Public Utilities & Regulatory Law
Riker Danzig’s emphasis on the public utility and regulatory practice started in 1978, when former president of the then New Jersey Public Utility Commission and New Jersey Attorney General William F. Hyland joined the Firm as a senior partner.
Riker Danzig has a broad and diverse public utility and regulatory practice. Our attorneys have represented clients before governmental agencies and the courts in all the principal areas of utility and regulatory law. In addition, the Firm’s utility and regulatory practice group works hand-in-hand with our governmental affairs group in Morristown and Trenton. We also team with attorneys in our local government, land use, real estate, corporate, tax and environmental practices. In this manner, we provide comprehensive representation before all relevant governmental branches on legislative, regulatory, litigation and transactional matters. This memorandum offers an overview of the Firm’s utility work in the following areas:
The Firm currently serves as outside New Jersey regulatory counsel to Rockland Electric Company, a Consolidated Edison subsidiary, and has successfully represented it in a broad range of rate case and other regulatory proceedings before the New Jersey Board of Public Utilities (“BPU”) and the New Jersey Courts. Matters include:
- Five base rate cases since 2002
- A proceeding to implement Advanced Metering Infrastructure (“AMI”) and smart meters throughout the company’s service territory
- A proceeding for approval of storm hardening and resiliency programs (including the first electric undergrounding program) and an accelerated rate recovery mechanism
- A proceeding to fully recover the costs of responding to Superstorm Sandy, Hurricane Irene and other storms
- A proceeding to implement a smart grid pilot program and a cost recovery surcharge
- Clean Energy matters and Petitions pursuant to RGGI legislation for approval of Energy Efficiency Programs, an SREC-based financing program and Demand Response (“DR”) Programs
- Appeal of the BPU’s LCAPPP orders
- Proceedings arising out of the Electric Discount and Energy Competition Act 1999 (“EDECA”) and its many amendments, including comprehensive electric industry stranded cost, deferred balance and restructuring proceedings
- The first proceeding to address “securitization” of deferred energy costs pursuant to legislation drafted and assisted through the Legislature by the Firm
- Energy Master Plan Matters
- The divestiture of generating assets
- The merger of Rockland’s parent, Orange and Rockland Utilities, with Consolidated Edison, Inc.
The Firm currently represents Jersey Central Power & Light Company in its $386 million JCP&L Reliability Plus Infrastructure Investment Program (“IIP”) under the Board’s new infrastructure investment recovery rules, N.J.A.C. 14:3-2A.1 et seq. The Firm also represents New Jersey Natural Gas Company in connection with appellate matters concerning its Southern Reliability Link (“SRI”) intrastate gas transmission pipeline and other litigation matters. In addition to our current energy utility clients, the Firm has had the opportunity to work with the New Jersey Utilities Association (“NJUA”), the trade organization for the state’s electric, gas, water and sewer utilities, and each of the state’s other electric distribution utilities, in a variety of matters. The Firm recently represented the NJUA before the Appellate Division of the New Jersey Superior Court, as a Respondent defending against a challenge to a BPU Order that favorably modified the methodology used for calculating consolidated tax adjustments (“CTAs”) in public utility rate proceedings.
The Firm represented Atlantic City Electric Company, d/b/a Conectiv, in the year-long legislative process resulting in EDECA. In that endeavor, the public utilities and regulatory practice group and governmental affairs practice group worked in coordinated fashion to formulate proposed language for the legislation which met the client’s objectives, and to press for enactment of the legislation before key legislators, regulators, the Office of Chief Counsel to the Governor and other influential constituencies. We have represented Atlantic City Electric in proceedings before the BPU, Superior Court and Appellate Division in defense of condemnation litigation initiated by a municipality in an effort to acquire a portion of the company’s distribution system and customers.
The Firm represented FirstEnergy Corp. in the joint filing with JCP&L for necessary approvals from the BPU relating to the merger of GPU, Inc. with FirstEnergy. Riker Danzig participated in regulatory and legislative hearings following the accident at the Three Mile Island Nuclear Generating Station and in related appellate litigation. We also represented JCP&L as trial and appellate counsel in major federal litigation involving interstate transportation of spent nuclear fuel.
Additionally, the Firm has represented Public Service Electric and Gas Company (“PSE&G”) on a number of matters and cases, including appeals from contracts entered into under flexible rate legislation.
