Energy Litigation
Overview
Crowell & Moring’s Chambers-ranked Energy Practice has been a destination practice for competitive power producers, traditional utilities and developers since the beginning of the competitive power industry in the 1980s. The advent of competition in the energy world has resulted in a steady stream of litigation for thirty years, and our litigators and trial lawyers have been on the front lines of that litigation from the outset. Crowell combines seasoned courtroom advocates with energy subject matter specialists to bring and defend disputes before FERC, state and federal courts (including the U.S. Supreme Court), public utility commissions, and in arbitration.
Insights
Client Alert | 7 min read | 10.09.24
Getting Bond(s) Out of Russia: UK Supreme Court Dismisses Appeal and Upholds Anti-suit Injunction
On 18 September 2024, the UK Supreme Court handed down its judgment in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30. The judgment considers several significant issues relevant to international arbitration. Primarily, though, it reaffirms: (i) the English court’s strong support for arbitration, in general; (ii) the steps it is prepared to take to hold parties to their agreement to arbitrate; and (iii) the current position for determining the governing law of an arbitration agreement, in the absence of an express election by the parties.
Firm News | 8 min read | 08.15.24
Firm News | 2 min read | 05.04.23
Washingtonian Names Ambassador Robert Holleyman and Tyler O’Connor to Most Influential People List
Client Alert | 4 min read | 02.22.23
Key Takeaways for the Future of International Energy Arbitration - 2022 Queen Mary University Survey
Representative Matters
Below is an extensive list of energy engagements that demonstrates our capabilities and experience across a variety of venues.
Federal and State Court
- Representation of client challenging the FERC rules governing cogenerator facilities. The Court of Appeals held that the Commission's full avoided cost rule was not adequately justified, and explained that the Commission's grant of blanket authority to cogenerators to “interconnect” with electric utilities without meeting statutory requirements was improper.
- Representation of Blumenthal in FERC rejected Connecticut's challenge to the structure of the state's electricity market. FERC concluded that the current “hybrid” market, in which some electricity generators sell power at regulated rates and others at market rates, is lawful, and that Connecticut's proposed alternative would not be.
- Representation of client in challenging FERC’s authority on market-based energy tariffs. The appeals court found that FERC's authorization of market-based tariffs complied with the Federal Power Act, but that FERC abused its administrative discretion by declining to order refunds for violations of its reporting requirements.
- Representation of client in petition for review of a FERC final order purporting to replace the governing board of CAISO with a new board chosen through a method dictated by FERC. The court agreed that FERC had no authority to make or enforce such an order.
- Representation of client against California state-court actions against wholesale energy suppliers, alleging price fixing conspiracy. Suppliers filed cross-claims seeking indemnification from federal and Canadian government agencies. The U.S. District Court for the Southern District of California ruled that federal agencies and Canadian government agency, but not Canadian agency's subsidiary, enjoyed immunity, and that subsidiary was not entitled to removal, and remanded. Suppliers and subsidiary appealed immunity rulings, and federal agencies appealed District Court's failure to dismiss claims against them prior to remand.
- Representation of electric utilities’ petition for judicial review of orders of FERC which had effect of reinstituting installed capability (ICAP) deficiency charge paid by New England utilities that failed to meet reserve capacity requirements.
- Representation of client in petition to review following FERC’s denial to lower the price under an energy purchase contract and also declined to relieve the seller from a delay of the effective date of the contract.
- Representation of state-created non-profit corporation in charge of operating state's bulk electric power transmission system challenge of FERCs rejection of corporation's request to retroactively revise rates for operating reserves as remedy for spiking reserve prices. The Court of Appeals held that FERC lacked authority under Federal Power Act to retroactively lower suppliers' rates for short-term operating reserves.
- Representation of Duke Energy in seeking injunctive relief from orders issued by Governor of California commandeering its contractual rights to deliver electricity to public utilities within state.
- Representation of Dynegy Power Marketing, Inc. petition to review two temporary, interim orders issued by FERC concerning proposals submitted by the New York Independent System Operator, Inc. (ISO) to mitigate prices resulting from the exercise of market power in energy markets administered by the ISO. Specifically, the ISO proposed an “Automated Mitigation Procedure” (AMP) that would accelerate the identification of questionable bidding based on existing and previously-approved conduct and impact criteria. The Commission approved the AMP for a limited period only.
