With the help of its in-house attorneys and a team of British lawyers, IntercontinentalExchange, or ICE, an Atlanta-based operator of global derivatives exchanges, has purchased Climate Exchange plc for $597 million, making a major investment in the nascent market for trading greenhouse gas emissions.

ICE’s vice president and associate general counsel, Andrew Surdykowski, said the biggest challenge from his perspective was learning the laws of the Isle of Man, a self-governing British dependency where Climate Exchange, which runs trading markets for carbon and sulfur dioxide, among other things, is incorporated. “It was the first transaction we’d done in a long time in the United Kingdom,” Surdykowski said. He said ICE also was represented by the London office of Shearman & Sterling; Climate Exchange was represented by the London office of Slaughter and May.

Climate Exchange shareholders received cash for their shares, with ICE paying $377 million from its own cash reserves and borrowing $220 million from existing credit facilities.

Surdykowski, who worked on the deal with ICE’s senior vice president and general counsel, Johnathan Short, and David Clifton, assistant general counsel for mergers and acquisitions, said his company had a long history with Climate Exchange, previously acquiring a 5 percent stake in the company and using ICE technology to run their exchanges. “We’ve partnered with them for many years,” he said.

All that helped the deal move quickly. Legal work on the deal, Surdykowski said, began in May and concluded in early July.

Climate Exchange runs three core businesses: the European Climate Exchange, which operates a trading market for carbon credits traded as part of the mandatory European Union Emission Trading Scheme, or EU-ETS; the Chicago Climate Exchange, North America’s only contractually binding, rules-based greenhouse gas emissions allowance trading system; and the Chicago Climate Futures Exchange, which  provides a contract market for regulated environmental products that include Regional Greenhouse Gas Initiative CO2 allowances and U.S. emissions such as sulfur dioxide and nitrogen oxide.

The United States created a regulated cap-and-trade program for sulfur dioxide and other acid-rain-causing emissions more than a decade ago, giving utilities a limited number of emissions allowances. Plants traded one allowance for each ton of sulfur dioxide they emitted; if they cut emissions, they could sell their extra allowances.

Just days after the acquisition, however, the U.S. Environmental Protection Agency issued new rules that basically caused the bottom to drop out of the trading market for sulfur dioxide and other acid-rain-causing emissions. The rules were issued in response to a 2008 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, which said that some EPA rules conflicted with Clean Air Act regulations.

The EPA rewrote its rules, placing stricter limits on power plant emissions, but relying less on trading. The Wall Street Journal reported that one-ton allowances that had traded at $1,600 prior to the lawsuit fell, at times, to $3 each.

“The regulatory and legislative environment in the U.S. is dynamic right now,” said Kelly Loeffler, a spokeswoman for ICE.

“We acquired Climate Exchange based on their European emissions business, where the emissions cap-and-trade program is mandated under the European Union Emission Trading Scheme,” she said. “They have a pretty robust business already.”

In 2009, according to information from ICE, the European Climate Exchange’s average daily volume exceeded 20,000 contracts, up 82 percent from a year prior.

Point Carbon, a Thomson Reuters company that tracks worldwide emissions markets, reported that in 2009, the global carbon market was worth roughly $121.2 billion, with the EU-ETS worth about $94.1 billion, accounting for 68 percent of global trades.

Operating out of what used to be an underwear factory in Rabun Gap, the state's first independent power-producing biomass plant officially opened on Earth Day, April 22, thanks to a 20-year, $225 million power purchase agreement put together by lawyers from Autry, Horton & Cole and McGuireWoods.

Green Power Electric Membership Corp., represented by Autry Horton lawyers Charles T. Autry and Roland F. Hall, signed on to buy electricity generated from forest waste such as wood chips, which will then be used by 38 electric cooperatives around the state. A 39th co-op has received board approval to join the group. Hall said he refers to the plant as the state's first "independent" facility of its kind because it is the only biomass plant in Georgia to produce power and sell it to a utility. Some other biomass plants exist in the state, but they do not sell power, instead producing it solely to support their owners' manufacturing processes.

The power producer, Multitrade Rabun Gap, a portfolio company of equity investor Leaf Clean Energy Co., which has offices in London and Washington, was represented by Mark J. La Fratta with McGuireWoods' Richmond, Va., office.

