UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
New York Independent System Operator, Inc.)Docket No. ER13-588-000
ANSWER OF THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.
Pursuant to Rules 212 and 213 of the Rules of Practice and Procedure of the Federal
Energy Regulatory Commission (“Commission”), 18 C.F.R. §§ 385.212 and 385.213 (2009), the New York Independent System Operator, Inc. (“NYISO”) submits this motion for leave to
answer, and an answer to, the Protest of Cape Vincent Wind Power, LLC (“Cape Vincent”)
(“Cape Vincent Protest”). The Cape Vincent Protest was filed in response to the NYISO’s
December 19, 2012 filing in the above-captioned proceeding, pursuant to Section 205 of the Federal Power Act and Part 35 of the Commission’s regulations, proposing revisions to the
NYISO’s interconnection procedures (“December 19 Filing”).
I.REQUEST FOR LEAVE TO FILE ANSWER
The NYISO recognizes that the Commission generally discourages answers to protests and answers. However, the Commission has the discretion to accept answers to protests and answers, and has done so when those answers help to clarify complex issues, provide additional information, or are otherwise helpful in the development of the record in a proceeding.1 The NYISO submits that this answer will assist the Commission in its decision-making process and respectfully requests leave to answer the Cape Vincent Protest.
1 See e.g., New York Independent System Operator, Inc., 123 FERC ¶ 61,044 at P 39 (2008) (accepting
answers to answers because they provided information that aided the Commission’s decision-making process); New
York Independent System Operator, Inc., 108 FERC ¶ 61,188 at P 7 (2004) (accepting the NYISO’s answer to
protests because it provided information that aided the Commission in better understanding the matters at issue in
the proceeding); Morgan Stanley Capital Group, Inc. v. New York Independent System Operator, Inc., 93 FERC
¶ 61,017 at 61,036 (2000) (accepting an answer that was “helpful in the development of the record…”).
II.ANSWER
A. The NYISO’s Proposed Tariff Revisions Impose Much Needed Limits On
Extended And/Or Repeated Extensions Of Commercial Operation Date For Projects In The NYISO’s Interconnection Queue.
Among other revisions, the December 19 Filing includes proposed changes to the
NYISO’s interconnection procedures related to extensions of Commercial Operation Date and
the time within which to finalize an Interconnection Agreement.2 The NYISO initiated
discussions with its stakeholders regarding the need for these tariff revisions with guidance from
the Commission in mind. The Commission has stated that while it is “in favor of allowing
interconnection customers flexibility with respect to interconnection milestones,” it also finds it
“important to ensure that interconnection queues do not become clogged with speculative
projects.” 3 Accordingly, the NYISO and stakeholders worked extensively through many months
of stakeholder meetings to develop mechanisms to encourage projects to move through the
interconnection process without unnecessary delays, while balancing the need to allow
Developers certain flexibility in the interconnection process.4 Toward this end, the proposed
tariff revisions place limitations on permissible extensions of Commercial Operation Dates and
on permissible time frames within which to finalize an Interconnection Agreement.
2 Capitalized terms not otherwise defined in this letter have the meaning set forth in Attachments S, X and Z of the NYISO’s Open Access Transmission Tariff (“OATT”), as amended by the enclosed proposed revisions to Attachments S, X and Z of the OATT.
3 Virginia Electric and Power Company, 104 F.E.R.C. P61,249, Order On Compliance Filing And
Rehearing, at P17 (Sept. 10, 2003). See also, Hudson Transmission Partners, LLC v. New York Independent
System Operator, Inc., 120 F.E.R.C. P61,179, Order on Complaint (Aug. 22, 2007) (ordering NYISO to remove
Cross Hudson's Project from Queue Position No. 93 as “consistent with our policy of reducing uncertainty and
congestion in the queue that threaten the prompt and efficient development of interconnection projects”)
4 Projects that have demonstrated considerable delay in progressing toward completion of the
interconnection process and Commercial Operation, should not be permitted to sit in the NYISO’s Interconnection
Queue indefinitely by continually requesting extensions of Commercial Operation Date. The longer a project sits in
the interconnection queue after the completion of its studies, the greater is the likelihood that events will unfold due
to the passage of time that would gradually degrade the inputs and results from the interconnection studies. For
example, equipment that was originally studied may no longer be available due to the passage of time (e.g., specific
wind turbine models).