- Representation of Electric Power Supply Association’s petition for judicial review of two FERC orders purporting to amend regulation so as to exempt communications between private market monitors and FERC decisional employees from restriction on agency ex parte communications imposed by Government in the Sunshine Act.
- Representation of petition review of FERC orders conditionally accepting two of utility's interconnection and operating agreements with power generators and requiring utility to revise its open access transmission tariff.
- Representation of electric utilities petition for judicial review of orders in which FERC ruled that certain costs incurred by customers connecting generators to utilities' networks had to be spread across all customers as network upgrades, rather than directly assigned to power generators.
- Representation of client in appeal of a FERC decision to revamp its order for a New Jersey power developer to pay charges to interconnect with regional grid operator.
- Representation of KeySpan-Ravenswood in proceedings at FERC and the U.S. Court of Appeals for the D.C. Circuit (sub nom. Consolidated Edison of N.Y. v. FERC) concerning the NYISO’s authority to change prices produced by competitive bidding.
- Representation of client in its request for review as to whether FERC reasonably determined that KeySpan’s proposal to convert its existing liquefied natural gas (LNG) storage facility into an LNG import facility was not consistent with public interest.
- Representation of Reliant Energy, Inc. in an evidentiary hearing and settlement proceedings to recover lost capacity revenues from the summer of 2002 because of the NYISO failure to correctly "translate" its installed capacity requirement for load serving entities into an unforced capacity requirement, as required by its tariff.
- Representation of client in order entered by the Bankruptcy Court confirming Chapter 11 plan that, subject to approval of the California Public Utilities Commission (CPUC), implemented a proposed settlement negotiated by the debtor-utility's and the CPUC.
- Representation of the Competitive Generators’ Group in a proceeding that affirmed FERC’s station power policies.
- Representation of PG&E petition for review of FERC orders that require the CISO rather than Participating Transmission Owners like PG&E, to conduct interconnection studies when a new electric generator seeks to interconnect with the electric transmission grid. PG&E argued that the orders violate Federal Power Act.
- Representation of PG&E Gas in petition for review of FERC suspending and then rejecting operator's proposal to change its method for allocating interruptible transmission (IT) capacity. The Court of Appeals held that rejection was arbitrary and capricious.
- Representation of electricity suppliers challenge of FERC’s approval of action taken by state-created nonprofit corporation in charge of operating state's bulk electric power transmission system, consisting of invocation of tariff-authorized temporary extraordinary procedures (TEP) to retroactively lower real-time market rates due to “market design flaw.”
- Representation of various non-public utilities, group of energy suppliers and generators, and various public entities petition for review of series of orders issued by FERC which ordered both public and non-public utilities to make refunds to California ratepayers with regard 2000 and 2001 spot market.
- Representation of Dynergy Power in litigation arising out of the California Energy Crisis of 2000-01, when shortages of power and high electricity prices caused blackouts and general turmoil in the electricity markets of the west coast. Public Utility District No. 1 of Snohomish County, Washington, a utility providing electricity to consumers in Washington state, sued various generators and traders of wholesale electricity for alleged defendants manipulated the market and restricted electricity supplies in order to cause artificially high prices in the market from which Snohomish purchased power.
- Representation of electric power companies that supplied surplus power to other distributors petitioned for review of set of orders of FERC.
- Representation of client in petition for review after FERC rejected its intention to seek recovery of line outage costs incurred to allow independent electricity generators to interconnect with its transmission system. The Court of Appeals held that interconnection agreements did not allow utilities to recover outage costs incurred when the utilities temporarily removed transmission lines in order to interconnect a generator.
- Representation of Duke Energy against alleged unfair business in violation of California Business and Professions Code.
- Representation of Westmoreland-LG&E Partners in a contractual dispute against Virginia Electric & Power Company before the Virginia Circuit Court, City of Richmond.
- Representation of Bridgeport Energy, LLC in a lawsuit for breach of a long-term supply of a specialized energy product.
- Representation of General Electric in obtaining the dismissal of alleged misrepresentation of the energy consumption of its freezers.
- Representation of former Executive Vice President for Investor Relations at Enron in criminal, SEC and civil proceedings; negotiated dispositions with the DOJ and SEC that substantially limited client's exposure, and guided client through central cooperation role in the related prosecutions of Kenneth Lay and Jeffrey Skilling.