Michael Whiteside, the president of Green Power, said that Multitrade contacted his company about two years ago to gauge its interest in purchasing renewable power. After months of negotiations, the companies reached a deal and Multitrade obtained a $20.7 million loan guarantee through the U.S. Department of Agriculture's rural development program to construct the facility. The plant is located in a former Fruit of the Loom factory that closed in 2006, and Green Power has repurposed the facility, including a boiler that the underwear maker used to generate its own power, to process the biomass.

Autry and Hall said the operation is fascinating to watch. "Semitrailer trucks bring in loads of wood chips, and they … back the semi onto a platform and lock it down," said Autry. "The whole platform pivots on its base, [upending] the truck, and the woodchips fall out by gravity … onto a conveyor belt.

"It's unbelievably clean for something that's burning wood," he said. "You really don't get an odor or smoke or anything."

Autry said contracts to purchase renewable energy are different from contracts to purchase the output of a coal- or gas-fired plant. Coal or gas power is "dispatchable," he said, meaning that you only take the power when you need it. "In this project, you take the power as it is generated, so there are unique issues there," he said, adding that the contract also includes specifications about the type of fuel used, to ensure that it is always environmentally friendly. A biomass contract, he said, also focuses on fuel-price issues, and can include caps or indices to control fuel costs—something that is not an issue, for example, in a contract for the purchase of solar power.

Hall said that renewable fuel contracts also differ from a coal or gas deal because of tax issues. "The developer or the company producing the power typically receives tax credits that may make up a big part of the profit they can anticipate receiving from the project, and there are renewable energy credits, and you have to negotiate who gets those," he said.

In this deal, Multitrade gets the tax benefits—co-ops are not taxable and can't use them; the co-ops get the renewable energy credits, which Whiteside said are not worth much now but could be in the future if legislative changes result in a renewable portfolio standard or laws related to carbon offsets.

This is Green Power's fourth eco-friendly deal, according to Whiteside. He said Green Power also has power-purchase agreements with two landfill methane gas facilities, one in Fayetteville and the other in Taylor County, and a hydroelectric project near Athens at Tallassee Shoals, which is on the Middle Oconee River. Together, these produce about 7.5 megawatts of power.

The new Rabun Gap facility generates 17 megawatts of power, which Whiteside said represents a small portion of overall power use by the individual electric co-ops—about 2/10ths of 1 percent.

Still, it is a large generator of renewable power compared with other facilities in the state. According to Lynn Wallace, a spokeswoman for Georgia Power, her company's Green Energy program purchases 3.2 megawatts of power from a methane gas facility, DeKalb County Seminole Road Landfill, and has 1.5 megawatts of power under contract in a buy-back program from customers who generate their own solar energy.

The production of green power is increasing, however. Wallace said that Georgia Power will purchase an additional megawatt in the solar buy-back program starting June 1. Also around that date, pending approval from the state's Public Service Commission, Troutman Sanders lawyers Kevin C. Greene and Brandon F. Marzo, who also represented Georgia Power in the Seminole Landfill and solar buy-back deals, said that their client will launch a 10-year power-purchase agreement with Waste Management Superior Landfill in Savannah. Wallace said that plant will produce 6.4 megawatts of power.

Greene and Marzo said they're working with Georgia Power now to secure approval from the Georgia Environmental Protection Division to convert Plant Mitchell, near Albany, to a wood-fueled biomass facility that could produce about 100 megawatts of power. Greene said the plant is likely to go online in the next several years.

Whiteside, the Green Power president, said that next year his company plans to begin purchasing power from a biomass facility near Carnesville. The plant's power will come from one of the most renewable fuels of all: chicken poop.

Slowly, the city of Atlanta is piecing together lots in the Old Fourth Ward neighborhood to create a new public park to complement the planned BeltLine. 

In one of the city’s latest real estate transactions, the Trust for Public Land acquired a 3-acre parcel along Freedom Parkway from Cox Enterprises Inc. The Trust for Public Land then deeded the parcel over to the city.

Dow Lohnes partner David Lester advised Cox Enterprises on the $3.85 million land sale. The Trust for Public Land was represented by staff attorneys Richard Tucker and Sireesha C. Ghanta.

