Client Services / Energy Advisory / Energy Regulatory, Compliance & Legislative Advice

Energy Regulatory, Compliance & Legislative Advice

The lawyers of McDermott’s Energy Advisory Practice Group understand regulatory risk in both developed and developing markets and are able to address relevant issues across agencies and industries.   McDermott has extensive experience representing clients in all types of regulatory matters, including those before the Federal Energy Regulatory Commission (FERC), the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Department of Energy (DOE), the North American Electric Reliability Corporation (NERC), various state public utility commissions (PUCs) as well as regional transmission organizations (RTOs) and independent system operators (ISOs).

Energy Regulatory Matters

Federal Energy Regulatory Commission

McDermott’s energy advisory team has extensive experience in electricity and natural gas regulatory matters before FERC, with a number of our members having practiced with FERC before going into private practice.  With respect to electricity matters, our lawyers have been actively involved in the regulatory aspects of structuring and facilitating energy-related transactions for every wholesale market in the United States, including market-based rate authorizations, transfers of jurisdictional assets, changes in status, interlocking directorate issues, public holding company issues and electronic quarterly report matters.  We also have a robust natural gas regulatory practice before FERC.  We routinely represent shippers in regulatory proceedings concerning interstate pipeline regulations and service, rate-setting and capacity assignment and release, tariff modifications and rulemakings.  We regularly advise clients on the following:

  • Enforcement investigation and litigation
  • Market-based rate authorizations
  • Electricity regulatory analyses and approvals for transactions
  • Administrative litigation concerning market design, tariff filings and complaint proceedings
  • Generation interconnection
  • Transfers of jurisdictional assets and changes in status
  • Interlocking directorate issues
  • Electronic quarterly report matters
  • Wholesale market design and structure issues
  • Capacity market proceedings and resource adequacy obligations
  • Transmission and interconnection as well as siting and permitting issues
  • Market power mitigation
  • Tariff modifications and rate setting
  • Rulemakings

Department of Energy

McDermott advises companies that trade wholesale energy and natural gas on the U.S. Department of Energy’s authorization and reporting requirements.

The U.S. Department of Energy administers an authorization program for companies interested in importing and exporting electricity and natural gas between the United States and Canada or Mexico.  The Firm’s energy and commodities advisory group prepares and oversees the application and approval process for import and export licenses issued by DOE.  The group also advises clients on the following:

  • Reporting and other compliance issues associated with DOE authorizations
  • Reporting issues associated with data collection activities conduction by the Energy Information Administration (EIA), a group at DOE that publishes statistical information about U.S. energy matters
  • Determining whether clients have a reporting obligation to EIA and how to complete forms on topics that include generation attributes, fuel sales and consumption, and wholesale energy transactions

State PUCs & Competitive Retail Energy Markets

Our lawyers advise clients in all aspects of competitive retail electricity and natural gas markets and related products throughout the United States, including licensure, market structure, regulatory compliance and administrative practice.  They also assist marketers, aggregators, traders, and industrial and commercial customers regarding restructured markets in numerous states, including Ohio, New York, New Jersey, Georgia, Texas, Pennsylvania, Connecticut, Rhode Island, Illinois, Michigan, California, Nevada, Montana, Massachusetts and Maryland.

We have extensive experience advising clients in matters related to state utility commissions, including the following:

  • Market monitoring and compliance issues
  • Commission rules and orders implementing federal qualifying facility requirements
  • Commission regulatory authority and policy regarding utility mergers, divestitures and restructurings

In more specific state-related work, we also assist with a variety of utility retail rate and service setting proceedings in various states, including Kansas, Missouri, Illinois and Massachusetts.  We also advise regarding all aspects of siting, regulatory compliance and development of generation projects in Massachusetts and New York, among other states.

Regional Transmission Organizations & Independent System Operators

We also assist clients in dealing with RTOs and ISOs on market structure, organization, operation, market monitoring, congestion pricing, capacity market developments and seams.  We regularly advise clients on the following:

  • Capacity market developments
  • Scheduling practices
  • Generation interconnection
  • Transmission expansion and access
  • Financial assurance and credit policies
  • Regulatory implications of market changes on existing transactions (e.g., move from zonal to LMP pricing)
  • Netting of RTO transactions in event of default

