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Electricity Litigation & Regulatory Disputes

Brattle offers extensive litigation support and testifying experience regarding disputed energy contracts, asset performance, and transactions.

Our experts testify frequently before regulatory commissions, courts, and arbitration and mediation panels on subjects involving both liability and damages. We have significant experience in damages estimation, including the application of modern finance theory for discount rate determination purposes, which is often an issue because the lost or impaired contract may have considerably different risks than its available replacements. Our knowledge of the energy industry allows us to testify on industry fundamentals and practices, common use of industry terms, the materiality of misrepresentations in securities offerings, and whether reasonable efforts were undertaken to mitigate damages.

We provide support to our clients in all aspects of the litigation process, including the formulation of economic arguments and case strategy, class certification matters, litigation risk analysis, and assistance with discovery, depositions, and cross examination. We also help clients with the identification and coordination of expert witnesses and we support clients in drafting legal documents involving economic subject areas or highly technical industry matters. Similarly, we have often provided assistance on technical issues and strategy in settlement negotiations and in allocating damage awards or settlement amounts among multiple claimants.

In addition to litigation assignments, Brattle provides business consulting services to clients in contract (re)negotiation, formulation and review of procurement strategies and auctions, and the valuation of contracts and specific contract terms.

Areas of Expertise

Below is a list of representative engagements for our Electricity Litigation & Regulatory Disputes practice.

Breach of natural gas contract

In a jury trial in federal court, we testified on behalf of Amerada Hess as to the appropriate damage theory and amount of damages for the breach of a natural gas supply contract between a gas producer and marketer (Hess). The jury returned a verdict that adopted our damage estimate. On appeal, the federal appeals court affirmed the jury verdict and cited our damage theory for its consistency with legal principles associated with the “anticipatory repudiation” of long-term contracts.

Damages analysis for the failure of a major generation plant in California
For estimating breach-of-contract damages, a Brattle principal provided written and oral expert testimony in a high-profile international arbitration case involving the failure of a major electricity generation plant in California. The Brattle team built and ran simulation models to forecast power prices and greenhouse gas (GHG) allowance prices in California and the rest of western states through 2050, accounting for very short-term operational effects as well as long-term capacity expansion needs. The models’ resulting range of power price forecasts under expected future market conditions was used to estimate damages.
Brazilian generation and distribution investment
The Brattle Group provided expert consulting services in two breach-of-contract arbitrations involving investments in energy generation and distribution assets in Brazil. The case involved damages, the valuation of assets, and determination of relevant acquisition premia.
Australian natural gas contract pricing
In several arbitrations concerning natural gas supply contracts in Australia, Brattle testified as to the proper economic interpretation of the price review clauses in those contracts. The testimony also analyzed gas market trends and practices and the terms included in other third party supply contracts obtained through discovery.
Development of settlement fund allocation methodology
To assist in the settlement of a major civil antitrust matter, The Brattle Group evaluated the damages to entities consuming natural gas and electricity that resulted from anti competitive behavior in the natural gas transportation market. These damages estimates were performed at the class and individual entity level for numerous types of consumers and were used as the basis for the allocation of over $1 billion in settlement funds.
Economic burden from long-term contracts signed during California Power Crisis
In a large litigation case before the Federal Energy Regulatory Commission (FERC) regarding two long-term contracts that the California Department of Water Resources (CDWR) signed with Shell and Iberdrola during the California Energy Crisis, Brattle experts provided four separate testimonies on market manipulation and tariff violations in the spot energy markets inflating forward power prices, and the prices in the two contracts resulting in a large economic burden on consumers. We estimated the “down the line” economic burden by comparing the payments under the contracts to prices in comparable contracts and market prices after the end of the dysfunction. We also assessed whether the contract prices could be explained by the expected future market fundamentals in the California power markets by using DAYZER market simulation software for the near-term and expected cost of installing and operating a new generation unit for the long-term. The decision from the presiding ALJ largely adopted the conclusions in our testimony.
Damages resulting from unfair oil pipeline lease
In a dispute between the owners of an oil pipeline in Texas, we submitted an expert report on behalf of Chevron Pipe Line Company, which calculated the damages that resulted from the majority owner of the pipeline entering into a pipeline lease with a subsidiary at a below-market lease price. Our report analyzed the demand for oil pipeline transportation services in Texas and the prices obtained for oil pipeline transportation service on new oil pipeline projects serving the Gulf Coast market. This analysis informed our opinion of a fair lease rate that could have been achieved by an independent owner of the pipeline.
Liberty power plant contract termination
In a dispute over damages from a prematurely terminated long-term power tolling contract, Brattle provided presented testimony on why calculating the present value of those damages required the use of two distinct discount rates: one (a low rate) for the revenues lost under the low-risk terminated contract, and another, much higher rate for the valuation of the replacement revenues in the risky, short-term wholesale power markets. This risk differentiation was important because the average undiscounted value for the lost, fixed-price contract revenues was somewhat lower than for the expected spot market revenues that would replace it. Nonetheless, there were significant damages under a two-discount rate calculation, reflecting the attractiveness of the secure contract. This position was adopted by the court.
Electricity Litigation Expertise
January 31, 2018
Published by The Brattle Group, Inc.
Retail Electricity and Gas Competition: Regulatory and Market Update
December 15, 2017
Agustin J. Ros , Ahmad Faruqui, Neil Lessem, and Rebecca Carroll
Published by The Brattle Group, Inc.

