The Past and Future of Energy Law

The energy system in the United States is undergoing a major transformation. What does that mean for energy law and those practicing it?

In March 2016, coal fueled only 23 percent of the nation’s monthly electricity production, while natural gas contributed nearly twice that amount. Just a decade ago, those numbers would have been considered preposterous.

Melissa Powers '01, Jeffrey Bain Faculty Scholar and Professor of Law Melissa Powers ’01, Jeffrey Bain Faculty Scholar and Professor of Law

Coal provided nearly half of the country’s electricity in the mid-2000s and the United States was in the midst of a so-called “coal rush” that promised to increase coal’s share moving forward. Although natural gas’s share of the electricity market was starting to grow, few people expected much to come of it. If anything appeared poised to knock coal from its dominant position, it was nuclear power.

Today, however, technological improvements, market forces, and regulatory changes have profoundly altered the structure of the U.S. energy system. Coal is down, gas is up, the future of nuclear is highly uncertain, and an increasing number of energy experts believe the United States could soon obtain all of its electricity from renewable sources.

Change is nothing new when it comes to energy; history teaches us that the energy sector is nothing if not dynamic. As important as energy production and consumption have been to U.S. development and economic growth, they have also been sources of repeated volatility.

Of Waves and Roller Coasters: A Brief History of Nuclear and Natural Gas

Consider nuclear energy. From the 1950s until the 1970s, nuclear seemed on the verge of becoming the U.S. fuel of the future as part of the “Atoms for Peace” program that sought to limit access to warfare nuclear technologies while turning nuclear power into a source of peaceful and clean energy. Capital costs were high, but the promise that nuclear power would eventually become “too cheap to meter” prompted a flurry of investments, construction contracts, and regulatory approvals to bring more than 200 new nuclear power plants online in the United States.

Then, in the 1970s, it started to fall apart. Economic, legal, and technical hurdles forced the cancelation of many proposed (and some fully constructed) power plants. By the time of the Three Mile Island nuclear accident in 1979, only about half of the planned nuclear units had come online, and stranded costs (debt incurred to build plants that were later canceled or decommissioned) exceeded $40 billion, leaving ratepayers and investors in the lurch. Stung by the resulting backlash, regulators refused to approve new investments in nuclear energy. For the next 30 years, it seemed that nuclear was doomed to be a legacy power source that would eventually disappear altogether from the energy mix.

That was until the century and the tide turned. In the 2000s, growing concerns about climate change prompted hopes of a nuclear renaissance. The industry reemerged, as did plans to complete construction of the high-level waste storage facility at Yucca Mountain. But just as “nuclear 2.0” was gearing up, a series of disconcerting incidents took place. Japan’s Fukushima nuclear plant melted down following massive seismic and tsunamic events in early 2011. The Obama Administration abandoned its efforts to build the Yucca Mountain project. The newly retrofitted San Onofre Nuclear Generating Station in California failed in early 2012. Yet again, there were serious doubts about the viability of nuclear power.

It is hard to predict what will happen with U.S. nuclear energy. But if what’s past is prologue, it seems safe to say that nobody should count the industry out.

If nuclear power’s profile of expansion and contraction over the last few decades resembles a wave, the natural gas industry’s profile looks like a roller coaster. Indeed, the CEO of Duke Energy reportedly quipped, “Ben Franklin said there are two certainties in life: death and taxes. To that, I would add the price volatility of natural gas.” Despite—or maybe because of—this volatility, natural gas has played a major role in the U.S. energy system.

Between the early 1970s and the early 2000s, the price of natural gas bounced around wildly. The development and implementation of hydraulic fracturing and horizontal drilling methods in the years that followed, however, have created a so-called “golden age of gas.” Massive investment in natural gas infrastructure and the resulting abundance of the fuel appear to be leading contributors to coal’s recent decline. Some argue that cheap gas has hurt the prospects of nuclear power and renewables, as well.

For many in the energy sector, the critical question is whether natural gas will remain cheap or will instead become more expensive as extraction costs rise. If gas prices go up, the U.S. power system may be vulnerable to another round of electricity price hikes and stranded costs associated with the recent infrastructure build-outs.

