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On July 16, 2009, the Western Area Power Administration (“WAPA”) and an LS Power affiliate, Great Basin Transmission LLC (“Great Basin”), announced that they have entered into a memorandum of understanding (“MOU”) where WAPA may partner with Great Basin to develop the Southwest Intertie Project (“SWIP”). While the MOU will not affect Great Basin’s current open season for SWIP, a partnership with WAPA could allow construction to start while arrangements for the sale of capacity to third-party shippers are being negotiated.

On July 16, 2009, FERC granted a complaint filed by Pepco Energy Services, Inc. (“Pepco”) challenging provisions of PJM’s Open Access Transmission Tariff regarding peak-hour-period availability penalties for infrequently-run generation units. The Commission determined that the market rules governing the peak-hour-period availability penalties for infrequently-run generators were unjust and unreasonable, and established new rates to be applied as of the date of the complaint (April 22, 2008).

On July 16, 2009, the Commission adopted staff’s conclusion that there were no deceptive or fraudulent actions taken by market participants when they placed circuitous power delivery schedules around the Lake Erie region in 2008. While the Commission did not find any market manipulation that directly led to the Lake Erie “loop flow” issues, it did order market operators in New York and surrounding regions to find long-term, comprehensive solutions to the problem and submit those solutions to the Commission within six months.

On July 16, 2009, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued Order No. 719-A affirming its decision in Order No. 719 that removing barriers to demand response is consistent with FERC’s duty to ensure the sound operation of organized wholesale electric markets. However, FERC exempted small utilities that distributed up to 4 million megawatt-hours (“MWh”) during the previous year.

On July 6, 2009, CPV Maryland, LLC (“CPV”) filed a motion with the Maryland Public Service Commission (“Maryland PSC”) to order one or more utilities to negotiate long-term contracts for all the capacity and energy from CPV’s St. Charles Project. CPV has requested that the Maryland PSC issue an order within 60 days. The motion is likely to be challenged by several parties in Maryland’s competitive wholesale and retail market.

On July 10, 2009, the North American Electric Reliability Corporation (“NERC”) filed with the Federal Energy Regulatory Commission (“FERC” or “Commission”) four notices of penalties with a proposed total of $75,000 in fines for violations of mandatory reliability standards. A fifth notice of violation did not include a financial penalty. All of the companies are also implementing mitigation plans.