139 FERC ¶ 61,131 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

 Philip D. Moeller, John R. Norris, 

 and Cheryl A. LaFleur. 

The Commission’s Role Regarding the 

Environmental Protection Agency’s 

Mercury and Air Toxics Standards 

Docket No. PL12-1-000 

POLICY STATEMENT ON THE COMMISSION’S ROLE REGARDING 

THE ENVIRONMENTAL PROTECTION AGENCY’S 

MERCURY AND AIR TOXICS STANDARDS 

(Issued May 17, 2012) 

1. The Commission issues this Policy Statement to explain how it will provide advice 

to the Environmental Protection Agency (EPA) for it to rule on requests for 

Administrative Orders (AO) to operate in noncompliance with EPA’s Mercury and Air 

Toxics Standards (MATS).1

 As noted below, this Policy Statement does not represent 

the entirety of the Commission’s efforts to monitor the impact of EPA regulations 

generally on bulk-power system reliability. 

I. Introduction

2. On December 21, 2011, the EPA released the MATS final rule pursuant to its 

authority under Section 112 of the Clean Air Act (CAA).2

 The MATS final rule limits 

mercury, acid gases and other toxic emissions from power plants. Pursuant to Section 

112(i)(3)(A) of the CAA, affected sources are required to comply within three years of 

 1

 National Emission Standards for Hazardous Air Pollutants from Coal- and Oilfired Electric Utility Steam Generating Units and Standards of Performance for FossilFuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small IndustrialCommercial-Institutional Steam Generating Units, http://www.gpo.gov/fdsys/pkg/FR2012-02-16/pdf/2012-806.pdf. 

2

 42 U.S.C. § 7412(i)(3)(A) (2006). 
Docket No. PL12-1-000 - 2 - 

the MATS effective date. Pursuant to CAA Section 112(i)(3)(B), some affected sources 

are eligible for a one-year extension (i.e. for a total of four years).3

 

3. The EPA’s Office of Enforcement and Compliance Assurance released a policy 

memorandum (EPA Policy Memorandum) dated December 16, 2011 describing its 

intended approach regarding the use of CAA Section 113(a) AOs with respect to sources 

that must operate in noncompliance with the MATS for up to a year to address a specific 

and documented reliability concern (i.e. for a total of five years).4

 

4. On January 30, 2012, Commission staff issued a White Paper seeking comment 

concerning staff’s position on how the Commission should advise the EPA on requests 

for extension of time to comply with EPA’s MATS. The Commission has considered all 

comments received in the formulation of this Policy Statement, which is limited in scope 

to how the Commission will handle an AO filing under CAA Section 113(a) for 

noncompliance with the MATS. This Policy Statement does not address the entirety of 

the Commission’s efforts to monitor the impact of EPA regulations generally on bulkpower system reliability. 

II. Background

A. Compliance with EPA’s Mercury and Air Toxics Standards

5. Under Section 112(i)(3) of the CAA, affected sources must be compliant with 

MATS within three years, with an extension of up to one year available in certain cases.5

 

In addition to the up to four-year compliance period contemplated in Section 112(i)(3), 

the EPA Policy Memorandum describes a process by which certain affected sources can 

obtain an AO to operate in noncompliance for an additional year pursuant to Section 

113(a) of the CAA. Specifically, the EPA Policy Memorandum contemplates that the 

EPA will receive AO requests: (1) concerning electric generating units (EGUs) that may 

 3 See id. § 7412(i)(3)(B). 

4

 The Environmental Protection Agency’s Enforcement Response Policy For Use 

Of Clean Air Act Section 113(a) Administrative Orders In Relation To Electric 

Reliability And The Mercury and Air Toxics Standard (Dec. 16, 2011), 

http://www.epa.gov/compliance/resources/policies/civil/erp/mats-erp.pdf. 

