Energy & Infrastructure

clean energy
Ropes & Gray represents clients in virtually every sector of the global energy and infrastructure industry, from private investors to real estate developers and academic institutions. Our attorneys work across several practice areas to help energy and infrastructure companies address their greatest legal and financial needs.

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Integrated Practices

Ropes & Gray takes a uniquely interdisciplinary approach to help clients in a broad range of energy and infrastructure subindustries address their greatest legal and financial needs. Attorneys from over ten practice areas work together seamlessly to provide comprehensive support for energy and infrastructure companies as well as funds investing in this rapidly evolving space.

energy-infrastructure

Our clients include:

  • Electricity generators and distributors
  • Private equity and infrastructure funds
  • Energy-related technology companies
  • Energy developers
  • Investment companies and advisors
  • Private investors
  • Academic institutions
  • Telecommunications network operators
  • Real estate developers and managers

Experience

Our attorneys have experience supporting energy and infrastructure companies and funds in a number of disciplines, including:

Mergers & Acquisitions

  • Represented Netrality Properties in the $142 million acquisition from Digital Realty of four network data centers including the separate acquisition of a colocation business from 365 Data Centers.
  • Represented a U.S. investor on a sale and leaseback, construction and development and debt financing of a 60MW build-to-suit data center for a major global technology business in The Netherlands, reported to be one of the World’s largest data centers and one of the first transactions of its kind with a total anticipated cost of EUR450 million.
  • Represented Berkshire Partners in its $461 million sale of Tower Development Corporation, a U.S.-based company that develops wireless communications infrastructure.

Private Equity

  • Represented a private equity firm in the $1.8 billion acquisition financing for Encana Oil & Gas’s Oil & Gas Assets.
  • Represented a private equity firm in its leveraged tender offer buyout of Japan Wind Development Company (JWD), a leading alternative energy firm in Japan.

Venture Capital

  • Stanford University. Acting for Stanford University endowment in connection with multiple investments in natural resources, including oil & gas funds and co-investments in fund-sponsored vehicles and alongside funds directly into companies.
  • Eversource. Represented Eversource in the Access Northeast Project, an equity investment in Algonquin Gas Transmission LLC (AGT), the owner of a natural gas pipeline. Eversource is joining investors Spectra Energy and National Grid in an effort to grow the capacity of Algonquin’s existing natural gas pipeline across New England and build out liquefied natural gas storage facilities in Acushnet, MA.
  • Eversource Energy. Represented Eversource Energy in its joint venture with Orsted AS, the global leader of offshore wind power, to develop deepwater offshore wind farms off the coast of the New England States.

Fund Formation

  • We represent both fund sponsors and fund investors; this balanced practice enables us to understand the concerns of both sides and craft creative solutions that address the needs of both sponsors and investors
    • Fund Sponsors: over the past five years, we have acted as fund counsel in organizing over 500 funds
    • Fund Investors: over the past five years, we have acted as counsel for over 100 separate investors in connection with their investments in approximately 2,250 private investment funds
    • Secondary Transactions: Over the past 10 years, we have completed approximately 350 secondary transactions
  • Buyer counsel for approximately 150 transactions, totaling over $14 billion
  • Seller counsel for approximately 200 transactions, totaling over $10 billion

Real Estate

  • Represented I Squared Capital in its acquisition with Veolia Energy of the Kendall Square Power Station, a 256 megawatt producer of electrical and steam energy.
  • Represented a group of homeowners whose sole means of vehicular and utility access was at imminent risk of being lost to climate change-induced sea level rise in advising the design and consulting team in the permitting process for the infrastructure.
  • Represented a multinational banking conglomerate in structuring the anchor investments by their domestic and foreign clients into a closed-end natural resources fund focused on the production and sale of oil and gas from unconventional production zones in North America.
  • Represented a leading multi-utility company in the purchase of power plants from American Electric Power.

Business Restructuring

  • Represented the official committee of unsecured creditors in connection with one of the largest of the wave of oil and gas industry bankruptcy cases.
  • Represented the Official Committee of Unsecured Creditors of an independent oil and gas exploration and production company that had $2.8 billion in first lien secured bank debt $1 billion in second lien bonds, and $4.7 billion in unsecured bonds and substantial trade claims.
  • Represented The Special Committee of the Sanchez Energy Board of Directors in an investigation analyzing potential claims relating to transactions between Sanchez Energy and Sanchez Midstream Partners for breach of fiduciary duties. Sanchez Energy is an independent exploration and production company focused on the development of oil and natural gas resources in the onshore United States.
  • Represented an ad hoc group of unsecured noteholders in the prepackaged chapter 11 cases of Forbes Energy Services Ltd., an oil and gas services provider.