The Firm has also represented non-utilities in certain energy-related matters. The Firm served as New Jersey Counsel to Calpine Corporation in its acquisition of Champion Energy Services, LLC, a licensed power supplier. We also represented Calpine as New Jersey Counsel in its $1.63 billion purchase of 4,490 MW of power generation assets from Pepco Holdings, Inc. and the related acquisition financing from a syndication group led by Credit Suisse AG. The purchase included 18 operating power plants, half of which were located in New Jersey.
The Firm has also represented unregulated entrants to the competitive electric market on discrete licensing and regulatory matters. The Firm has served as counsel to several lenders to and developers of cogeneration projects, including projects at Marcal Paper Mills in Elmwood Park, Schering-Plough in Kenilworth, the Exxon refinery in Linden and the Coastal Oil Company Eagle Point facility in West Deptford Township.
For over three decades, the Firm has successfully represented clients in telecommunications matters before regulators, legislators, and the Courts.
For the past several years, Riker Danzig has served as outside New Jersey counsel to Sprint in BPU and appellate matters. Recently, the Firm successfully represented Sprint before the BPU in obtaining approval of its merger with T-Mobile. Prior to that we successfully represented Sprint in a litigated proceeding achieving reductions in switched access rates, and then again before the Appellate Division in upholding that favorable BPU decision against stay motions and several appeals. The Firm also represented Sprint in obtaining BPU approval of its acquisition by SoftBank and subsequent reorganization, and in ILEC service reclassification and alternative regulation plan proceedings.
In addition, following divestiture in the early 1980s until its merger with Southwestern Bell Company, the Firm served as outside New Jersey regulatory counsel to AT&T Communications of NJ, L.P. (“AT&T”). In this role, Riker Danzig represented AT&T in the major divestiture and post-divestiture telecommunications proceedings before the BPU and Appellate Courts, including its initial post-divestiture rate and access charge proceedings. We also participated with the BPU staff in the development of rate flexibility regulations for interexchange carrier (“IXCs”). We represented AT&T in the legislative hearings which culminated in the enactment of legislation substantially deregulating the pricing of IXC services throughout New Jersey. (See the 1992 Telecommunications Act, N.J.S.A. 48:2-21.16 et seq.) We also represented AT&T in the proceedings before the BPU and Federal District Court which successfully opened up the intraLATA toll market to competition, first on a 10XXX dial-around basis, and then on a presubscription basis. The Firm also represented AT&T before the BPU in matters involving implementation of the Telecommunications Act of 1996, as well as Verizon’s Plan for an Alternative Form of Regulation. For example, we represented AT&T as outside New Jersey Counsel in its initial arbitration with Verizon (then Bell Atlantic) pursuant to the Telecommunications Act and in the BPU’s generic local competition proceeding. The Firm also represented AT&T in obtaining regulatory approvals for transactional matters including restructuring and securitization of accounts receivable. Finally, we successfully represented AT&T in the proceedings before the BPU to obtain approval of its merger with SBC.
We have assisted a number of established carriers, CLECs and resellers, both public and private, large and small, in certification matters, financing applications, merger proceedings and other matters before the BPU; interconnection/resale negotiations under the Telecommunications Act; and litigation matters.
Riker Danzig also represents certain owners of residential apartment buildings in transactional, regulatory and litigation matters involving the provision of cable television and Internet services, including in defending against petitions by cable television carriers to provide forced access to the premises and negotiating access agreements.
Riker Danzig’s water and sewer law experience includes representation of clients in matters related to water rights, public utility regulation, legislative efforts, public authority counseling, counseling of municipal governments and litigation.
We have performed extensive work in the area of water rights, a subject of vital importance to New Jersey as public and private interests compete for that precious resource. In the 1980s Riker Danzig assisted Hackensack Water Company in the successful defense of the approval of the Wanaque South Project, a joint undertaking with the North Jersey District Water Supply Commission (“NJDWSC”), for diversion of over 70 mgd of water at the confluence of the Passaic and Ramapo Rivers, in two litigations which culminated in a published opinion. In re North Jersey District Water Supply Commission, 175 N.J. Super 167 (App. Div. 1980), certif. denied 85 N.J.460 (1980). We also assisted Hackensack Water Company in evaluating claims of the Dundee Water Power and Land Company (“Dundee”) to the full natural flow of the Passaic River, which flow would be impacted by the Wanaque South Project. Subsequently, Dundee was acquired by NJDWSC and Hackensack Water Company to pave the way for the Wanaque South Project. In 2009 Riker Danzig represented Marcal Manufacturing LLC in negotiation of the Third Rider to Agreement Between Dundee Water Power and Land Company and Marcal, which fixed the terms of Marcal’s withdrawal of 2.7 mgd of non-potable water from the Passaic River from 2010-2019.