Whether the United States stays with natural gas may depend on the next major emerging energy source: renewable energy.

The Growth of Green

The rise of renewables is arguably the most surprising change to take place in the U.S. energy sector. A decade ago, hydropower provided the bulk of renewable power, with energy from nonhydro renewables representing only about two percent of U.S. electricity supplies. As of June 2016, nonhydro renewables have grown to contribute nearly seven percent of U.S. electricity supply. While this is still a small share of total U.S. electricity supply, renewable power growth rates have exceeded expectations and show little signs of stopping.

This growth reflects remarkable changes in energy costs, technologies, and policies. Compared to just a few years ago, renewable generating plants have become more efficient and cheaper to build, and new technologies to store, conserve, and deliver electricity have come online at an unprecedented pace. Various studies have demonstrated how the United States could produce all of its electricity from renewable sources by the middle of this century, and even the more moderate estimates call 80 percent a viable goal. At the same time, renewables have undergone their own boom-bust cycles, largely due to expiration deadlines of the short-term incentive and tax credit plans that dominate renewable energy policies. Even so, backers see a rosy future for these emerging energy sources, particularly if policies provide greater certainty to renewable energy investors and developers. Finally, the urgency of climate change makes a transition to renewables ever more likely.

The Evolution of Utilities

Ongoing shifts in the energy mix are only one part of the changing energy picture.

Since 2008, Lewis & Clark Law School has been expanding its offerings to prepare new lawyers for the ever-changing energy systems in this country and abroad. In 2012, we created the Green Energy Institute, an organization focused on developing smart policies for the energy transition. In addition to growing our set of energy law courses (nine and counting), we have created a separate track for students who want to specialize in this area. Over the next year, we will be working to expand connections between our growing energy program and our amazing energy-focused alumni.

Since the mid-1990s, the electricity sector has experienced profound structural changes focused on the ownership and regulatory models governing the vertically integrated, investor-owned utilities that owned and operated most of the electricity system for its first 100 years. Traditional regulatory theory viewed these utilities as natural monopolies immune to competition. Under this theory, the utilities received franchises to operate as monopolies subject to extensive state regulation. The utilities benefitted from economic stability associated with rate regulation and guaranteed recovery of their capital investments, while ratepayers benefitted from relatively stable prices and access to guaranteed services.

In the 1990s, this traditional model changed when about a third of the country restructured electric utilities to increase competition at the power generation level. More states were heading down that path when California’s electricity system collapsed due to poor design and market manipulation. Scared off by California’s resulting energy crisis, many of these states abandoned their restructuring plans. Today, however, the rise of affordable rooftop solar, batteries, and other components of the so-called “smart grid” has reinvigorated the debate regarding restructuring. It’s too soon to tell how the discussion will play out, but it is safe to say that utilities of the 21st century will look little like their predecessors.

Changes in the heating and transportation systems make this even more likely. For decades, policymakers and efficiency experts have decried the use of energy-intensive electric heating systems and promoted natural gas heating for its efficiency. But as concerns about climate change grow, efforts to decarbonize energy systems do, too, leading some to promote electric-based heating once again. Perhaps more significantly, engineers and energy planners have begun to design integrated energy systems in which petroleum-fueled vehicles would give way to a combination of electric personal vehicles and heavy-duty vehicles powered by a mix of renewable biodiesel and hydrogen fuel cells. In other words, over time, the vast majority of heating and transportation systems could become integrated with the electric grid.

Thriving on Change

For current and future energy lawyers, the volatility and uncertainty inherent in the U.S. energy system present extraordinary opportunities and, sometimes, challenges. As our alumni attest in the following pages, energy law is a complex and rewarding field. Lewis & Clark Law School is excited to be a part of this dynamic sector.

Energy Law Profiles

  • Lana Le Hir ’12

    Le Hir earned a BS in electrical engineering from the University of California at San Diego and worked as a senior applications engineering lead managing the development of a wireless chipset prior to attending Lewis & Clark. During law school, she clerked for Iberdrola Renewables and has continued with the company, now called AVANGRID Renewables, as a full-time in-house contract attorney.

