Twenty years ago, if Orrick’s Les Sherman was at a cocktail party and told people he was an energy lawyer who works on power contracts, their eyes would glaze over.
Lately, he feels a bit more hip.
“Now, if I say I represent renewable energy companies, people are intrigued,” Sherman said. “They want to know more.”
Sherman just wrapped up a contract between First Solar Inc. and Southern California Edison to build two solar power projects that will produce a combined 550 megawatts, or enough power for 170,000 homes.
“Did we include the volcano clause?” — after the jump.
The contracts took a year and a half to iron out, so Sherman and his team have been plenty busy in the downturn.
“It’s what’s keeping a lot of us very busy, particularly in the development area. Even though there’s been a slowdown in the financing of these activities, the development of these projects has continued apace,” Sherman said.
Power purchase contracts can be complex because there are many unknowns. For instance, if there’s a change in law, or if the transmission lines don’t get built, or a permit isn’t issued down the line. Or if Mount St. Helens blows up and blocks the sunlight for a while, diminishing the power plant’s ability to produce the promised energy.
“So many issues like that might come up, you need to protect yourself and have all sorts of off-ramps,” Sherman said.
Sherman brought the work with him from Thelen when he joined Orrick in July 2008 with an energy group of three other partners and eight associates. Sherman has known one of First Solar’s in-house counsel, Lisa Bodensteiner, for many years. Once an associate at Thelen, she was later the general counsel at OptiSolar (acquired in April by First Solar).
The main thing propelling the renewable energy industry now is tough portfolio standards enacted in many states, Sherman said. California’s utilities must buy 20 percent of their power from renewable sources by next year.
The pace and momentum has really picked up in the past four or five years, he said.
“Many of our clients who we might have been representing 20 years ago we are still representing today,” he said, but “there are also many clients we are representing today who didn’t exist five years ago.”
Which just gives him more to chat about at cocktail parties.
— Amanda Royal
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