5

 The EPA Policy Memorandum refers to the date by which affected sources must 

comply under Section 112(i)(3) of the CAA (which includes the possible one-year 

extension under Section 112(i)(3)(B)) as the “MATS Compliance Date.” 
Docket No. PL12-1-000 - 3 - 

affect reliability due to deactivation; and (2) concerning EGUs that may affect reliability 

due to delays related to the installation of controls.6

 

6. The EPA Policy Memorandum states that an AO cannot be issued under Section 

113(a) prior to the MATS Compliance Date in Section 112(i)(3).7

 However, provided an 

owner/operator has timely submitted a complete request and provided appropriate 

cooperation, the EPA expects to give an owner/operator “as much advance written notice 

as practicable of the [EPA’s] plans with regard to such an AO.”8

7. The EPA Policy Memorandum states that in evaluating a request for an AO, the 

EPA will seek advice, on a case-by-case basis, from the Commission and/or other entities 

with relevant reliability expertise.9

 However, the EPA’s issuance of an AO is not 

conditioned upon the approval or concurrence of the Commission or any other entity. 

1. General Requirements for AO Requests

8. The EPA Policy Memorandum provides that within one year after the MATS 

effective date, an owner/operator should submit written notice of its compliance plans 

(Notice of Compliance Plans) with regard to each EGU it owns or operates to the 

planning authority for the area in which the relevant EGU is located. According to the 

EPA, the Notice of Compliance Plans should identify: (1) the units the owner/operator 

plans to deactivate and the anticipated dates of deactivation; and (2) the units for which it 

intends to install pollution control equipment or otherwise retrofit and the anticipated 

schedule for completion of that work. 

 6

 EPA Policy Memorandum at 4. 

7 Id. at 5. 

8 Id. 

9

 The EPA Policy Memorandum states that “in light of the complexity of the 

electric system and the local nature of many reliability issues, the EPA will, for purposes 

of using its Section 113(a) AO authority in this context, rely for identification and/or 

analysis of reliability risks upon the advice and counsel of reliability experts, including, 

but not limited to, the Federal Energy Regulatory Commission (‘FERC’), Regional 

Transmission Operators (‘RTOs’), Independent System Operators (‘ISOs’) and other 

Planning Authorities as identified herein, the North American Electric Reliability 

Corporation (‘NERC’) and affiliated regional entities, and state public service 

commissions (‘PSCs’) and public utility commissions (‘PUCs’). The EPA will work 

with these and other organizations, as appropriate, to ensure that any claims of reliability 

risks are properly characterized and evaluated.” EPA Policy Memorandum at 2. 
Docket No. PL12-1-000 - 4 - 

9. The EPA Policy Memorandum states that an owner/operator should, generally no 

less than 180 days prior to the MATS Compliance Date,10 submit a written request to the 

EPA11 for an enforceable compliance schedule in an AO for the unit. An owner/operator 

should submit the following information for all AO requests: 

(1) copies of the Notice of Compliance Plans provided to the planning authority or 

an explanation why it was not practicable to have provided such notice and a 

demonstration that such notice was provided as soon as it was practicable; 

(2) written analysis of the reliability risk if the EGU were not in operation, which 

demonstrates that operation of the unit after the MATS Compliance Date is 

critical to maintaining electric reliability, and that failure to operate the unit 

would: (a) result in the violation of at least one of the reliability criteria required to 

be filed with the Commission, and, in the case of the Electric Reliability Council 

of Texas, with the Texas Public Utility Commission; or (b) cause reserves to fall 

below the required system reserve margin; 

(3) written concurrence with the reliability risk analysis, or a separate and 

equivalent analysis, by the planning authority for the area in which the relevant 

EGU(s) are located, or, in the alternative, a written explanation of why such 

concurrence or separate and equivalent analysis cannot be provided, and, where 

practicable, any related system wide analysis by such entity; 

(4) copies of any written comments from third parties directed to, and received by, 

the owner/operator in favor of, or opposed to, operation of the unit after the MATS 

Compliance Date; 

 10 The EPA Policy Memorandum also has provisions for an owner/operator to, in 

certain circumstances, provide less notice to the EPA and the Commission. 

