Project Development

Drinker Biddle’s Energy Team regularly represents project sponsors, private developers and purchasers of electricity, thermal output, and renewable energy credits in connection with the development and financing of power and cogeneration facilities. We assist with energy efficiency and energy management projects. Further, we counsel clients through all stages of carbon projects among other environmental market-based development. Our team understands the business, environmental and regulatory dimensions of these projects, as well as relevant federal and state incentive programs.

Drinker Biddle lawyers have worked on conventional power plants ranging from coal and waste coal to gas and nuclear as well as renewable energy projects, including wind, solar, geothermal, landfill gas, biomass and tidal. We understand the technical issues raised by different power sources and the business issues affecting all project participants. Our lawyers have negotiated engineering, procurement and construction agreements and operating agreements that manage and allocate risks among project participants so that client risks are reduced. We negotiate agreements for the purchase and transportation of fuel (including coal, biomass, landfill gas and natural gas) and other process inputs. The Drinker Biddle team advises clients on water and waste water agreements for a range of operations from resort communities and water processing facilities to power plants and gas rigs. Our lawyers also negotiate agreements in the energy and environmental markets, including agreements for the purchase and sale of power, renewable energy certificates, energy efficiency certificates and carbon credits and guaranteed energy savings agreements.

An increasing global focus on the impact of human behavior on the environment has resulted in a proliferation of new renewable energy technologies and ground-breaking changes in international, national, state and local environmental and energy policy. As one result, most renewable energy projects are currently eligible for federal tax credits (or grants in lieu of those credits) and for state incentives such as renewable energy credits, grants and production incentive payments. We assist clients with ownership, leasing and operating structures that allow a project to make efficient use of incentives.

In addition to core energy business issues and tax and other incentive requirements, our lawyers help to identify necessary permits and governmental approvals, land use and real estate issues, regulatory requirements, and issues affecting lenders rights in project collateral. Drinker Biddle lawyers advise clients on siting, contamination, environmental indemnities, and stakeholder strategies. Our lawyers also manage controversy, including participation in contested governmental proceedings, coalition building, preemptive stakeholder engagement, public meetings, private mediation and litigation.

3/8/2013: Project Finance Magazine Names Poseidon Project a 'Deal of the Year'
3/29/2011: Drinker Biddle Enhances Energy Practice With Addition of Christopher B. Berendt

1/1/2010 American Bar Association Forum on the Construction Industry. (2d Edition): Federal Government Construction Contract – Chapter 13, Changes
1/1/1994 Construction Law Update. John Wiley & Sons, Inc.: The Construction Contractor’s Right to Early Completion

Project Finance magazine on March 7, 2013, awarded “North American Water Deal of the Year 2012” honors to Poseidon Resource’s billion-dollar Carlsbad, Calif., desalination project to serve the San Diego County Water Authority. Drinker Biddle represented J.P. Morgan as the lead underwriter for the financing, which will fund construction of the largest seawater desalination plant in the United States.

To read a copy of the article from Project Finance, please click here.

The deal team was led by partner, and head of the energy team, Baird Brown, along with core team members of counsel Chris Berendt, associate Emily Sysak and senior transaction analyst Molly Wood. The deal team also exemplified cross-practice group collaboration, with lawyers from almost every Drinker Biddle office lending a hand. Critical assistance along the way was provided by partner Tim Casey and associate Andrew Weissman from the firm’s Corporate Restructuring Practice Group, partner Stuart Law from the Construction Law Group, partners Charles Congdon and Doug Raymond from the Corporate & Securities Practice Group, partner Sara Hansen Wilson in the Real Estate Practice Group and partner Mark Costley from the Investment Management Practice Group.

The project includes the first desalination plant in the United States to be financed as a public/private partnership and a related 10-mile pipeline connecting the new facility to the San Diego County Water Authority’s existing distribution system. The financial close on Monday, December 24, involved the sale of $755 million worth of tax-exempt bonds by the California Pollution Control Financing Authority on behalf of a subsidiary of Poseidon Resources Corp. (which will own the Plant) and the San Diego County Water Authority (which will own the pipeline and purchase the entire output of the plant).

The proceeds of the bond issuance, along with $167 million in private equity from Stonepeak Infrastructure Partners, when combined with $80 million in improvements committed to be made by the Water Authority to its own system to accommodate the project, push the total capital investment over a billion dollars. The financial closing culminated more than decade-long effort to develop the Poseidon project.

The Poseidon project is expected to be completed in 2016, at which time it is projected to produce about 50 million gallons of potable water a day using reverse-osmosis technology. By 2020, the Poseidon project is expected to supply the region with about 7 per cent of its water. With rising demand for fresh water sources, and reductions in water availability from the Colorado River and Northern California, the locally controlled and drought-proof Poseidon plant will be a key component of San Diego County’s water supply.