Public Utilities & Regulatory Law

Riker Danzig has perhaps the most diverse public utility and regulatory practice of any major New Jersey law firm. Our attorneys have represented clients before governmental agencies and the Courts in all the principal areas of utility and regulatory law. In addition, the firm’s utility and regulatory practice group works hand-in-hand with our governmental affairs group in Morristown and Trenton to provide comprehensive representation before all relevant governmental branches on legislative, regulatory and litigation matters. This memorandum offers an overview of the firm’s utility work in the following areas:

• Energy
• Telecommunications
• Water
• Sewer
• Solid waste

Energy

The firm currently serves as New Jersey regulatory counsel to Rockland Electric Company and has successfully represented it in a broad range of regulatory proceedings before the New Jersey Board of Public Utilities (BPU) and the New Jersey Courts. Recent matters include:

• Three base rate cases and deferred energy cost proceedings since 2002
• Proceedings arising out of the Electric Discount and Energy Competition Act. 1999 (EDECA) and its many amendments
• Energy Master Plan Matters
• Clean Energy matters and Petitions pursuant to RGGI legislation for approval of Energy Efficiency Programs, a Solar Energy Loan Program, an SREC-based financing program and Demand Response (DR) Programs
• Proceedings arising out of the Electric Discount and Energy Competition Act of 1999 (Energy Competition Act)
• Economic stimulus filings to accelerate investments
• Comprehensive electric industry restructuring proceedings
• The first proceeding to address "securitization" of deferred energy costs pursuant to legislation drafted and assisted through the legislature by the firm
• The divestiture of generating assets
• The merger of Rockland's parent, Orange and Rockland Utilities, with Consolidated Edison, Inc.

The firm represented FirstEnergy Corp. in the joint filing with Jersey Central Power & Light Company, d/b/a GPU Energy (JCP&L), for necessary approvals from the BPU relating to the merger of GPU, Inc. with FirstEnergy. That merger produced the fourth largest electric distribution company in the United States, with over four million customers in Ohio, Pennsylvania and New Jersey.

The firm also represented Atlantic City Electric Company, d/b/a Conectiv, in the year-long legislative process resulting in EDECA. In that endeavor, the public utilities and regulatory practice group and governmental affairs practice group worked in coordinated fashion to formulate proposed language for the legislation which met the client’s objectives, and to press for enactment of the legislation before key legislators, regulators, the Office of Chief Counsel to the Governor and other influential constituencies. We have represented Atlantic Electric in proceedings before the Board of Public Utilities, Superior Court and Appellate Division challenging the attempted acquisition through condemnation of the company’s distribution system and customers by a municipality.

The firm has also represented unregulated new entrants to the competitive electric market on selected licensing and related matters, including Consolidated Edison Solutions.

The firm has served as counsel to JCP&L in a wide variety of other matters, including cases before the New Jersey Department of Environmental Protection (DEP) and in the Courts. We participated in regulatory and legislative hearings following the accident at the Three Mile Island Nuclear Generating Station and in related appellate litigation. We also have represented JCP&L as trial and appellate counsel in major federal litigation involving interstate transportation of spent nuclear fuel and in securing permits for the construction of a natural gas-fueled, 60-mw cogeneration facility. Additionally, the firm has represented Public Service Electric and Gas Company (PSE&G) in a number of matters, including a substantial claim for damages to one of its nuclear generating facilities, in connection with the transactions related to the Tocks Island Project and in appeals relating to establishment of a new customer class of large refinery customers and from a contract entered into under the new flexible rate legislation. In addition, the firm has served as counsel to several lenders to and developers of cogeneration projects, including projects at Marcal Paper Mills in Elmwood Park, Schering-Plough in Kenilworth, the Exxon refinery in Linden and the Coastal Oil Company Eagle Point facility in West Deptford Township. The firm also represented a subsidiary of PSE&G engaged in the business of natural gas marketing as an intervenor in a South Jersey Gas rate case on issues related to market entry standards.

The firm recently served as New Jersey Counsel to Calpine Corporation in its $1.63 billion purchase of 4,490 MW of power generation assets from Pepco Holdings, Inc. and the related acquisition financing from a syndication group led by Credit Suisse AG. The purchase included 18 operating power plants, half of which were located in New Jersey.

Telecommunications

For over two decades, the firm has successfully represented clients in telecommunications matters before regulators, legislators, and the Courts.

