Summary
Carmen has devoted his career to providing effective legal services to electric utilities and investors in electric utilities, investors in electric utilities, and other owners of generation or transmission facilities.
He has addressed issues before the Federal Energy Regulatory Commission (FERC) and in other venues related to all aspects of the Federal Power Act (FPA), the Electric Policy Act of 2005 including the Public Utility Holding Company Act of 2005, the Public Utility Regulatory Policies Act, and the FERC regulations and policies under those statutes, including matters related to FERC’s jurisdiction, markets, competition, prudence, regional transmission organizations, rates, mandatory wheeling, asset transfers and bankruptcies.
He has argued appeals before the 1st, 2nd, 9th and D.C. Circuits of the U.S. Courts of Appeals, submitted briefs in other appellate proceedings, litigated innumerable cases before FERC to final decision, kept current on evolving FERC policies affecting particular litigations and disputes, solicited FERC Staff for pre-filing advice, maintained cordial relations with adverse parties to exploit settlement possibilities, and negotiated, drafted and gained FERC approval for numerous settlements ranging from the simple to the extremely complex.
He has developed a particular interest in the generation mix, including reliance on energy conservation and zero and low carbon generation of all types, in the potential benefits of distributed generation, and in the application of electric power to the transportation sector.
Recent Work
Represented major creditors in FERC aspects of the two billion-dollar bankruptcy of a multi-state electric generation company;
Participated as part of a clean energy RFP in the evaluation of competitive transmission construction proposals to wheel clean energy from off shore resources and remotely located on-shore resources;
Participated in the negotiation and drafting of power supply and transmission contracts with the RFP “winners”.
Additional Contracts and Mobile Sierra Analysis
Negotiated, drafted and conducted litigation in defense of innumerable power sale and transmission contracts;
Authored The Mobile Sierra Rule: its Illustrious Past and Uncertain Future, 21 Energy L. J. 353 (2000), a compendium (at the time) of contract rights under the FPA which was based on his successful Court of Appeals brief to enforce settlement agreement rights which a corporate successor to the contracting party attempted to disclaim; emphasized that Mobile Sierra protection applies to a utility’s right to charge contractually fixed “high” rates as well as a customer’s right to contractually fixed “low” rates; and contemplated application of the Mobile Sierra contract protection rule in a restructured, non-vertically integrated utility environment with an accompanying shift in jurisdiction over generation rates from state regulatory agencies to the FERC.
Section 203 Transactions
In-depth expertise and experience in the asset and security acquisition provisions of section 203 of the FPA including
FERC section 203 precedent
passive investment rules and criteria related to shielding financial participants in utility ownership from detailed FERC regulation
the competition and customer protection issues which are of foremost importance when FERC considers these transactions.
Submitted many section 203 applications seeking FERC authorization to merge utilities and utility holding companies and for the acquisition of utility securities and/or generation and/or transmission assets, and, in that regard
supervised and created applications for FERC section 203 authorizations containing analyses and evidence to explain the relevant details of the transaction, demonstrate compliance of the application with FERC’s regulations, seek timely FERC authorization, and show that the transaction was not anti-competitive, did not unreasonably increase ratepayer costs or contained adequate ratepayer protection mechanisms, and was otherwise consistent with the public interest.
successfully defended against allegations that particular acquisitions were inconsistent with the public interest or otherwise contrary to law.
Authored a July 2016 Public Utilities Fortnightly article critiquing FERC’s application of its section 203 authority to facilities of de minimis value, explaining that transactions involving such facilities’ value could not possibly adversely affect the public interest, and containing a recommendation, which FERC has recently adopted, that FERC discontinue case-by-case scrutiny of such transactions and grant them generic authorization.
Jurisdiction
Has in-depth experience regarding the interplay of the FPA with antitrust law and bankruptcy law;
Worked on primary and exclusive jurisdiction issues involving the boundaries between FERC authority under the FPA and the authority of courts and state regulatory commissions;
Defended successfully a state commission’s transportation rates against a claim in an oil pipeline case under the Interstate Commerce Act that the rates were confiscatory and therefore subject to FERC override.
