Industries: Energy, Energy Regulatory & Utilities

Federal Energy Regulation, Compliance & Enforcement

Our Federal Energy Regulation, Compliance and Enforcement Group is an important part of McGuireWoods’ capability to offer comprehensive service from a multidisciplinary team to clients throughout the energy industry. In the increasingly complex regulatory, enforcement, and transactional settings confronting the energy industry, outside counsel need to do more than simply have a strong grasp of the regulatory rules and processes. At McGuireWoods we:

• Understand our energy clients’ business models, operations and objectives.
• Maintain a rapport with energy regulators – including state regulators who increasingly impact federal issues – founded on mutual respect and a firm grasp of the legislative and policy issues that often fuel the regulatory process.
• Fully address issues that defy the boundaries of historically defined “practice areas.”
• Provide cutting-edge services at rates that help clients achieve value in a tough economic climate.

Federal energy regulatory activities are increasingly about five things:

• Compliance in day-to-day energy sector operations
• Enforcement audits & investigation
• Regional Transmission Organizations (RTO) market design & participation
• Transactional issue spotting & regulatory approvals
• Regulatory and legislative policy

McGuireWoods does all five.

Compliance

Because we’ve worked with dozens of companies on Federal Energy Regulatory Commission, North American Electric Reliability Corporation, NERC regional, and U.S. Commodity Futures Trading Commission compliance, we have substantial experience helping companies identify and adopt compliance best practices that fit their risk profiles. Our attorneys have assisted clients with:

• Advice on substantive compliance questions including:
  • Reliability standards
  • Market manipulation
  • Affiliate restrictions
  • Affiliate sales
  • Standards of conduct
  • Electric Quarterly Report filings
  • Market-based rates & other issues associated with power sales
  • Transmission & interconnection, including proper use of network service
  • RTO/ISO tariff & market rules compliance
  • Reporting requirements & OASIS posting requirements
  • Determining whether transactions require FERC approval
  • Interlocking directorates
  • Capacity release & shipper-must-have-title
• Compliance program evaluation, design and implementation (including a substantial role in the development by 27 utilities of a guide to building a model compliance program).
• Live training of management and employees, and design of computerized training modules (including design of the Edison Electric Institute’s computerized training on FERC’s standards of conduct).
• Internal investigations and auditing, and design and implementation of remedial measures where appropriate.
• Self-report evaluation and (if appropriate) execution.
• No action letter and other guidance requests.

Enforcement

We’re experienced in assisting numerous clients with audit and investigation responses – including actually trying enforcement cases at FERC and in the courts. We’re well-positioned to assist with:

• Defense of FERC, NERC and regional entity audits and investigations covering, for example, market manipulation, OATT issues, EQRs, and a wide range of electric reliability issues, including:
  • Helping clients understand the process and what to expect
  • Factual investigation
  • Document discovery
  • Preparation for site visits
  • Witness preparation and deposition defense
  • Third-party discovery
  • Negotiating with regulators
  • Preparation of pleadings
  • Representation at trial
• Additional electric reliability enforcement matters such as spot checks, event analyses and self-certifications.
• Prosecution or defense of complaints at FERC.
• Related civil litigation or ADR.
• Informal complaints to FERC staff.

Organized Market Design & Participation

We’ve assisted clients in the design of organized energy markets, and participation within those markets, including:

• Representation of a major Midwestern utility on design of the Midwest ISO market since prior to its inception.
• Representation of an RTO and representation of utilities withdrawing from and joining RTOs.
• Work on the gamut of economic/regulatory issues such as design of market rules and tariffs for centrally administered markets for energy, capacity and ancillary services, including oversight of economic modeling and preparation of testimony by expert witnesses, including:
  • Energy market design and operations
  • Resource adequacy and capacity market design and operation
  • Ancillary services market design and operation
  • Uplift issues
  • Issues associated with load pockets and mitigation of market power
  • Congestion, including financial transmission rights, auction revenue rights, and long-term transmission rights
  • RTO transmission rate design, including cost allocation and elimination of rate pancakes
  • Incorporation of demand response and energy efficiency
  • Market design issues associated with retail switching
  • Allocation of flowgate entitlements and associated issues
  • Litigation over tariff interpretation and application at FERC and the court of appeals
• Advice on compliance with market rules and RTO tariffs and business practices manuals.
• Representation in inquiries launched by market monitors.