- Representation of Murphy Flat Power before FERC and Idaho Public Utilities Commission to enforce the wind company’s rights to secure a power purchase agreement under PURPA, convincing FERC, for the first time, to initiate its own enforcement action to enforce PURPA.
- Representation of California Energy Co. in a proceeding where a utility company sought to cancel its power purchase agreement with the client.
- Representation of Vestas, a leading turbine vendor and wind plant developer, in a Federal Court of Claims case arising from the DOE’s rescission of a lease of federal lands to build a wind farm.
- Representation of Edison Mission Energy in cogeneration project in the Virginia Supreme Court against Virginia Electric and Power Company in connection with a contract dispute between the utility and the electric generator involving the applicability of the force majeure clause in the power purchase agreement.
- Representation of Mid-American Energy Holdings Company in an ownership dispute between shareholders involving a hydro-electric project in the Philippines.
- Representation of Duke Energy North America and Duke Energy Trading and Marketing, LLC in multiple lawsuits alleging antitrust and business practices claims in connection with the California energy markets.
- Representation of Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C. in their defense against state antitrust claims brought by a putative class of indirect purchasers of wholesale natural gas. The Supreme Court of Tennessee decided in favor of the defendants-appellants, including Duke Energy, reversing the Court of Appeals' decision and agreeing with the trial court that federal law preempted state claims. This ruling, which impacts every participant in the wholesale natural gas supply chain, acknowledges that the field of wholesale natural gas transactions is subject to regulation and review only under federal law.
Arbitrations
- Representation of a natural-gas fired facility in a multi-hundred million dollar power purchase agreement dispute with a large California utility.
- Representation of Atlantic City Electric and Delmarva Power & Light in an arbitration proceeding involving assignment of claims against the DOE for failure to remove spent nuclear fuel.
- Representation of the developer of several gas-fired generation plants in South America in arbitration before the International Chamber of Commerce in claims against the EPC contractor for defective and untimely construction of the plants.
- Representation of the utility, Northwestern, against a waste coal project (Colstrip) in connection with disputes arising out of the compensation scheme under a long-term power purchase agreement between Northwestern and Colstrip. The suit was originally filed in Montana State Court, but we successfully invoked the arbitration clause under the contract and subsequently represented Northwestern in the arbitration.
- Representation of the developer of a gas-fired generation plant in arbitration before the American Arbitration Association concerning warranty claims for turbine defects against the EPC contractor.
- Representation of Ocean State Power in an arbitration of provisions of two natural gas contracts in a Toronto-based arbitration under the rules of the American Arbitration Association.
- Representation of Avondale Shipyards in an arbitration of construction and warranty claims relating to a hydro-electric plant.
- Representation of Duke Energy Trading and Marketing, LLC in arbitration over the terms of a true-up provision in a settlement agreement entered into with a large California investor-owned utility in 2001.
- Representation of NRG Energy, Inc. in arbitration over Connecticut generating facilities' obligations to pay retail station power charges under interconnection agreement for station power delivered at transmission voltage.
FERC Litigation*
- Representation of Electric Power Supply Association in litigation concerning the standards governing a regulated utility's acquisition of utility assets of its unregulated affiliate.
- Representation of Constellation Energy Commodities Group, Inc. in hearing and settlement negotiations to resolve 2007 ancillary services rates for affiliate sales to Ameren IP, Ameren CILCO, and Ameren CIPS.
- Representation of Bridgeport Energy, LLC in proceedings associated with its filing of a cost-of-service RMR agreement with ISO New England Inc. to provide reliability services for the period of June 1, 2005 until the implementation of a New England LICAP market.
- Representation of Cedar Creek Wind, LLC in proceedings before FERC, the Idaho Public Utilities Commission (IPUC), and the Idaho Supreme Court, and subsequent settlement negotiations, to enforce PURPA. We won a highly unusual ruling from FERC not only upholding Cedar Creek's challenge that the IPUC's decision was inconsistent both with PURPA and FERC's implementing regulations, but also strongly suggesting to the IPUC how it should comply with them.
- Representation of Duke Energy Trading and Marketing, LLC in litigation over standard offer service contracts.
- Representation of Milford Power Company, LLC in complaint and settlement proceedings challenging its continuing eligibility for a reliability must-run agreement and in negotiation of subsequent settlement agreement.
