On Thursday, FERC Acting Chairman Jon Wellinghoff testified before the U.S. Senate’s Committee on Energy and Natural Resources on siting of electric transmission lines. Acting Chairman Wellinghoff’s testimony was part of a full committee hearing that included witnesses representing federal and state commissions, transmission and electricity companies, and regional entities.

In a Notice of Proposed Rulemaking issued by the U.S. Environmental Protection Agency (“EPA”) on March 10, 2009, EPA has proposed a nationwide system for the reporting of greenhouse gas (“GHG”) emissions by large industrial sources. In doing so, the Agency has taken the initial step toward federal regulation of GHG emissions.

The National Ambient Air Quality Standard (“NAAQS”) for ozone established by the EPA under the Bush administration was challenged by a coalition of environmental and health advocacy groups, and is currently the subject of pending litigation in the U.S. Court of Appeals for the D.C. Circuit. EPA has now requested that the briefing schedule in that case be suspended for six months, in order for the new administration to review the existing ozone NAAQS and determine whether revision is warranted.

On Thursday, Sen. Harry Reid (D-Nevada) introduced “The Clean Renewable Energy and Economic Development Act.” The bill would give the Federal Energy Regulatory Commission (“FERC” or “Commission”) the authority to step in if states are blocking the development of transmission lines designated to bring more renewable energy onto the nation’s electric grid.

On Monday, FERC hosted a technical conference entitled, Integrating Renewable Resources Into the Wholesale Electric Grid. Attention at the conference centered on the challenges that intermittent resources pose to the transmission system, as well as which entities should be responsible for regional planning.

On February 27, 2009, FERC approved a settlement agreement with Energy Transfer Partners LP (“ETP”) under which it will pay no civil penalty and neither admit nor deny any wrongdoing to any third party by Oasis Pipeline, LP (“Oasis”), an affiliate. The decision follows a ruling by FERC Administrative Law Judge Bruce Birchman that FERC was unable to prove Oasis had unduly discriminated against non-affiliated shippers (see November 21, 2008 edition of the WER).

President Obama on Tuesday issued a memorandum directing the Departments of Commerce and the Interior to reconsider regulations they had issued in December of last year to limit the impact of the listing of the polar bear as a threatened species. Although the Interior Department found that the number of polar bears have been increasing in the last several decades, the Department last year listed the polar bear as a threatened species based on actual and modeled future loss of Arctic sea ice.

On Tuesday, Maryland Governor Martin O’Malley (D) introduced legislation to partially re-regulate the electricity market in that state. Separately, state legislators also have filed two bills (SB 795 and SB 844) that would go even further, and fully re-regulate Maryland’s electricity market.

On February 20, 2009, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) Exceptional Dispatch provisions in its Market Redesign and Technology Upgrade Tariff (“MRTU Tariff”). While FERC believes that CAISO will rely on the Exceptional Dispatch mechanism much less frequently in the future as it gains experience with MRTU, the mechanism will maintain grid reliability in circumstances where resources issued exceptional dispatch instructions could exercise local market power.