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 2, 2012, United States Federal Court of Claims issued a ruling in Case Nos. 07-157C and 07-167, holding that the Bonneville Power Administration (“BPA”) and the Western Area Power Administration (“WAPA”) are in breach of a present contractual duty to pay refunds that they owe to the California parties.

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.

On May 8, 2012, President Obama nominated Kristine Svinicki (R) to a second five-year term on the Nuclear Regulatory Commission (“NRC”).  Svinicki’s current term is set to expire on June 30, and several Republican Members of Congress are asking for a speedy confirmation.  However, this nomination may be opposed by Senate Majority Leader Harry Reid (D-NV).

On May 3, 2012, FERC established an evidentiary hearing to explore whether New England transmission owners’ rate of return on equity continues to be just and reasonable.  The order stems from a September 2011 complaint filed by the Massachusetts Attorney General and various other state officials and commissions (“collectively, “Complainants”) from the New England states (see October 7, 2011 edition of the WER).

On May 4, 2012, the FERC Office of Enforcement released a delegated letter order accepting the results and recommendations of an audit of the North American Electric Reliability Corporation (“NERC”).  The audit report, critical of NERC in many ways, prompted NERC to issue a strongly-worded statement criticizing FERC Staff for releasing the report while negotiations regarding some of the audit results and recommendations were ongoing.