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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.

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.

On April 30, 2012, the Federal Energy Regulatory Commission approved revisions to the PJM Interconnection, L.L.C.’s (“PJM”) transmission planning process in Docket No. ER12-1179-000.  PJM submitted the proposed revisions in order to expand its planning analyses beyond reliability and market efficiency considerations, developing a more extensive analysis that includes renewable resource integration, demand response programs, environmental initiatives and “at risk” generation.

On April 19, 2012, the Federal Energy Regulatory Commission (the “Commission” or “FERC”) approved proposed tariff revisions of Midwest Independent Transmission System Operator, Inc. and the Transmission Owners of the Midwest Independent System Operating, Inc. (collectively “MISO”) in its effort to facilitate the integration of Entergy Corporation and its operating companies (“Entergy”) into MISO.  The order clarifies how the costs of certain transmission projects will be allocated during the transition of Entergy into MISO, and sets the stage for future cost sharing between the current MISO and Entergy regions.

On April 20, 2012, FERC clarified through a WSPP, Inc. (“WSPP”) order that the Commission does not have jurisdiction over the trading of unbundled renewable energy certificates (“REC”) – i.e. those REC contracts that do not have an energy sales component.  However, the Commission did assert jurisdiction over bundled REC transactions under sections 201, 205, and 206 of the Federal Power Act.