2
The NYISO proposes to revise Section 30.4.4.5 to limit permissible extensions of the
Commercial Operation Date. As revised, Section 30.4.4.5 would permit extensions of
Commercial Operation Date that are within four (4) years from the completion of the Class Year
Study or tender of the SGIA, as applicable (“permissible extension period”).5 As revised,
Section 30.4.4.5 would further provide that a Developer may request an extension of its
Commercial Operation Date beyond the permissible extension period and such extension would
not be a Material Modification (and would therefore be permitted) if the following conditions
have been met: (1) Developer must have an executed Interconnection Agreement for the project
or have on file with FERC an unexecuted Interconnection Agreement; and (2) Developer must
demonstrate (via an Officer certification) continuous progress against milestones set forth in the
Interconnection Agreement (e.g., completion of engineering design, major equipment orders,
commencement and continuation of construction of the project and associated System Upgrade
Facilities, as applicable). If the Developer does not satisfy the above conditions, an extension of
Commercial Operation Date beyond the permissible extension period would not be allowed.
The NYISO’s proposed tariff revisions regarding extensions of Commercial Operation Date include a transition rule that was fully vetted with stakeholders and finalized only after
considerable stakeholder discussions.6 This transition rule, set forth in new Section 30.4.4.5.3 of
5 This proposed change to the current tariff language that allows for Commercial Operation Date extensions
of up to three (3) years from the project’s original Commercial Operation Date, does not extend the three (3)-year
suspension provision in the pro forma Interconnection Agreement. Such suspension provision operates in
conjunction with the Material Modification provisions in Attachment X and, as the Commission has made clear,
does not extend or expand permissible extensions of Commercial Operation Date permitted under the pro forma
Large Facility Interconnection Procedures. See, e.g., Montgomery Great Falls Energy Partners LP v. NorthWestern
Corp., 123 F.E.R.C. P61,181, 62, Order Denying Complaint (May 16, 2008) at P46 (finding, “[w]here, as here, a
suspension causes the commercial operation date to be extended beyond three years, such extension can be
considered a material modification.”). This would continue to be the case under the proposed tariff language.
6 The NYISO notes that Cape Vincent did not raise its concerns during the NYISO stakeholder process.
3
Attachment X, applies to projects such as Cape Vincent’s Queue Nos. 166/207 projects (“Cape
Vincent Project”) 7 that have already completed the interconnection study process. For such
projects, the proposed transition rule requires the Developer to satisfy certain criteria within sixty
(60) days of the effective date of these tariff revisions if, at the time these tariff revisions become
effective, the proposed Commercial Operation Date is not within the permissible extension
period. Those criteria are: (1) an executed Interconnection Agreement (or an unexecuted
Interconnection Agreement filed with FERC); and (2) demonstrated progress against the
milestones set forth in the Interconnection Agreement. Projects subject to the transition rule that
fail to satisfy such criteria within sixty (60) days would be withdrawn from the interconnection
queue.
Cape Vincent protests the NYISO’s proposed tariff revisions regarding extensions of Commercial Operation Date and requests that the Commission direct the NYISO to modify its proposal to (1) provide that the proposed language in Section 30.4.4.5.3 does not apply to
projects in the interconnection queue for which the NYISO has determined that a Commercial Operation Date extension is not a Material Modification;8 and (2) for those projects that are subject to Section 30.4.4.5.3, modify the requirements a Developer must satisfy for Commercial Operation Dates beyond the permissible extension period.9
7These two separate Queue positions merged into one project after the completion of both projects’ Class Year Interconnection Facilities Studies.
