Energy and environmental markets have developed rapidly over the last two decades. In addition to utilities, independent power producers and commercial, industrial, institutional and governmental users participate directly in wholesale and retail markets for electricity and gas, as well as electric capacity reserves and demand response markets. Markets for environmental commodities ranging from carbon and NOx allowances to renewable energy credits and energy efficiency “white tags” have arisen from regulatory imperatives as well as voluntary action. Financings of energy and environmental projects typically depend on forward sales of these products. Drinker Biddle lawyers have been involved with the evolution of these markets over two decades and have drafted legislation and participated in regulatory proceedings that shaped the markets, as well as assisting market participants in numerous transactions.
Environmental Markets
Drinker Biddle’s lawyers have advised clients on the development and operations of the environmental markets since their inception. Environmental markets are focused on a broad range of challenges – from reducing emissions, to providing incentives for the restoration and protection of forests and improving water quality. They present an opportunity to align compliance, cost control and revenue generation with environmental protection. For many clean energy projects in particular, the origination and monetization of environmental instruments provides a critical revenue stream to secure financing.
Environmental markets are often “regulatory markets,” created by legislation or regulation rather than developing in commerce. As an alternative to traditional command-and-control regulatory frameworks, they provide flexible compliance options for regulated entities as well as revenue origination opportunities for regulated and unregulated entities alike. We advise clients on legislative and regulatory initiatives aimed at the development of environmental markets.
We also counsel clients in the voluntary environmental marketplace, developing opportunities to demonstrate and communicate environmental stewardship in an efficient and effective manner. Our team has worked with many of the nation’s leading utilities, industrials, developers, retailers, institutions and non-profits, as well as governments, to assist them in designing, operating and participating in these emerging markets.
We help clients anticipate and influence future environmental market developments in present-day policies and investments, working to manage risks and take advantage of opportunities in business and project planning. Having watched the founding and tracked the growth of environmental market participants and infrastructure providers, we have an extensive network in place for strategically advising clients. Our team frequently introduces clients to new players and opportunities. Through involvement with the American Bar Association, the Environmental Markets Association and the American Council on Renewable Energy among other organizations, Drinker Biddle lawyers have spearheaded the development of standard agreements for best practices in environmental market transactions. Our focus is the creation of true environmental and economic value for clients.
Click here for a further listing of environmental markets products where Drinker Biddle’s Environmental Markets Team can provide assistance.
Energy Markets
Over the last 20 years, the scope and scale of markets for electricity and natural gas have expanded dramatically. Much of the wholesale trade of electricity is through markets operated by Regional Transmission Operators and retail choice in both electricity and gas is now the rule in a majority of states. Drinker Biddle lawyers have drafted and negotiated long-term power purchase agreements to support project financing of electric generating facilities and negotiated bilateral wholesale contracts on industry standard forms. We have assisted commercial and industrial customers as well as government and institutions with power and natural gas purchase arrangements. In addition, we negotiate service agreements with energy purchasing agents and we are familiar with retail competition requirements adopted by many states.
Drinker Biddle lawyers assist clients who participate in the markets operated by regional transmission operators including capacity and demand response markets. We negotiate gas commodity and gas transportation agreements. We draft and negotiate service agreements that provide for smart energy management, including arbitrage among energy resources and time of day usage.