Capital Markets

  • Represented Eversource Energy in its $264 million follow-on offering
  • Represented the lead underwriters in an aggregate of over $2 billion in high yield debt offerings and a $302 million follow-on offering for Tampa Electric Company
  • Represented NSTAR, a major provider of electricity and natural gas, in its $295 million debt offering (NSTAR now operates as a subsidiary of Eversource Energy)

Intellectual Property

  • Solar Power. Methods of manufacturing solar cell arrays; production of amorphous silicon semiconductor materials; novel photovoltaic cells
  • Alternative Power. Microbial digestion for production of cellulosic ethanol; production and utilization of biogas; hybrid vehicle power systems
  • Electric Power. Environmentally-friendly energy storage devices; advanced fuel cell technology; dielectric impregnants; regional electric power distribution, optimization and market pricing; regional electric power load control and disaster prevention; tidal generation of electricity
  • Environmental. Aquifier contamination; oil tanker deballasting residue; atmospheric transformation of fossil fuel combustion products

Environmental Compliance

  • Represented Abiomed, a leading provider of breakthrough heart support technologies, in connection with environmental regulatory and diligence matters involving the expansion of the company’s campus and headquarters in Danvers, MA.
  • Represented Kohlberg & Co. in its acquisition of Sara Lee Frozen Bakery and Van’s businesses from Tyson Foods. The transaction required environmental diligence on two large-scale manufacturing plants, the negation of environmental liability allocation agreements and the transfer of numerous operational permits issued under environmental law.
  • Advised Coca-Cola Beverages Florida on the environmental diligence and structuring aspects of its acquisition of distribution territories and operation and productions facilities in South Florida from The Coca-Cola company.

Tax

  • Advised Eversource Energy on the tax aspects of its agreement to acquire Aquarion Water Company, the largest private water company in the region.
  • Represented Elliott Management Corporation on tax matters as part of a $2.5 billion equity investment in FirstEnergy that includes $1.62 billion in mandatory convertible preferred equity and $850 million of common equity.
  • Represented a multinational energy company before the Massachusetts Appellate Tax Board, achieving a complete victory in a multi-million dollar dispute over local taxes.

Case Studies

  • Hancock Infrastructure Fund

  • MATEP

Hospital Consortium Purchase and Sale of a Tri-Generation Power Plant

Overview

Ropes & Gray represented a consortium of world-class teaching hospitals in evaluating and executing a transaction to monetize a purchase option held by the consortium, as well as other institutions, to purchase a tri-generation power plant servicing the institutions. Through a series of simultaneously negotiated transactions, the consortium was able to (i) establish and exercise the purchase option with the owner of the tri-gen plant, a private investment infrastructure fund and (ii) ultimately control the transfer of the ownership and operations of the plant through a competitive bid process to a strategic owner and operator with a demonstrated commitment to hospitals and other non-profit institutions. The transaction structure enabled the consortium to control the ownership transfer of the plant without the consortium ever taking title to or ownership of the plant while preserving a tax-efficient structure for the consortium members.

Our firm leveraged its deep institutional knowledge about both the plant and the involved parties to guide the consortium to a successful transaction.

Specific Challenges

This complex transaction required us to draw on our deep legal expertise across a broad range of disciplines, most notably our educational/health care, energy transactional and tax practices to negotiate and structure the transaction to the advantage of the tax-exempt members of the consortium, as well as to navigate multiple contracts with over ten counterparties having often competing or divergent interests and with particular issues related to tax and regulatory approvals.

At the heart of this transaction lay a purchase option held by the consortium and other institutions struck in 2015 between the institutions and the plant owner as part of an overall compromise in negotiating long-term utility contracts between the institutions and the plant. This purchase option offered the institutions the non-assignable right to acquire the plant for a substantial fixed purchase price.

As the purchase option term neared expiration, the institutions explored the market value of the fixed price option, realizing the market value significantly exceeded the option exercise price but that because of the expressly non-assignable nature of the option agreement, the institutions would need to exercise the option, thereby funding the significant exercise price, before monetizing the value of the difference between the market value and exercise price. This structural limitation raised significant questions about operational capabilities, financing obligations (particularly in light of the institutions’ tax-exempt status) and other risks of ownership and value.

Strategy

To meet these challenges, our team of attorneys collaborated closely with other advisors and the officers of the consortium to structure a transaction that allowed the consortium to simultaneously negotiate with the plant owner for the exercise of the option, the ultimate purchaser for the transfer of the consortium’s ownership rights and the financing parties willing to fund different scenarios dependent upon the outcome of regulatory approvals and other considerations.