11 This request is to be submitted electronically to the Director of the Air 

Enforcement Division in the EPA’s Office of Enforcement and Compliance Assurance 

and the Regional Administrator of the EPA region in which the EGU is located, with a 

copy to the Commission. At the same time, an owner/operator should provide notice that 

it is seeking an AO to: (1) the planning authority, (2) any state public utility 

commissions or public service commissions with regulatory jurisdiction with regard to 

the relevant EGU, and (3) any state, tribal or local environmental agency with permitting 

authority under Titles I and V of the CAA, and any tribal environmental agency that does 

not have such authority, with jurisdiction over the area in which the EGU is located 

(collectively, “AO Notice Recipients”). 
Docket No. PL12-1-000 - 5 - 

(5) a plan to achieve compliance with the MATS no later than one year after the 

MATS Compliance Date, and, where practicable, a written demonstration of the 

plan to resolve the underlying reliability problem and the steps and timeframe for 

implementing it, which demonstrates that such resolution cannot be effected on or 

before the MATS Compliance Date; and 

(6) identification of the level of operation of the EGU that is required to avoid the 

documented reliability risk and, consistent with that level, a proposal for 

operational limits and/or work practices to minimize or mitigate any hazardous air 

pollutant emissions to the extent practicable during any operation not in full 

compliance with the MATS.12

2. Specific Requirements for AO Requests

10. As stated above, the EPA Policy Memorandum states that the owner/operator of 

an EGU that wants to obtain an AO must, no less than 180 days prior to the MATS 

Compliance Date, submit electronically a written request for an enforceable compliance 

schedule. To request an AO for any EGU that is required to run for reliability purposes 

that, due to factors beyond the control of the owner/operator, have delays in installation 

of controls or need to operate because another EGU has had such a delay, the EPA Policy 

Memorandum states that an owner/operator should: (1) within a reasonable time of 

learning of a delay that it believes may result in an EGU being unable to comply by the 

MATS Compliance Date, provide to the planning authority for the area in which the 

relevant EGU(s) are located, written notice of the EGU(s) impacted by the delay, the 

cause of the delay, an estimate of the length of time of the delay, and the timeframe 

during which the owner/operator contemplates operation in non-compliance with the 

MATS; (2) within a reasonable time of learning that it is critical to reliability to operate 

the identified EGU(s) in non-compliance with the MATS after the MATS Compliance 

Date, submit electronically to the AO Request Recipients a written request for an 

enforceable compliance schedule in an AO for the EGU(s), which includes information 

responsive to as many of the general requirements discussed above as it is possible to 

provide at that time; and (3) at the same time the owner/operator submits its request for 

an AO, provide notice that it is seeking such an AO to the AO Notice Recipients. 

B. Energy Policy Act of 2005 and Mandatory Reliability Standards

11. Section 215 of the Federal Power Act (FPA) requires a Commission-certified 

Electric Reliability Organization (ERO) to develop mandatory and enforceable 

Reliability Standards, which provide for the reliable operation of the Bulk-Power System, 

 12 EPA Policy Memorandum at 6-7. 
Docket No. PL12-1-000 - 6 - 

subject to Commission review and approval.13 On February 3, 2006, the Commission 

issued Order No. 672 to implement the requirements of section 215 of the FPA governing 

electric reliability.14 

III. Commission Policy for Advice to the EPA Under the EPA’s Policy 

Memorandum 

12. The EPA Policy Memorandum indicates that the EPA intends to seek advice, as 

necessary and on a case-by-case basis from the Commission, among others, as the EPA 

decides whether it will grant an AO to an owner/operator. The EPA Policy 

Memorandum makes clear that the EPA decision as to whether to grant an AO to an 

owner/operator is solely the decision of the EPA and that the concurrence or approval of 

any entity is not a condition for approval or denial of an AO request.15 The Commission 

believes that it is important to provide as much guidance to industry as possible as to how 

the Commission intends to provide advice to the EPA on any AO request. In developing 

this process, the Commission considered how to provide a fair and transparent process for 

communicating the Commission’s expertise on reliability issues, while respecting that the 

EPA will seek the Commission’s advice in a timely manner so that EPA can decide 

whether to grant certain AOs. 