- Representation of New England generation subsidiaries of NRG Energy, Inc. in obtaining FERC approval of the cost-of-service RMR Agreement with ISO New England, Inc. and related settlement agreements for service provided between January 1, 2006 and the implementation of a New England Locational Installed Capacity market.
- Representation of Duke Energy North America, LLC (a competitive power supplier affiliate of Duke Energy) and Milford Power Company, LLC in the administrative hearing leading to an initial decision on the demand curve parameters and other design features of the ISO New England Inc. LICAP market and subsequent settlement proceedings establishing the Forward Capacity Market.
- Representation of generation subsidiaries of Duke Energy Corporation in settlement of litigation with respect to reactive power compensation tariffs.
- Representation of Duke Energy Trading and Marketing, LLC in investigation and show cause proceedings concerning the California energy markets. The "California Energy Crisis" of 2000-2001 spawned a wide array of regulatory, political, and litigation responses, and we represented Duke Energy in every forum. At FERC, we defended Duke Energy in proceedings, involving more than 100 parties, designed to provide refunds to California electricity purchasers, and in proceedings opened to investigate charges of "gaming" behavior in the western electric energy markets. We achieved a "global settlement" of all these proceedings to which the California government agencies, the California investor-owned utilities, and FERC were all parties. We also represented Duke Energy before a variety of western state government agencies that exercise independent law enforcement authority and before a select investigating committee empanelled by the California State Senate. The California Energy Crisis also generated more than two dozen private lawsuits on behalf of electricity consumers in western states. We acted as co-lead counsel for the power generators and marketers named in these cases, and steered them to successful results through the Federal District Court, the U.S. Court of Appeals for the Ninth Circuit, and the U.S. Supreme Court. Collectively, these investigations, suits, and proceedings involved every conceivable economic, scientific, and regulatory aspect of the western energy markets.
- Representation of Grouse Creek before FERC to enforce PURPA. This case represented the second time we obtained an unprecedented decision by FERC finding that the Idaho Public Utilities Commission had violated PURPA and then initiating FERC's own enforcement action to enforce PURPA.
- Representation of Duke Energy North America, LLC in a settlement and administrative hearing with respect to changes to ISO New England Inc. market rules related to the scheduling and compensation of generation during extreme cold weather conditions.
- Representation of Maxim Power Corporation with respect to an investigation being conducted by the staff of the FERC Office of Enforcement in connection with the company’s power generation subsidiaries participation in New England regional electricity markets.
- Representation of Reliant Energy Services, Inc. in a 2008 evidentiary hearing and settlement proceedings to obtain additional evidence on return on equity (ROE) component of pipeline rate in view of new FERC policy permitting inclusion of master limited partnerships in ROE proxy groups.
- Representation of Reliant Energy, Inc. in a 2008 evidentiary hearing and settlement proceedings to recover lost capacity revenues from the summer of 2002 because of the New York Independent System Operator's failure to correctly "translate" its installed capacity requirement for load serving entities into an unforced capacity requirement, as required by its tariff.
- Representation of Reliant Energy Corporation in complaint and paper hearing proceedings to terminate certain exemptions from PJM energy market offer caps and consider changes to the three pivotal supplier market power test.
- Representation of Duke Energy Trading and Marketing, LLC in litigation of seams elimination adjustment charges arising due to the elimination of multiple transmission charges for inter-market transmission arrangements.
- Representation of Milford Power Company, LLC in the settlement proceedings and administrative hearing with respect to the cost-of-service RMR agreement with ISO New England Inc. accepted by FERC for the 2004-2005 interim period prior to implementation of a New England LICAP market.
- Representation of New York Power Authority and KeySpan Corporation affiliates in numerous FERC proceedings involving the NYISO, on subjects including ICAP, UCAP, status service, reserves market structure, and price mitigation.
- Representation of NYPA in a complaint proceeding at FERC against Consolidated Edison Company of New York alleging violation of FERC Station Power Policies.
- Representation of Duke Energy Trading and Marketing, LLC in prehearing and settlement proceedings related to certain long-term power sales agreements entered into by the Nevada utilities during the 2000-2001 western power crisis.
- Representation of NRG Energy, Inc.'s Norwalk Harbor generating facility in a settlement and administrative hearing with respect to its application for an RMR agreement with ISO New England Inc.
