Practice Areas & Industries: Winston & Strawn LLP

Practice/Industry Group Overview

Comprising one of the largest energy practices in the nation, Winston & Strawn’s energy lawyers have been fully engaged across the spectrum of energy and utility regulation, including electric, natural gas, hydroelectric, and nuclear matters. Our energy attorneys have more than 30 years of experience in electric utility regulation and deregulation, including extensive experience with independent system operators (ISOs) and regional transmission organizations (RTOs), transmission ratemaking, negotiating power and transmission agreements, as well as nuclear and hydroelectric licensing and compliance matters.

We have been representing our clients as FERC regulation has evolved from traditional cost-of-service ratemaking, to service “unbundling” and open access transportation with its greater reliance on market forces. We are continuing to advise our clients as regulation changes and new opportunities arise in the wake of the Energy Policy Act of 2005, which removes the Public Utility Holding Company Act of 1935 as an impediment to utility mergers, offers new incentives for transmission investments, gives FERC new authority over transmission siting, electric reliability standards and market manipulation, and establishes new procedures to enable hydroelectric licensees to challenge onerous mandatory license conditions.

Services Available

Electricity

Our clients have sought our assistance and counsel through the formation and development of ISOs and RTOs, on the market power issues that may arise when they compete in wholesale energy markets, and with the myriad compliance issues that inevitably arise as they seek to keep pace with FERC’s evolving policies. We advise our clients on traditional cost of service ratemaking matters, as well as market-based wholesale power sales. Our practice spans traditional franchised electric utilities, wholesale generating companies and marketers, merchant transmission companies, as well as lenders and private equity investors that provide the financing to support the electric power industry.

Our regular and frequent practice before the FERC gives our attorneys a keen appreciation of critical regulatory issues underpinning energy transactions, and we currently provide added value to our clients in a number of ways. For example, we have been lead counsel on numerous open access rate cases filed by investor-owned utilities, and have helped some of these clients to develop, and seek FERC approval for, formula rate proposals designed to avoid the normal “regulatory lag” and instead provide more current rate recovery for new transmission investments.

Clients also seek our counsel in navigating the regulatory approval process for a wide variety of transaction structures such as mergers, asset sales, and stock transactions. Working with leading economic consulting firms, we have submitted numerous applications under FERC’s “Merger Guidelines” for transactions that have successfully closed, including those resulting from some of the biggest utility bankruptcies in U.S. history. Similarly, we often advise the firm’s private equity clients on transaction structures and strategies to obtain the best possible returns on their investments in independent transmission and other energy projects. The increased regulatory oversight delegated to FERC by the Energy Policy Act of 2005 increases the value of our robust regulation skill set of mergers and acquisitions to our clients.

Regulatory compliance is always an important concern that has become all the more essential to our energy clients in the wake of the Enron scandal, the California energy market failure, wash trading revelations at several utilities, and the Sarbanes-Oxley Act and FERC's growing emphasis on enforcement. Working with our litigation attorneys, our FERC practitioners have advised a number of energy clients on standards of conduct and similar issues, and we have counseled them in connection with regulatory investigations into alleged wash trading, commodity pricing reporting and standards of conduct violations.

Hydroelectric and Renewables

Our FERC lawyers have extensive experience on virtually all issues relating to the licensing and relicensing of hydroelectric projects, including fish passage, land use regulation, Endangered Species Act and NEPA compliance, Clean Water Act certification, the scope and exercise of mandatory conditioning authority under sections 4(e) and 18 of the FPA, minimum flows, adaptive management, project decommissioning/license surrender, headwater benefits, annual charges for use of reservations and for administrative expenses of FERC and other federal agencies, and state/federal jurisdictional conflicts. We have represented utilities such as Pacific Gas and Electric Company, Duke Power Company, Grant County PUD, and Nebraska Public Power District in major litigation involving the construction and relicensing of hydroelectric projects, and have represented numerous independent power developers in the licensing and financing of such projects. Our FERC lawyers also have extensive experience in negotiating settlement agreements in relicensing and amendment proceedings and in representing our hydroelectric clients in appellate proceedings before the District of Columbia, Ninth, and other U.S. Courts of Appeal.

We also served as regulatory counsel on some of the earliest wind energy projects in the nation, and have advised developers on the requirements of the Public Utility Regulatory Policies Act of 1978 (PURPA) since the earliest days of the statute. In addition to wind energy, our experience includes FERC approvals for waste-energy projects, biofuels, and hydroelectric facilities. We have litigated disputes over the valuation of PURPA contracts, including a recent case where the amount at issue was over $100 million. Together with our tax attorneys, we continue to advise our renewable energy clients on ways to benefit from available renewable energy incentives while satisfying their regulatory and contractual obligations.

Natural Gas Utility Regulation

Winston & Strawn has deep and long-standing regulatory experience at FERC regarding the transportation and sale of natural gas. The firm's energy lawyers have been continuously involved in virtually every aspect of FERC gas regulation, beginning with the advent of FERC's first open access rule, Order 436, in the mid-1980’s; the issuance of Order 636, requiring the unbundling of pipeline sales and transportation functions in the early 1990's; and the more recent Order 637, refining FERC's unbundling policy.

Our experience includes major litigation involving valuation of substantial damage claims for breaches of pipeline transportation contracts. We have represented clients in numerous pipeline rate proceedings involving over 15 interstate pipelines throughout most of the United States. We have also represented utility clients in complex certificate matters for pipeline expansions, pipeline reorganizations, the development of new pipelines and, most recently, development of LNG projects. Examples include the development of the Iroquois and Viking Voyager pipelines, expansions on the Viking Gas Transmission system, and the proposed reorganization of Pacific Gas and Electric Company’s natural gas pipeline and storage assets in California as a FERC jurisdictional interstate pipeline. In these proceedings, we worked with company personnel, leading consultants and FERC staff to develop the certificate applications and related materials necessary to obtain FERC approval. As a result, we are knowledgeable about virtually every ratemaking, certificate and state/federal jurisdictional issue at FERC today.

Retail Restructuring and Marketing

We have actively represented utility clients and industrial customers in various states that have implemented customer retail choice programs. In this regard, we have addressed issues ranging from utility stranded cost recovery to low income assistance, as well as attempted municipalizations of utility assets, generation divestiture, and wholesale power procurement for utility “provider of last resort” obligations. Although the future of retail choice across the country is clouded, we are able to counsel clients effectively in states where the programs exist, as well as those considering the implementation of such programs. Our experience with retail supply issues in this area and experience negotiating wholesale power sales contracts also allows us to provide effective counsel to industrial clients seeking to lower their energy costs by procuring electric supplies directly.