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Overview | Practice Strengths | Practice Areas
Overview
Vinson & Elkins has a large, diverse energy regulatory practice, with highly experienced lawyers working in the Houston and Austin, Texas and Washington offices. Our lawyers bring a range of experience—litigation skills, transactional experience, and an understanding of varying regulatory regimes—to aid the firm's energy clients in operating their businesses in the fluid environment of what remains one of the most heavily regulated industries in the U.S. Our practice encompasses domestic federal and state regulation of the generation, sale and transportation/transmission of natural gas, petroleum and refined petrochemical products, and electricity. The firm's energy regulatory practice is an integral part of the firm's overall energy practice.
Practice Strengths
The firm's energy regulatory practice focuses on the needs of clients with interests in the electric power, natural gas pipeline, and oil pipeline industries. In each of these areas, our lawyers represent clients in a variety of ways: - Administrative litigation. The firm's regulatory lawyers pursue litigation on behalf of firm clients with business before or affected by the Federal Energy Regulatory Commission ("FERC") in Washington, D.C. and various state regulatory agencies. We have assisted clients in the preparation and prosecution of requests for state and federal energy regulatory authorization, including rate and other tariff authorizations, certificates of public convenience and necessity, merger applications, requests for certification of EWG status, and import and export permits. We have both prosecuted and opposed interstate and intrastate pipeline rate cases, contested applications for certificates of public convenience and necessity, requests for declaratory orders, complaint proceedings, and enforcement investigations before the FERC, the Public Utility Commission of Texas and its counterparts in other states, and the Railroad Commission of Texas and its counterparts in other states.
- Appellate litigation. Firm lawyers handle appeals generated by administrative litigation on behalf of the firm's clients, most frequently to the federal courts of appeals involving FERC decisions and to the Austin Court of Appeals involving decisions of state regulatory agencies in Texas.
- Regulatory counseling. Firm lawyers counsel clients whose business plans and activities are affected by federal and state energy statutory regimes and regulatory authorities, including FERC and state agencies in various jurisdictions, such as the Texas Railroad Commission. The long-term trend toward "light-handed" regulation has altered, rather than eliminated, the complex landscape faced by the firm's clients with respect to compliance matters under the wide range of statutes and regulations affecting the energy industry, such as the Natural Gas Act, the Federal Power Act, the Interstate Commerce Act, the Public Utility Holding Company Act, the Energy Policy Act of 1992, and the Outer Continental Shelf Lands Act.
- Transactional work. The firm's regulatory lawyers work individually and with firm lawyers from other groups, such as the Corporate and the Business/International groups, to represent clients in energy transactions, both domestically and internationally. We bring our regulatory counseling skills to bear in the structuring of transactions to comply with regulatory requirements, in performing regulatory due diligence, and in obtaining regulatory approvals. With their deep familiarity with the energy industry, the firm's regulatory lawyers also provide considerable know-how to clients in the drafting of a wide variety of energy contracts, such as agreements for energy commodity sales, pipeline development and transportation, and energy services.
Practice Areas
To give a flavor of the range and depth of the firm's energy regulatory experience in working with the electric power, natural gas, and oil pipeline industries, we have compiled the following descriptions of some representative work in each practice area.
Natural Gas
The firm has extensive experience with the natural gas industry. The firm's regulatory lawyers are principal regulatory counsel for the corporate owner of one of the largest and most extensive interstate natural gas pipeline systems in the nation, stretching from offshore in the Gulf of Mexico, through Texas and Louisiana, to New York, and through an interconnected system to Massachusetts. The firm has worked on a variety of natural gas supply transportation projects overseas as well, including extensive work on projects in Latin America, Africa, and South Asia. The following list highlights some of the firm's principal natural gas representations: - A joint venture of four U.S. and Canadian energy companies, including two Fortune 500 corporations to develop, construct and finance a $1.2 billion 800-mile natural gas pipeline from Nova Scotia to Massachusetts. We handled the U.S. regulatory aspects of the transaction, including the FERC application, drafting of pleadings, drafting of generally applicable transportation terms, design and support of transportation tariffs, preparation of compliance filings and data responses, coordination with Canadian counsel, and drafting of contracts with shippers and producers.