- Representation of Pittsfield Generating Company, L.P. in a in a FERC proceeding concerning ISO New England Inc. tariff revisions regarding cold weather operations in the Forward Capacity Market
- Representation of PSEG Power Connecticut, LLC in the administrative hearing into the rate filed in its 2004-2005 interim RMR agreement with ISO New England Inc.
- Representation of Duke Energy Trading and Marketing, LLC in prehearing and settlement proceedings related to the impact of the California ISO Corporation's implementation of nodal pricing on "sellers' choice" delivery point provisions in existing bilateral contracts.
- Representation of Invenergy Wind North America LLC and American Wind Energy Association in proceedings before FERC defeating an effort by Puget Sound Energy, a transmission provider, to hike the fees wind energy companies would pay for generator imbalances, which could have cost Invenergy and other wind suppliers many millions of dollars a year and likely would have led other providers to impose similar fee hikes. Subsequently, represented Invenergy Wind North America and its affiliate, Vantage Wind Energy LLC, in proceedings before FERC litigating Puget's second attempt to impose increased imbalance fees as well as increased transmission rates. Both cases were settled at rates significantly below those proposed by Puget.
- Representation of Renewable Energy Systems Americas in several proceedings before FERC involving the Midwest Intercontinental System Operator's development of a new generator interconnection product, termed Net Zero Interconnection. The litigation was resolved in settlement.
- Representation of Duke Energy Corporation and various Duke Energy subsidiaries and affiliates in the California ISO Refund Hearing and related proceedings arising out of the 2000-2001 collapse of the California energy markets.
*Additional FERC litigation is listed under Federal and State Court representative matters.
State Regulatory Litigation
- Representation of Big Savage, LLC, a subsidiary of EverPower Wind Holdings, Inc., in obtaining a CPCN for the construction of a 5.5 mile overhead generator lead line to interconnect a proposed 200 MW Pennsylvania wind facility to the transmission system in Maryland.
- Representation of Cedar Creek Wind, LLC, a subsidiary of Summit Power and the developer of five wind energy power plants, in reaching a settlement with PacifiCorp's Idaho utility, after litigation before the IPUC, FERC, and the Idaho Supreme Court, whereby Rocky Mountain Power will purchase power from Cedar Creek's wind plants at a published avoided cost rate for a qualifying facility (QF). By appeal to FERC, we convinced the IPUC to reconsider its prior QF eligibility requirement ruling, thus enabling the investor-owned utility's approved purchase from the proposed wind projects.
- Representation of client appeal of the NERC Compliance Registry as a Transmission Owner and Transmission Operator in connection with 500 kV generation interconnection facilities that connect the Harquahala generating facility to the Hassayampa Switchyard.
Insights
Client Alert | 7 min read | 10.09.24
Getting Bond(s) Out of Russia: UK Supreme Court Dismisses Appeal and Upholds Anti-suit Injunction
On 18 September 2024, the UK Supreme Court handed down its judgment in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30. The judgment considers several significant issues relevant to international arbitration. Primarily, though, it reaffirms: (i) the English court’s strong support for arbitration, in general; (ii) the steps it is prepared to take to hold parties to their agreement to arbitrate; and (iii) the current position for determining the governing law of an arbitration agreement, in the absence of an express election by the parties.
Firm News | 8 min read | 08.15.24
Firm News | 2 min read | 05.04.23
Washingtonian Names Ambassador Robert Holleyman and Tyler O’Connor to Most Influential People List
Client Alert | 4 min read | 02.22.23
Key Takeaways for the Future of International Energy Arbitration - 2022 Queen Mary University Survey
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Insights
Client Alert | 7 min read | 10.09.24
Getting Bond(s) Out of Russia: UK Supreme Court Dismisses Appeal and Upholds Anti-suit Injunction
On 18 September 2024, the UK Supreme Court handed down its judgment in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30. The judgment considers several significant issues relevant to international arbitration. Primarily, though, it reaffirms: (i) the English court’s strong support for arbitration, in general; (ii) the steps it is prepared to take to hold parties to their agreement to arbitrate; and (iii) the current position for determining the governing law of an arbitration agreement, in the absence of an express election by the parties.
Firm News | 8 min read | 08.15.24
Firm News | 2 min read | 05.04.23
Washingtonian Names Ambassador Robert Holleyman and Tyler O’Connor to Most Influential People List
Client Alert | 4 min read | 02.22.23
Key Takeaways for the Future of International Energy Arbitration - 2022 Queen Mary University Survey