8 Cape Vincent Protest at 7.
9 Id. at 7-9.
4
1. Cape Vincent’s Proposed Exception for Projects with Previously Approved
Extensions of Commercial Operation Date
Cape Vincent urges the Commission to direct the NYISO to clarify that the proposed
transition rule does not apply to projects such as the Cape Vincent Project. Specifically, Cape
Vincent requests that the Commission direct the NYISO to clarify that proposed Section
30.4.4.5.3 of Attachment X does not apply to projects in the interconnection queue for which the
NYISO has previously determined that a Commercial Operation Date extension was not a
Material Modification. Cape Vincent further asserts that such an exception “would not, in this
circumstance, disturb what the NYISO has indicated it is trying to achieve with its proposal.”10
A blanket exception to the proposed Commercial Operation Date limitations for projects
such as the Cape Vincent Project would, however, be a direct contravention to the intent of the
NYISO’s proposal. The proposal is designed to encourage projects to move forward in the
interconnection process toward an Interconnection Agreement and Commercial Operation within
a reasonable amount of time from completion of the interconnection study process. Projects with
significant delays in their Commercial Operation Dates were the impetus for the NYISO’s
proposed tariff revisions. The Cape Vincent Project has already significantly extended its
originally-proposed Commercial Operation Date. The two queue positions that currently make
up Cape Vincent’s project have extended their Commercial Operation Dates by eight and five
years, respectively, to December 2014. Cape Vincent also modified its project after the
interconnection study process was completed, combining two separately-queued projects into a
single project.11
10 Id. at 7.
11 The combined Cape Vincent Project changes required significant modification to the configuration
evaluated in the completed interconnection study process. NYISO evaluated these proposed changes and
5
The NYISO’s proposed tariff revisions would not, as Cape Vincent contends, “invalidate the Material Modification review” previously conducted for the December 2014 Commercial
Operation Date for the Cape Vincent Project.12 Rather, the proposed transition rule simply
requires that for such extraordinary extensions the Developer satisfy certain concrete milestones. It is not onerous or unreasonable to require a project with such an extended Commercial
Operation Date to move forward to an Interconnection Agreement and to begin progressing
against milestones that are necessary for the project to reach Commercial Operation by its
currently proposed Commercial Operation Date. Cape Vincent fails to explain why these very reasonable expectations are unattainable or unreasonable.
However, the NYISO would not oppose limited modifications of the transition
mechanism to address, at least in part, the concerns expressed by Cape Vincent. Specifically, for those projects where the NYISO has already determined an extension of the Commercial
Operation Date to be non-material, the new requirement regarding the Interconnection
Agreement and progress against the stated milestones could apply only if and when the
Developer requests a further extension. For example, in order for Cape Vincent to obtain an
extension beyond its current December 2014 Commercial Operation Date, the project would
have to have its Interconnection Agreement and demonstrate progress against the requisite
milestones prior to December 2014.
determined, after extensive review, that the proposed changes were not a Material Modification of the projects.
However, Cape Vincent’s decision to make such substantial changes to the projects after the completion of the
interconnection studies necessarily required that technical details produced by such studies be updated prior to
finalizing the Interconnection Agreement. Notably, it was Cape Vincent’s decision to wait until after the completion of the interconnection studies to make such significant project changes.
12 Id. at 5.
6
2. Cape Vincent’s Proposed Modification to the Requirements for Projects with
Proposed Commercial Operation Dates Beyond the Permissible Extension
Period
Under the NYISO’s proposal, as set forth in the December 19 Filing, a project’s
Commercial Operation Date must be within four (4) years from the completion of the Class Year
Study. The proposed tariff revisions provide that in order to obtain an extension of Commercial
Operation Date beyond this period requires: (1) an executed Interconnection Agreement (or an
unexecuted Interconnection Agreement filed with the Commission); and (2) demonstrated
progress against the milestones set forth in such Interconnection Agreement. Cape Vincent
requests revisions to these requirements that would significantly weaken their efficacy.
