It is axiomatic that public utilities, and the infrastructure they own and operate, play a critical role in our economy now and will continue to do so in the future. Public utilities, however, face a myriad of challenges including: pervasive state and federal regulation, demand for capital investment, pressure to maintain utility service affordability, and shifting customer needs and expectations that require new services and the implementation of new technologies.
Saul Ewing attorneys assist utilities of all types, including municipalities, investor-owned entities, and developers of various kinds, with their regulatory and operational needs. We have significant experience working with gas, electric, water, and wastewater utilities in Delaware, Maryland, New Jersey, and Pennsylvania. As a result, we have the detailed knowledge of jurisdiction-specific laws, proceedings and cost-recovery mechanisms required for full base rate cases, interim rate relief, and various other types of proceedings. We also have extensive experience advising on various cost recovery programs and allocation methods, including those related to energy efficiency, conservation, and rate implications of the ever-changing energy landscape, including such things as electric vehicle charging infrastructure and implementation of automated meters. We have also assisted clients with internal compliance audits and reviews, as well as with external audits conducted by state regulatory agencies.
We have extensive experience assisting public utilities and private equity funds with the due diligence process as part of mergers, acquisitions or asset sales, often under tight timeframes. We staff these matters by relying on our bench of colleagues focused on regulatory, corporate, real estate, environmental and tax law. Our attorneys guide clients from due diligence during the bid offer phase through state regulatory commission approval and closing.
We routinely advise public utilities and/or acquiring entities in the following areas:
- Rate proceedings, administrative enforcement actions, and other regulatory proceedings before state public utility commissions, including appeals
- Certificates of public convenience and necessity, licenses, and permits
- Due diligence as part of mergers and acquisitions
- Mergers, corporate reorganizations, and asset acquisitions and divestitures
- Project and infrastructure development
- Filing comments on proposed regulations
- Advising clients on defending customer complaints
- Business planning and strategic regulatory advice
- Compliance, management and financial audits, including focused regulatory audits regarding affiliate relationships in New Jersey
- Various debt and equity financings
- State and federal litigation and appeals
Saul Ewing attorneys recently advised on these select utilities industry matters in the representation of:
Gas and Electric Utilities
- A New Jersey electric utility before the New Jersey Board of Public Utilities (NJBPU) to obtain approval of a program to replace all of its 500,000+ meters with digital smart meters to improve electric grid reliability and transition to a clean energy future.
- A New Jersey electric utility before the NJBPU to obtain a $41 million increase in base rates for electric distribution service. This matter was filed and negotiated entirely during the COVID-19 pandemic and features an interesting approach to deferring the impact of the approved rate increase on customers, while making the client whole from an income perspective.
- A New Jersey electric company before the NJBPU to obtain approval of a portfolio of energy efficiency programs (geared at all customer segments) and a related cost-recovery mechanism. The filing was made at the direction of the BPU, and represents the client’s first comprehensive energy efficiency program.
- A New Jersey electric utility before the NJBPU for approval of a program to provide electric vehicle charging infrastructure and incentives. The matter survived a motion to dismiss filed by the Division of Rate Counsel, and ultimately settled. The settlement includes a negotiated electric distribution rate applicable to DCFC charging stations in an effort to provide incentives for the use of electric vehicles.
- A Delaware gas utility in successfully settling base rate cases in 2020 and 2022 before the Delaware Public Service Commission.
- A Delaware electric utility in a base rate case in 2020. After obtaining a partial settlement, we fully litigated the matter through hybrid hearings consisting of four days of testimony, followed by post-hearing briefing and oral argument to the Delaware Public Service Commission. The Delaware Division of the Public Advocate appealed a portion of the Commission’s order, which is pending.
- A Pennsylvania gas utility in its annual request for modifications to its purchased gas cost adjustment rates, which was settled early in the proceeding through robust discovery efforts and cooperation with the intervening parties.
- A Maryland electric utility in winning complete dismissal of a lawsuit related to two farmer plaintiffs who sued for injunctive relief and a declaratory judgment, attempting to prevent the utility company from maintaining a 200-foot wide power transmission line easement over the plaintiffs’ property.
- A Maryland electric utility with advice on land use, zoning, permitting and related government approvals to construct a new transmission substation in Frederick County, Maryland.
- A private equity fund in its acquisition of two natural gas utilities. We assisted with this merger from the due diligence phase through the NJBPU regulatory approvals, obtained in January 2023.
- Saul Ewing has represented various private equity funds and other investors in their review of potential asset acquisitions, due diligence processes, and regulatory proceedings. Recently, the firm assisted an investor with the due diligence and related regulatory approvals for the acquisition of a portfolio of generation assets.
Water and Wastewater Utilities
- Two of the largest water utilities in the world in obtaining regulatory approvals in both New Jersey and Delaware for an acquisition/merger.
- A New Jersey water company before the NJBPU to obtain a significant increase in base rates for water and wastewater service within its various operations. This matter was the company’s first base rate request in several years and was prepared, filed, and negotiated entirely during the COVID-19 pandemic. The matter involved then unique ratemaking proposals, including how to address significantly increased customer arrearages as a result of the pandemic, a state-wide utility shut-off moratorium, and the intersection of this case with a pending proceeding involving the company’s replacement and cost recovery of utility investment in lead service lines.
- A water services company before the NJBPU to obtain appropriate regulatory treatment of costs related to addressing lead in the water system after the client received a notice from the New Jersey Department of Environmental Protection regarding an exceedance of lead concentrations in water in violation of the Lead and Copper Rule.
- A water and wastewater services company before the NJBPU to obtain approval of an increase in base rates for wastewater service. This matter represented the company’s first base rate request in over a decade for some of the wastewater systems involved. The case involved favorable resolution of a significant acquisition adjustment as well as the implementation of a uniform rate structure for the majority of the wastewater systems.
- An investor in utility and energy companies in due diligence analysis of a major water and wastewater utility’s assets in anticipation of a potential merger to create a leading regulated water and wastewater utility. This matter involved state utility regulatory, environmental and real estate issues.
- A major water utility before the NJBPU to obtain a more than 30% increase in base rates over two years for water service within its various operations reflecting full recovery for major investments in its utility plant in service.
- A water and wastewater company for approval of an internal reorganization, which required a unique approach considering the breadth of NJBPU’s regulations relating to approvals of a change in control. This matter was successfully concluded via settlement.
- A Pennsylvania municipally-owned water utility before the Pennsylvania Public Utility Commission (PAPUC) to obtain an approximately $4 million rate increase for its PUC-jurisdictional customers. This matter was successfully brought to conclusion prior to hearings through a favorable settlement.
- A Pennsylvania water utility for approval of an acquisition of a municipal water utility before the PAPUC, pursuant to Pa. C.S.A. 1329 and other statutes and regulations.