
Pepper has counseled clients on a broad range of regulatory issues, including issues arising under the Federal Power Act, the Natural Gas Act, the Energy Policy Act of 1992, the Public Utility Regulatory Policies Act of 1978 and the Price-Anderson Act. Recently, we have been advising a power marketer on regulatory issues relating to the development of merchant power plants in several different states. We also have represented clients in merger and restructuring proceedings before the Federal Energy Regulatory Commission (FERC) and before various state public utility commissions. In addition, we have counseled an electric utility located in the Midwest and an energy supplier located in the mid-Atlantic on restructuring issues arising under FERC Order No. 888, Order No. 2000, and later FERC orders. We also have represented a power marketing firm in proceedings before FERC, including proceedings relating to another utility's sale of jurisdictional assets for the purpose of avoiding FERC review of a proposed acquisition.
We often represent clients in proceedings before state public utility commissions. Recently, for example, we represented the owner of an interstate transmission system in a proceeding before the Maryland Public Service Commission focusing on whether a company that buys electric power from utilities located in many different states and then resells power to various end users is a "retail customer" under Maryland law. In addition, we have been counseling a large industrial company on recent regulatory developments in California and their likely impact on energy consumers.
Our regulatory work often involves questions of corporate strategy. For example, we have advised an electric utility on strategic issues relating to a nuclear power plant that has repeatedly been shut down due to regulatory and operational difficulties. In another, entirely separate matter, we have advised a utility holding company on regulatory issues that could arise in a potential acquisition of a transportation company.
We also represented a utility based in New England in proceedings before the U.S. Department of Energy relating to a Presidential permit for the importation of electric power. We advised another client regarding federal legislative action required to eliminate state permitting requirements for construction of new transmission and distribution lines. We counseled a Canadian utility regarding regulatory issues associated with increased exportation of power to U.S. utilities and/or direct sales of electricity to U.S. manufacturing firms. In addition, we represented an integrated oil company in federal and state regulatory proceedings relating to the construction and operation of a cogeneration unit.
Our regulatory work for energy companies extends into related areas. We represented a combined gas and electric utility based in Illinois in connection with a railroad merger approved by the Surface Transportation Board, the successor agency to the Interstate Commerce Commission. As part of this representation, we advised the utility on the development of a long-term coal procurement strategy for two generating stations.
Representative Litigation Engagements
Pepper represents utilities and other energy companies in many types of litigation. We represented a Michigan electric utility in disputes involving a company hired to demolish a generating station and in several bankruptcy matters involving major suppliers or customers. We also represented an electric utility based in the Midwest in arbitration proceedings relating to its coal supply contracts. This effort ultimately resulted in substantial fuel cost savings for the client.
We represented an electric utility in litigation with a supplier of the containment vessel used in a nuclear power plant. The supplier ultimately acknowledged that the vessel was defective and agreed to undertake the necessary repairs, at a cost in excess of $60 million.
Recently, Pepper also advised an independent power producer (IPP) on a strategy for avoiding litigation over the termination of a long-term gas supply contract. As a result of governmental pressure, the electric utility that had always purchased the power generated by our client negotiated a "buy-out" of its long-term agreement. This "buy-out" virtually eliminated our client's future need for fuel, and we provided counseling on issues arising under the IPP's gas supply agreement.
Finally, we represent a utility based in Pennsylvania in litigation relating to the accidental release of radiation at the Three Mile Island nuclear power plant. More than 2,000 personal injury claims were consolidated in a single federal court, and our client settled a substantial number of claims and obtained summary judgment on the remaining claims.
Representative Corporate, Securities and Real Estate Engagements
Pepper handles a wide variety of corporate, real estate and project finance matters for utilities and other entities. We have represented an electric utility in connection with an auction and later disposition of generating stations in two states. We also represent an unregulated utility subsidiary that manufactures a supplemental fuel used in coal-fired generating stations. This new pelletized fuel is produced from coal wastes, pulp and paper, plastic wastes and proprietary additives. Manufacturing plants are being constructed in many locations in the United States, and we are representing this client in the formation of joint ventures in Argentina, Brazil, Costa Rica, India, Mexico and South Africa.
We also represent a utility affiliate in the development of new commercial products utilizing fly ash and flue gas desulfurization sludge. By combining these two materials with various additives, our client produces a concrete-like material that has very low permeability and can be used to fill in mines and to cover waste disposal areas. We are representing this client in negotiations with a steel company relating to the use and sale of this product.
Pepper also represented a large industrial company in connection with a 10-year energy supply and outsourcing agreement with a leading energy trading firm. This agreement established floating prices for electricity and natural gas at 10 manufacturing plants, while requiring the supplier to plan and finance energy-saving capital projects.