For the past several years, Riker Danzig has served as outside New Jersey counsel to Sprint in BPU and appellate matters. Recently, the firm successfully represented Sprint before the BPU in achieving switched access reform, and before the Appellate Division in opposing LEC efforts to stay the BPU’s order. The firm also represented Sprint in the BPU’s ILEC service reclassification and alternative regulation plan proceeding involving Verizon and Embarq.

In addition, the firm served as outside New Jersey regulatory counsel to AT&T Communications of NJ, L.P. (AT&T) commencing with divestiture in the early 1980’s. In this role, Riker Danzig represented AT&T in the major divestiture and post-divestiture telecommunications proceedings before the BPU and Appellate Courts, including its initial post-divestiture rate and access charge proceedings. We also participated with the BPU staff in the development of rate flexibility regulations for IXCs. We represented AT&T in the legislative hearings which culminated in the enactment of legislation substantially deregulating the pricing of interexchange carrier services throughout New Jersey. (See the 1992 Telecommunications Act, N.J.S.A. 48:2-21.16 et seq.) We also represented AT&T in the proceedings before the BPU and Federal District Court which successfully opened up the intraLATA toll market to competition, first on a 10XXX dial-around basis, and then on a presubscription basis. The firm also represented AT&T before the BPU in matters involving implementation of the Telecommunications Act of 1996, as well as Verizon’s Plan for an Alternative Form of Regulation. For example, we represented AT&T as outside New Jersey Counsel in its initial arbitration with Verizon (then Bell Atlantic) pursuant to the Telecommunications Act and in the BPU’s generic local competition proceeding. The firm also represented AT&T in obtaining regulatory approvals for transactional matters including restructuring and securitization of accounts receivable. Most recently, we successfully represented AT&T in the proceedings before the BPU to obtain approval of its merger with SBC.

We have assisted a number of established carriers, CLECs and resellers, both public and private, large and small, in certification matters, financing applications, merger proceedings and other matters before the BPU; interconnection/resale negotiations with Verizon under the Telecommunications Act; and litigation against Verizon.

Riker Danzig also represents certain real estate interests in transactional, regulatory and litigation matters involving the provision of cable television and Internet services.

Water

The Firm assisted the City of Trenton in the preparation of a Request for Proposals and negotiated contracts with New Jersey-American Water Company for the sale of Trenton’s outside water untility system and for long-term water supply of the acquired system. Riker Danzig represented Trenton in a joint filing with New Jersey American to secure BPU approval of the transaction. Subsequently, Trenton’s voters rejected the sale in a referendum.

Riker Danzig has represented United Water Resources Inc., formerly Hackensack Water Company, (United Water), one of the State’s largest private water companies, in connection with successful litigation which led to implementation of the Wanaque South Project, a joint project with the North Jersey District Water Supply Commission (NJDWSC), which has greatly increased the reliable water supply to the over one million persons served by United Water and by NJDWSC. We also helped United Water secure regulatory approval for the refinancing of $100 million of tax-exempt debt used to finance the project. The firm also has represented United Water in numerous rate and appellate proceedings before the BPU and in the New Jersey Courts.

The firm served as legislative counsel to United Water in connection with drafting and securing passage of the New Jersey Water Supply Public-Private Contracting Act, P.L. 1995, c. 101 (N.J.S.A. 58: 26-19 et seq.), which provides a streamlined process by which a private firm may contract for up to forty years to operate a municipally owned water system. We also assisted United Water in securing enactment of the New Jersey Wastewater Treatment Public-Private Contracting Act, P.L. 1995, c. 216 (N.J.S.A. 58:27-19 et seq.), which was modeled after the earlier water supply public-private contracting act. We subsequently successfully litigated an action on behalf of United Water against the NJDWSC and the City of Bayonne which established that a regional water supply authority could not enter into a similar arrangement with a municipality under the auspices of its enabling legislation and the Interlocal Services Act, N.J.S.A. 40: 8A-3 et seq. See United Water Resources, Inc. v. North Jersey District Water Supply Commission, 151 N.J. 497 (1997).

The firm has served as General Counsel and Special Counsel to the Jersey City Municipal Utilities Authority and provides extensive advice concerning the water supply contracts, water charges and sewer matters over which the Authority has jurisdiction. Riker Danzig has represented JCMUA in connection with its combined sewer overflow program, including negotiation of an Administrative Consent Order with the State. We have advised JCMUA on many issues related to its sewer system, including rates and in negotiations with other authorities.