In 2009 Riker Danzig represented the City of Trenton in defense of claims brought by the Delaware River Basin Commission (“DRBC”) that Trenton violated several DRBC regulations by failure (1) to apply for DRBC approval of increases in the capacity of its water treatment plant along the Delaware River, (2) to pay the DRBC in accordance with a 1998 DRBC authorization for Trenton’s withdrawal of additional water from the Delaware River for delivery to customers in a new service area encompassing several new developments in Hopewell Township, (3) to provide substantiation of the territory to which Trenton provided water service as of October 27, 1961, when the Delaware River Basin Compact (“Compact”) became effective and provided grandfathered rights for Trenton to take water from the Delaware River without charge by the DRBC, (4) to seek and secure DRBC approval for interconnections with New Jersey-American Water Company (“N.J. American”) to facilitate emergency water transfers and (5) to apply to DRBC for the continued allocation of surface water from the Delaware River, notwithstanding Trenton’s grandfathered rights. Riker Danzig assisted Trenton in meetings with DRBC representatives, and with an application to DRBC for an allocation of surface water and approval of its water filtration plant expansion, which culminated in DRBC approvals issued May 11, 2011. In the approval document DRBC also commented favorably on the emergency interconnection with N.J. American. We also assisted Trenton in locating, reviewing and providing additional documentation to DRBC about Trenton’s service territory within outside municipalities at the time of the Compact and in calculation of the volume of water withdrawn to supply developments in Hopewell Township, which commenced post-Compact and for which Trenton owed DRBC payments.
Between 2001 and 2006 Riker Danzig represented Consumers New Jersey Water Company (now Aqua New Jersey, Inc.) in a series of water allocation matters before the New Jersey Department of Environmental Protection (“NJDEP”) and Office of Administrative Law. At issue was the water company’s rights to additional groundwater withdrawals in Woolwich Township, New Jersey. The Firm prepared and filed a hearing request contesting a partial denial of Consumers’ initial water allocation requests and prepared and filed amended water allocation applications to support the company’s business needs, conducted a two-day hearing at the Office of Administrative Law and assisted consumers in negotiation of a settlement whereby the company received some of the additional water allocations it had requested
Riker Danzig has represented Honeywell Corporation and A.M. Best in regulatory matters involving the water supply system at Honeywell’s former corporate headquarters in Morristown, N.J. and A.M. Best’s corporate headquarters in Oldwick, N.J. The Firm represented Wyndham Hotel Group, LLC, which manages the Wyndham Hamilton Park Hotel, in connection with water supply issues involving Fairleigh Dickinson University, N.J. American and the NJDEP.
Public Utility Regulation of Water/Sewer
Riker Danzig has represented water and sewer utilities before the BPU since the early 1980’s. This representation has included representation of Environmental Disposal Corp. (“EDC”) in three base rate cases and Hackensack Water Company in filings in the 1980s for inclusion in rates on a provisional basis in the absence of a pending base rate case of expenditures for the Wanaque South Project. Riker Danzig has successfully defended base rate orders for clients in Appellate Division proceedings. N.J. Dept. of the Public Advocate v. N.J. Bd. of Public Utilities and Hackensack Water Company, 189 N.J. Super 491 (App. Div. 1983); In the Matter of the Petition of Environmental Disposal Corporation for an Increase In Rates, Appellate Division Docket Nos. A-0286-00T3 and A-1590-00T3, April 3, 2002 (unpublished). We also have secured BPU approval of long term financings for EDC.
