Six Takeaways: How Utilities and IPPs Are Responding to COVID-19

On Thursday, April 30, McDermott was joined by Brett Kerr, vice president of external affairs at Calpine, Drew Murphy, senior vice president of strategy and corporate development at Edison International, and Andrew Campbell, director of regulatory support and planning at NiSource who shared their perspectives on how investor-owned utilities and independent power producers are managing the COVID-19 crisis.

Below are six takeaways from this week’s webinar:

      1. As businesses go back to work, it is essential that they carefully plan for a new normal, including consideration of travel restrictions, acquisition of personal protective equipment, maintaining social distancing of employees and contractors, and compliance with new rules and regulations.
      2. Utilities have been and will continue to optimize their maintenance schedules to balance safety and reliability concerns considering the essential nature of electricity and risks potentially associated with deferred maintenance.
      3. Although it is too soon to see the permanent effects of COVID-19, there has been a five to seven percent reduction in weather-normalized demand: this includes both an increase in residential demand and a larger reduction in commercial and industrial demand.
      4. Utilities are watching cash flow more closely as more customers are either not paying or deferring payment, and as commercial and industrial customers reduce demand. In California, where revenues are decoupled from electricity demand, this should not affect total revenues, but may lead to reallocation of rates across customer classes.
      5. A number of large commercial and industrial corporate customers with renewable and sustainability commitments are talking about placing these commitments on hold or rethinking them as recessionary impacts become clearer.
      6. Drops in load and low natural gas prices could detrimentally impact the economics of new renewable projects seeking financing and prevent the projects from moving forward. However, as renewables often dominate interconnection queues, if some of these projects do not come online, prices could actually remain constant.

Listen to the full webinar.

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Philip TinglePhilip Tingle
  Philip (Phil) Tingle represents energy companies such as utilities, independent power producers and financial institutions on a wide range of energy tax-related matters. He is the global head of the Firm's Energy Advisory Practice Group. Phil provides advice regarding all aspects of renewable-energy projects, including tax equity structures, refinancings, acquisitions and dispositions, restructurings and workouts. He has extensive experience with the production tax credit and with the application of renewable credits to new technologies. Moreover, he works with the investment tax credit for numerous kinds of solar projects. Read Philip Tingle's full bio.


AvatarNeil Levy
Neil L. Levy focuses his practice on energy-related regulatory and transactional matters. He represents independent power producers, electric power and natural gas marketers, merchant transmission developers, interstate pipelines and local distribution companies before the Federal Energy Regulatory Commission (FERC), state public utility commissions and the courts of appeal. Neil regularly represents private equity clients in merger and acquisition transactions in the energy sector. He also focuses on representing clients in energy-related investigations and audits before FERC and the Commodity Futures Trading Commission. Read Neil Levy's full bio.


Lloyd J. MacNeilLloyd J. MacNeil
Lloyd J. MacNeil represents developers, sponsors, investors and lenders of capital and infrastructure projects. His principal focus is on renewable energy and emerging energy technologies, where he has been a leading advisor since the emergence of wind energy as a competitor to fossil fuels as an energy source. He advises clients throughout the arc of development, construction, operation, financing, and purchase and sale. He also advises commercial and industrial clients on energy portfolio services and energy efficiency solutions. Read Lloyd MacNeil's full bio.


Edward ZaelkeEdward Zaelke
Edward (Ed) Zaelke is the head of the Firm’s Global Energy Project Finance group. He focuses his practice on project finance and private equity in renewable energy transactional matters. With more than 30 years of experience, he advises clients on all elements of alternative energy development and finance, including equity and debt financing, merger and acquisition transactions, equipment purchase and sale agreements, power purchase agreements, siting and other real property issues, governmental approvals, and engineering, procurement and construction (EPC) contracts. Read Ed Zaelke's full bio.


Seth B. DoughtySeth B. Doughty
Seth Doughty focuses his practice on transactional matters in the energy industry. He has in-house experience at one of the largest Southern California utility companies. There, he gained experience drafting and negotiating a large variety of contracts, amendments and consents for supply and power procurement agreements. Read Seth Doughty's full bio.

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