    You were an engineer for several years. Why did you decide to go to law school?

    I worked in a very high-pressure, fast-paced, and hostile environment developing a new kind of wireless technology for a defense contractor. Working 80 hours a week and having to travel internationally at a moment’s notice made me really think about why I was doing what I was doing. I quit, backpacked around the world for six months, and came to the realization that I wanted to refocus my life on something that mattered to me. I was inspired by the natural world I had rediscovered on my travels, so I chose to pursue environmental law.

    How did you get into energy law?

    I felt renewable energy might offer the balance of environmental, business, and technical elements I believe is required to achieve environmental sustainability. I worked for Iberdrola the summer after my second year in law school, and quickly discovered how interesting and complex renewable energy law was. And Iberdrola is a great place to work. The legal team is wonderful and supportive. I was also lucky enough to be in the right place at the right time to meet and apprentice under a great mentor.

    You should be willing and able to adapt to changes, too, because nothing in this industry is static. Lana Le Hir ’12
    What do you like most about your work?

    I enjoy making a difference environmentally while still maintaining business objectives. Renewable energy is such an interesting and dynamic area. I work mostly on drafting, negotiating, and helping maintain long-term power purchase agreements (PPAs), and while it might seem from the outside like ordinary contract work, the nature of how energy is actually bought, sold, and delivered in the market makes everything more complex. My company builds wind and solar farms around the world, and we sell renewable power to utilities and Fortune 500 companies in most U.S. markets. But selling electricity is not like selling any other commodity, because the rules designed to maintain reliability and competitive markets are different from state to state (or at least region to region) and are constantly developing. The issues that result flow through the long-term PPAs that I advise on. My technical and math background has proven to be extremely useful in interpreting contracts and allows me to engage in technical discussions with business people to help resolve complex legal issues.

    What advice would you give to students interested in energy law?

    It is a small industry and hard to break into, so I would recommend gaining practical experience. The more exposure you have, the more you will understand how things work and how fluid the industry is. You should be willing and able to adapt to changes, too, because nothing in this industry is static.

  • Green Energy Institute

    The GREEN ENERGY INSTITUTE (GEI) is Lewis & Clark Law School’s newest energy endeavor. GEI conducts research and analysis to develop smart and comprehensive strategies to transition to a 100-percent renewable energy system. Our staff of Lewis & Clark graduates are currently focused on improving Oregon’s energy governance, ensuring greater access to affordable renewable energy, and designing regional strategies that will facilitate a West-wide transition to clean energy resources.

    Learn more about GEI’s work

  • Tyson Smith ’03

    Smith earned a BS magna cum laude in civil and environmental engineering from Vanderbilt University and an MS in civil and environmental engineering from Stanford University. Following law school, he worked as an attorney for the Nuclear Regulatory Commission before joining Winston & Strawn LLP, where he continues to work as a partner on nuclear facility licensing and regulation, investigations, and litigation.

    How did you get into energy law?

    As an undergraduate, I had a scholarship funded by the U.S. Department of Energy that required me to take courses in nuclear physics, nuclear engineering, and similar subjects. Then, after Stanford, I took a job with the U.S. Geological Survey researching low-level radioactive waste disposal. So, I’ve been involved with nuclear energy in some form since college.

    It was always my plan to be a lawyer. While science and engineering have always fascinated me and I really enjoyed the technical work, I also had a strong interest in overarching policy issues, such as climate change. I seemed to have a knack for translating technical concepts into policy and vice versa. A law degree seemed like the logical next step. Lawyers can play a key role at that intersection between science and law, and that’s what I wanted to do.

    Based on your experience as a lawyer, do you think policymakers care about the technical issues?

    Yes, but perhaps not about the details as much in every case. It’s the same on the other side, though—technical people want details, but they don’t always do well translating that information into action. That’s an important role for lawyers.

    What did you do at the Nuclear Regulatory Commission (NRC)?