The parcel is bounded by Willoughby Way on the south, Freedom Parkway to the east and south and the BeltLine corridor to the east. But the most distinctive aspect of the parcel is its location next to a WSB television antenna and the concrete structure that spans Freedom Parkway, protecting motorists from ice that might fall from the antenna’s guy wires. The parcel that Cox sold is an empty lot, Lester said. The antenna and accompanying brick WSB-TV building sit on the adjacent lot; Cox isn’t selling that property, he said.

From the city's perspective, the biggest lure of the Cox parcel is its location directly on the BeltLine. The BeltLine is the city’s ambitious plan for a streetcar line, walking paths and greenspace that will encircle the city's core. Along with its designs for the BeltLine, the city also is planning the addition of several new park s

The city will plant trees and grass on its new parcel, said Paul Taylor, director of Atlanta’s office of park design. Also planned are a new facility for skateboarders and a multiuse athletic field.

The Cox lot will be part of a larger aggregation of greenspace, featuring a large stormwater-retention pond, that the city plans to call Historic Fourth Ward Park. The largest element of the planned 16-acre park is property that's bounded by the former Sears Building [photo, right] on North Avenue (now City Hall East and scheduled for conversion to residential and retail space) and Ralph McGill Boulevard. The Cox parcel will be detached from the largest segment, connected by a tree-lined sidewalk or walkway along Ensley Street and crossing Ralph McGill Boulevard.

From Dowdell’s Knob on top of Pine Mountain in central Georgia, the visage of Franklin D. Roosevelt gazes upon the southernmost element of the Appalachian Mountain range. FDR often visited the area to treat his polio in the waters of nearby Warm Springs.

After FDR’s death, the state of Georgia created its largest state park in and around the Pine Mountain and Warm Springs area. Surrounding F.D. Roosevelt State Park, which features the life-sized bronze sculpture of the 32nd president, are the holdings of the Ida Cason Callaway family. Some of the Callaway family property comprises Callaway Gardens, a golf resort and nature preserve. Much of the rest of the land is virtual wilderness.

In a multi-party, $4 million transaction last month, the Ida Cason Callaway Foundation last month transferred about 2,507 acres of its property to the Georgia Forestry Commission to be held in a conservation easement. Of the 13,000 acres owned by the foundation, about 4,000 acres are now held in a conservation easement, said foundation spokeswoman Rachel Crumbley. None of the recently donated property would affect daily visitors to Callaway Gardens, she said, and the Callaway foundation will remain the owner of the tract.

The Georgia Land Conservation Program provided a $2 million grant and a $2 million low-interest loan to Harris County, Ga. to acquire an easement on the property from the Callaway Foundation. The county then transferred the easement to the Georgia Forestry Commission.

Lawson & Moseley partner Bill Lawson and attorney Susan Kalus in Atlanta advised the Ida Cason Callaway Foundation on the transaction. Lewis Taylor & Todd partner John M. Taylor in LaGrange advised the government of Harris County, Ga., where the property is located. The Georgia State Properties Commission was represented by in-house counsel Alisa C. Pereira. Shannon A. McGhee of the Office of the Attorney General advised the Georgia Land Conservation Program, a state-funded effort to protect property from private development.

A conservation easement imposes strict limits on what type of development can take place on the property, said Curt Soper, director of the Georgia Land Conservation Program. The easement limits the number and types of homes that can be built, as well as restricts digging and grading land. In return, a private landowner can obtain tax benefits—in Georgia, up to $250,000 per individual, or up to $500,000 for a corporation—if a property owner donates an easement.

From the public’s point of view, any additional land that’s set aside from private development is a good thing, said Mark Woodall, a Talbot County tree farmer who lobbies at the state Capitol on behalf of the Sierra Club.

“This makes for a fine protected area for folks in west Georgia,” Woodall said.

The conservation easement should also help efforts by public and private groups, including the Callaway foundation, to restore the population of rare and endangered montane longleaf pine trees to the Pine Mountain ridge and valley area, Woodall said.

An additional benefit accrues to the public when property that’s located adjacent to a state park is placed in a conservation easement, Soper said. For example, the 23-mile Pine Mountain Trail could be extended from within F.D. Roosevelt State Park into the Callaway tract.

The Callaway property is one of about 500 tracts in the state held in conservation easements, Soper said. The vast majority of those easements are held by private trusts with the remainder, including the new Callaway property, being held by the state government.