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Confirmation hearings were held this week for President-elect Obama’s designations for EPA Administrator (Lisa Jackson) and head of the Energy Department (Steven Chu). The confirmation hearings now underway for these two designees provide an inside look at the policy choices that may soon become law once the Obama Administration takes over on Tuesday.

New Mexico Attorney General Gary King is hoping that a new Environmental Protection Agency (“EPA”) under Barack Obama’s administration will provide a fair hearing in his appeal of an air permit. On July 31, 2008, the EPA granted an air permit to the proposed 1,500 megawatt coal-burning plant, but King hopes that a new administration might force the EPA to reconsider.

The Southwest Power Pool Inc. (“SPP”) and the Electric Reliability Council of Texas Inc. (“ERCOT”) have each filed reports with the Public Utility Commission of Texas (“PUCT”) detailing the estimated costs and production cost savings of transferring Entergy Texas Inc. (“Entergy TX”) into each reliability region.

Only 13 days after EPA issued interpretive guidance stating carbon dioxide (CO2) is not currently a regulated pollutant, and on the same day that the guidance was published in the federal register, environmental groups asked EPA to change its mind. As reported previously, the EPA guidance was released in response to the In re: Deseret decision by the Environmental Appeals Board (“EAB”), which held that EPA had not previously determined whether air permits issued under the Clean Air Act’s New Source Review (“NSR”) program must contain conditions limiting CO2 emissions.

On Wednesday, Federal Energy Regulatory Commission (“FERC” or “Commission”) Chairman Joseph T. Kelliher announced that he would step down as Chairman effective January 20.  His term on the Commission does not end until 2012, but he said that he will immediately begin to recuse himself from FERC business.

On December 23, 2008, the U.S. Court of Appeals finally answered the request for reconsideration of its decision to vacate the Clean Air Interstate Rule known as “CAIR.” As reported previously, CAIR is a cap-and-trade program designed by EPA to ensure that the emissions from power plants in one state do not interfere with efforts to attain the national air quality standards in another state. In the Court’s July decision, it found “more than several fatal flaws in the rule” and vacated it in its entirety, rendering the rule of no force or effect. In December, however, the Court reversed its decision to vacate the rule in order to “temporarily preserve the environmental values covered by CAIR” until EPA has time to revise the program.