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Energy Enforcement & Regulatory Counseling

The Energy Enforcement & Regulatory Counseling Practice Group is a cornerstone of McGuireWoods’ energy industry team services, which includes over 200 lawyers and governmental affairs professionals. We provide clients across the energy industry with a team approach to their interactions — proactive and reactive — with federal and state regulators. In the increasingly complex regulatory and enforcement landscape, it is not enough for outside counsel to understand the regulatory framework. At McGuireWoods, we take a holistic approach to addressing clients’ challenges, leveraging our industry knowledge and experience with — and within — regulatory agencies.

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The hallmark of our approach are:

  • Understanding the business. We don’t learn on the job on your dime. Our advice is legally sound and practical.
  • Experience with regulators. We maintain strong relationships with state and federal energy regulators. Our approach is built on mutual respect and a thorough understanding of the regulatory process and evolving regulatory priorities. Many team members once worked in these agencies, so we know how they think and what is important to them.
  • Experience with RTOs and state public service commissions. We have a track record handling high-profile cases and issues across every regional transmission organization and through litigation at numerous state public service commissions.

Federal Energy Regulation

Bolstered by first-hand agency experience, including a former FERC Commissioner and Department of Energy official, our federal energy regulatory attorneys routinely represent energy clients before the Federal Energy Regulatory Commission on all matters impacting electric and gas utilities. We provide the entire range of legal services – from compliance, routine filings and proceedings to complex administrative litigation and related appeals.

The team’s experience includes representing transmission owners in the areas of transmission cost of service rate recovery, transmission planning and cost allocation in and outside of RTOs and independent system operators (ISOs), and wires-to-wires interconnection.

On the generation side, we represent generation owners, both vertically integrated utilities and independent power producers. We counsel generators on generator interconnection issues and day-to-day compliance issues related to obtaining and maintaining market-based rate authority. The team also handles cost-based rate recovery, including through wholesale power purchase agreements and under market rules such as reliability-must-run cases.

Closely partnering with McGuireWoods’ Energy Mergers & Acquisitions and Finance Practice Group, our federal energy regulatory attorneys provide strategic counsel on the regulatory implications of deal structure, perform regulatory due diligence, and prepare and file regulatory filings related to transactions, including FPA Section 203 applications.

In addition to traditional regulatory issues, we often address novel challenges or develop innovative solutions to existing regulatory matters subject to the Federal Energy Regulatory Commission’s jurisdiction, particularly in organized markets. We pride ourselves on using our broad background and creativity to develop legal strategies for new and emerging issues.

The group advises on natural gas regulatory matters, spanning certification of interstate pipeline and storage facilities, rate and tariff proceedings, service modifications, rulemakings and enforcement actions. With over 30 years of collective experience practicing before FERC, our attorneys bring deep institutional knowledge and practical insight to help clients navigate complicated regulatory frameworks and advance strategic objectives.

State Energy Regulation

The state energy regulatory team includes several former senior leaders from state public service commissions and electric and gas utilities. We develop, negotiate and litigate base-rate and rider-cost recovery cases, as well as issues involving cost of service, rate of return, regulatory accounting, cost allocation, utility taxation and rate design. Our lawyers’ strategic insight and ability to shape successful applications put clients in the best starting position.

We are trusted advisers on utility mergers, acquisitions and securities issuance, as well as utility relations with affiliates. We assist with integrated resource planning, demand-side management and CPCN proceedings for transmission and new generation resources. Our attorneys also work on renewable energy matters, including rate recovery for renewable generation plants.

Energy Enforcement

McGuireWoods’ energy enforcement team is a key component of our award-winning Government Investigations & White Collar Litigation Practice Group, which was recognized twice as a Law360 Practice Group of the Year. The team serves a range of energy clients, including around 30% of the nation’s utilities, as well as top commodity trading houses, hedge funds, developers and financial institutions.