    I was an honor law graduate in the Office of the General Counsel, where I worked a series of rotations. One involved nuclear power plant licensing and relicensing, another was with the high-level waste division, a third dealt with investigations and enforcement, and the last was rulemaking. It was a fantastic opportunity to learn about the various responsibilities of the NRC, as well as how administrative agencies function more generally.

    To realistically shift our energy production to low- carbon sources in time to avoid a significant increase in global temperatures would require a serious commitment to expanding nuclear in the United States and abroad—solar and wind simply are not enough.Tyson Smith ’03
    What was your favorite detail?

    I enjoyed working on Yucca Mountain, because it was technically engaging, complex, and high profile, but then the U.S. Department of Energy withdrew the application to build a repository there. Congress, the administration, and the courts are still grappling with those issues. I also liked new reactor licensing, and was fortunate enough to work on the first applications for new reactors since the late 1970s.

    What do you do now?

    I work on licensing for reactors and fuel cycle facilities, energy-related litigation, and investigation and enforcement. I also do some international work on nuclear liability and export controls. In fact, I just completed a short book about nuclear energy regulation in India.

    What do you think of the policy and economic framework for nuclear energy?

    Nuclear power plants are facing challenging economic conditions around the country. The market failures creating these conditions are caused, in many cases, by policies that promote and subsidize renewables, such as production tax credits and renewable portfolio standards. Perversely, these policies are also threatening the long-term viability of the largest sources of carbon-free power in the United States—nuclear energy. This is why a number of states are now taking steps to ensure that these market failures are addressed. But, there remains a need for state and national action to address the market failures more broadly. For example, states should have low-carbon energy standards, which would better recognize the benefits of nuclear energy, rather than renewable energy standards. At the national level, efforts like the Clean Power Plan represent some initial steps towards appropriately accounting for low carbon generation. But more could and should be done.

    What is your prognostication for nuclear power?

    In the United States, nuclear generates approximately 20 percent of electricity and will continue to be a major contributor to our energy mix for the foreseeable future. We will probably see a slow decline of nuclear generation over the next several years, even with the new reactors now under construction scheduled to come online. But new technologies should result in growth for nuclear power over the next decade or so. Globally, the market for nuclear generation is and will continue to be much more robust. For example, China and India are implementing ambitious plans for their nuclear power growth.

    What about waste disposal?

    This is a political issue, not a technical or safety one. After a lengthy review of potential sites for a national nuclear waste repository, Congress voted nearly unanimously to locate such a repository at Yucca Mountain, Nevada. The Department of Energy subsequently submitted an application to the NRC, but has yet to follow through with the project due to a lack of funds from Congress. While project opponents have argued that Yucca Mountain is “not safe,” the fact is that the NRC, which is the expert independent agency charged with ensuring radiological health and safety, has found that the project meets all regulatory requirements and has minimal environmental impact for at least one million years. That is a long time, especially when you consider the real and imminent threat of climate change to this and future generations.

    You are pretty optimistic about nuclear energy’s future. Do you generally feel positive about climate change solutions?

    Unfortunately, no. We already have the technology needed to address climate change, but we lack the political will to deploy this solution at the scale or in the time frame necessary. To realistically shift our energy production to low-carbon sources in time to avoid a significant increase in global temperatures would require a serious commitment to expanding nuclear in the United States and abroad—solar and wind simply are not enough. Yet, we seem to be moving in the opposition direction. A different mindset is needed. If people are serious about working to mitigate global warming, they should support nuclear as part of the mix of low-carbon energy sources going forward.

    What advice would you give to students interested in energy law?

    It’s important to pick a niche of interest to you and develop a specialty. (This is particularly true in the nuclear energy field.) But cultivating your expertise makes the job fun. You can become a thought leader, and this both gives you purpose and makes you valuable to your clients. If you’re deeply interested in something, you tend to be better at it and you will be more satisfied.

  • Etta Lockey ’11

    Lockey earned a degree in political science from the University of Oregon. Following law school, she worked for McDowell Rackner & Gibson, an energy firm in Oregon. She is now senior counsel at PacifiCorp.

    How did you get into energy work?