Transaction-Related Regulatory Advice & Approvals

Our clients rely on us to help them with the regulatory issues associated with transactions involving regulated commodities, derivatives, and mergers and acquisitions. We’re called upon to help clients evaluate potential transactions by spotting issues associated with, for example:

• FERC, state commission, and Hart-Scott-Rodino requirements, including market power evaluations, for M&A transactions.
• Regulation of power sales by FERC, whether at cost or market-based rates, including market power analysis for market-based rates.
• Affiliate sales of power and non-power goods and services.
• FERC and CFTC rules regarding market manipulation.
• Rates for transmission and interconnection service, including merchant transmission.
• Consistency of transactions with rules of organized markets.
• Emerging issues relating to renewable resources.
• Questions of state and federal jurisdiction.
• Requirements for qualifying facility (QF) status under PURPA.
• Natural gas transportation and storage.
• Demand response programs

If, after evaluation, a client wishes to proceed with a transaction, we can aid (as appropriate) by arranging and participating in meetings with regulators, preparing filings, and obtaining approvals from the relevant regulatory bodies.

Hydropower Licensing and Relicensing

We have counseled and assisted clients as they seek to license and relicense hydropower projects under the Federal Power Act. We have advised applicants on the procedural and substantive requirements of FERC’s Traditional Licensing Process, the Alternative Licensing Process and the preliminary permit application process. We have assisted these clients in environmental impact reviews and strategy development; issue identification and resolution; negotiations with stakeholders; drafting settlement agreements and other licensing documents; and appealing unfavorable FERC orders and other license terms and conditions. Our team has represented hydrolectric interests at the U.S. Supreme Court and the Courts of Appeals.

Connecting With Policy-Makers

At McGuireWoods, we aim to provide clients with a total solution to the often novel and complex issues they face. Sometimes that involves trying to change or influence policies; for example, by participating in rulemaking proceedings at federal or state levels, which we do frequently. But having a good pleading is not always the total solution.

In some cases, a meeting with regulators can facilitate the sort of give-and-take, back-and-forth dialogue that can result in a level of mutual understanding that is difficult to achieve through an impersonal exchange of pleadings. And sometimes, the hands of regulators are tied by laws that can become rapidly outdated as markets, technology and other conditions evolve. That is why we strive to maintain open lines of communication with regulators, decision makers in Congress and state capitols and NGOs to help clients make connections and ensure that their point of view is appropriately considered. We provide these services through our attorneys and the professionals of McGuireWoods Consulting, a full-service public affairs firm offering infrastructure and economic development, strategic and grassroots communications and government relations services.

Complimentary Resources: The Broader McGuireWoods Energy Team

McGuireWoods provides comprehensive service from a multidisciplinary team to energy sector clients. In addition to the attorneys focused on federal energy regulatory matters, we have a team of more than 100 attorneys experienced at advising energy clients on, among other things:

• Project finance.
• Mergers and acquisitions.
• Energy transactional capabilities over the full range of power, fuel, equipment and related products.
• Alternative and renewable energy sources, such as wind and biomass, and other emerging issues, such as federal-state cooperation on smart grid, demand-side management, and competitive procurement.
• Environmental compliance and due diligence.
• State regulatory matters, including acquisition approvals, rates, certificates, enforcement cases, rulemakings, taxation, and the development of regulated and non-regulated power projects.
• Antitrust and competition issues.
• Other government agency investigations and enforcement, including CFTC, PCAOB, SEC, and DOJ.
• Lobbying and consulting through the capabilities of McGuireWoods Consulting.

FERC Hotline

Our Federal Energy Regulatory Hotline Service, a joint representation involving many clients where clients can receive advice on day-to-day compliance questions for a fixed fee and can share in the advice provided to others, is just one example of our innovative approach to meeting clients’ needs while employing alternatives to the billable hour.