Electric Power

Steptoe has represented electric utilities in virtually every aspect of rate litigation before FERC. We have extensive experience in traditional embedded cost of service ratemaking and related accounting issues for both transmission and ancillary services. Our understanding and familiarity with FERC policies and ratemaking principles allows us to work closely with our clients’ management and rate experts in developing a rate case strategy and in putting together the company’s presentation for the case. We are recognized in both Chambers USA and The Legal 500 US for being on the cutting edge of numerous transmission and wholesale distribution pricing issues. For example, we have represented clients in the very proceedings before FERC which caused that regulatory body to adopt its current policies on such matters as pricing for merchant transmission. We have participated in state regulatory proceedings involving retail transmission rates.

As to non-rate transmission issues, Steptoe has expertise in open access tariffs, generator and transmission interconnections, Order Nos. 888, 890, and 1000, transmission planning disputes, wholesale distribution service and tariffs, and tariff compliance among other areas.

From the outset of competitive electric power markets, Steptoe has assisted clients in the formation and negotiation of virtually every kind of wholesale power and energy transaction (physical and financial), representing buyers, sellers, and marketers. We have drafted tariffs, standard form contracts, and transaction-specific agreements at all levels of complexity for these various transactions. In addition, we have experience in electric markets in different areas of the US, and are therefore familiar with the contracting practices that may be unique to these regions.

We represent clients that are members of all the existing ISOs/RTOs in the United States. Our lawyers have played instrumental roles in the formation of various ISOs/RTOs, drafting many of their foundational documents. Over the last several years, we have represented clients in numerous types of disputes regarding ISO/RTO policies and membership, and these disputes have addressed issues such as cost allocation of transmission, the proper application of ISO/RTO market rules including rules proscribing market manipulation, and identification of what facilities should comprise the ISO/RTO transmission system. We have also represented clients on matters involving the intersection of state and federal authority over these institutions and their markets, including issues of preemption under the Supremacy Clause.

In addition, we represent several major utilities that do not operate within ISOs or RTOs, which present different types of market issues. For these clients, we have assisted them in developing cost-based rates for short-term power sales in mitigated markets, with revisions to the wholesale requirements rates, and with developing policies to ensure that utilities abide by requirements limiting market-based rate sales.

Steptoe represents electric utilities in all aspects of FERC compliance. Subject areas include: Order No. 860, EQR, eTariff, interlocking directorates, change in status filings, affiliate rules, Standards of Conduct, OATT compliance, OASIS compliance, and FERC filing requirements. Our team also assists clients to shape regulation through rulemakings.

When clients are faced with enforcement inquiries from FERC, they turn to Steptoe to provide unique insight and counsel, and efficient resolution. Steptoe's leading enforcement lawyers have been involved in almost every major enforcement action since the Energy Policy Act of 2005. Led by former senior officials, our energy enforcement and investigations practice advises clients on potential violations of anti-market manipulation statutes and rules, RTO/ISO and pipeline tariffs, and rules in connection with the trading and marketing of physical and financial energy products. Our clients include all market participants, such as traditional utilities, energy companies, commodity traders, hedge funds and financial institutions, and their executives, traders, and compliance staff. We also advise clients on potential violations of applicable law and defend clients that are subject to FERC audits and enforcement actions. Where negotiation will not serve our clients' interests, we plan and execute effective litigation strategies, and in show-cause and federal court proceedings.

Additionally, we counsel clients subject to internal investigations and compliance audits, and assist clients in maintaining compliant and up-to-date internal trading and regulatory compliance programs. This includes compliance with the Commodity Futures Trading Commission (CFTC), CME Group, Intercontinental Exchange (ICE), Self-Regulatory Organizations (SRO), and National Futures Association (NFA) registration and disclosure requirements, and compliance with FERC tariff requirements.

Steptoe knows the rules, the markets, and the players—the project developer, the purchasing electric utility, and the lenders providing the necessary financing. Our lawyers have the legal and practical experience to handle all aspects of developing and implementing an electric power project. Our experience, which includes representing both project developers and purchasing electric utilities, enables us to quickly fashion effective and innovative solutions to the issues that inevitably arise in putting a project together.

We draft and negotiate power purchase agreements, financing agreements, and the other contractual arrangements necessary to implement projects. We provide advice concerning implementation of executed power purchase agreements and, where appropriate, termination of such agreements. We counsel clients with respect to applicable state and federal statutory and regulatory requirements. We represent clients in applying for necessary regulatory authorizations and defend clients from challenges to their activities in regulatory proceedings. We draft and negotiate agreements to organize partnerships or other ownership structures entered into by multiple parties to jointly develop a project. We also provide advice to electric utilities on the selection from competing proposals of projects with which to enter into negotiations.