The analysis examines those states in the U.S. and Canada that permit full (residential, commercial, and industrial) and partial retail choice and the share of customers and load served by retail electricity providers since 2005.

Building an Effective Trade Surveillance System: A Framework-Based Approach using Guidance from Two Recent FERC White Papers
March 20, 2017
Published by The Brattle Group, Inc.

The whitepaper outlines a cost-effective, learning-driven approach for companies to develop in-house trade surveillance systems to analyze potentially manipulative behavior.

News & Knowledge
March 30, 2021
Nathalie Hinchey Examines the Potential for Vertically Integrated Firms to Manipulate Natural Gas and Electricity Market Prices

Brattle Associate Nathalie Hinchey has published an article in The Energy Journal titled “Incentives for Vertically Integrated Firms in the Natural Gas and Electricity Markets to Manipulate Prices.”

September 21, 2020
Article by Brattle Consultants Provides Economic Framework for Force Majeure Energy Contract Disputes

Brattle consultants have coauthored a new article that discusses the instrumental role economic analyses can serve in evaluating force majeure or other contract defense disputes in energy-industry transactions.

June 18, 2020
Who's Who Legal Recognizes Brattle Economists as Leading Consulting Experts for their Work in Energy

Who’s Who Legal has recognized six Brattle economists as leading economic consulting experts in their WWL Energy 2020 list: Dr. Ahmad Faruqui, Dr. José Antonio García, Dan Harris, Carlos Lapuerta, Dr. Pedro Marín, and Dr. Kathleen Spees.

February 21, 2018
Shaun Ledgerwood and John Tsoukalis to Present at Energy Risk Event on Trade Surveillance & Market Compliance for Energy Trading Organizations

Brattle Principal Shaun Ledgerwood and Senior Associate John Tsoukalis will present at Energy Risk’s training event, “Trade Surveillance & Market Compliance for Energy Trading Organizations,” taking place February 21-22, 2018 in Houston, TX.

December 15, 2017
Brattle Economists Provide Update on U.S. and Canada Retail Electric and Gas Competition

Brattle economists Agustin Ros, Ahmad Faruqui, Rebecca Carroll, and Neil Lessem have undertaken a comprehensive review of retail electricity and natural gas competition in the U.S. and Canada.

March 20, 2017
Building an Effective Trade Surveillance System: Guidance from FERC White Papers

Brattle Principal Shaun Ledgerwood and Associate John Tsoukalis have authored a white paper that outlines a cost-effective, learning-driven approach for companies to develop in-house trade surveillance systems to analyze potentially manipulative behavior.

September 12, 2016
Brattle Consultants Contribute to Significant Win for the State of California on Energy Crisis Tariff Violations

Testimony by Brattle consultants contributed to a favorable outcome for the State of California in a recent decision by the U.S. Court of Appeals for the Ninth Circuit, which upheld a ruling by the Federal Energy Regulatory Commission (FERC) finding that several electric power sellers committed tariff violations during the California Energy Crisis in the summer of 2000.

July 11, 2016
Damages Testimony by Brattle Principals Contributes to Favorable Outcome for U.S. Department of the Interior in Gas Pipeline Contract Dispute

Expert testimony by Principals Paul Carpenter and Steve Levine helped to secure a favorable outcome for the U.S. Department of the Interior in a contract dispute with Rockies Express Pipeline LLC.

April 13, 2016
Brattle Consultants Contribute to Significant Win for the State of California on Energy Crisis Long-Term Contracts

Based on evidence presented by Brattle consultants, a FERC Administrative Law Judge issued a ruling that found that the Mobile-Sierra doctrine does not protect two long-term wholesale electricity contracts entered into during the Western Energy Crisis in 2001.

April 14, 2015
Brattle Consultants Release Book on Market Power and Market Manipulation in Energy Markets

Brattle principals Gerald Taylor, Shaun Ledgerwood, Romkaew Broehm, and Peter Fox-Penner have authored a book that provides insights and an analytical framework for understanding the legal and economic nuances associated with energy market manipulation. Market Power and Market Manipulation in Energy Markets: From the California Crisis to the Present will be published in April 2015 by PUR Inc.

March 31, 2015
Shaun Ledgerwood to Speak on Market Manipulation in U.S. Electricity Markets at Gulf Coast Power Association Spring Conference

Brattle principal Shaun Ledgerwood will speak on the current state of market manipulation activity in the U.S. electricity markets at the upcoming 29th Annual Gulf Coast Power Association (GCPA) Spring Conference.

November 18, 2014
Brattle Economists Contribute to FERC Ruling Supporting Findings of Manipulative Behavior by Power Suppliers During the California Energy Crisis

Testimony provided by Brattle consultants supported a FERC order affirming the initial decision in the matter of San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs, which found power suppliers engaged in manipulative behavior during the California Energy Crisis.