Negotiations required the team at Ropes & Gray to negotiate with both the current plant owner and ultimate purchaser on a confidential basis, while structuring the transaction documents to transform the non-assignable purchase option into a fully negotiated purchase agreement that the consortium could then assign to the ultimate purchaser. Because of the uncertainty of the outcome of negotiations with the current owner, we negotiated on behalf of the consortium a back-to-back purchase arrangement that could be restructured in the event of the assignment of the consortium’s purchase agreement with the current owner.

The process required deep collaboration with the consortium and its advisors and officers to identify and creatively resolve a number of novel issues as challenges to the structure arose throughout the transaction related to the existing purchase option, simultaneous regulatory approvals, financing limitations and tax considerations.

Success

Under our counsel, the consortium successfully exercised its rights to purchase the plant, secured all regulatory permitting for the overall transaction and then assigned its rights to the ownership and operation of the plant to a strategic owner, generating significant proceeds for the consortium without ownership risk. The success of the deal is a testament to our firm’s ability to collaborate with our clients to solve deeply complex commercial and legal issues through innovative thinking and broad experience. 

  • Squibnocket Farm

Overview

 Ropes & Gray represents Squibnocket Farm, a nonprofit association of homeowners (the Association), in its collaboration with the Town of Chilmark on a public-private project to preserve both the sole access route to the Squibnocket Farm subdivision and one of the few public beaches on the south shore of Martha’s Vineyard.

Chilmark had leased Squibnocket Beach from the Association since the 1950’s.  Over time, erosion and sea level rise rendered the beach usable only at low tide.  The ocean frequently flooded and damaged the adjacent road during storms.  The ravages of climate change were on vivid display. The beach and road were at risk of permanent loss unless steps were taken to effect a “managed retreat” from the encroaching ocean.

After Super Storm Sandy nearly destroyed the road in 2012, the principals of the Association were referred to us by Chilmark’s counsel, who knew us from our prior work for various Island municipalities on public law and finance matters.  We and Chilmark then raced to identify and execute a coordinated set of projects that could solve the town’s beach problem and the Association’s access problem before natural events made it impossible to recover.

Specific Challenges

The existing roadway was protected by a stone revetment.  As an engineering matter, the road’s useful life could have been prolonged simply by reconstructing and extending the revetment. This, though, would do nothing to save the beach (and in fact might accelerate its demise), and was flatly prohibited under Massachusetts wetlands protection laws.  The better approach – functionally and environmentally – was to relocate the roadway to a more landward position and elevate it, as a causeway, on piles.  This would allow the revetment to be removed, and the beach to be widened and replenished.

The construction of the causeway was to be the private portion of the P3, undertaken at the Association’s expense.  Subsequently, the town at its expense would restore the beach and create new public amenities (e.g., parking) adjacent to the restored beach, on land to be variously leased from the Association or acquired from third parties, some of whom were opposed to the project.  Once complete, the contemplated transactions and projects would deliver to the public decades of access to a bigger and better beach, secure decades of sustainable access for the Association, and yield significant environmental benefits.

To execute the project, consents were needed from an array of federal, state, regional and municipal regulatory agencies; both Chilmark and the Association had to acquire land from unaffiliated (and either hostile or uncooperative) third parties; and the Chilmark Town Meeting needed to amend the town’s zoning bylaw to clarify the project’s conforming status and to authorize the Board of Selectmen to transact with the Association and acquire land.  All of this had to be done in the face of a deeply-resourced and aggressive oppositional campaign organized by individuals concerned about the impact that the project would have on their aesthetic interests, or just motivated by personal animus, including some members of the Association itself.  One of the opponents vowed publicly to “fight the project to the death” and had the financial resources to do so.

The P3 was first presented to the public in 2013.  The causeway was opened on March 8, 2018 (the same day that a Nor’easter delivered the final, debilitating punch to the old roadway), and the ribbon was cut on the public beach project on May 25, 2018.  In between, our client and the town had to weather three Town Meeting votes; convince an ad hoc municipal committee that there were no viable alternatives to the project; complete five environmental impact review and permitting processes at every level of government; defend and win four administrative appeals; defend and win two litigations in the Massachusetts Land Court; and defend and defeat an injunction request in the Dukes County Superior Court.