a. Requirement 1: Executed Interconnection Agreement or Unexecuted
Interconnection Agreement on File with the Commission
Cape Vincent asks the Commission to direct the NYISO to modify the first of the two
requirements that a Developer show in order to have a Commercial Operation Date beyond the permissible extension period - that the Developer have either an executed Interconnection
Agreement or that an unexecuted Interconnection Agreement has been jointly filed with the
Commission by the NYISO and Connecting Transmission Owner.13 Cape Vincent contends that “the [D]eveloper could lose its queue position if the NYISO and Connecting Transmission
Owner inadvertently or intentionally fail to make the filing by the required deadline” and that it is “not fair or just and reasonable to place the viability of the [D]eveloper’s project in the hands of third parties that the [D]eveloper cannot control.”14
Cape Vincent suggests that the Interconnection Agreement requirement be modified such
that a Developer need only show it has an executed Interconnection Agreement or that it has
13 Id. at 7-8.
14 Id. at 8.
7
requested the NYISO and Connecting Transmission Owner to file an unexecuted Interconnection
Agreement.15 The NYISO’s current tariff, however, already requires that the NYISO and the
Connecting Transmission Owner jointly file the unexecuted Interconnection Agreement with the
Commission “[a]s soon as practicable, but not later than ten (10) Business Days after receiving
… the request to file an unexecuted [Interconnection Agreement].”16 Cape Vincent is therefore
requesting that the Commission direct the NYISO to revise its proposed tariff revision to
anticipate the NYISO’s violation of its tariff. Since the NYISO has no history of violating this
tariff provision and has no intention of doing so in the future, Cape Vincent’s requested
modification is without basis.17 A Developer requesting that an unexecuted Interconnection
Agreement be filed simply needs to make its request at least ten (10) Business Days before the
applicable deadline
Cape Vincent also suggests that the Commission direct the NYISO to modify its proposal to provide a grace period of sixty (60) days after issuance of the Commission’s Order on an
unexecuted Interconnection Agreement for the Developer to demonstrate reasonable efforts
against the milestones ultimately approved by the Commission. The NYISO would not oppose this limited modification.
b. Requirement 2: Progress Against Interconnection Agreement
Milestones
Cape Vincent also requests that the Commission direct the NYISO to expand the list of
permissible milestones that a Developer must meet in order to have a Commercial Operation
15 Id.
16 See Attachment X, Section 30.11.3.
17 Moreover, contrary to Cape Vincent’s contentions, the consequence of a Developer’s failure to satisfy the new tariff revisions is not a “death knell” to the project. See Cape Vincent Protest at 6. The project always has the option of submitting a new Interconnection Request.
8
Date beyond the permissible extension period.18 Specifically, Cape Vincent suggests that the
proposed language be revised to add, as a permissible milestone, a Developer “actively pursuing required governmental permits.”19
While the specific milestones the NYISO included in this tariff language are those that
typically appear in an Interconnection Agreement, the satisfaction of which demonstrate the
Developer’s earnest intention to move forward toward Commercial Operation, Cape Vincent’s
proposed addition to this requirement would require a more subjective determination. Cape
Vincent does not adequately describe what activities would constitute “active pursuit” of
required permits. The NYISO’s tariff currently requires a project to complete a regulatory
milestone in order to enter a Class Year, the final interconnection study. 20 This regulatory
milestone generally requires a project to have a permitting application determined to be complete
by the applicable agency. It is unclear what incremental, objective milestone Cape Vincent
suggests that is beyond achievement of the currently required regulatory milestone, but before
obtaining required permits. Depending on where on the spectrum of “active pursuit” a
Developer is, Cape Vincent’s proposed milestone might not be any more than what is already
required for a project to even enter a Class Year Study. The NYISO therefore respectfully
requests that the Commission reject this portion of Cape Vincent’s Protest and not require the
NYISO to modify the list of acceptable milestones against which the Developer’s intention to
move forward should be measured.
B. SUGGESTED MODIFICATIONS TO THE NYISO’S PROPOSED
TARIFF REVISIONS TO ADDRESS CERTAIN OF CAPE VINCENT’S
18 Id.
19 Id.
20 See Attachment S, Sections 25.6.2.3.1.1.1 through 25.6.2.3.1.1.7.
9
CONCERNS
As discussed above, the NYISO would not object to certain limited modifications requested by Cape Vincent to Section 30.4.4.5, as proposed in the NYISO’s December 19 Filing. The following language reflects these modifications to the language proposed in its December 19 Filing:
30.4.4.5Extensions of the proposed Commercial Operation Date will not be
Material Modifications if:
30.4.4.5.1The proposed Commercial Operation Date is within four (4) years
from the following date:
30.4.4.5.1.1 For all Large Facilities and for Small Generating Facilities
subject to Attachment S, the date the Developer and all
other Developers remaining in the Class Year post security as part of a Class Year Interconnection Facilities Study (i.e., completion of the Class Year).