Pepper has handled many other commercial matters for clients in the energy sector. We are representing a power marketer in connection with the development of new gas-fired and coal-fired generating stations. We have represented a U.S. utility in a sale of technology to a foreign nation. We represented a utility holding company and its unregulated subsidiary in transactions involving the extraction and purification of methane gas from inactive coal mines. We have advised utilities on proposed contracts to operate or manage public water and sewer systems. We often represent utilities in negotiations with construction companies and negotiate agreements with various service providers. One such agreement covers the installation of a device that monitors the position of uranium fuel rods inside a nuclear reactor.
In addition, we provide counseling on various securities matters. This work includes the preparation or review of submissions to the Securities and Exchange Commission (SEC), including Forms 10-K, 10-Q and S-1. We also provide counseling on project finance and related tax matters. For example, we represented local industrial development authorities in connection with cogeneration projects. Several of these projects involve cogeneration facilities that burn solid waste, including coal tailings. In these transactions, we provided counseling on the issuance of tax-exempt bonds and on other financing issues.
We also represent developers of cogeneration facilities. In that capacity, we have negotiated fuel acquisition contracts and power sales agreements and have provided advice on tax-exempt financing and related issues.
In the real estate area, Pepper represents utilities and their affiliates in buying and selling land, facilities, easements and licenses. We have represented utilities in connection with the leasing of facilities or rights-of-way to telecommunications firms. We also have handled numerous zoning and land use matters.
Representative Antitrust Engagements
Pepper Hamilton's antitrust work involves litigation and counseling. We represented an electric utility in litigation involving a "tying claim" and have represented other regulated firms in "price-squeeze," "essential facility" and other monopolization or price-fixing claims. In addition, we have advised many clients, including utilities and utility affiliates, on proposed mergers or acquisitions. We recently represented an electric utility that is concerned about the competitive effects of a proposed merger involving a fuel supplier and another utility. By presenting evidence to federal antitrust authorities, we blocked consummation of the transaction and identified protective conditions that ought to be imposed upon any future transaction involving the same parties.
Our clients include domestic and foreign entities. We counseled a Canadian utility on the antitrust implications of increasing sales into the United States during the current period of restructuring.
We also represented a transportation company in its effort to upgrade its electric transmission system and restructure its relationship with the utilities supplying it with power. Part of this effort has focused on FERC's existing authority to order wholesale wheeling of electric power under the Energy Policy Act of 1992; our firm has evaluated the impact of FERC's present regulatory powers on traditional antitrust remedies. In addition, we have examined the antitrust implications of ongoing state efforts to authorize retail competition or to allow utilities to wheel power to retail customers on a voluntary basis. We have examined the continuing viability of the state action defense in a changing environment in which residual restrictions on retail wheeling may interfere with interstate sales of electricity or discriminate against power producers in other states.
Representative Environmental Engagements
In the environmental area, we represented a Pennsylvania electric utility in connection with the state's regulations governing emissions of nitrogen oxides (NOx). We were successful in obtaining an additional allocation of valuable emissions allowances for the client.
We have represented an independent power producer in the sale of emission reduction credits, and have counseled various clients in the regulatory requirements for banking emission reduction credits for future use and sale.
We also have advised an electric utility on environmental issues arising from the use and disposal of coal dust, fly ash and scrubber sludge. We have provided counseling on the commercial use and recycling of these substances.
Another environmental client is a natural gas distribution company located in the Midwest. We advised this company on environmental issues at a substantial number of manufactured gas sites. Part of this representation focused on regulatory issues associated with the primary chemical of concern at such sites, ferric ferrocyanide. We also assisted a natural gas distribution company with brownfields redevelopment efforts.
In power plant siting engagements, we have provided advice on riparian rights issues and other water supply acquisition options, and have advised on brownfields issues in facility siting.
In addition, we represented an interstate gas pipeline company in negotiations with a state agency relating to a multi-site cleanup of compressor stations along a pipeline. The primary contaminants of concern were polychlorinated biphenyls (PCBs). We represented the same pipeline company in connection with EPA's development of national soil screening levels for Superfund cleanups.
We also represented an oil pipeline company in numerous claims for personal injury and property damage stemming from releases of product from pipelines. In addition, we represented an affiliate of the pipeline company in commenting on proposed hazardous waste regulations and in lobbying for amendments to the regulations.
We have represented a coal mine operator in licensing and permitting matters, including enforcement defense, before a state regulatory agency.
Representative Bankruptcy and Reorganization Engagements
Pepper has represented several major energy companies as well as creditors' committees consisting of such energy companies in various bankruptcy proceedings throughout the United States. We also represent a number of major creditors in a large energy company bankruptcy proceeding.
We represent the International Energy Credit Association, whose members include most of the major energy companies in the United States, Canada and Europe. Several times each year, Pepper lawyers teach credit seminars at IECA-sponsored meetings and at other industry-sponsored events.
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