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 The Alliance to Save Energy would like to congratulate Earle O’Donnell on recently becoming a partner with the law firm of White & Case LLP. Mr. O’Donnell is on the Alliance’s board and executive committee and serves as pro bono counsel. He is a member of White & Case’s Energy, Infrastructure and Project Finance Group and heads the firm’s Energy practice. Mr. O’Donnell has received numerous accolades and awards in his distinguished career, including being named a Top Ten Attorney in Energy Law by "Legal Times".
e-FFICIENCY NEWS: I’m not sure many of our readers have a firm grasp on what energy law is or what an energy lawyer does. Can you describe for us how you first became interested in energy law and generally the types of cases you handle, both as pro bono counsel to the Alliance as well as for your other clients?
O’Donnell: My interest in energy law started as a result of many happy accidents. I first came to Washington, DC in the 1970’s to attend law school. I have always been fascinated by the interplay between government regulations, economic theory and competition. Lucky for me this was during the time of America’s first great energy crisis, the Arab oil embargo, natural gas curtailments and an intense interest by many government agencies, companies and law firms in finding ways to prevent such a thing from ever happening again. The burgeoning field of energy law gave me the opportunity to explore my fascination with these issues.
As far as the types of cases I work on, I primarily represent large suppliers and purchasers of energy and power. One of the main things we try to do is participate in administrative proceedings which are designed to shape market rules devised by the Federal Energy Regulatory Commission (FERC) and various state agencies. In this capacity, I attempt to find solutions that ensure the market works in a historically heavily regulated industry.
For example, I have handled large transactions between energy companies, including one in which a New England utility sold $2 billion of generation assets to one of my clients. I also was retained by PG&E Corp. to obtain the federal approvals necessary during the restructuring efforts of its subsidiary, Pacific Gas and Electric Co., following the California energy crisis.
On the pro bono side, I would say my experience with the Alliance represents something of a wonderful smorgasbord. I have drafted by-law revisions; worked on contract and employment issues; and advised on copyright, trademark and confidentiality policies. I enjoy working with the people at the Alliance. They are idealists and my job is to meet their needs while minimizing disputes and preserving that idealism.
e-FFICIENCY NEWS: This year marks the 30th Anniversary of the Alliance to Save Energy. What changes have you noticed in the 10+ years you’ve served on the board of directors and as counsel?
O’Donnell: Two things stand out. The first is that the Alliance has become much more global in its outreach and much more successful in its international activities. The organization has responded to the greater need to expand to developing countries, which are in turn open to the types of efficiency improvements the Alliance offers. I think the leadership and associate members deserve the credit for this positive change.
Second, the Alliance has become a much more effective voice for efficiency in the United States in the past decade. It has gained the experience in the diverse areas and interests that impact energy policy and has managed to work well with a collection of groups often at odds with one another. This makes the organization more effective politically without diluting or sacrificing its message or principles.
e-FFICIENCY NEWS: After instances like the California energy crisis in 2000 and the Enron scandal in 2002, do you think large utility mergers and widespread industry consolidation represent a greater risk or reward to U.S. gas and electric customers?
O’Donnell: Gas and electric utilities are capital-intensive industries, and in order to operate efficiently, they need the ability to access capital markets to provide customers with the lowest rates and best services. Consider that on transmission alone last year, the utility industry spent somewhere on the magnitude of $6 billion.
Consolidation can make sense to improve access to capital and gain economics of scale. For those reasons, some consolidation is both efficient and is inevitable for long-term stability and confidence in companies. A company needs to be large enough to raise the necessary capital and provide efficiencies to keep costs and prices low.
e-FFICIENCY NEWS: What about the risks from consolidation?
O’Donnell: The oversight provided by federal and state agencies goes a long way toward prohibiting excessive concentration and abuse of power. The goal of almost all mergers I’ve been involved in is to save companies (and customers) money while increasing supply or generation capabilities.
e-FFICIENCY NEWS: Currently, what are some of the hottest topics and issues in energy law?
O’Donnell: The single, biggest issue facing regulators right now is trying to devise strategies to manage energy markets. From the California experience we know markets that don’t behave properly can cause serious and long-lived consequences. What we need is market policies that encourage building (of supply and transmission) where needs exist. At the same time, we need rules that allow new supply to compete with demand response.
Regulators need to adopt rules that ensure fair, competitive markets. I have been active in negotiating rules that provide long-term price signals that encourage new cost-effective investment and increase competition. Importantly they also allowed demand response to compete with supply. The result should be the most efficient alternatives possible.
e-FFICIENCY NEWS: What do you see as the best solution(s) for the United States to secure its energy future?
O’Donnell: I’m neither a pure supply-side or demand-side advocate. We need to push hard for both. Energy is no longer a cheap, limitless resource. To sustain a growing economy we need continued investment in generation, gas pipelines and transmission while pursuing responsible environmental protections. This approach is both possible and plausible. Appropriate long-term price signals, meaningful competition, greater technical innovation, effective efficiency standards and education allow us to pursue efficiency and supply in parallel, which ultimately provides the greatest societal benefit.
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