    I wanted to get some experience before I made a final decision about heading to law school and so I took a paralegal job at Iberdrola Renewables (now called AVANGRID Renewables), a renewable energy company with its U.S. headquarters in Portland. I found that I loved it. It was a time of huge development within a relatively young business, and it was dynamic and exciting.

    Why did you pick law school, rather than business school or something else?

    At Iberdrola, I saw how in-house lawyers worked across all the business units on all the most interesting issues. The legal department was—and still is—filled with really interesting people doing inspirational work. I wanted to be part of that.

    What’s the most surprising part of your work at PacifiCorp?

    Finding myself practicing in a completely different area of energy law than I initially planned on. My first experience was with an independent power producer and I was really interested in that business model. The fact that I now work for a regulated energy company and am exposed to that side of the energy world is fascinating to me and completely unexpected.

    How do you manage all the changes in the energy industry?

    As a representative of a regulated energy company, I have to keep in mind two fundamental objectives: keeping the power on and keeping it affordable for customers. That makes all of the policy decisions challenging, because they result in hugely important consequences for customers. Regulated energy companies want to be environmentally protective and to reduce carbon dioxide emissions, but we also need to make sure the energy system remains reliable and affordable. It’s both exciting and scary, in terms of the potential for positive environmental outcomes and potential impact on our customers.

    You were actively involved in negotiating Oregon’s new “coal to clean” energy legislation, SB 1547. How was that experience?

    Exhilarating! We have an energy system with a lot of existing infrastructure and sunk costs. There’s no easy way to adjust for the future without addressing the realities of the past.

    It’s both exciting and scary, in terms of the potential for positive environmental outcomes and potential impact on our customers.Etta Lockey ’11

    In my view, SB 1547 was a positive example of how a room full of stakeholders with different interests can work to align their disparate visions of the future and negotiate a path forward. We were able to balance the need to move toward a cleaner energy system with the necessity of keeping electricity affordable.

    Do others within the electric utility system look at SB 1547 as a good way to move forward?

    In Oregon, yes. It’s not clear yet whether utilities in other states have the same perspective.

    What makes you feel most optimistic about the changes in the energy system?

    In the West, there is active discussion and planning around formation of a regional grid and more fluid energy market. That will make renewables easier to integrate reliably. And, when I read reports out of Europe that some places have been able to rely on 100 percent renewables for a few hours, I feel really optimistic. In the United States, we also see all sorts of innovations with distributed generation. These technological changes make me feel optimistic that we can do a lot more with renewables. The challenge will be transitioning our current system to the system of the future without stranding costs or harming customers. Those are not small challenges, but the successes in other places make me think we can do it here.

    What advice would you give to students interested in energy law?

    Understand the industry. Understand who the players are and what the issues are. Immerse yourself. Employers want to see that you really care about energy law. It’s a funky, funky field.

    My other piece of advice applies to anyone practicing law. Make sure you focus on how to respond to your clients’ needs. Lawyers are essentially customer service providers, so you need to figure out how to serve their needs, not just understand the law.

  • Lara Skidmore ’93

    Skidmore earned a political science degree from Oregon State University. She worked at Bonneville Power Administration and PacifiCorp after receiving her JD from Lewis & Clark. In 2007, she opened the Portland office of Troutman Sanders, an international law firm with a large energy practice, and became its Portland office managing partner.

    How did you get into energy law?

    After my first year in law school, I was hired into the co-op student program in the transmission contracts group at Bonneville Power Administration, which ultimately turned into a permanent job in the office of general counsel. My practice focused on transmission and power contracts and policy. I had studied a lot of engineering as an undergraduate, which helped me get the initial job at Bonneville.

    In 2003, I moved to PacifiCorp, where I was the associate general counsel for transmission organization.

    Finally, in 2007, I moved to Troutman Sanders. I still represent PacifiCorp, as well as other energy companies—including renewable energy companies—in administrative and judicial proceedings.

    How were you able to develop a federal energy practice without moving to Washington, D.C.?