The group includes former top FERC enforcement officials who led some of the agency’s most high-profile cases. We advise on matters before the North American Electric Reliability Corporation, and can pull in firm experience with environmental regulators and the Pipeline and Hazardous Materials Safety Administration, as needed. With this unique blend of experience, we are well-positioned to handle enforcement matters before agencies and courts. The Edison Electric Institute recently recognized the firm for redesigning the organization’s online member training on anti-market manipulation rules. We also produce the FERC Enforcement Reporter, an authoritative resource on energy enforcement.

How We Help

Our attorneys assist electric and natural gas utilities, trading houses, independent power producers and developers with developing compliance as well as enforcement and investigation responses, plus less formal audits and inquiries. This includes:

Federal Energy Regulation

  • Generator and transmission interconnection matters
  • FPA Section 205 and 206 proceedings related to cost recovery, including:
  • Transmission rates, including stated rates, formula rates and transitioning from stated to formula rates
  • Cost-based generation rates, including reactive rates and cost-based rates for generation under tariff rules (e.g., reliability must run and reactive rate proceedings)
  • FERC filings and compliance related to market-based rate holders, EWGs and QFs
  • Organized market participation and compliance with market rules, market design, and cost allocation within RTOs and ISOs
  • Regulatory approvals related to FERC-jurisdictional transactions, including FPA Section 203 applications
  • Strategic advice and compliance counseling on FERC’s affiliate regulations, namely the Standards of Conduct, Affiliate Restrictions, and Cross Subsidization Rules
  • FERC, NERC and PHMSA compliance, including program development and training and assistance with reporting to comply with FERC’s requirements related to:
  • MBR authorization
  • PUHCA
  • PURPA
  • Interlocking directorates
  • Appeals of FERC orders, partnering with McGuireWoods’ Appeals & Issues Practice Group

State Energy Regulation

  • Commission proceedings, including:
  • Applications for general rates, rate adjustments or “riders,” and pilot programs or alternative rates, including tariff design
  • Certification/approval of generation (traditional, solar, offshore wind and nuclear life extensions), transmission and energy storage
  • Distribution facilities, including grid transformation
  • Affiliate relationships
  • Planning, including Integrated resource planning, zero carbon targets and renewable portfolio standards plans
  • Demand-side management and energy efficiency
  • Prudence reviews
  • Rulemakings
  • Securitization
  • Pipeline Safety
  • Strategic advice
  • Legislative support
  • Stakeholder meeting support

Energy Enforcement

  • Direct FERC and CFTC enforcement defense
  • Electric reliability matters
  • External audit response
  • Internal investigations
  • Prosecution or defense of complaints at FERC
  • Related litigation
  • General energy compliance program design and counseling
  • Electric reliability compliance counseling
  • Self-Report evaluation and execution
  • No action letter and other guidance requests
  • Informal complaints to FERC staff

Representative Experience

Federal Energy Regulation

  • Seventeen utilities and electric co-operatives and a government entity jointly to develop and obtain FERC approval for a new intra-hour energy market covering much of the Southeastern United States, including appeals to the D.C. Circuit and expansion. The innovative new 1,100-mile-wide Southeast Energy Exchange Market covers all or parts of 10 states and uses otherwise unutilized transmission at no charge, with recovery for transmission losses at rates determined by each participating transmission provider.
  • A coalition of transmission owners in PJM in a FERC complaint case lodged by multiple consumer and public interest groups concerning planning of local transmission projects nationwide.
  • A generating facility and neighboring liquefied natural gas import facility in formula rate proceedings related to a first-of-its-kind cost of service case for a needed fuel-security contract, including annual updates and related challenges associated with cost-of-service reliability-must-run agreement.
  • A developer with obtaining FERC approval for a unique method to finance construction of a transmission line by the Western Area Power Administration (WAPA) under which WAPA would reassign the full capacity of the line to the developer for 30 years and DATC would reassign that capacity to others at uncapped negotiated rates.
  • Utility companies in their move from MISO to PJM, including successfully defeating at FERC and on appeal MISO’s effort to allocate about $2.7 billion (over a 60-year period) in multivalue project costs as an exit fee, and strategic advice on ROE and other rate issues upon integration into PJM.
  • SPP transmission owners in litigation with MISO over payment for flows on the SPP system caused by the dispatch of MISO’s market. MISO argued that the flows were loop flows that were not compensable, but agreed in settlement to substantial payments to the SPP transmission owners and others.
  • An investor-owned utility in obtaining FERC approval of incentive rate treatment associated with more than $850 million of transmission enhancement projects.
  • A large generation developer in ownership restructuring and financing of several coal and natural gas-fired facilities to be repurposed for renewable energy power sources, including obtaining Section 203 authorization; MBR authorization, EWG status and new reactive rates for new project companies, and negotiating new interconnection service agreements with PJM.

