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On May 15, 2012, the North American Electric Reliability Corporation (“NERC”) filed a request for rehearing of a May 4, 2012 letter order issued by the Director of FERC’s Office of Enforcement accepting a contested audit report critical of NERC (“May 4 Letter Order”).  NERC noted that the FERC audit report contained “so many errors that it is difficult to understand the Office of Enforcement’s position on a wide range of matters.”

On May 17, 2012, FERC instituted an investigation pursuant to section 206 of the Federal Power Act (“FPA”) regarding the protocols used by transmission owners in the Midwest Independent Transmission System Operator’s, Inc. (“MISO”) when calculating their annual formula transmission rates.  The investigation centers around whether the formula rate protocols used by MISO and transmission owners in the region are sufficient to ensure just and reasonable rates.

On May 17, 2012, FERC issued a policy statement to explain how it will advise the Environmental Protection Agency (“EPA”) on requests for Administrative Orders (“AOs”) to allow generators to operate in noncompliance with the EPA’s recent Mercury and Air Toxic Standards (“MATS”) rule for electric generators.   The Policy Statement is generally consistent with the FERC Staff white paper on the same topic issued in January.

On May 9, 2012, the House of Representatives Committee on Energy and Commerce, Subcommittee on Energy and Power held a hearing on H.R. 4273: “Resolving Environmental and Grid Reliability Conflicts Act of 2012” and the “Hydropower Regulatory Efficiency Act of 2012.”  H.R. 4273 purports to resolve the conflict for an electric generator who may be asked by DOE to run for the sake of electric reliability, even though it may be unable to comply with the recent suite of EPA power plant regulations.