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 1, 2012, FERC and NERC released a joint report detailing the events that led to the 2011 blackout in the Southwestern United States that left 2.7 million customers without power.  The report called for transmission operators and balancing authorities to improve coordination and planning.

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 September 15, 2011, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to approve revisions to eight critical infrastructure protection (“CIP”) reliability standards, CIP-002-4 through CIP-009-4, which were developed and submitted to the Commission by the North American Electric Reliability Corporation (“NERC”). 

On September 15, 2011, FERC issued two final rules approving NERC’s interpretation of the Transmission Operations Reliability Standard, TOP-001-1, and the Transmission Planning Reliability Standard, TPL-002-0.

On August 29, 2011, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order initiating review of a Notice of Penalty (“NOP”) issued by the North American Electric Reliability Corporation (“NERC”) on July 28, 2011, against Southwestern Power Administration (“SWPA”) for violating Reliability Standards Requirements for Critical Infrastructure Protection.  SWPA and the United States Department of Energy (“DOE”) filed an application for review with FERC arguing that NERC lacks the statutory authority to assess monetary penalties against a federal agency, and thus the NOP against SWPA must be dismissed.