GLG News by International Trade Experts: Lawyers (US)

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC's Standards of Conduct NOPR: Back to the Future?

April 3, 2008

Analysis of:FERC Standards of Conduct Notice of Proposed Rulemaking | www.ferc.gov

The Federal Energy Regulatory Commission's recently issued Notice of Proposed Rulemaking on the Standards of Conduct applicable to natural gas and electric transmission providers would establish revised standards for preventing anti-competitive information sharing between those trasmission providers and their marketing affiliates. FERC’s rulemaking bluntly acknowledges that the standards of conduct adopted with much fanfare in Order No. 2004 have proven too difficult for both industry and regulators to interpret and enforce, and seeks a return to the "functional separation" regulatory approach that prevailed prior to Order No. 2004.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

“Affirmative Benefits” and the Public Interest: A Higher Hurdle for Utility Mergers?

March 19, 2007

Analysis of:PUC ordered to reconsider Verizon, MCI merger issue | www.pennlive.com

Pennsylvania Commonwealth Court's decision in Popowsky underscores the importance of rate-related benefits in demonstrating that a proposed merger affords sufficient "affirmative benefits" to satisfy the statutory "public interest" standard.

Popowsky indicates that promises of continued "good corporate citizenship" and locally-based management, without more, are not sufficient to satisfy the "affirmative benefits" test.

Popowsky suggests that merger applicants will not be able to rely on federal-level approvals to avoid a state-level inquiry into a proposed merger's potential anti-competitive effects.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC’s Standards of Conduct: Back to the Drawing Board

December 1, 2006

Analysis of:National Fuel unit settles with FERC | washington.bizjournals.com

-- D.C. Circuit decision in National Fuel Gas Supply Corp. v. FERC vacates and remands Order No. 2004 as applied to natural gas pipelines.

-- The Commission's theoretical concerns with potential anti-competitive conduct, without actual evidence of such conduct, were insufficient to justify imposing Standards of Conduct on pipelines and their non-marketing affiliates.

-- The Commission may attempt to satisfy the Court's concerns on remand and repromulgate Order No. 2004. In the meantime, it is unclear what Standards of Conduct, if any, apply to natural gas pipelines and their affiliates.

David LewisVice PresidentMANCHESTER TRADE LTD

Verizon DR tax settlement allows for purchase by AmericaMovil of Mexico

December 1, 2006

Analysis of:Verizon sales tax agreement reached | www.dr1.com

Reports from the Dominican government and US Embassy in Santo Domingo indicate that Verizon and the government have reached an agreement on the amount of sales tax to be paid on the $2bn sale of earlier this year. Reports are that both sides agreed to a sales tax payment of approx. $200m rather than the $518m originally requested by the Dominican government.

While the settlement obligates Verizon to pay the sales tax on the transaction (the company argued that since the holding company was Canadian the sales tax did not apply), it does serve to uphold investor-state agreements and buttress investor confidence in the Dominican Republic.

The resolution of this tax settlement will not pave the way for the settlement of the sale of Verizon DR to Mexican America Movil which has been aggressive in its telecomm expansion in the region, including recent purchase of Verizon in Puerto Rico as well.

However, other service investors will now be very cautious as to how they structure financial transactions in the Dominican Republic so as to avoid a similar conflict and/or a similar tax burden.

David LewisVice PresidentMANCHESTER TRADE LTD

Ecuador election will result in energy and debt concerns for investors

December 1, 2006

Analysis of:A Leftist at the Helm in Ecuador | www.businessweek.com

Ecuadorian President-elect Rafael Correa announced that he wants to revise oil exploration contracts between the government and foreign companies to increase revenues and he will also not withdraw the government's unilateral cancelation of Occidental Petroleum investment contracts in the country. Coupled with his commitment to press for foreign debt renegotiation terms and/or default, the economic environment in Ecuador will be very worrisome for investors, national and foreign.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC Opens Door to Changes in Cost of Equity Model

October 27, 2006

Analysis of:Opinion 486 and Order on Initial Decision re Kern River Gas Transmission Co with Commissioner Sptizer's concurring statement attached under RP04-274 | elibrary.ferc.gov

FERC's Kern River decision opens the door to future changes in the Commission's traditional DCF model for setting pipeline equity returns.

FERC indicates a willingness to consider future DCF proxy groups that include properly adjusted MLP distributions.

FERC also indicates a willingness to consider DCF proxy groups that include energy companies with substantial monopoly utility revenues.

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