A. Commission Process for Advising the EPA Under the EPA’s Policy 

Memorandum 

Submittal of Information to the Commission

13. The EPA Policy Memorandum explains that when an owner/operator submits an 

AO request: (1) for EGUs that may affect reliability due to deactivation; and (2) for 

EGUs that may affect reliability due to delays related to the installation of controls, the 

owner/operator must provide a copy of the request to the Commission. This AO request 

must include an owner/operator’s “written analysis of the reliability risk if the unit were 

not in operation, which demonstrates that operation of the unit after the MATS 

Compliance Date is critical to maintaining electric reliability, and that failure to operate 

the unit would . . . result in the violation of at least one of the reliability criteria required 

 13 16 U.S.C. § 824o(d)(2). 

14 Rules Concerning Certification of the Electric Reliability Organization; and 

Procedures for the Establishment, Approval, and Enforcement of Electric Reliability 

Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, order on reh’g, Order 

No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006). 

15 EPA Policy Memorandum at 7. 
Docket No. PL12-1-000 - 7 - 

to be filed with [the Commission] . . . .”16 In addition, the AO request will include the 

Planning Authority’s written concurrence with the owner/operator’s analysis, or a written 

explanation of why the Planning Authority’s concurrence cannot be provided. 

14. As an initial matter, each AO request should be filed with the Commission. The 

Commission will treat any AO request filed with the Commission as an informational 

filing. The Commission will assign each informational filing a separate Administrative 

Docket (AD) number. The Commission’s Office of Electric Reliability will be 

designated as the lead office tasked with processing an owner/operator’s informational 

filing. 

15. Each informational filing should include the same information that the 

owner/operator submitted to the EPA pursuant to the EPA Policy Memorandum. While 

the Commission does not propose mandating that Planning Authorities undertake specific 

types of analyses, the Commission identifies below certain types of information that are 

already available today and that the Commission commonly reviews when examining 

potential violations of Reliability Standards.17 Including this information as part of the 

materials an owner/operator submits to the EPA, and therefore to the Commission, would 

aid in the Commission’s review of the informational filing. It is essential that the 

Commission receive enough information to review the claims made by a requesting 

owner/operator so that the Commission can provide timely comments to the EPA. These 

types of information include, but are not limited to, system planning and operations 

studies, system restoration studies or plans, operating procedures, and mitigation plans 

required by the Reliability Standards.18 By suggesting what information would aid the 

 

(continued...) 

16 Id. 

17 The Commission does not believe it is necessary to identify specific factors that 

each planning authority must take into account in assessing system reliability outside of 

the NERC planning standards. The existing processes used by the Planning Authorities 

to conduct reliability assessments, which are based on the NERC planning standards and 

performed under NERC’s oversight, appear to be sufficient. We encourage NERC to 

continue to work closely with the Planning Authorities to ensure that these existing 

processes adequately assess system reliability in the specific circumstances presented by 

compliance with EPA regulations. In addition, Commission staff is available to Planning 

Authorities and participants in these processes for consultation on these matters. Also, 

we expect Commission staff to monitor these processes through periodic outreach to 

Planning Authorities. 

18 The Commission reviews power flow, dynamic, or other simulation results that 

support the Reliability Standards as well as the modeling assumptions used in these 

simulations. Modeling assumptions may include factors such as the base case used, 
Docket No. PL12-1-000 - 8 - 

Commission in its review, the Commission is not requiring any specific analysis be done 

or indicating that this information must be submitted or what the EPA should consider, 

but rather what the Commission would find informative when reviewing potential 

violations of Reliability Standards.19 

16. The Commission generally anticipates it would not have to seek additional 

information. The Commission is concerned that seeking additional information from an 

owner/operator of an EGU could delay or prevent the Commission from issuing timely 

comments to the EPA.20 

B. Scope and Standard of Review for Informational Filings

17. EPA states that the analysis provided in an AO request should demonstrate “that 

operation of the unit after the MATS Compliance Date is critical to maintaining electric 

reliability, and that failure to operate the unit would: (a) result in the violation of at least 

one of the reliability criteria required to be filed with the Commission, and, in the case of 

the Electric Reliability Council of Texas, with the Texas Public Utility Commission; or 

