Our energy market work includes drafting and negotiating long-term power purchase agreements to support project financing of electric generating facilities and negotiated bilateral wholesale and retail contracts. We have assisted commercial and industrial customers as well as government and institutions with power, liquid fuel and natural gas among other energy commodity purchase and sale arrangements.
We have counseled clients, including developers, underwriters, equity funds and public agencies, in connection with taxable and tax-exempt, rated and unrated, and registered and unregistered financings, credit enhancements, and tax credit structures. We have worked extensively on public/private partnerships and privatization of public services. We have represented a Regional Transmission Organization on market design issues and has assisted in the establishment of a private energy trading platform.
We have pioneered efforts in the pooled origination, financing and securitization of clean energy project portfolios and have worked with deployment of smart grid and microgrid technologies including dynamically managed load and onsite generation which are emerging as critical assets in the power markets.
Cleantech Investment and Energy
We are actively involved in assisting emerging companies in the cleantech arena. Our experience includes a range of technology from energy efficiency technologies to solar and tidal power and cellulosic ethanol. We assist both companies and investors with private equity and venture capital as well as angel investments in these companies. We also assist emerging companies and their investors with patent prosecution and due diligence, licensing, and other intellectual property issues. We serve as counsel to equity funds and their advisors, assisting with securities law and governance issues as well as the structure of investments. We are advising on the creation of a fund intended to attract tax equity to renewable energy projects.
We have led acquisitions of individual generating assets and of large portfolios of power projects, including operating projects, projects under construction and development projects. We not only review project contracts and corporate arrangements, but also perform environmental due diligence and permit review and assess energy regulatory issues. We assist with the purchase and restructuring of troubled projects and often assist with refinancing of projects in connection with an acquisition. We advise on Corporate Tax, both in connection with the acquisition itself and the effect of the acquisition on tax credits and other tax benefits, and advise on repositioning acquired assets in the energy and environmental markets. Our experience with acquisitions includes gas cogeneration, coal, waste-coal, waste-to energy, wind and solar generating facilities, and Drinker Biddle lawyers have led the acquisition of an LNG importing facility. We also do energy due diligence in connection with other corporate mergers and acquisitions.
We have extensive experience with P3 projects ranging from toll roads and waste-to-energy projects to a first of its kind financing of a billion dollar desalination project for the San Diego County Water Authority. Our lawyers regularly structure public-private partnerships and profit-nonprofit partnerships, in which careful consideration of appropriate risks to be born by public and non-profit participants are required. In addition to governmental projects, we have also provided structuring assistance to permit public and private universities and other NGOs to take advantage of tax credits and treasury grants for solar, water and geothermal projects. Drinker lawyers have assisted with P3 projects as diverse as a hyperspectral imaging satellite with the Naval Research Labs, sustainable community infrastructure for a planned community in India, and a demonstration tidal power project for New York City.
We have developed and negotiated operating agreements, construction agreements, concession agreements and power purchase and sale arrangements along with dozens of other documents ancillary to transactions with ongoing public interest dimensions. We understand the risks and obligations appropriate to public and private parties and are accustomed to structuring incentive compensation arrangements that align private incentives with public goals. In particular, we represent public bodies with strong environmental goals in practical transactions that create clean energy results.
Energy Commodity Services
Drinker Biddle lawyers have been involved with the evolution of environmental market commodities for 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.
- Represented Southern Maryland Electric Cooperative in negotiating power purchase arrangements to build its energy purchase portfolio.
- Represent one of the largest national truck leasing, maintenance and transportation logistics companies on liquid and gaseous fuel commodity transactions. We also counsel on fuel supply and customer contract portfolio management.
- Represent several large real estate development companies on their electricity service agreements as well as retail electricity and gas procurements. Where appropriate, we represent these companies and aggregators in selling distribution level originated products (energy, capacity and ancillary services) into the wholesale markets.
- Represent power plant owners and operators in wholesale fuel commodity transactions, power (and steam) purchase agreements as well as regulatory approvals and disputes.
- Represented several clients on solid fuel commodity transactions, including transportation in the national bulk system and bluewater.
- Represent clients with large alternative fuel fleets on biofuel, CNG and LCNG fueling station development and commodity transactions.
- Represent energy service providers on the monetization and commoditization of negawatts originated from energy efficiency projects.
- Represent large C&I clients on balancing and optimizing onsite generation and controls with commodity procurement portfolios.
Pooling and Securitization for Energy Projects
We have pioneered pooled energy efficiency financing transactions around the country. In addition to representing a specialized form of public/private partnership, these transactions involve implementing smart control systems that can integrate with generating resources and grid response.
We have represented domestic and international commercial banks, financial institutions, asset managers, funds, sponsors, large corporations, and others in numerous multimillion and multibillion-dollar CMBS, ABS, and RMBS securitizations, as well as structured finance, leveraged finance, and other complex financing transactions, including CLOs, in the public and private markets, both domestically and internationally.
- We represent the Foundation for Renewable Energy and Environment under a contract with the Pennsylvania Treasury Department to develop a statewide pooled energy efficiency bond finance program for governmental and non‐profit organizations. The program is supported by a grant from the West Penn Power Sustainable Energy Fund. See: http://freefutures.org/pennsef/about/.
- We acted as project counsel and bond counsel to the Delaware Sustainable Energy Utility in a groundbreaking $70 million pooled financing for energy efficiency retrofits for five state agencies and two state higher education institutions in Delaware. The project included a prequalification process for energy service companies, development of transparent guaranteed energy savings contracts and managing the multiparty financial closing.
- We act as counsel to the Foundation for Renewable Energy and Environment advising the Sonoma County Water Authority on structuring a pooled energy and water efficiency financing for municipalities, school districts, hospitals and a community college.
- We represented the Delaware Sustainable Energy Utility, Inc. in facilitating the lease financing of energy efficiency improvements for all of the schools in the Red Clay Consolidated School District. We negotiated the documentation as well as acted as special counsel to Red Clay District. Tax‐exempt financing was provided through a Master Equipment Lease/Purchase Agreement between The State of Delaware and Banc of America Public Capital Corp.
- We represented Campus Energy Efficiency Fund as subordinated debt lender in a three tier financing structure for energy efficiency improvements to Drexel University campus facilities.
Onsite energy infrastructure, Development and Finance
- Drinker Biddle lawyers represented J. P. Morgan as lead underwriter in a financing in San Diego County, California, to build the largest seawater desalination plant in the United States. 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 financing 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, bring the total capital investment over a billion dollars.
- We represented Weston in connection with its participation in a joint venture to develop sustainable infrastructure for a planned community in India. We developed a phased construction and operating services agreement that integrated infrastructure development with real estate development and established fee structures for utility services in the community.