Power contract arbitration

In a major dispute headed to arbitration, assisted a merchant generating company in determining the value lost when the government agency with whom it had contracted to develop a gas-fired power plant decided to terminate the contract before the plant was completed. A key contributor to the value lost was the potential riskiness of the contract revenues. The contract’s unusual structure insulated the merchant generating company from many of the risks normally associated with electricity markets, transferring these risks to the government agency over the contract’s twenty-year term. This transfer of risk dramatically increased the value of the contract and thus the magnitude of the claim. The case resulted in an advantageous settlement for the client.