(b) cause reserves to fall below the required system reserve margin.” Commission review 

of an informational filing will be conducted pursuant to section 307(a) of the FPA, the 

Commission’s general investigative authority. The review will examine whether, based 

on the circumstances presented, there might be a violation of a Commission-approved 

Reliability Standard.21 In addition, the Commission’s comments to the EPA could also 

identify issues, pursuant to our other areas of authority, raised by the AO request for the 

 

demand levels, modifications made to the base case, system transfers modeled, scheduled 

outages modeled, and contingencies tested. 

19 We understand that these types of information are readily available today so that 

their submission should not impose a burden on the owner/operator. 

20 However, the Commission reserves the right to seek additional information 

regarding a filing when necessary. 

21 A statement by the Commission indicating that circumstances presented “might” 

result in the violation of a Reliability Standard would not constitute a final determination 

under section 215 of the FPA that a Reliability Standard has or will be violated. That is, 

the Commission comments will reflect our preliminary view based on information 

presented about a possible hypothetical circumstance in the future, not a final agency 

action triggering civil penalties or other enforcement actions. 
Docket No. PL12-1-000 - 9 - 

EPA to consider as critical to reliability.22 Further, an EGU's continued operation may 

have reliability impacts beyond those implicated by the Commission's jurisdiction. The 

EPA should look to NERC and state commissions, among the other entities it has 

enumerated, for guidance in those areas.23

18. The Commission’s jurisdiction under section 215 is over the ERO, Regional 

Entities, and all users, owners and operators of the bulk-power system “for purposes of 

approving Reliability Standards established under [section 215] and enforcing 

compliance with [section 215].”24 Further, section 215 states that “this section does not 

authorize the ERO or the Commission to order the construction of additional generation 

or transmission capacity or to set and enforce compliance with standards for adequacy or 

safety of electric facilities or services.”25 In addition, section 215 specifically preserves 

authority of states over safety, resource adequacy, and even reliability as long as the latter 

does not conflict with the Commission’s Reliability Standards. 

19. While our comments to the EPA are largely limited to whether the issue in 

question may result in the violation of a Reliability Standard, we recognize that the EPA 

is not so limited in what it may consider in reviewing a request for an AO. Indeed, the 

EPA Policy Memorandum indicates that the EPA may also seek advice and counsel of 

reliability experts, including, state public service commissions and public utility 

commissions, RTOs and ISOs, Planning Authorities, NERC and affiliated regional 

entities – and we encourage them to do so. Nothing in this Policy Statement precludes 

NERC, state agencies or others from providing the EPA with information regarding 

resource adequacy and other local reliability concerns that are not addressed in the 

Commission’s comments to the EPA. 

20. The Commission will review the Planning Authority’s analysis included in each 

informational filing to ensure that it was reasonable and sufficiently supported by the 

information supplied, recognizing the Planning Authority's knowledge of, and expertise 

on, local and regional conditions. The Commission would focus on whether the Planning 

Authority’s reliability analysis has identified and supported, in a detailed and reasoned 

 22 For example, the Commission may determine that the potential closure of an 

EGU could trigger the Commission’s jurisdiction outside of section 215 of the FPA. See 

e.g., Exelon Generation Co., LLC, 132 FERC ¶ 61,219 (2010). 

23 Commission staff will also be available to communicate with the EPA on any 

reliability-related issues to aid the EPA in its consideration of these issues. 

24 16 U.S.C. § 824o(b). 

25 Id. § 824o(i)(2). 
Docket No. PL12-1-000 - 10 - 

fashion, whether there might be a violation of a Commission-approved Reliability 

Standard. 