Strategy

The legal strategy from the outset was to select and design projects that were fully consistent with environmental and land use law and required no special variances or discretionary relief.  This required a lot of needle-threading in such an environmentally sensitive context.  Although we were certain that the permits would be appealed, because we took this approach, we were equally certain that all challenges could ultimately be defeated on the merits.

We took a highly conservative approach to the permitting process.  Where there was any doubt about the need for a certain permit or approval, we erred in nearly every case on the side of proactively seeking the approval.  Where it was to our strategic advantage to join the town in joint permitting processes we did so, and vice versa.  A key, early decision was to join the town in a joint filing under the Massachusetts Environmental Policy Act (MEPA).  MEPA review was not technically needed for the private project, but was required for the public project.  By volunteering to join with Chilmark in its compulsory MEPA process, we preempted any arguments later that the private project had unlawfully evaded MEPA review, and more important were able to claim that the state’s highest ranking environmental officer (the Secretary of Environmental Affairs) had blessed the project.

Conversely, the private and public projects were presented separately to the US Army Corps of Engineers, which arguably had jurisdiction over the public project, but lacked jurisdiction over the private project.  This approach required convincing the Corps that the two projects had independent utility, as well as a creative (but correct) interpretation of the Corps’ Clean Water Act permitting program as administered in Massachusetts.

When the opposition engaged in PR campaigns designed to mislead, including the publication of false and threatening renderings of what the project would look like, we disseminated uncontestable facts, with no spin.  We stayed on the right side of every technical and regulatory issue, and prevailed.  We were assisted in this by a top-flight team of engineering and permitting consultants, resilient clients who did not waver in their commitment to the project, and a courageous group of selectmen who withstood years of personal and legal attacks and worked with us effectively to prevent the public display of any daylight between the parties. For further information on the outcome of this project, please refer to the attached local news coverage.

Success

IMAGES

  • Veolia/I Squared Capital

Joint Venture between I Squared Capital and Veolia to own and operate Kendall Cogeneration Station

Overview

Ropes & Gray represented I Squared Capital, a leading infrastructure investment manager, in its negotiations with Veolia Energy, a leading provider of sustainable energy services, in their joint venture to purchase the 256- megawatt Kendall Cogeneration Station from NRG North America, LLC. The station, built in the mid-1940’s, had used natural gas as its primary fuel source in order to generate electrical and steam energy but required significant repairs and upgrades to continue efficient operations and comply with a recently issued EPA order requiring certain reconfigurations due to heated water discharge in the Charles River.  At the time of the transaction, I Squared Capital was a recently formed infrastructure fund consisting mainly of principals of the infrastructure fund that had purchased the MATEP Plant from NSTAR, where Ropes & Gray had represented NSTAR.

Specific Challenges

This transaction involved both detailed negotiations between the two joint venture partners in organizing the future operations, governance and economics with respect to the Kendall plant and negotiations with NRG in the sale of the plant to the joint venture. With Veolia principally responsible for operations at the plant but ISQ desiring significant control in strategic and operational decision-making, the joint venture required delicate negotiations between two parties who were, at the same time, already acting as partners in the acquisition transaction. The acquisition transaction was complicated by the need for significant long-term capital improvements at the plant, including the required reconfiguration, as well as in-progress repairs and upgrades ongoing during the negotiations.

Strategy

Negotiating the joint venture arrangement required extensive discussions between the partners to devise a governance scheme that provided equal voices while recognizing that Veolia’s employees would be managing the plants ongoing operations and would therefore be in the best position to understand and foresee the short- and long-term requirements for the plant. This position, coupled with shared economic interest in the value of the plant, formed the basis on which to create a joint venture that balanced interests while acknowledging subject-matter expertise. Ropes & Gray lawyers worked to facilitate the conversation on the various decisions, propose creative solutions to disagreements and articulate those decisions in the operating agreements that would be used for years into the future.

The negotiations on the purchase of the plant from NRG required clear guidelines for pre-closing and post-closing obligations for plant repairs, upgrades and the reconfiguration. Ropes & Gray worked with our clients to create an innovative structure to protect the joint venture from potential cost overruns on the ongoing repairs undertaken by the current owner as well as the reconfiguration needed to comply with the terms of the EPA order.

Success

With contractual protections on the ongoing repair projects and the expense and status of the reconfiguration project, the joint venture parties acquired the plant with a detailed work plan in place for the operations of the plant into the future. The acquisition was followed by significant updates to the plant’s infrastructure, which was retrofitted with a new system that leveraged ambient air for use in its thermal cycle instead of water from the Charles River thus eliminating heated water discharge into the river and protecting the local aquatic habitat, while also reducing greenhouse gas emissions and improving air quality.  

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