Tariffs
Helped design and develop an exchange-based tariff under which individual purchasers could obtain long-term power supply commitments from an aggregation of sellers;
Assisted in developing utility cost-based tariffs authorizing without individual cost of service filings bilateral power sales from all, several or one of a system’s generating units;
Obtained numerous authorizations for clients to sell power at market-based rates and supervised and/or actually developed evidentiary presentations showing the clients lacked market power;
Worked on and defended clients’ open access transmission tariffs, including the tariffs’ formula rate and annual true-up provisions;
Defended annual true-up filings against claims that a true-up failed to follow the tariff’s substantive or procedural requirements or otherwise recovered unjust and unreasonable revenues.
FERC Non-Rate Matters
Provided advice regarding and defended against claims of imprudence involving fuel procurements, power purchases and the construction and operation of nuclear power plants;
Worked on competition issues involving market power in connection with asset acquisitions and market-based rates as described above, claimed Sherman 2 collusion among neighboring utilities, claimed denials of service, and claimed discriminatory disparities between wholesale and retail industrial rates;
Advised clients relative to compliance with regional transmission organization (RTO) requirements, assisted clients in negotiations regarding RTO membership, worked on and filed interconnection agreements, negotiated and litigated the terms of interconnection agreements between clients and their RTOs, negotiated and submitted to FERC and to the relevant RTOs the terms and conditions of distribution-level interconnection agreements between clients and generators and clients and wholesale distribution systems;
Advised clients regarding Standards and Code of Conduct compliance, the terms and conditions of power sale transactions among affiliated entities and successfully defended a client that was a target of a FERC compliance investigation;
Advised clients regarding issues under Part I (hydro) of the FPA;
Helped prepare, filed, and justified a mandatory wheeling rate under section 211 of the FPA;
Advised clients regarding the legal aspects of system planning issues affecting generation and transmission additions.
FERC Cost of Service Matters
Advised clients and conducted litigation regarding virtually all FERC cost of service and related accounting issues including in part:
successfully litigated against a company that overstated the investment base of its reliability-must-run generators by more than $1 billion dollars through failure to recognize asset impairments and below book value purchases of its generators;
reached settlement with FERC Staff for accounting and rate treatment that would allow a client to recover surplus over book value of its purchase price of a large natural gas generating plant on the ground that the purchase would improve reliability and cut the client’s dependence on its more carbon-intensive coal plants;
litigated and/or advised clients seeking to justify higher returns on equity (ROE) or avoid ROE reductions;
drafted a Public Utility Fortnightly (PUF) article recommending that FERC abandon its then predominant reliance on discounted cash flow analysis in establishing the fair ROE (August 2013) FERC has since adopted a multi-method cost of equity approach;
drafted a PUF ROE article urging FERC to prohibit use of pancaked complaints against the same ROE to extend ROE refunds beyond the 15-month period allowed under section 206 of the FPA (April 2019);
litigated a host of other cost of service matters including, but not limited to, tax-related additions to and subtractions from rate base, treatment of unamortized balances of deferred rate recoveries, recovery of (i) transmission rate incentives, (ii) buyout costs of electric supply and fuel supply contracts, (iii) stranded costs, and (iv) spent nuclear fuel disposal costs, the allocation of income taxes to time periods, numerous depreciation and depreciation reserve issues including effect of economic obsolescence, functionalization of costs as among generation, transmission and distribution, allocation and direct assignment of costs as between clients and their wholesale distribution customers, and rate design both of stated rates (specific charges per unit of service) and formula rates recovery of a utility’s costs based on FERC accounting rules.
Government Service
Served as Assistant Legal Counsel to the Governor of Massachusetts working for Governor John Volpe for several months and Governor Frank Sargent for two years (1968-1970);
drafted legislation;
testified before committees of the state legislature
exercised oversight over agency and departmental activities of particular interest to the Governor
provided general legal advice to the Governor and top staff members;
Worked as a law clerk to the Justices of the Massachusetts Superior Court, the state’s trial court of general jurisdiction; under the direction of the Chief Justice of that Court prepared an extensive memorandum on the handling of guilty pleas which, in modified and expanded form, was published in the Boston University Law Review under the title Fair Bargains and Accurate Pleas, 49 Boston University Law Review 514 (1969).
Pre-Legal Work and Education
U. S. Department of State, appointed as a Foreign Service Officer and Vice Consul, American Consulate General, Palermo, Italy (1961-64);
Unites States Army Reserve (1961-67);
University of Pennsylvania Law School (LL.B 1967); Harvard College (B.A. 1961); Boston Latin School (founded 1635, oldest U.S. continuously functioning public high school).
CONTACT INFORMATION
202.412.0004
clgentile@gentilepllc.com