In our representation of EDC from 1990-2016, when EDC was acquired by N.J. American Water Co., Riker Danzig was involved in many novel regulatory issues. EDC provides collection and treatment service to a development of over 5300 units in two municipalities and provides treatment service for three municipalities under bulk treatment contracts approved by the BPU. We negotiated on EDC’s behalf and secured BPU approval of agreements to treat sewage from territory in three municipalities which was not within EDC’s service territory. These agreements required the municipalities to acquire unused capacity in EDC’s wastewater treatment plant from EDC’s owner, the Hills Development Company (“Hills”). Riker Danzig structured this arrangement in a manner that avoided imputation of over $10 million collected by Hills as contributions in aid of construction on EDC’s books and successfully defended the arrangement before the Office of Administrative Law, the Board and the Appellate Division. In the Matter of the Petition of Environmental Disposal Corporation for an Increase In Rates, supra.
The Firm also represented EDC in the Board’s audit of its Debt to Associated Companies Account and drafted and filed with the Board a Management Agreement and Amendment for EDC to be managed by GWD Management, Inc.
Riker Danzig negotiated on behalf of EDC the agreement for sale of EDC’s common stock shares to N.J. American and assisted in securing Board approval of the change of control and acquisition of EDC’s stock shares.
Riker Danzig also defended the City of Trenton against Hamilton Township’s challenge of a water rate increase. We convinced the BPU that Trenton was charging customers within Trenton the same rates that it charged customers in other municipalities, resulting in the Board’s having no jurisdiction over the rates. Docket No. WCO6100708, July 12, 2007.
Riker Danzig represented the City of Trenton in preparing the documentation, evaluation of proposals, and in the competitive negotiations for the sale of its outside water system (“OWS”), a procurement in which N.J. American prevailed. We negotiated the OWS sale agreement and a water supply agreement with N.J. American. Riker Danzig represented Trenton in the joint petition with N.J. American for BPU approval of the agreements. All necessary BPU and NJDEP approvals for the transaction were secured but the transaction was defeated in a referendum of Trenton’s voters.
Riker Danzig also has secured approval of municipal consents for Consumers New Jersey Waste Company (now Aqua New Jersey) and AquaSource Utility-New Jersey, Inc. The Firm has also represented Aquasource Utility New Jersey in proceedings before the BPU and in connection with the acquisition of its parent by Philadelphia Suburban Water Company.
In addition, the Firm represented the New Jersey Foreign Trade Zone in the sale of its water system to N.J. American Water Company and have represented other developers in connection with the sale of water system assets to a water public utility.
Public Authority/Municipality Counseling on Water/Wastewater Issues
Riker Danzig has been counsel to the Warren Township Sewerage Authority since 2016. We represent the Authority in virtually all legal matters, including as to OPRA and OPMA issues, shared services agreements, public contracting, contract disputes and alternative dispute resolution/litigation, general litigation, NJDEP permits and approvals, regulatory matters, connection fees and use rates, employment, and applications submitted to the Authority. As part of that representation, we attend various meetings with the Authority and its employees and professionals, including the regular public meetings.
Riker Danzig served as general or special counsel to the Jersey City Municipal Utilities Authority (“JCMUA”) from 2002-2017. By virtue of a franchise agreement with Jersey City, the JCMUA is responsible for the Jersey City water system, which consists of two reservoirs in Morris County, an aqueduct which delivers water to Jersey City from the larger reservoir located in Boonton, New Jersey, and the water distribution system in Jersey City. On behalf of JCMUA Riker Danzig negotiated 2003 and 2005 Water Franchise and Service Agreements Between the City of Jersey City and the Jersey City Municipal Utilities Authority. The Firm prepared updated Rules and Regulations for the Jersey City Water System. Riker Danzig also assisted the JCMUA in rate setting for wholesale and retail water sales, negotiation of a water supply agreement with the Township of Parsippany-Troy Hills and in dealings with the contract operator of the Jersey City Water System, United Water Jersey City, Inc. (“UWJC”, today Suez Water Jersey City, Inc.).
The Firm represented JCMUA in the review of allegations that UWJC failed to bill and collect for a portion of the water received from Jersey City by United Water New Jersey and United Water Hoboken Service under their wholesale water supply agreements with Jersey City. Our representation of JCMUA included demanding, securing and reviewing documents from UWJC, Inc. and numerous meetings and telephone conferences during which these documents were discussed at length. It was determined that there had not been under-billing of UWJC affiliates. However, it was agreed that the practice of level billing and employing running credits would be discontinued by UWJC and going forward purchased water would be billed on the basis of actual volumes taken each contract year, subject to the put or pay minimum.
