Freezing Rates with Confidence from Counsel

The Firm served as counsel to a utility in its application to convert into holding company form. At that time, with one exception, no other gas or electric utility in the state was owned by a utility holding company. Given the novelty of this matter, as well as the fact that the New York State Public Service Commission (“NYPSC”) was insisting on a long-term rate plan in exchange for the approval, the negotiation and ultimate settlement of this matter, took many months of intensive, weekly face-to-face negotiations among the parties. To a large extent, the resulting settlement agreement was created from whole cloth, as no holding company approval had been granted by the NYPSC for decades. The Firm’s lawyers crafted the terms of the agreement, which included several competitive protections, as well as devised a strategy, ultimately adopted by the client and agreed to by Staff and the other parties, to permit the client to effectively detariff a regulated service and retain the revenues from that service “below the line,” for the period of the rate plan. This provided the client with the ability to agree to a 6-year rate freeze which was, at the time, the longest rate freeze for a gas or electric utility in the State.