ERAC Regulatory Compliance & Legal Framework 4 — Questions and Answers
Question 1: Under NERC's compliance monitoring framework, what is the significance of a 'Reliability Standard Audit Worksheet' (RSAW)?
- It is used by registered entities to self-certify compliance with specific CIP standards
- It serves as NERC's guidance document outlining how auditors assess compliance with a particular reliability standard (Correct answer)
- It replaces the periodic compliance filing for transmission owners
- It documents inter-control-area reliability events for FERC reporting
Correct answer: It serves as NERC's guidance document outlining how auditors assess compliance with a particular reliability standard
RSAWs are documents developed by NERC that guide both auditors and registered entities on how each reliability standard requirement is assessed during audits.
Question 2: The Clean Water Act Section 401 certification process gives states authority to do which of the following for federally permitted energy projects?
- Set wholesale electricity rates for hydropower facilities
- Condition or deny federal permits based on state water quality standards (Correct answer)
- Override FERC licensing decisions for interstate pipelines
- Establish federal wetlands delineation methodologies
Correct answer: Condition or deny federal permits based on state water quality standards
Section 401 allows states to grant, condition, or deny certification that a federally permitted project complies with state water quality standards, giving states significant leverage over hydropower and other projects.
Question 3: Under CFTC regulations implementing Dodd-Frank, the 'end-user exception' to mandatory clearing requirements is available to energy companies that meet which primary criterion?
- They are registered as swap dealers with annual notional swap volume over $8 billion
- They are not financial entities and use swaps to hedge or mitigate commercial risk (Correct answer)
- They are subsidiaries of federally regulated utilities subject to FERC jurisdiction
- They maintain swap positions of less than $1 million notional value
Correct answer: They are not financial entities and use swaps to hedge or mitigate commercial risk
The end-user exception exempts non-financial entities, like commercial energy companies, from mandatory clearing when they use swaps to hedge commercial risk, not for speculative purposes.
Question 4: Which federal statute primarily governs the siting, construction, and operation of nuclear power plants in the United States?
- Energy Reorganization Act of 1974 / Atomic Energy Act (Correct answer)
- Clean Air Act Section 111(d)
- Federal Power Act Part II
- National Environmental Policy Act
Correct answer: Energy Reorganization Act of 1974 / Atomic Energy Act
The Atomic Energy Act (as amended by the Energy Reorganization Act) authorizes the NRC to license and regulate civilian nuclear facilities, including power plants.
Question 5: A FERC-jurisdictional pipeline files a tariff change that would increase rates. Under the Natural Gas Act, within how many days must FERC act on a proposed rate change before it goes into effect by operation of law?
- 30 days
- 60 days (Correct answer)
- 90 days
- 180 days
Correct answer: 60 days
Under the NGA, proposed tariff changes become effective 60 days after filing unless FERC acts to suspend or investigate them within that period.
Question 6: An energy company's compliance officer is reviewing obligations under EPA's Greenhouse Gas Reporting Program (GHGRP). Which threshold triggers mandatory annual GHG reporting for stationary sources?
- 1,000 metric tons CO2e per year
- 10,000 metric tons CO2e per year
- 25,000 metric tons CO2e per year (Correct answer)
- 100,000 metric tons CO2e per year
Correct answer: 25,000 metric tons CO2e per year
The GHGRP generally requires facilities emitting 25,000 metric tons or more of CO2 equivalent per year to report their greenhouse gas emissions annually to EPA.
Question 7: Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which party can be held strictly liable for cleanup costs at a contaminated energy facility site?
- Only the party that caused the contamination
- Only current owners and operators
- Current and past owners/operators, generators, and transporters of hazardous substances (Correct answer)
- Only government agencies that permitted the original operations
Correct answer: Current and past owners/operators, generators, and transporters of hazardous substances
CERCLA imposes strict, joint and several liability on a broad class of potentially responsible parties including current owners, past owners, hazardous waste generators, and transporters.
ERAC Regulatory Compliance & Legal Framework 4
Under NERC's compliance monitoring framework, what is the significance of a 'Reliability Standard Audit Worksheet' (RSAW)?