The firm has also represented Aquasource Utility New Jersey in proceedings before the BPU and in connection with the acquisition of its parent by Philadelphia Suburban Water Company.

In addition, the firm represented the New Jersey Foreign Trade Zone in the sale of its water system to New Jersey American Water Company and have represented other developers in connection with the sale of water system assets to a water public utility. We have also performed extensive work in the area of water rights, a subject of vital importance to New Jersey as public and private interests compete for that precious resource.

Sewer

We represent Environmental Disposal Corp. (EDC), which provides collection and treatment service to a development of over 5,000 units in two municipalities and provides treatment service to sewerage from all or portions of three municipalities on the basis of bulk treatment contracts which the firm negotiated with municipalities and for which it obtained BPU approval. The firm also assisted EDC with various applications before DEP. We have handled rate case proceedings and judicial appeals on behalf of EDC for both customer classes and have secured financing approvals as needed from BPU for the unique regional project.

Riker Danzig provides legal advice to the Township of West Caldwell relating to its sewer system and its contractual relationship with the Borough of Caldwell, which treats West Caldwell’s sewage.

We also conducted an investigation of sewer and water rates charged by the public utilities serving a majority of the residents of the Township of Allamuchy and rendered a report providing options to the municipality.

Solid Waste

Riker Danzig’s experience in the multifaceted area of solid waste disposal is unparalleled. We represent the principal developers of waste-to-energy facilities, Covanta Energy (Covanta), and Wheelabrator Environmental Systems Inc. (Wheelabrator) in connection with enforcement actions of DEP, and all other aspects of solid waste regulation. The firm has represented the Integrated Waste Services Association, the trade association of the waste-to-energy industry, as intervenor in a major litigation and in legislative initiatives.

The firm represented the Covanta subsidiary which owns and operates a waste-to-energy facility in Warren County in litigation against Somerset County, Hunterdon County and a transfer station operator/hauler, regarding the equitable allocation of the burdens associated with invalidation of an Interdistrict Agreement among Somerset County, Warren County and the Pollution Control Financing Authority of Warren County. The firm secured necessary New Jersey regulatory approvals for the 1998 restructuring of the Union County solid waste disposal system. Before restructuring, we represented Covanta’s Union County subsidiary in litigation in both the State and Federal Courts pertaining to the enforceability of an Interdistrict Agreement between Bergen County and its Authority, and Union County and its Authority.

The firm represented Covanta’s Warren County subsidiary in litigation brought by East Coast Sanitation (East Coast) against various disposal facilities and the Morris County Municipal Utilities Authority in which East Coast alleges that it was harmed by Morris County waste being disposed of at facilities other than the ones designated in the County’s Solid Waste Management Plan. The firm succeeded in having the complaint dismissed with prejudice by the trial court and is representing the Covanta subsidiary in East Coast’s appeal.

The firm also has assisted Covanta in connection with legislative initiatives to secure State assistance in dealing with the stranded debt problem associated with invalidation of the flow control regulation.

The firm represented Wheelabrator and assisted it in securing the requisite permits and approvals for construction of a resource recovery facility in Gloucester County. In the process, we assisted the client in developing, proposing and having adopted by the BPU, a generic approach to regulation of resource recovery facilities which involves a rate levelization process never before attempted. We also successfully defended the site designated for the facility in trial and appellate litigation and achieved a favorable resolution of various matters before the DEP, including litigation concerning alleged air permit violations. The firm also represented Wheelabrator in litigation pertaining to the continued viability of its franchise and the covenant not to compete, which the Gloucester County Improvement Authority had entered into in connection with a financing.

Since 1987, Riker Danzig has represented the Cumberland County Improvement Authority (Authority) in proceedings before the BPU and subsequently the DEP to establish landfill tariffs and to secure approval of necessary financings and host community benefit agreements. In addition, we have provided advice and guidance to the Authority in its contracting activities in the wake of Court decisions invalidating the State’s original flow control system and in connection with developing appropriate plans to participate successfully in a competitive environment.

We also have done extensive work in the sludge disposal area, having represented Bio Gro Systems, Inc. in securing an important subcontract for utilization of its process by the Bergen County Utilities Authority, and in connection with a plant which it operated for the County of Burlington. We also have experience in bid and contract issues related to delivery of sludge disposal services.