November 2007

From the editors of Wolters Kluwer Law & Business, this update describes important developments from CCH energy publications.

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Nuclear Power

Senator Clinton Calls for Alternative to Yucca Mountain Site
Presidential candidate Senator Hillary Clinton (D.-N.Y.) said Yucca Mountain, Nevada, ``is not the answer’’ to the question of how best to provide long-term storage of the nation’s nuclear waste. ``It’s time to move on from Yucca Mountain. I believe we should start over,’’ Clinton said during an October 31 hearing of the Senate Environment and Public Works Committee. Clinton pointed to scientific evidence which she said confirms that Yucca Mountain is an area of considerable seismic activity. Other scientific concerns for Clinton include potential volcanic activity at the site and groundwater contamination. At the same time, a DOE official told senators that his agency was committed to submitting a license application to the NRC to construct a repository at the Yucca site no later than June 30, 2008. ``DOE has not put schedule ahead of quality,’’ he said, noting that the application will integrate the results of over 20 years of scientific and engineering work. (Reported by Sarah Borcherson-Keto, CCH News Bureau) (CCH Nuclear Regulation Reports, No. 1380, November 6, 2007)

TVA Submits COL Application for Two New Advanced Reactors
The Tennessee Valley Authority (TVA) and the NuStart Energy Development consortium (NuStart) have submitted their combined Construction and Operating License (COL) application to the Nuclear Regulatory Commission (NRC). In nearly 30 years, this is only the second application submitted to the NRC for the construction of a new nuclear reactor. Specifically, TVA’s application seeks approval to build and operate two Westinghouse AP1000 advanced commercial nuclear reactors at its Bellefonte site near Hollywood, Alabama. The application will also serve as the reference application for utilities applying for approval of an AP1000 COL in the future. (CCH Nuclear Regulation Reports, No. 1380, November 6, 2007)

Electric Utilities

NERC’s 2008 Budget/Business Plan Conditionally Accepted
The North American Electric Reliability Corporation’s (NERC) 2008 business plan and budget as well as the 2008 business plans and budgets of each regional entity were conditionally accepted by the Commission. NERC was given authorization to issue billing invoices to fund the fiscal year 2008 operations of the regional entities, Western Interconnection Regional Advisory Body (WIRAB) and itself. The total funding requirement for 2008 allocable to end users in the United States was $82,587,129 and included $22,780,492 for NERC funding, $59,402,602 for regional entity funding, and $404,035 for WIRAB funding (North American Electric Reliability Corp., 121 FERC ¶61,057 (ip access user)).

Mosaic and Tampa NERC Determinations Remanded
Two decisions in which the North American Electric Reliability Corporation (NERC) found that two Florida entities, Mosaic Fertilizer, LLC (Mosaic) and City of Tampa, Florida (Tampa), were properly included on the NERC compliance registry and, therefore, subject to NERC’s mandatory and enforceable reliability standards were remanded to NERC so that NERC could either reconsider its decisions or provide a further explanation of the basis for its denials of the Mosaic and Tampa appeals. Florida Reliability Coordinating Council (FRCC), a NERC regional entity, had registered Mosaic as a generator owner and a generator operator. FRCC had also registered Tampa as a generator owner. The decisions were appealed to NERC and Mosaic and Tampa argued that their respective generation facilities did not fall within NERC’s registration criteria (Mosaic Fertilizer, LLC, et al., 121 FERC ¶61,058 (ip access user).

Commission Addresses California Refund Orders
In an order on remand from the United States Court of Appeals for the Ninth Circuit [Bonneville Power Administration v. FERC, CCH Utilities Law Reports Federal New Matters 2002-2006, ¶14,573], setting aside the Commission’s orders [96 FERC ¶61,120, order on rehearing, 97 FERC ¶61,275] related to the 2000 and 2001 energy spot market to the extent that the orders subjected governmental entities and non-public utilities to the Commission’s refund authority under the Federal Power Act (FPA) section 206, which governs determination of production costs and rates and charges, the Commission vacated each of its California refund orders in the California refund proceeding to the extent that it ordered non-public utility entities to pay refunds. The Commission directed the California Independent System Operator Corporation (CAISO) and California Power Exchange Corporation (PX) to complete their refund calculations including all entities that participated in the CAISO/PX markets for the period October 2, 2000 through June 20, 2001 (San Diego Gas & Electric Co. v. Sellers of Energy and Ancillary Services Into Markets Operated by the California Independent System Operator and California Power Exchange, 121 FERC ¶61,067 (ip access user).

Natural Gas

BP/MGTC Settlements Approved; Penalties Set
Two stipulation and consent agreements between the Office of Enforcement (Enforcement) and BP Energy Company and its affiliates, including BP Canada Energy Company, BP Canada Energy Marketing Corporation, and IGI Resources, Inc. (collectively, BP) and Enforcement and MGTC, Inc. (MGTC) resolving preliminary, non-public investigations into self-reported violations and setting penalties were approved by the Commission. BP agreed to pay a civil penalty of $7 million and to implement a compliance monitoring plan. In another order, MGTC agreed to pay a civil penalty of $300,000 after an investigation of a self-report of MGTC’s violations of the Commission’s shipper-must-have-title policy by MGTC’s parent company, Anadarko Petroleum Corporation (Anadarko) (In re MGTC, Inc., 121 FERC ¶61,087 (ip access user) and In re BP Energy Co., 121 FERC ¶61,088 (ip access user)).

Landowner Notification Requirements for NG Facilities Expanded
Landowner notification requirements for certain interstate natural gas pipeline construction and upgrade projects have been expanded by the Federal Energy Regulatory Commission. The new rule, which amends the Commission’s blanket certificate requirements, directs natural gas companies planning to build or upgrade compressors or liquefied natural gas (LNG) facilities to notify all landowners of property located within one-half mile of the boundary of the project site before beginning construction. Previously, notification was required only if the property contained a residence within one-half mile of the site for a compressor or LNG facility. The rule also requires the completion of noise surveys for compressor stations constructed or upgraded under blanket certificate authority. After a compressor project is completed, natural gas companies must submit a noise survey that demonstrates compliance with a noise level limit of 55 decibels at a noise-sensitive area when operating at full load. This is the same requirement applied to compressor facilities installed after case-specific certificate authority has been granted by the Commission. (CCH FERC Statutes and Regulations Edition ¶31,256 (ip access user))