With our unique combination of deep energy industry knowledge and top-ranked civil litigation lawyers, we deliver outstanding results for our clients in energy litigation – whether in standard commercial matters or those involving complex regulatory issues. We regularly handle antitrust matters; cases involving power plant operations and outages; power supply, coal, and other contract disputes; fraud actions; matters involving constitutional and Indian law issues, and other commercial litigation. Recently, we convinced a federal district court to dismiss related antitrust and consumer protection class actions alleging market manipulation of New England gas and electric markets. The Court of Appeals affirmed, accepting our argument that the filed rate doctrine prohibited claims that interfered with FERC’s regulation of the markets.  Breiding v. Eversource, 939 F.3d 47 (1st Cir. 2019) and PNE Energy Supply v. Eversource, 974 F.3d 77 (1st Cir. 2020).

Steptoe's electric practice has been pre-eminent in handling antitrust and competition issues in the power industry for many years. Our practice encompasses antitrust litigation, mergers and acquisitions and related antitrust clearances and regulatory approvals, government and internal investigations, compliance counseling, and handling competition and restructuring issues before regulatory agencies. We have successfully handled some of the most complex and challenging antitrust and competition matters in the power industry for a number of the largest electric utility systems in the country. For example, we recently won landmark victories dismissing two class action antitrust lawsuits brought in federal court in Massachusetts alleging market manipulation and attempted monopolization, each seeking over $3 billion in damages against Eversource. We are defending Duke Energy against monopolization and deceptive practices claims in federal court in North Carolina. Our work for Southern California Edison Company on the market power issues in California has resulted in refunds of over $5 billion. We have obtained FERC and Department of Justice Antitrust Division approval of some the most challenging transactions in the industry, and we have had a comparable record of success in other major litigated and regulatory matters for many years.

In antitrust, prevention of problems is critically important. We pride ourselves on our ability to design successful business strategies for our clients that allow them to carry out their business plans successfully while maintaining full compliance with the antitrust laws. In the event of disputes, Steptoe's profound understanding of the industry and its regulatory structures and rules often is the key to victory. We focus on approaches to resolve problems quickly with regulators and counter-parties. In the event of litigation, we devise strategies to win as rapidly and efficiently as possible.

From the very first wave of utility industry consolidation that began nearly 40 years ago through the present, Steptoe professionals have handled utility mergers and acquisitions of a wide variety of sizes and types. We have negotiated the conditions that ensure FERC approval of mergers and are steeped in knowledge relating to market power issues. Steptoe also performs due diligence in connection with contemplated mergers and acquisitions. The firm routinely counsels clients on when and what type of Federal Power Act Section 203 filings are required and assists in all aspects of their preparation as well as the drafting of ancillary documents.

Steptoe represents clients in connection with the need to abide by the requirements set forth in the Public Utilities Regulatory Policies Act of 1978 (PURPA) and seeking relief from those requirements. We have successfully represented clients at FERC and state public utility commissions in situations where states attempt to overstep PURPA or their jurisdictional boundaries in implementing feed-in tariffs or other renewable programs. We have represented clients in PURPA Enforcement Petition FERC and district court proceedings where qualifying facilities have claimed on a variety of grounds that states are not properly enforcing PURPA. We also advise on competition and jurisdictional issues surrounding emerging markets for distributed resources and storage. We represent clients in connection with matters related to FERC Order Nos. 872, 2222, and 841. In addition, counseling regarding the provision of delivery service to and from distributed resources, including storage, is a specialty.

Our state-focused energy team assists clients with a broad range of energy regulatory issues, ranging from traditional intrastate matters pending before public utilities commissions, executive agencies, and testimony before state legislatures, to novel and complex issues at the intersection of state and federal law. Beginning with the development and introduction of new concepts and legislation, our team works with clients to analyze and shape emerging policy and regulations. Following adoption, our work continues as we represent clients in the litigated proceedings designed to implement new or expanded requirements.

Partnering with energy clients who are at the forefront of advancing innovative energy policies across the country, members of our team have assisted in developing and executing leading-edge grid modernization and clean energy initiatives, including smart meter deployment, distributed generation/storage and net metering programs, energy efficiency portfolios, procurements of renewable energy credits and zero emission credits, and innovative performance-based and formula ratemaking models that pivot to more transparent and timely cost recovery models. Steptoe also maintains substantial experience in core energy regulatory areas like market structure, deregulation, return on equity, antitrust, Public Utilities Regulatory Policies Act of 1978 (PURPA) and avoided cost rates, interconnection, and energy on tribal lands.

Buttressed by Steptoe’s first-rate FERC practice, our state energy team is well-equipped to navigate the complex issues that are increasingly arising where state and federal law overlaps. From rapidly changing clean energy policies impacting capacity markets to state-led procurements of clean energy and its associated attributes, Steptoe's experience at the state and FERC levels uniquely positions the firm as go-to counsel for clients working through these challenging issues across jurisdictions.