The Firm also represented JCMUA in negotiations with UWJC concerning appropriate calculation of payments owed UWJC under the billing collection incentive (“BCI”) provision of the operating agreement for the 2000-2004 period. UWJC claimed it was owed $10.7 million. After months of exchanging documents and numerous meetings a settlement was reached. UWJC was paid $7.7 million for the BCI for the five-year period in dispute and the operating agreement was amended to change the BCI. The operating agreement had been negotiated in accordance with the New Jersey Water Supply Public-Private Contracting Act (P.L. 1995, c.101.; N.J.S.A. 58:26-19 et seq.), which required approval of the BPU and Local Finance Board within the Department of Community Affairs of any such contracts or amendments thereto. The Firm made filings with and secured the approval of the Amended First Modification Agreement from both agencies, and also filed the amended agreement with the NJDEP, which has statutory authority to comment on such modifications.
Since 2012, Riker Danzig has served as special or general counsel, in alternating years, for the Madison/Chatham Joint Meeting, which manages a trunk line conveying sewage from the municipalities to the wastewater treatment plant which it operates on their behalf. In addition to counseling the Joint Meeting on day-to-day legal issues associated with operation of a sewer system, the Firm has drafted an amended and restated agreement between the municipalities with respect to their ownership and financial obligations pertaining to the Joint Meeting which is currently under review by each municipality.
Riker Danzig also advises the Township of Parsippany-Troy Hills in water and sewer-related matters as part of our municipal counsel representation. The Firm has advised the Township on recent legislation affecting water and sewer connection fees and has defended it in a legal challenge to connection fees assessed a proposed adult day care center. We also have counseled the Township on issues relating to contractual arrangements under which the Township treats sewage from other municipalities at its wastewater treatment plant.
Riker Danzig provided legal advice to the Township of West Caldwell relating to its sewer system and its contractual relationship with the Borough of Caldwell, which treats West Caldwell’s sewage.
Riker Danzig’s experience in the multifaceted area of solid waste disposal is unparalleled. We have represented the principal developers of waste-to-energy facilities, Covanta Energy (“Covanta”), and Wheelabrator Technologies Inc. (“Wheelabrator”), in connection with enforcement actions of NJDEP, and all other aspects of solid waste regulation. The Firm has represented the Integrated Waste Services Association, the trade association of the waste-to-energy industry, as intervenor in a major litigation and in legislative initiatives.
The Firm represented the Covanta subsidiary which owns and operates a waste-to-energy facility in Warren County in litigation against Somerset County, Hunterdon County and a transfer station operator/hauler, regarding the equitable allocation of the burdens associated with invalidation of an Interdistrict Agreement among Somerset County, Warren County and the Pollution Control Financing Authority of Warren County. The Firm secured necessary New Jersey regulatory approvals for the 1998 restructuring of the Union County solid waste disposal system. Before restructuring, we represented Covanta’s Union County subsidiary in litigation in both the State and Federal Courts pertaining to the enforceability of an Interdistrict Agreement between Bergen County and its Authority, and Union County and its Authority.
The Firm represented Covanta’s Warren County subsidiary in litigation brought by East Coast Sanitation (“East Coast”) against various disposal facilities and the Morris County Municipal Utilities Authority in which East Coast alleged that it was harmed by Morris County waste being disposed of at facilities other than the ones designated in the County’s Solid Waste Management Plan. The Firm succeeded in having the complaint dismissed with prejudice by the trial court and successfully represented the Covanta subsidiary in East Coast’s appeal.
The Firm also has assisted Covanta in connection with legislative initiatives to secure State assistance in dealing with the stranded debt problem associated with invalidation of the flow control regulation.
The Firm represented Wheelabrator’s New Jersey subsidiary, Wheelabratoer Gloucester Company, L.P. (“WGC”) and assisted it in securing the requisite permits and approvals for construction of a resource recovery facility in Gloucester County. In the process, we assisted the client in developing, proposing and having adopted by the BPU a generic approach to regulation of resource recovery facilities which involves a rate levelization process never before attempted. We also successfully defended the site designated for the facility in trial and appellate litigation and achieved a favorable resolution of various matters before the NJDEP, including litigation concerning alleged air permit violations. The Firm also represented Wheelabrator in litigation pertaining to the continued viability of its franchise and the covenant not to compete, which the Gloucester County Improvement Authority had entered into in connection with a financing.
