Climate Change and Sustainability
The nation is in the midst of a historical transition to decarbonization and a new energy economy, and these changes will create enormous risks as well as opportunities. Jenner & Block helps clients develop and execute forward-thinking approaches to address these risks and opportunities.
Decarbonization presents opportunities for innovative new companies and technologies to disrupt traditional industry. Regulatory constructs are often critical in determining whether these new companies and technologies will succeed or fail. We advise our clients—which include start-ups as well as established industry players—on the threats and opportunities posed by existing regulatory frameworks. We also work with them to develop their strategic vision and advocate for new regulatory frameworks that advance that vision.
In particular, electric and gas utilities in many regions of the country must actively reimagine their decades-old business models or risk being saddled with significant stranded costs as the world changes around them. We help these companies develop business, regulatory, and litigation strategies to pivot their operations toward a decarbonized future while minimizing stranded costs. We maintain working knowledge of new technologies as well as a firm understanding of how those technologies serve customers, the issues involved in integrating or interconnecting them to the electricity and gas grids, and the details of rate recovery and rate design that will determine how regulated companies will recover the costs from customers. We are fluent in energy economics and we have the business acumen to achieve real economic solutions for our clients. And we have a national practice that helps us connect participants – new and old – in the evolving marketplace of ideas and solutions.
We bring a diverse and multidisciplinary team to help our clients. Formulating and executing new strategic and regulatory goals requires lawyers who think creatively and bring a variety of perspectives to the discussion. Jenner & Block’s Climate Change and Sustainability Practice brings together diverse lawyers in our Energy/Regulatory, Telecom/Broadband, Corporate/M&A, Environmental, Government Strategies and Litigation/Appellate Practices to provide integrated advice and counsel across the business and regulatory spectrum. Our partners include a former FERC commissioner, former high-level officials at the US Department of Justice, the former chief of staff to the California governor, two former general counsels of one of America’s largest energy companies, and three former US Supreme Court clerks.
- Jenner & Block counseled Exelon Corporation to devise a new regulatory framework for supporting its zero-carbon nuclear power plants, which had become financially distressed. Over a period of several years, we worked with Exelon to devise new strategic and regulatory goals, and worked to support the company in its advocacy before state regulatory commissions, federal regulators, and state and federal courts to create and then defend a zero emission credit based on in part on the social cost of carbon. Zero emission credit programs are now in place in Illinois, New York, and New Jersey, supporting 10 nuclear units.
- Jenner & Block has been helping applied technology company AppHarvest acquire and access green energy to run its three 60-acre smart and sustainable, fruit and vegetable indoor farms in Appalachia. These indoor farms are among the largest in the US, and they need large amounts of energy to sustain the growing. Consistent with AppHarvest’s mission to drive positive environmental change in agriculture and improve communities within which it operates, it wishes to leave the tiniest carbon footprint possible. To that end, we have worked with AppHarvest to negotiate green tariffs and specialized AgTech tariffs with regional electricity providers to provide access to PJM’s markets for green power and to monetize the energy efficiency gains from using sunlight, efficient LEDs, and high-pressure sodium growing lights in its business.
- The mission of Advanced Energy Economy, a national association of businesses that are making the energy we use secure, clean, and affordable, is to transform public policy to enable rapid growth of advanced energy businesses. To that end, Jenner & Block has worked with AEE on many occasions over the last five years to develop and implement federal regulatory strategies to expand the size and value of wholesale electricity markets for advanced energy products and services. We have had significant success at FERC in opening markets to energy efficiency, distributed storage, and distributed energy resources.
Other Representative Work:
- Overcoming hurdles to participation of energy efficiency in capacity markets.
- Helping deploy fuel cells through accomplishing regulatory reforms to distributed resources’ interconnection processes.
- Developing, from scratch, an 8 MW community solar project, including procuring an independent consultant, through an RFP that we developed, to advise on the alternative uses of 40 open acres for solar development; using the RFP process to procure the optimum development and developer of a solar project; advising on the structuring of the project (a lease, an off-take agreement, solar energy renewable energy credit allocations); advising on income and real estate tax implications of the transaction for the university; and drafting the lease/development agreement.
Other work in helping clients transform their business strategies has included:
- Advising electric and gas utilities on constructive regulatory strategies in state rulemakings and related regulatory proceedings concerning decarbonization, including general rate case and rate design dockets.
- Obtaining stakeholder support and regulatory approval for technologically advanced (smart grid) infrastructure investments and improvements that are and will be needed to support the transition.
- Helping design and implement collaborative, efficient, equitable and cost-effective interconnection of renewable energy resources, electric vehicle infrastructure, microgrids, and behind-the-meter technologies and services.
- Obtaining support and approval for enhanced and incentivized energy efficiency/demand response standards and programs.
- Providing regulatory guidance and transactional support for new entrants and clean tech entrepreneurs.
- Advising business on legislative initiatives and drafting model legislation.
- Litigating cutting-edge issues regarding the boundaries of state and federal jurisdiction in connection with decarbonization and zero emissions policies.
The changing climate, commitment to sustainability, and considerations of social and economic justice will have a significant impact on the risks faced by many businesses. In the energy industry, for example, more extreme weather events have significant consequences for grid resilience. The need to mitigate that risk, while considering socioeconomic impacts, will drive regulatory policy as well as investment decisions. Increased wildfire risk in the West resulting from a drier climate has necessitated a change in utility operations and a new form of significant regulatory and litigation risk. For regulated utilities, these changing conditions represent not only challenges, but also opportunities. Significant investment will be required over coming decades as sea levels rise, endangering existing infrastructure, and affecting decisions regarding where public and private investments should be made. For start-ups, external pressures may create opportunities to meet customers’ needs in new ways that bypass traditional infrastructure.
Current and new businesses are facing increasing stress as existing and new regulations affect the cost and use of energy sources and as federal and state governments demand that business adapt to new regulatory and policy requirements, including environmental justice initiatives.
Work helping clients mitigate the risks of climate change and ESG considerations has included the following:
- We are advising a start-up company that seeks to manufacture an alternative fuel, challenging traditional gasoline for vehicles. The manufacturing process involves regulation from multiple federal and state regulators, including the Clean Air Act, Clean Water Act, NEPA, and Endangered Species Act. We advised the company on how to navigate and prepare its permit applications under multiple regulatory schemes, including BACT analyses for GHG emissions.
- Solar generating facilities are an attractive mechanism to decrease emphasis on traditional fossil fuel energy sources. However, the advantages of those facilities can be wiped out by emissions of high-global-warming potential gas used as dielectric medium in equipment critical to connecting those facilities to the grid. We advised a company regarding the impacts of California regulations limiting the greenhouse gas emissions and disclosure and other regulatory obligations associated with the operation of equipment at solar facilities.
- We successfully defended a client regarding Title VI environmental justice claims brought by national environmental NGOs on its air emissions in connection with ongoing operations in California.
- Manufacturing expansion often cannot occur without access to adequate supplies of water, the availability of which is directly impacted by climate change. We regularly counsel clients with respect to national and international regulatory and compact constraints on water availability, including in connection with the sale and acquisition of manufacturing operations globally.
- We provide guidance to a major logistics company regarding NEPA compliance in connection with numerous projects at airport properties through the US, including with respect to ESG-related disclosures and considerations. NEPA compliance allowed the client’s projects to proceed in a timely manner while minimizing the risks of third-party challenges.
- We are advising a telecommunications company regarding strategy under NEPA and related regulation to qualify for federal funding and network expansion, as part of infrastructure improvements targeting technology-disconnected communities.