John Mercer established the firm with five other lawyers in 2009 after they left Troutman Sanders. (Zachary D. Porter)
Atlanta energy law boutique Mercer Thompson has recruited a five-lawyer renewable energy team from Cooley that establishes a Washington office for the firm. Tom Amis and Nik Patel join as partners, Renu Gupta and Rusty Brewer as of counsel and Mauricio Posadas as an associate.
Amis said his team was attracted to the boutique model that John Mercer and Chip Thompson took a flyer on in June 2009 when they left Troutman Sanders with four other lawyers to start Mercer Thompson. Mercer had been the head of Troutman’s project development and finance group.
“They have built a platform that is different from the highly leveraged project finance platform and are uniquely positioned for client service in the sector,” Amis said. “It’s an opportunity to join these guys who four years ago were the pioneers on this. They’ve proved this model could really work for clients.”
Mercer said the boutique is staffed predominantly with experienced, mid-career lawyers in a diamond-shaped model rather than the traditional big-firm pyramid, with lots of associates at the bottom and a few senior partners at the top. Of its 17 lawyers, 11 are in their late 30s and 40s, Mercer said, with three younger associates at the bottom point of the diamond and three senior-level partners (including himself) at the upper tip.
“For the kind of high value-added, complex work that we do, it is more efficient and economical for clients to have access to lawyers who know what they are doing—and who are going to do the actual work,” Mercer said.
General counsels have become more savvy about purchasing legal services, Mercer said. “As big law firms have developed something of a revolving door phenomenon, general counsels are sophisticated enough to understand that the old brand names may not be an indicator of the quality of the people at the firm, so they focus on hiring specific lawyers,” he said.
Amis was the co-chairman of Cooley’s clean energy and technology practice, a 35-lawyer group that Chambers and Partners calls “a prominent force” in the renewables and alternative energy project market, which includes nuclear.
The Washington lawyers have known the Mercer Thompson lawyers for years. Amis and Mercer were partners at Troutman Sanders earlier in their careers and Thompson said he’s worked on deals with Patel for almost two decades.
Mercer Thompson handles project development and financing deals for power plants ranging from traditional coal-fired plants to renewable facilities, as well as acquisitions and dispositions for power plant owners and investors. Clients include Southern Power Co. (a subsidiary of The Southern Co.), Georgia Power, Wisconsin Electric Power Co. and Duke Energy.
“They have been involved in some of the largest [power] transactions in the country. The model works,” Amis said.
Financing for big power plant deals dried up after the financial markets crashed in 2008, but Mercer said private financing from capital markets is “very robust” at this point. However, the largest transaction he’s working on right now is obtaining an $8.3 billion loan guarantee from the U.S. Department of Energy for Georgia Power’s construction of two additional nuclear units at Plant Vogtle.
Amis started out working on conventional power plant deals but shifted his focus to renewable power generation about a decade ago. The higher costs of conventional fuels plus concerns about climate change and the desire for energy independence have sparked interest in renewable power sources, he said. Meanwhile technology advances are making renewable energy generation cheaper and more efficient.
“Some people view renewables as a traditional power plant without a fuel supply,” Amis said. To the contrary, wind, solar, biomass and other renewable energy plants generate power on a far smaller scale than conventional coal-fired plants.
“These are a different animal than conventional power projects,” he said. Tax credits and government incentives are key to making the financing for a renewable power generation deal work in the developing industry. Thirty-one states require utilities to deliver a percentage of electricity from renewable and alternative energy sources.
A major growth area in the renewable sector is distributed power generation, where electricity is generated locally on a small scale rather than produced at a far-off power plant and then transmitted. “It’s an area of real ferment,” Amis said. “Why build out a utility grid when you can put a gasifier in?”
One investor client is acquiring solar power projects all over the U.S. and starting to move into the wind power sector, Amis said, and he’s closing a deal for another to acquire a portfolio of wind farms.
“There is a distributed [power] revolution going on, whether for small-scale solar, biomass or wind. If you can sell at retail instead of wholesale, it gets around the transmission problems plaguing a lot of large energy projects,” he said.
“We’re not going to move away from the utility grid anytime soon, but distributed power is a very interesting part of the market. It’s where the action is and where the future opportunity is,” he added.
The legal template for selling locally sourced power can be applied to locally sourced produce. Amis said produce vendors face the same transmission problem in getting produce to market as power producers do with electricity: a huge percentage of the price is from transportation costs.
His team handled produce purchase agreements for an urban greenhouse that the District of Columbia is building in its Anacostia neighborhood in partnership with BrightFarms. The hydroponic greenhouse will grow up to 1 million pounds of produce annually for local consumption as part of the city’s Sustainable DC initiative.