State Energy Regulation

  • An electric utility with approval of the nation’s first large utility-scale offshore wind project in electric transmission siting proceeding and cost recovery.
  • An electric utility in provision of a one-of-a-kind suite of transactional, regulatory, litigation, government relations and grassroots advocacy efforts to secure approval for a southeastern utility acquisition, recognized in Financial Times’ North America Innovative Lawyers report.
  • Electric and natural gas utilities in multiple general ratemaking proceedings before state regulatory commissions.
  • An electric utility applicant in obtaining state commission approval to construct multiple combined cycle electric generation facilities that are operational.
  • An electric utility applicant in over 50 electric transmission line siting proceedings at voltages of 500 kV and 230kV, including multistate 500 kV lines.
  • An electric utility applicant in obtaining state commission approvals to implement multiple statewide demand-side management programs resulting in rider cost recovery of over $1 billion of electric utility program costs and utility incentives.

Energy Enforcement

  • Voltus, Inc. in resolution of an investigation into demand response aggregation in MISO.
  • More than 20 different FERC or CFTC nonpublic investigations over the past five years, most of which closed with no action or settled favorably.
  • More than a dozen clients on major compliance issues that did not result in enforcement.
  • PSEG Energy Resources & Trade LLC in the resolution of what could have been a $100 million-plus enforcement matter relating to PSEG’s electricity offers into the mid-Atlantic-based PJM energy market. The settlement resolved all issues for PSEG, with no admission of violations, for a total payment of $39.4 million.
  • Dan Brin and Scott Connelly, two energy traders formerly with Barclays, in a FERC investigation of manipulation of western U.S. energy markets. They were accused of planning to trade day-ahead fixed-price electricity to boost their financial swap positions. The case settled without our clients paying any penalty, incurring any trading restrictions or making any admissions after a California federal judge refused to confirm the $453 million FERC penalty. This was a widely watched case of first impression on many fronts,  named by Law360 as one of the “4 biggest energy cases of 2015.”
  • City Power Marketing in FERC enforcement litigation in federal district court alleging manipulation of the PJM markets. The case settled with no admission of liability and a substantially reduced penalty and a payment plan that considered the financial circumstances of the company. The case was one of several testing the limits of what FERC views as market manipulation and it tested the unique procedural step of seeking “de novo review” of the commission’s determination in federal court.
  • Utility clients in two of the three FERC reliability Inquiries that followed major grid events.
  • Big River Steel and U.S. Steel in resolution of a FERC investigation involving demand response in MISO.

FERC Enforcement Reporter

To request a copy, please click here.

If you are already a subscriber, feel free to access the Energy Enforcement Index.

McGuireWoods’ Energy Enforcement & Regulatory Counseling Practice Group is founded on the premise that knowing clients and regulators is good but knowing how clients and regulators think and act is essential.

  • National, Tier 1 ranking for energy law.

    – Best Law Firms

  • testimonial quote ic

    Nationwide ranking for energy: electricity (regulatory and litigation) and statewide rankings in North Carolina and Pennsylvania for energy and natural resources.

    – Chambers USA

  • testimonial quote ic

    Nationwide ranking for energy litigation: electric power and energy regulation: electric power.

    – The Legal 500 U.S.

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