    Portland is the center of energy activity in the Pacific Northwest. The city is home to two major investor-owned utilities, the headquarters for Bonneville, and several large renewable energy companies—AVANGRID Renewables, Vestas, Solar-World, EDPR—as well as many other related companies. Clients have stated that they really value the ability to have local counsel familiar with their utilities and the local energy community, but also with significant experience practicing before the Federal Energy Regulatory Commission in Washington, D.C. It was great that Troutman Sanders recognized the importance of Portland to its energy work.

    In energy law… the laws and policies and markets are evolving, and most of the legal questions do not have clear answers.Lara Skidmore ’93
    What do you like about practicing energy law?

    I love how dynamic it is. In some other areas of law, after you practice for a while, you generally know the answer to a question because you’ve seen the issue before and the law is settled. In energy law, though, the laws and policies and markets are evolving, and most of the legal questions do not have clear answers. Several different sets of regulations—at both the federal and state levels—might apply to an issue, and there often is little or no case law to guide you. This makes practicing interesting and challenging.

    You’ve seen a lot of changes in the energy sector. What do you think of them?

    I feel very positive about them. In the West, there is finally some movement toward a broader energy imbalance market, which can encourage more efficient renewable resource integration. In my view, this movement toward more efficient markets will provide both economic and environmental benefits.

    What advice would you give to students interested in energy law?

    Be committed, write well, and be scrappy. You have to be willing to dive deeply into energy law and embrace its complexity. It’s not an area of law that you can work with on a superficial level. And it’s really important to be willing to work hard and to stick with things even when then become challenging. Students who have that tenacity and grit make great lawyers.

  • Tim Johnson ’91

    After graduating from law school, Johnson worked at the Northwest Power Planning and Conservation Council, the U.S. Department of Justice, and with the private law firm Ball Janik. He has been with the Bonneville Power Administration (BPA), where he is assistant general counsel, for 21 years.

    How did you get into energy law?

    I think it might have started in Michael Blumm’s public lands class, where we discussed the intersection between dam operations and wildlife. I clerked with the Northwest Power Planning and Conservation Council during my third year of law school and stayed on after graduation to help them finalize their fourth Fish and Wildlife Program. Then, I moved to the U.S. Department of Justice, where I represented Bonneville in the big Washington Public Power Supply System litigation—which involved one of the largest public bond defaults in U.S. history—arising from the failed construction of nuclear power plants. The litigation itself was extremely complicated, and I became hooked on energy law and policy.

    What do you do at the BPA?

    I manage a great group of 10 lawyers who focus on a host of issues related to power generation and sales. I have worked on negotiating long-term contracts with our power buyers, managing short-term power trades, complying with our conservation and efficiency requirements, dealing with our transmission tariffs, integrating renewable resources, and ensuring that our operations comply with applicable federal laws that impact the operations of the federal dams, including the Endangered Species Act.

    We are basically driving a 1950s Chevy—our governing statutes—in a world of Teslas. The most recent power statute governing Bonneville was passed by Congress in 1980, and things have obviously changed profoundly since then.Tim Johnson ’91
    What is your favorite thing about energy law?

    The challenges and opportunities. We are basically driving a 1950s Chevy—our governing statutes—in a world of Teslas. The most recent power statute governing Bonneville was passed by Congress in 1980, and things have obviously changed profoundly since then. So, my job is really interesting, because it requires a lot of creative lawyering to make these old laws function in today’s dynamic energy world. We need to adapt while at the same time maintaining consistency with our prior positions. From a lawyer’s perspective, this challenge keeps things exciting.

    Are things in the energy world more exciting now?

    Not necessarily. It’s always been exciting. When I first came to Bonneville, the country was in the midst of electricity restructuring, and we spent several years designing new models to accommodate increased competition in the energy sector. Then the California energy crisis of 2000–01 hit, and that had a major impact on the BPA. Now, we’re in a period where we have a lot more renewables entering the system, and we might also be moving again towards a restructured market. All of these developments are linked, of course, but they all raise new issues and challenges.

    What advice would you give to students interested in energy law?

    Stay focused and engaged in the field even if you cannot get the specific energy law job you want right out of school. The energy industry is competitive and specialized, so you need to develop expertise.

    To all students I’d say aim to find a place that fits you. The people I work with love what they do, which makes the work much easier and more enjoyable.