Power Plant Projects
Practice Leader: Marc D. Machlin
Pepper Hamilton LLP represents a variety of clients in the development and financing of merchant power projects, including project developers, equipment manufacturers, energy users, power marketers, public utilities, financial institutions and public agencies. We are currently involved in power plant projects in seven states. We assist clients in all aspects of project development, including regulatory compliance; acquisition of real estate; project financing, including structuring relationships between multiple project participants; negotiation and review of contractual relationships, including energy sales agreements, operating agreements and construction contracts; and preparation of project financing documentation. We also provide legal services in connection with the state and federal environmental permitting of power projects and other energy projects.
For the past 30 years, Pepper has enjoyed an outstanding national reputation in construction law. We have worked with all segments of the industry, representing owners, developers, contractors, subcontractors, suppliers, sureties, construction managers, architects, engineers and manufacturers in a variety of industrial and commercial contexts. We understand the many varieties of construction contract relationships in this ever-changing field, and we are experienced in structuring such relationships and in drafting the necessary contracts. Our experience gives us a broad understanding of the problems that clients in this industry are likely to encounter, the positions likely to be taken by every participant in the process, and how to structure the contract documents to avoid disputes or to minimize their consequences if they occur.
Our work includes preparing bid packages and advising owners on bidding strategy, handling bid disputes, drafting forms of contract for construction management and construction, handling contractor and design professional claims, and litigating, arbitrating or resolving by alternative dispute resolution procedures claims arising from defective design or construction.
Some of Pepper’s power plant engagements are described below. We have represented:
- a diversified energy company in the development of a 500-megawatt coal-fired plant in the Midwest
- a merchant plant developer in the negotiation of a turbine purchase agreement with a foreign supplier
- a diversified energy company in a capacity/tolling transaction with a power marketer
- an electric utility in the auction and later sale of fossil-fuel plants in two states
- the principal electric utility in the Czech Republic, advising on the acceptability of, and risks relating to, a proposed draft agreement with a major U.S. supplier of an instrumentation and control system for a nuclear power plant; this was the first instance of an attempted interface of modern western nuclear technology with former Soviet Union power plant construction
- a power marketer in the development of two 100-megawatt gas-fired peaking plants in the Pacific Northwest
- the owner in the structuring and project financing and refinancing of a waste-fueled electric generating facility
- the developer in the structuring, project financing and refunding of 35-megawatt gas-fired cogeneration facility, a culm processing facility and a coal gasification facility
- the developer in the structuring and financing of natural gas wellhead and transportation facilities
- the owner in the structuring of a competitive selection process and the development structure for a waste-fueled electric generating facility
- the owner in the structuring and serial project financing of an 80-megawatt coal-fired cogeneration facility and greenhouse
- the owner in the development of the structuring, project financing and refinancing of a 35-megawatt waste-fueled cogeneration facility
- a Nebraska city with regard to a coal-fired power plant
- an international engineering/construction management firm on the construction of hydro-power plants
- a major U.S. oil company in all phases of planning, constructing and operating a large nuclear fuel reprocessing facility (consulted on legal and regulatory aspects of plant design, drafted conceptual financial plan, drafted preliminary documents involving procurement of key plant components, etc.)
- two major U.S. electric utilities in sales of interests in three operating units in partially completed nuclear power facilities to consortia of municipal and cooperative utilities, which were the first such sales of this type
- a public authority in an international dispute involving a Japanese contractor and the construction of a power plant in Puerto Rico
- an electric utility in the disposition of its interest in a nuclear power plant
- several U.S. railroads regarding integrated transportation contracts for the supply of coal to electric utilities in the West, Southwest, Midwest, South and East
- a manufacturer producing combined cycle gas turbines for use in Egypt
- six electric utilities in proceedings involving certification matters and other administrative matters (including rate schedule) before the Federal Energy Regulatory Commission and State Public Utility Commissions
- a manufacturer producing oil-powered generators for Egyptian power plants
- the owners in the project financing and sale of several cogeneration facilities
- a major utility company in a dispute between the architect/engineer and the suppliers of the turbine, the boiler, and the condenser and pumps for cost overruns on an 80-megawatt coal-fired unit
- a major public utility in negotiation of nuclear fuel and power plant equipment contracts
- a supplier of radiation monitoring systems in a dispute with utilities concerning two nuclear units.
Our lawyers deal regularly with the liability and safety issues involved in the successful construction and operation of nuclear power plants. We were selected in 1979 by American Nuclear Insurers and Mutual Atomic Energy Liability Underwriters to defend all persons sued as a consequence of the accident at the Three Mile Island generating station. That engagement continued for more than 20 years. This matter and other engagements in this field have brought Pepper into intimate contact with the legal, health, physics and other technical issues that must be understood to provide effective representation in this area.