Commodities Regulatory Matters

Commodity Futures Trading Commission

The energy and commodities advisory team has lawyers and non-lawyer professional analysts who have worked for the CFTC prior to joining the Firm.  The group advises financial institutions, hedge funds, energy companies and commodity trading companies regarding Commodity Exchange Act (CEA) and CFTC regulations governing trade practices, registration requirements and exemptions, reporting and recordkeeping requirements.  The group also provides compliance training and manuals that address CFTC-related issues.  We regularly advise clients on the following:

  • Trade practices in OTC markets, electronic trading facilities and designated contract markets
  • Implementation of trading strategies to comply with CEA and CFTC regulations
  • Legislative and regulatory advocacy
  • CFTC enforcement of anti-manipulation and fraud
  • Financial reform initiatives
  • Submission of comments to proposed agency regulations
  • CFTC Form 40 filings
  • Hedge exemptions from CFTC and designated contract markets
  • Guidance on registration processes
  • Application of CFTC regulations to agricultural options and swaptions
  • Forward contracting programs
  • Performance of compliance audits

We also advise clients with respect to CFTC enforcement and government investigations.   Our enforcement defense lawyers regularly represent commodity traders and companies in investigations and litigation involving physical, over-the-counter and regulated futures trading.  They are experienced in civil and criminal proceedings that involve allegations of fraud, manipulation, false reporting and multiple other regulatory violations. 

Compliance Policies & Procedures

The energy and commodities compliance team has developed a broad range of compliance policies and procedures for energy marketers, generators and other entities across commodity sectors.  We have designed policies for more than a dozen companies with physical and/or financial trading operations in electricity, natural gas, oil, coal and emissions addressing compliance standards under FERC, CFTC, federal banking, and federal and state antitrust law.  Several of the members of the group previously practiced with federal or state agencies, including the FERC and CFTC, prior to joining the Firm.  The team also includes two derivative markets analysts, with prior experience as an investigator for the CFTC and the U.S. Securities and Exchange Commission (SEC) and as a former compliance officer of a major investment bank.   

Highlights of our compliance practice include the following capabilities:

  • We understand regulatory risk in both developed and developing markets, and address all relevant issues, including various trading practices, price reporting, information-sharing, commodity price manipulation, prohibited transactions and recordkeeping. 
  • Our lawyers have been actively involved in all major proceedings related to market rules and have advised clients on a large number of regulatory reviews and investigations in the last decade. 
  • We maintain current knowledge of all FERC and NERC rules as well as U.S. market rules at the ISO/RTO and control-area level, and routinely monitor regulatory developments with compliance implications. 
  • Our policies offer practical guidance on the full range of compliance issues facing energy and commodity trading companies today and can be tailored to the level of detail desired by each client.
  • We also advise on anti-money laundering, import-export requirements, Foreign Corrupt Practices Act, Patriot Act and antitrust requirements. 

Compliance Training

We regularly conduct compliance training for energy and commodities clients, including front-office traders and schedulers, and mid-office and back-office personnel.  Our in-depth knowledge of market operations enhances the effectiveness of training sessions, which can be broken down into modules or presented in a single session.  We utilize a highly interactive and practical training approach that encourages dialogue on important questions regarding existing and emerging rules, as well as franchise risk.  We offer refresher programs as well as annual updates and routinely address new developments as requested.

Federal Legislative Matters

Since 1978, McDermott lawyers, based out of our Washington, D.C., office, have been helping clients solve their critical legal, policy and political problems in the capital of the United States.  We believe that a law firm must practice not only in court, but also before Congress, the executive branch, and the regulatory agencies and departments.  Our bipartisan team of policy attorneys and professionals combine substantive experience, detailed knowledge of the legislative process and access to key decisionmakers.  Our team has represented hundreds of clients in all aspects of the legislative process, including the following services:

  • Lobbying members of Congress, appointed and career officials of the executive branch, and their respective staffs
  • Monitoring legislative activities
  • Analyzing legislative proposals
  • Preparing regulatory strategies and liaising with governmental authorities
  • Developing and implementing overall legislative, regulatory and political strategy, tactics and advocacy
  • Drafting of legislation and testimonies
  • Preparing witnesses for congressional hearings

We have worked on issues with U.S. senators and congressmen from nearly every state and with virtually every committee—from issues before congressional panels and committees on energy, over-the-counter derivatives, climate change, banking, commerce, the environment, the judiciary and labor, to tax, trade and health care matters before the House Committee on Ways and Means and the Senate Committee on Finance.

Energy Advisory Client Services

McDermott Will & Emery

McDermott Will and Emery