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As a congressional committee and a joint U.S.-Canadian governmental task force kick off fast-track probes of the massive Aug. 14 electrical blackout, electric utilities and other key industry players are scrambling to line up attorneys in preparation for their unwanted moment in the spotlight. D.C. law firms whose partners have spent long years litigating cases at the Federal Energy Regulatory Commission and lobbying the fine points of energy bills now need to help their clients respond very publicly to tough questions: How did the outage begin? Why did it spread and affect 50 million people? And how can the system be fixed? Managing investigative fallout is only part of the assignment. The major energy bill in Congress — given momentum by the historic blackout — and last week’s filing of a class action against the FirstEnergy Corp. will combine to keep armies of lawyers busy for quite some time. One veteran Washington energy lobbyist says “massive finger pointing” and public concern about the reliability of the nation’s energy infrastructure will mean significant action for Washington energy, class action, and white collar lawyers and energy lobbyists. “It’s so complicated, and it’s going to go on for so long, that you’re going to see a lot of lobbying and a lot of legal business flowing into Washington,” says this lawyer, who asks not to be identified. Akron, Ohio-based FirstEnergy, the nation’s fourth largest investor-owned utility holding company, has been a target of the finger pointing and, sources say, is putting together a legal team that will include D.C. specialists in energy law and government investigations. At press time, FirstEnergy had not yet selected that team. But in the past, D.C.-based lawyers from Akin Gump Strauss Hauer & Feld and Swidler Berlin Shereff Friedman have handled FERC matters for the company. Both Kenneth Jaffe, a partner in the D.C. office of Swidler Berlin, and G. Philip Nowak, a partner in the D.C. office of Akin Gump, say FirstEnergy has not yet decided on the makeup of the legal team. FirstEnergy Senior Vice President and General Counsel Leila Vespoli declines comment through a company spokeswoman. One well-known energy lawyer already working for a key industry member is Linda Gillespie Stuntz, a former deputy secretary of energy under the first President George Bush and now a partner in the five-lawyer D.C. energy and environmental firm of Stuntz, Davis & Staffier. Stuntz represents the North American Electric Reliability Council (NERC), a voluntary association of U.S. and Canadian utility companies that tries to keep up the steady flow of power through the continent’s electric wires. Michehl Gent, NERC’s president, will be an important witness at hearings called for Sept. 3 and 4 by Rep. W. J. “Billy” Tauzin (R-La.), chairman of the House Energy and Commerce Committee. Tauzin signaled his interest with an Aug. 19 letter to 15 utilities and state governmental bodies, asking them to respond to questions about the origins of the blackout. “I will have input into crafting [Gent's] testimony and in responding to the Department of Energy [in its probe of the blackout],” Stuntz says. “As questions have been asked about NERC’s role in the outage, we are working on that.” Stuntz, who has represented NERC on a variety of matters for the past three years, says she will also continue lobbying for the council on the energy bill now pending before a House-Senate conference committee. A key item on NERC’s legislative agenda has been to get Congress to upgrade utilities’ voluntary codes of conduct to enforceable rules that, among other things, will tell utilities how to move electricity around the system to contain small disturbances like the ones that may have triggered the outage. This idea is now picking up new support on Capitol Hill. In addition to four years spent crafting and shaping energy policy during the first Bush administration, including one year in the post of deputy energy secretary, Stuntz knows the Hill. For six years in the 1980s, she worked for the Republicans as minority counsel for the House Committee on Energy and Commerce. Stuntz left the government in 1993, at the beginning of the Clinton administration. Also that year, she became a founding partner of Stuntz, Davis, where she represents utilities, pipeline companies, and other entities in the energy field. CALLED TO THE HILL Some of the other recipients of the Tauzin letter may ultimately have less to worry about than the FirstEnergy Corp., but still need to respond quickly to the congressional and the executive branch inquiries. An official at the Ann Arbor, Mich.-based International Transmission Co. says it has no plans to beef up its outside legal team. Larry Bruneel, the company’s D.C.-based vice president, says International Transmission normally looks to two law firms: Detroit-based Dykema Gossett and Stuntz, Davis (the same energy boutique that represents NERC). Dykema Gossett has a 19-lawyer D.C. office. Its roster includes partner D. Biard MacGuineas, who serves as International Transmission’s chief FERC lawyer. He will continue to handle the company’s energy regulatory work, Bruneel says, and Stuntz, Davis, which is registered to lobby for the company, will assist in strategic consulting. Stuntz says she would be happy to assist the company in responding to the Tauzin letter, but has not yet been asked. International Transmission’s strategy, Bruneel says, has been to provide a “fact-based analysis of what happened on our transmission grid.” On Aug. 20, the company released a step-by-step account of why the power failure occurred, claiming that FirstEnergy never informed it of a series of breakdowns that led to the collapse of the International Transmission lines. Another recipient of the Tauzin letter is the energy transmission and distribution company National Grid USA, which includes subsidiaries Niagara Mohawk, Massachusetts Electric, Narragansett Electric, Granite State Electric, and Nantucket Electric. Of these, only Niagara Mohawk was affected by the blackout, when 1.25 million of the company’s customers lost power. According to company spokeswoman Amy Atwood, its two main law firms in Washington are LeBoeuf, Lamb, Greene & MacRae and Swidler Berlin. The company’s British parent firm, National Grid Transco, tapped LeBoeuf, Lamb as its lead U.S. counsel last November, according to the law firm’s Web site. Swidler Berlin represented National Grid USA and its subsidiary Niagara Mohawk in several transactions at FERC in 2002. Swidler Berlin’s Jaffe says he is now working with two of his partners, William Glew Jr. and former FERC Chairman James Hoecker, on behalf of National Grid. FIRST IN LINE But observers say that National Grid and International Transmission are less likely to take serious heat — at least initially — from Congress and federal investigators than is FirstEnergy, the Ohio utility holding company. Although no one has yet determined exactly what caused the blackout, a cascading series of failures evidently began with some of FirstEnergy’s transmission lines and power plants in Ohio. The company serves 4.3 million customers in New Jersey, Pennsylvania, and Ohio and owns seven utility operating companies. It had been criticized before the blackout for not paying enough attention to safety and infrastructure concerns. The company’s Davis-Besse Nuclear Power Station near Toledo has been shut down since last February when workers found a large hole caused by leaking acid in a reactor vessel head. After an investigation, the Nuclear Regulatory Commission and the company concluded that employees at the plant were afraid to raise safety concerns with management.

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