The Firm represented WGC in a 2018 regulatory filing which secured approval of the change in its indirect control. Macquarie Infrastructure Partners IV, L.P. acquired indirect control of WGC by acquiring all the stock shares of Wheelabrator, the upstream indirect owner of WGC. The Firm had represented Granite Acquisition, Inc. (“Granite”) in a 2014 regulatory filing which secured approval of the change in indirect control over WGC. Granite acquired all of the stock of WGC’s indirect owner, Wheelabrator from several indirect subsidiaries of Waste Management, Inc.
Recently, the Firm secured approval of EQT Infrastructure, Inc’s. acquisition of indirect control of Environmental Protection and Improvement Company, LLC (“EPIC”), a New Jersey solid waste collector and disposal utility carrying on an intermodal container business at a railroad facility in Newark, N.J. In 2015 we assisted EPIC in the successful resolution of an issue with the New Jersey Department of Environmental Protection related to operations at its intermodal container facility in Newark, NJ. We also assist several clients who own companies in the solid waste business in New Jersey in complying with the A901 Statute, which imposes stringent reporting requirements on those in the ownership chain of such companies.
For twenty-five years, Riker Danzig represented the Cumberland County Improvement Authority (“Authority”) in proceedings before the BPU and subsequently the NJDEP to establish landfill tariffs and to secure approval of necessary financings and host community benefit agreements. In addition, we provided advice and guidance to the Authority in its contracting activities in the wake of Court decisions invalidating the State’s original flow control system and in connection with developing appropriate plans to participate successfully in a competitive environment.
We also have done extensive work in the sludge disposal area, having represented EPIC in the matter described above and the former Bio Gro Systems, Inc. in securing an important subcontract for utilization of its process by the Bergen County Utilities Authority, and in connection with a plant which it operated for the County of Burlington. We also have experience in bid and contract issues related to delivery of sludge disposal services.
The Firm also represents the Borough of Chatham in its dealings with solid waste collection companies and state regulators in connection with its solid waste collection disposal.
Legislative Efforts and Interpretation
Riker Danzig has one of the leading Governmental Affairs practices of any New Jersey law firm, having opened its Trenton, N.J. office in 1980. The Firm assists clients by alerting them to proposed legislation that could affect their businesses, facilitating meetings with legislators and leaders in the executive branch, lobbying legislators and drafting legislation. Riker Danzig has had a significant role in the drafting and passage of major legislation, including the Electric Discount and Energy Competition Act, P.L. 1999, c.23; the New Jersey Water-Supply Public Private Contracting Act, P.L. 1995, c.101, and the New Jersey Wastewater Treatment Public-Private Contracting Act. P.L. 1995, c.216. The latter two laws simplified and streamlined the process by which a public entity can advertise and procure the long-term services of a private entity to manage and operate a public water or sewer system without subjecting the private operator to day-to-day regulation as a public utility by the Board. The Firm subsequently successfully represented United Water Resources, Inc. in litigation against the NJDWSC and City of Bayonne, in which the Appellate Division and Supreme Court of New Jersey ruled that NJDWSC and Bayonne had no statutory authority to enter into an arrangement whereby NJDWSC would operate and manage Bayonne’s water system, as legislative authority only existed for a public body to contract with a private entity for such services. United Water Resources, Inc. v. North Jersey District Water Supply Commission and the City of Bayonne, 295 N.J. Super. 305 (App. Div. 1996), aff’d. o.b.151 N.J. 497(1997).
The Trenton office is managed by Mary Kay Roberts, Esq., who has over twenty-five years’ experience representing clients in legislative matters. Both Edward K. DeHope and James C. Meyer have represented clients in matters pertaining to legislation. Mr. DeHope was the principal draftsman of the New Jersey Water-Supply Public Private Contracting Act and Mr. Meyer has served as the legislative coordinator for the Consultors of the Public Utility Law Section of the New Jersey State Bar Association and drafted a securitization amendment to EDECA. The Firm offers legislative tracking services to clients whereby notification of proposed legislation that could affect the client is provided.