When Sparks Fly: Economic Issues in Complex Energy Contract Litigation
Published by The Brattle Group, Inc.
The uneven movement toward deregulation of energy markets has set the stage for an increasing level of contract litigation. On one hand, industry restructuring, the collapse of the merchant energy sector, and the demand to meet growing resource needs will force many utilities to contract for some combination of power purchases, new generator construction, and fuel supply.
On the other hand, fuel and power price volatility, changing network conditions, and evolving regulatory regimes and environmental requirements create uncertainties that complicate the contractual allocation of risks. This combination of circumstances will almost inevitably lead to unanticipated outcomes, disappointed parties, and thus, contract renegotiation and litigation.