- The owner of an extensive natural gas gathering pipeline system in the mid-continent U.S. in its regulatory compliance and business activities in various jurisdictions.
- The successful bidder on natural gas distribution facilities privatized in Brazil in negotiation of gas supply and distribution contracts within its service territory.
- A group of major, affiliated interstate pipelines in numerous natural gas policy and rulemaking proceedings at the FERC.
- Several different interstate pipelines in connection with the development of strategies and procedures for compliance with the FERC's energy affiliate rules, including preparation of compliance filings, requests for exemption, and internal compliance training tools and compliance protocols.
- A number of energy services providers in preparation of form commodity sales and energy service contracts.
Oil Pipelines
Our lawyers have been involved in every major oil pipeline regulation case decided in the last 30 years. For example, we have represented one or more of the owners of the Trans Alaska Pipeline System (or "TAPS") since the planning and construction of that project in the early 1970's on matters related to the operation of TAPS. In the lower-48, our lawyers represent a range of major crude oil, refined petroleum products, and natural gas liquids pipeline systems, with facilities in nearly every region of the country. The following highlights some of the oil pipeline representations of the regulatory practice group: - The owners of the largest crude oil pipeline in the United States in rate proceedings before federal and state commissions and appellate courts to determine the pipeline's initial rates.
- The owners of that pipeline in several rate proceedings before the FERC and a state commission in which a royalty owner and shippers contested the prudence of operating and capital expenditures.
- The owner of a major refined petroleum products pipeline system in various rate proceedings before the FERC, including resolution of its overall system rate structure and defense, of its "grandfatherrd" rates under the Energy Policy Act of 1992.
- The developer of two new offshore crude oil pipelines in successfully obtaining a declaratory order from the FERC authorizing innovative contract transportation arrangements under the Outer Continental Shelf Lands Act.
- A major pipeline participant in proceedings before the Interstate Commerce Commission and the FERC that resulted in the issuance of Opinion No. 154-B, a major evolution of oil pipeline rate-setting standards.
- The owner of a major southwest U.S. products pipeline in successfully obtaining a declaratory order from the FERC in support of a significant expansion of its system.
- The owner of that pipeline in obtaining dismissal by FERC of protests against its indexing rate adjustments.
Electric Power
The firm has wide experience in all regulatory aspects of electrical power generation and transmission. As a result of the firm's representation of electric cooperatives, power developers, and marketers in domestic matters, our lawyers are intimately familiar with the regulatory and business issues affecting fuel supply and transportation, wheeling, power purchases and sales, and other contracts related to power generation, transmission, and consumption. Our extensive experience in the restructuring of the natural gas industry affords our lawyers unique insights as the electric industry restructures. The following list highlights some representative engagements of our energy regulatory lawyers in this area: - A major integrated energy company in its acquisition of a west coast utility company. We acted as both merger and acquisition and FERC counsel. This transaction was the first acquisition by a "non-electric" energy company of a major electric utility company in the U.S. In addition to merger and acquisition representation, we assisted in the preparation of the market power analysis of the merger, which was endorsed by the FERC in its approval of the merger, and we obtained approvals for the continuation of market-based rates for our client's power marketing affiliates, which was required based on their affiliation with a franchised utility company.
- A registered holding company in its merger with another registered public utility holding company with utility operations in seven states. This transaction is the largest merger of electric utilities to date. In addition to merger and acquisition representation, we advised our client on issues relating to compliance with PUHCA, the Federal Power Act, and approvals by the eleven affected state regulatory commissions.
- A major U.S. electric utility and gas pipeline company in obtaining FERC approvals of its rates and code of conduct for a 500 MW "merchant" power plant in Florida. The project will sell energy and capacity to wholesale customers in peninsular Florida. The FERC rejected intervenor's contention that the project company be required to establish a "code of conduct" with a municipal utility that is providing land and services to the project and buying power from the project.