30.4.4.5.1.2 For Small Generating Facilities not subject to Attachment
S, the date the NYISO tenders the SGIA to the
Interconnection Customer.
30.4.4.5.2 Developer may request an extension of its Commercial Operation
Date beyond the limit specified in Section 30.4.4.5.1. Such request will not be a Material Modification only if the following conditions have been met:
30.4.4.5.2.1 Developer must have an executed Interconnection
Agreement for the project or have an unexecuted
Interconnection Agreement jointly filed at FERC by the NYISO and Connecting Transmission Owner; and
30.4.4.5.2.1221Developer must demonstrate (via an Officer
certification) that it has made reasonable progress against
milestones set forth in the Interconnection Agreement (e.g.,
completion of engineering design, major equipment orders,
commencement and continuation of construction of the
Large Facility and associated System Upgrade Facilities, as
21 This section inadvertently repeated the section number from the above section, but should read
30.4.4.5.2.2.
10
applicable). If Developer has requested an unexecuted
Interconnection Agreement be filed with FERC, Developer
must meet this requirement within sixty (60) days of a
FERC Order on the unexecuted Interconnection
Agreement.
30.4.4.5.3 For projects in the NYISO Interconnection Queue that as of
February 18, 2013 have accepted Project Cost Allocations and
posted Security for System Upgrade Facilities from the final round of a Class Year Interconnection Facilities Study, one of the
following criteria must be satisfied with respect to the proposed Commercial Operation Date:
30.4.4.5.3.1 The project’s proposed Commercial Operation Date
posted on the NYISO interconnection queue as of February
18, 2013 must be within the limit specified in Section
30.4.4.5.1; or
30.4.4.5.3.2 The project’s proposed Commercial Operation Date
posted on the NYISO interconnection queue as of February
18, 2013 must have been a reviewed by the NYISO and
determined not to be a Material Modification prior to
February 18, 2012; or
30.4.4.5.3.3 If the project’s proposed Commercial Operation
Date posted on the NYISO interconnection queue as of February
18, 2013 is beyond the limit specified in Section 30.4.4.5.1, the
following conditions must be satisfied within sixty (60) days of
February 18, 2013 or the project will withdrawn from the NYISO
Interconnection Queue:
30.4.4.5.3.13.1Within sixty (60) days of February
18, 2013, Developer must either (1) have an
executed Interconnection Agreement for the project; or (2) have an unexecuted interconnection
Agreement jointly filed at FERC by the NYISO and Connecting Transmission Owner; and
30.4.4.5.3.13.2Within sixty (60) days of execution
of an Interconnection Agreement or a FERC Order
on an unexecuted Interconnection Agreement, as
applicable, Developer must demonstrate (via an
Officer certification) that it has made reasonable
progress against milestones set forth in the
Interconnection Agreement (e.g., completion of
engineering design, major equipment orders,
11
commencement and continuation of construction of the Large Facility and associated System Upgrade Facilities, as applicable).
The NYISO requests that the Commission consider these proposed revisions that the
NYISO could incorporate in a compliance filing if so issued by the Commission in its Order on the December 19 Filing.
III.CONCLUSION
Wherefore, for the reasons set forth herein, the NYISO respectfully requests that the Commission take action as specified herein.
Respectfully submitted,
/s/ Sara B. Keegan
Sara B. Keegan
Senior Attorney
New York Independent System Operator, Inc.
January 24, 2013
12
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in this proceeding in accordance with the requirements of Rule 2010 of the Commission’s Rules of Practice and Procedure, 18 C.F.R. § 2010 (2013).
Dated at Rensselaer, New York this 24th day of January, 2013.
/s/ Mohsana Akter
New York Independent System Operator, Inc.
10 Krey Blvd.
Rensselaer, NY 12144 (518) 356-7560
