CAEM Plans Study of
Alternative Dispute Resolution

Advisory Board Memberships Sought

CAEM believes that more effective use of Alternative Dispute Resolution can enhance the competitiveness of energy markets.

The multi-billion dollar electricity, oil, natural gas and coal industries are highly litigious because the financial stakes of decisions and business dealings are enormous. As a result, there is a long history of litigation before regulatory commissions, administrative agencies, and courts to resolve disputes. As these industries evolve toward more competitive markets, there is a significant need for more certainty, quicker decision making, preservation of relationships, confidentiality, flexibility, cost and time savings, and other efficiencies.

Scope of Project

The premise of the project is that the expanded use of Alternative Dispute Resolution (ADR) can enhance the competitiveness of energy markets and deliver other significant benefits to energy industry stakeholders. Its precise scope will be determined principally by the ADR Forum participants.

Deliverables

The possibilities include the following:

  1. Recommendations to FERC and the PUCs/PSCs on the appropriate scope and speed of agency review of disputes resolved by parties using a neutral arbitrator or mediator;
  2. Recommended best ADR practices (including settlement procedures) for state PUCs/PSCs and possible areas for amendment of state laws (including but not limited to the value of contested settlement rules and practices and the establishment of a NARUC Committee to focus on these issues);
  3. Development of recommended ADR provisions for the NAESB Wholesale Gas Quadrant base contract for the sale and purchase of gas and the EEI/NEMA standardized electricity contract;
  4. Practice pointers on drafting effective ADR provisions in natural gas and electricity contracts;
  5. Recommendations on the effective use of ADR and neutrals in connection with the competitive procurement of supply through RFPs or other processes;
  6. Recommendations on how to increase the quality of neutrals on various lists commonly used in the energy industry (including AAA, RTOs, ISOs, and CPR);
  7. Description of various of categories of energy-related decision making and identification of examples in each of innovative, collaborative approaches to addressing recurrent frictions (e.g. electric restructuring in Texas, gas restructuring in Maryland, employment and HR disputes in Kansas, general commercial disputes, RTO development in New England, and energy/environmental disputes);
  8. Development of ADR training, education programs, and seminars tailored for the energy industry; and
  9. Development of appropriate other specific actions that may be taken by energy industry stakeholders, including an ADR pledge, models, pilots, web-based initiatives, or data sharing on other good practices.

CAEM's study of Alternative Dispute Resolution will be headed co-chaired by Robert Fleishman and Charles Pou. Fleishman, with 25 years of energy law experience in the public and private sectors, is a former president of the Energy Bar Association, and chairman of its Alternative Dispute Resolution Committee. He also is executive editor of the Energy Law Journal and counsel at Covington & Burling. Pou, former director of the Dispute Resolution Program at the Administrative Conference of the United States, is the co-author of the federal Administrative Dispute Resolution Act.

CAEM is seeking participants from the public and private sectors to serve on an advisory board, or forum, to provide guidance for its Alternative Dispute Resolution project. Participants from for-profit corporations will be asked to make financial contributions to help defray the cost of the study and the participation of government and non-profit organizations.

A kickoff/planning meeting was held on April 19 in Washington, DC.

To date, public/government, non-profit sector representatives include: American Arbitration Association, American Bar Association Section on Dispute Resolution, California Independent System Operator, Connecticut Department of Public Utility Control, CPR Institute for Dispute Resolution, U.S. Department of Energy, U.S. Department of the Interior, U.S. Environmental Protection Agency, Federal Energy Regulatory Commission, U.S. Institute for Environmental Conflict Resolution, Maryland Public Service Commission, Massachusetts Department of Telecommunications and Energy, National Association of Regulatory Utility Commissioners, National Energy Board of Canada, New York Public Service Commission, North American Electric Reliability Council, Oregon Public Utility Commission, and Utah Public Service Commission.

Private sector or for-profit companies participating, include Ameren Energy Marketing, American Electric Power, Charter Resolution LLC, Covington & Burling, Found Lake Consulting (founder and principal is Joseph Mettner, former chairman of the Wisconsin Public Service Commission), Kansas City Power & Light, Latham & Watkins LLP, Northeast Utilities, PacifiCorp, Peregrine Group, Powell Goldstein LLP, Questar Corporation, Steptoe & Johnson LLP, Van Ness Feldman PC, Venable LLP, and Watson Consulting (Ann Watson is a former Administrative Law Judge for the California Public Utility Commission).

For more information about the Alternative Dispute Resolution study, or to obtain a prospectus, please contact Gary Clouser, CAEM Director of Education and Outreach, at gclouser@caem.org.