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On July 22, 2012, NRG Energy, Inc. (“NRG”) and GenOn Energy, Inc. (“GenOn”) announced that the two companies intend to merge and operate under the name NRG Energy.  The companies claim that the merger, if completed, will create the nation’s largest competitive power generation company with approximately 47,000 MW serving the east, west, and Gulf Coast regions, and lead to $300 million in annual benefits in its first full year of operations.

On July 19, 2012, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to approve a new National Electric Reliability Corporation (“NERC”) regional reliability standard governing the coordination of automatic underfrequency load-shedding (“UFLS”) schemes within the SERC Reliability Corp. (“SERC”). 

On July 19, 2012, FERC upheld the North American Electric Reliability Corporation’s (“NERC”) proposed penalty against the Southwestern Power Administration (“SWPA”), an entity within the Department of Energy (“DOE”), for violating certain mandatory Reliability Standards.  FERC held that section 215 of the Federal Power Act (“FPA”) authorizes NERC to assess monetary penalties against federal agencies that are users, owners, or operators of the Bulk-Power System for violating mandatory Reliability Standards. 

On July 19, 2012, FERC issued several orders related to whether the governing agreements of the PJM Interconnection, LLC (“PJM”) and Midwest Independent Transmission System Operator, Inc. (“MISO”) include a right of first refusal (“ROFR”) for incumbent transmission owners to build and own new projects.  FERC concluded that the MISO Transmission Owners Agreement does include a ROFR, and enforced that right to find that several disputed transmission projects were properly awarded, at least in part, to existing transmission owners.

On July 17, 2012, FERC’s Director of the Office of Electric Reliability, Joseph McClelland, testified before the Senate Committee on Energy and Natural Resources regarding grid and cyber security matters.  McClelland discussed what he believes are the general limitations of FERC’s current authority over cyber security, as well as his recommendations for new legislation to enhance the Commission’s ability to prepare for and respond to cyber attacks and other grid vulnerabilities.

On July 11, 2012, FERC issued an order granting the complaint of FirstEnergy Solutions Corp. (“FirstEnergy”) regarding the allocation of Auction Revenue Rights (“ARRs”) under the PJM Interconnection, L.L.C.’s (“PJM”) Open Access Transmission Tariff (“Tariff”).  FirstEnergy’s complaint focused on the allocation of monthly ARRs for transmission capacity that becomes available over the course of the year, but was limited in the annual allocation due to modeled outages. 

On July 12, 2012, FERC denied NorthWestern Corporation’s (“NorthWestern”) request for rehearing of a December 30, 2011 order (“December 30 Order”) which rejected, in part, NorthWestern’s proposal to modify Schedule 3, Regulation and Frequency Response Service (“Schedule 3”) of its Montana Open Access Transmission Tariff (“July 12 Rehearing Order”).  The requested modifications rejected by the Commission included, among other things, creation of an explicit right for NorthWestern to apply certain Schedule 3 charges to customers who elect to self-supply regulating reserves. 

On July 10, 2012, the National Transportation Safety Board (“NTSB”) approved a staff report that faults both Enbridge Energy, Limited Partnership (“Enbridge”) and the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) for a 2010 pipeline rupture that spilled almost 850,000 gallons of crude oil in Marshall, Michigan.