21. The Commission will advise the EPA, as contemplated by the EPA Policy 

Memorandum, by submitting written Commission comments to the EPA based on the 

Commission’s review of the information provided in the informational filing.26 The 

Commission’s comments would provide advice to the EPA on whether, based on the 

Commission’s review of the informational filing, there might be a violation of a 

Commission-approved Reliability Standard. As noted above, the Commission’s 

comments may also identify issues within its jurisdiction other than a potential violation 

of a Commission-approved Reliability Standard. The Commission comments will not 

address the appropriateness of granting or denying an AO. 

C. Intervention and Other Procedures

The Commission’s process will not provide for entities to intervene in the AD dockets.27 

The EPA Policy Memorandum generally anticipates that an AO request will be filed 180 

days prior to the MATS Compliance Date and the Commission is concerned that 

allowing interventions may inhibit the Commission’s ability to timely provide advice to 

the EPA. In addition, interventions are not available generally in a matter under 

investigation pursuant to Section 307(a) of the FPA. Yet the lack of a formal intervention 

procedure does not preclude an interested entity from being heard. The EPA Policy 

Memorandum requires an owner/operator requesting an AO to submit “[c]opies of any 

written comments from third parties directed to, and received by, the owner/operator in 

favor of, or opposed to, operation of the unit after the MATS compliance date.”28 These 

materials should also be included as part of the informational filing an owner/operator 

 26 The Commission will vote on the Commission comments before submission to 

the EPA. Commission comments submitted to the EPA will be publicly posted on the 

Commission’s eLibrary system under the applicable AD docket number. Differing views 

by any Commissioner will also be submitted to the EPA in writing and will be publicly 

posted on the Commission’s eLibrary system. 

27 While the Commission will not seek comments on these informational filings, if 

comments are received by the Commission, these would be placed in the associated AD 

docket. Because these would be informational dockets, while the Commission may 

consider these comments, it would not be required to do so. Due to the nature of the 

Commission’s comments as non-final agency action and the limited time for the 

Commission to act, the Commission does not anticipate responding to any comments that 

may be submitted in an AD docket. 

28 EPA Policy Memorandum at 7. 
Docket No. PL12-1-000 - 11 - 

submits to the Commission under the requirements in the EPA Policy Memorandum.29 

While the Commission is not imposing any additional requirements, we anticipate that 

owners/operators will, consistent with the EPA Policy Memorandum, provide third 

parties with an opportunity to offer “written comments ... in favor of, or opposed to, 

operation of the unit after the MATS compliance date” before they submit their AO 

request. 

 

IV. Conclusion 

22. This Policy Statement explains how the Commission plans to advise the EPA 

under the EPA’s Policy Memorandum. The Commission believes the process 

appropriately takes into account the need for timeliness, fairness, and transparency, while 

respecting the Commission’s jurisdiction over electric reliability. As stated in the EPA 

Policy Memorandum, whether or to what extent the EPA considers or relies on the 

Commission’s comments, and whether to grant an AO to an owner/operator, will rest 

entirely with the EPA. 

23. Additionally, we emphasize that this Policy Statement does not represent the 

entirety of the Commission’s efforts to monitor the impact of EPA regulations generally 

on bulk-power system reliability. For example, the Commission intends to continue 

addressing these issues with state commissions in a regular public forum, the National 

Association of Regulatory Utility Commissioners/FERC Forum on Reliability and the 

Environment. The Commission and its staff will also continue to review plans, reports 

and other information generated by the Planning Authorities, industry and other 

stakeholders regarding the impact of compliance with EPA regulations. To the extent 

additional analysis or evidence would aid the Commission’s efforts to monitor these 

issues, we will consider holding additional technical conferences or workshops.30 

 29 Id. at 5, 6. 

30 The Commission held a technical conference on these issues on November 30, 

2011, in Docket No. AD12-1-000. 
Docket No. PL12-1-000 - 12 - 

Finally, the Commission will monitor and promptly review proposals from regulated 

entities that may seek to modify their tariffs in order to reliably and efficiently comply 

with EPA regulations. 

By the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary.