On January 30, 2012, Federal Energy Regulatory Commission (FERC or Commission) Staff issued a white paper outlining a proposal to guide the Commission in advising the Environmental Protection Agency (EPA) on requests for administrative orders (AOs) extending the time for power plants to comply with EPA’s Mercury and Air Toxics Standards (MATS) based on system reliability concerns. EPA stated in a Final Rule that, in considering such requests, it will seek advice from FERC as well as certain other entities with reliability expertise. FERC Staff recommends that requests for AOs be filed with the FERC Secretary’s office on an informational basis and assigned to the Office of Electric Reliability (OER). OER would consider whether discontinuing operations of the generating unit in question would result in a Reliability Standard violation. The Commission in turn would advise EPA regarding such Reliability Standard violations in written comments. FERC has requested comments on these and other procedural steps recommended in the White Paper. The deadline for filing comments is February 29, 2012.

The MATS Final Rule, which the EPA released on December 21, 2011, pursuant to its authority under section 112 of the Clean Air Act (CAA), limits the emission of mercury, acid gases, and other toxic pollutants from power plants. It focuses on reducing emissions from new and existing coal- and oil-fired electric utility steam-generating units (EGUs). Affected facilities must be in compliance with the MATS Final Rule within three years, though state permitting authorities may grant a one-year extension. In addition, with its authority under CAA section 113(a), EPA may grant requests for AOs to provide an additional one-year extension to address a specific and documented reliability concern.

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