On Wednesday, the United States Court of Appeals for the Fourth Circuit (“Court of Appeals”) reversed a Federal Energy Regulatory Commission (“FERC” or “Commission”) ruling interpreting its authority to approve certain interstate electric transmission projects that had been previously denied by state commissions.

On Thursday, FERC approved new flexible rate mechanisms for two merchant transmission projects. Chinook Power Transmission, LLC (“Chinook”) and Zephyr Power Transmission, LLC (“Zephyr”) plan to build 2,100 miles of transmission to deliver wind power from Montana and Wyoming to customers in Nevada and other Southwestern states.

On February 12, 2009, in an unusual move, FERC rejected a settlement between the Commission’s Office of Enforcement Litigation Staff (“Staff”), the defunct hedge fund Amaranth Advisors LLC (“Amaranth”) and two of Amaranth’s traders, Brian Hunter and Matthew Donohoe. The parties submitted the settlement, which was not made public, to the Commission for approval on November 24, 2008.

On Tuesday, the U.S. Environmental Protection Agency (“EPA”) granted a petition from the Sierra Club and others to reconsider former EPA Administrator Stephen Johnson’s December 18, 2008 memorandum interpreting the federal Clean Air Act as not requiring regulation of carbon dioxide emissions from new coal-fired power plants.

On Wednesday, leaders from both the U.S. House of Representatives (“House”) and the U.S. Senate (“Senate”) finished reconciling all of the major provisions of the American Recovery and Reinvestment Act (“Stimulus Bill”), estimated to cost $789 billion. While some of the energy provisions passed by the House and Senate (see January 23 and January 30, 2009 edition of WER) have changed, the majority remain intact.

On Monday, several regional grid operators and organizations announced the Joint Coordinated System Plan (“JCSP”) report, which estimates that over $80 billion in new transmission is needed to support 20% of the electricity consumed in the eastern U.S. coming from wind generation. 20% is the wind energy contribution that the U.S. Department of Energy (“DOE”) recommended in its Eastern Wind Integration and Transmission Study.

On January 30, 2009, FERC issued an order approving ISO-NE tariff revisions to integrate the FCM and the generator interconnection process. The modified OATT provisions will offer two levels of interconnection service, one of which will have a deliverability requirement.

On January 29, Indeck Energy Services Inc. filed a lawsuit in Saratoga County, New York against New York State’s participation in and implementation of the Regional Greenhouse Gas Initiative (“RGGI”) program.  Indeck owns almost 20 electric power plants powered by various types of fuels, including a 128-MW combined cycle natural gas-fired power plant in Corinth, New York.