Energy Tax
Our Firm regularly advises electric and gas utilities and energy trading companies in their mergers and acquisitions, financing transactions, trading and risk management activities and regarding the tax treatment of electric and gas industry specific issues. We advise our clients with respect to U.S., cross-border and foreign-to-foreign activities.
We work extensively on the U.S. income tax issues associated with transactions of energy companies, including U.S. and international stock and asset acquisitions, industry deregulation motivated restructurings, equity enhanced and off-balance sheet debt refinancings and other innovative financing structures. Acquisition work includes taxable and tax-free U.S., cross-border and foreign-to-foreign merger transactions, public company stock acquisitions in the United States and abroad and various privatization acquisitions. In this context, structuring issues usually include the reduction of transactional tax expense, which can directly impact the viability of a transaction. Similarly, the minimization of "ongoing" tax expense can enhance the probability of a successful acquisition in competitive bidding situations. In the foreign context, deferring U.S. income inclusion and maximizing foreign tax credit from electric energy generation, distribution and trading is generally the objective.
We advise our clients with respect to the disposition of energy assets through sales, partnership contributions and like-kind exchanges. We have worked with our clients in structuring exchanges of power stations and emission allowances. Our work further includes advice with respect to appropriate structures for cooperative management of network expense, network and transmission ownership, as well as the use of structured energy contracts as substitutes for acquisitions, dispositions and financing.
We have worked extensively on U.S. and offshore debt financings, as well as a wide variety of new debt products offered in the capital markets, including long term subordinated deferrable debt, debt coupled with forward purchase obligations of issuers’ stock, and variable rate and re-marketed instruments. In addition, we have worked on a large number of tax deferred and off-balance sheet financing strategies.
Energy and telecommunications transactions frequently involve partnerships, limited liability companies and other pass-through entities. We have significant experience in structuring transactions so as to minimize adverse tax consequences. We have pioneered many tax-planning techniques and our partners are recognized leaders in developing innovative transactions to permit energy, telecommunications and similar companies to reduce their tax liability to the maximum extent allowed by law.
Our partners are widely recognized as preeminent in the taxation of energy contracts, energy derivative trading and risk management techniques. In this regard, we have represented clients before the Internal Revenue Service and the U.S. Treasury Department as to the appropriate tax treatment of an energy dealer's customer and hedging activities. We have represented large oil and gas marketing companies and power marketers with respect to federal and state tax obligations and provide advice as to their contract terms. We have also conducted all-day training sessions on the taxation and regulation of energy derivatives, emissions allowances, bandwidth and weather derivatives.
We have advised our clients regarding the acquisition and disposition of nuclear power plants and the transfers of nuclear decommissioning trust funds. We also provide advice on issues regarding qualified nuclear decommissioning reserve funds and prepare private letter ruling requests to allow contributions to qualified funds. We have developed proposed changes to the tax laws for qualified funds and have worked extensively with the Treasury and the Joint Committee of Taxation during that process.
We advise clients regarding capitalization issues, timing of income issues, contributions in aid of construction, abandonment losses and other frequently challenged industry tax issues. Our partners are recognized leaders in tax litigation relating to the energy companies.
Contacts
- Andrea S. Kramer
+1 312 984 6480
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