- Obtaining FERC approvals for market-based sales for a new 140 MW peaking project in New Mexico developed by an independent project developer. This project required obtaining approval from the New Mexico PSC for the transfer of assets from a retired utility plant site to the project company, as part of obtaining "exempt wholesale generator" status for the project.
- Numerous clients in different contexts respecting the creation of regional transmission organizations. Our lawyers have assisted an independent system operator in the filing and defense of its open access tariff, have acted as litigation counsel in the preparation for filing and hearing of administrative charges, have prepared and filed tariffs regarding the provision of services to a regional transmission provider, and have provided advice regarding the competitive implication of markets administered by such organizations.
- A consortium of distribution electric utilities in the restructuring of the nation's largest generation and transmission cooperative utility into a separate generation company, transmission company, and operating company. Our representation included preparation of open access transmission tariffs consistent with FERC Order No. 888, modified to reflect their use by a transco, review and revision of amendments to existing agreements with the control area operator to coordinate with the new structure; drafting, review and revision of transmission provisions of new power supply agreements to reflect allocation of transmission risk, and advice related to the refinancing of the G&T; cooperative as separate genco, transco, and opco entities.
- A major power marketer, retail service provider and project developer with respect to its interactions with the California ISO and PX. We have familiarity with the various transmission pricing proposals advanced in the California discussions; similar proposals and issues are being advanced in other venues.
Energy Appellate Litigation
The firm has represented clients in over 50 appeals from decisions of the FERC since 1990, primarily in the United States Court of Appeals for the District of Columbia Circuit. Our regulatory lawyers have also represented clients before the United States Supreme Court and the Fourth, Fifth, Sixth, and Eleventh Circuits of the United States Court of Appeals. The following list highlights some representative cases: - The firm's regulatory attorneys led an industry group in challenging, and ultimately eliminating in its entirety, a set of FERC regulations that had required natural gas gatherers operating on the outer continental shelf to report the rates and conditions of service in effect under all contracts with their gathering customers. Cheveron U.S.A., Inc. v. FERC, 193 F. Supp. 2d 54 (D.D.C. 2002); upheld, The Williams Cos. v. FERC, 345 F. 3d 910 (D.C. Cir. 2003); Order No. 639-B, 106 FERC ¶ 61,238 (2004) (removing regulations).
- UNITED DISTRIBUTION COS. V. FERC, 88 F.3d 1105 (D.C. Cir. 1996). The firm represented a number of interstate natural gas pipeline clients in successfully defending FERC orders approving Order No. 636, a comprehensive rulemaking that restructured the natural gas transportation industry and imposed, among other things, mandatory unbundling of pipelines’ sales and transportation services. This was an extremely complex and high-profile case, which consolidated over 75 separate appeals of Order No. 636. The head of our energy regulatory practice group, Henry May, was selected by Intervenors to deliver the Intervenors’ argument in favor of affirming the FERC’s orders. In a landmark decision, the Court affirmed the FERC on the issues addressed in the firm's representation.
- UGI UTILITIES, INC. V. FERC,144 F.3d 868 (D.C. Cir. 1998). The firm represented intervenor Texas Eastern in defending, against appeal by a local distribution company customer, FERC orders allowing another interstate pipeline to assign its capacity on Texas Eastern directly to the plaintiff local distribution company. The orders approving the assignment, issued in conjunction with Texas Eastern’s Order No. 636 compliance filings, were attacked on grounds that those orders allegedly deprived the plaintiff of a particular class of delivery service. The firm was successful in winning affirmance of the contested FERC orders.
- AMERADA HESS PIPELINE CORP V. FERC, Nos. 97-1220 and 97-1420 (D.C. Cir. 1998). The firm represented the owners of the Trans Alaska Pipeline System in a challenge to a FERC order requiring refunds for the inclusion in their rates of certain litigation and settlement costs stemming from the Exxon Valdez oil spill. The firm negotiating a favorable settlement prior to final disposition of the appeal by the D.C. Circuit.
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