March 15, 2018

By Electronic Delivery

Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

Re: New York Independent System Operator, Inc., Docket No. ER16-120-___;
Amendment to Compliance Filing

Dear Secretary Bose:

On January 16, 2018, the New York Independent System Operator, Inc. (“NYISO”)

submitted to the Federal Energy Regulatory Commission (“Commission”) a Compliance Filing to revise its Open Access Transmission Tariff (“OATT”) and its Market Administration and Control Area Services Tariff.1 The NYISO has discovered that OATT Section 31.2, filed with a proposed effective date of October 20, 2015 in the Compliance Filing, inadvertently included tariff language that was proposed by the NYISO in other proceedings, and accepted by the
Commission to be effective on effective dates subsequent to the October 20, 2015 effective date that the NYISO specified in its Compliance Filing.2

The NYISO hereby submits to the Commission a corrected version of OATT Section

31.2, effective October 20, 2015, with subsequently effective language removed, and three

additional versions of the section with the October 20, 2015 effective language included, to be effective on each relevant subsequent effective date.3

1 New York Indep. Sys. Operator, Inc., January 16, 2018, Compliance Filing, Docket No. ER16-
120-005.

2 See New York Indep. Sys. Operator, Inc., March 22, 2016, Compliance Filing, Docket No.
ER13-102-009; New York Indep. Sys. Operator, Inc., May 18, 2016, Compliance Filing, Docket No.
ER16-966-001; New York Indep. Sys. Operator, Inc., August 18, 2017, Proposed Revisions to Its Open
Access Transmission Tariff Regarding Cost Recovery for Regulated Transmission Facilities, Docket No.
ER17-2327-000.

3 Reflecting OATT revisions that the Commission accepted and permitted to become effective

February 19, 2016 in Docket No. ER16-966, see New York Independent System Operator, Inc., 156 FERC
¶ 61,162 at P 1 and Ordering Paragraph (B) (2016); April 1, 2016 in Docket No. ER13-102, see New York

Honorable Kimberly D. Bose March 15, 2018

Page 2

I.Documents Submitted With this Filing Letter

1.A clean version of corrected OATT Section 31.2, effective October 20, 2015

(“Attachment I”).

2.A clean version of OATT Section 31.2, effective February 19, 2016 (“Attachment

II”).

3.A clean version of OATT Section 31.2, effective April 1, 2016 (“Attachment III”).

4.A clean version of OATT Section 31.2, effective October 18, 2017 (“Attachment

IV”).

5.A redlined version of corrected OATT Section 31.2, effective October 20, 2015

(“Attachment V”).

II.Notice of Effective Date

The NYISO hereby provides notice to the Commission that the corrected version of OATT Section 31.2 will become effective on October 20, 2015, consistent with the
Commission’s November 16, 2017 Order in Docket No. ER16-1204 and the NYISO’s
Compliance Filing.

III.Service

The NYISO will send an electronic link to this filing to the official representative of each
party to this proceeding, to the official representative of each of its customers, to each participant
on its stakeholder committees, to the New York Public Service Commission, and to the New
Jersey Board of Public Utilities. In addition, the complete filing will be posted on the NYISO’s
website at www.nyiso.com.

Independent System Operator, Inc., 162 FERC ¶ 61,107 at P 1 and Ordering Paragraph (A) (2018); and October 18, 2017 in Docket No. ER17-2327, see New York Independent System Operator, Inc., 161 FERC ¶ 61,045 at P 7 (2017).

4 See New York Independent System Operator, Inc., 161 FERC ¶ 61,189 at P 1 and Ordering Paragraph (A) (2017).

Honorable Kimberly D. Bose March 15, 2018

Page 3

IV.Conclusion

The New York Independent System Operator, Inc. respectfully requests that the Commission accept this amendment to its January 16, 2018 Compliance Filing.

Respectfully submitted,

/s/ Alex M. Schnell

Alex M. Schnell, Assistant General Counsel/ Registered Corporate Counsel

New York Independent System Operator, Inc.

cc:Anna Cochrane

James Danly
Jette Gebhart
Kurt Longo

David Morenoff
Daniel Nowak
Larry Parkinson

J. Arnold Quinn
Douglas Roe

Kathleen Schnorf Gary Will

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 Rules of Practice and Procedure, 18 C.F.R. §385.2010.
Dated at Rensselaer, NY this 15th day of March 2018.

/s/ Joy A. Zimberlin

Joy A. Zimberlin

New York Independent System Operator, Inc.

10 Krey Blvd.

Rensselaer, NY 12144 (518) 356-6207

31.2Reliability Planning Process

31.2.1Local Transmission Owner Planning Process

31.2.1.1 Scope

31.2.1.1.1 Criteria, Assumptions and Data

Each Transmission Owner will post on its website the planning criteria and assumptions
currently used in its LTPP as well as a list of any applicable software and/or analytical tools
currently used in the LTPP. Customers, Market Participants and other interested parties may
review and comment on the planning criteria and assumptions used by each Transmission
Owner, as well as other data and models used by each Transmission Owner in its LTPP. The
Transmission Owners will take into consideration any comments received. Any planning criteria
or assumptions for a Transmission Owner’s BPTFs will meet or exceed any applicable NERC,
NPCC or NYSRC criteria. The LTPP shall include a description of the needs addressed by the
LTPP as well as the assumptions, applicable planning criteria and methodology utilized and the
Public Policy Requirements considered. A link to each Transmission Owner’s website will be
posted on the ISO website.

31.2.1.1.2 Consideration of Transmission Needs Driven by Public Policy
Requirements

31.2.1.1.2.1 Procedures for the Identification of Transmission Needs Driven by
Public Policy Requirements in Local Transmission Plans and for the
Consideration of Transmission Solutions

In developing its LTP, each Transmission Owner shall consider whether there is a

transmission need on its system that is being driven by a Public Policy Requirement. The LTP
will identify any transmission project included in the LTP as a solution to a transmission need
being driven by a Public Policy Requirement. In evaluating potential transmission solutions, the

Transmission Owner will give consideration to the objectives of the Public Policy Requirement(s) driving the need for transmission.

31.2.1.1.2.2 Determination of Local Transmission Needs Driven by Public Policy
Requirements

As part of its LTP process pursuant to Section 31.2.1.2 below, each Transmission Owner
will consider whether there is a transmission need on its local system that is being driven by a
Public Policy Requirement for which a local transmission solution should be evaluated,
including needs proposed by market participants and other interested parties. A market
participant or other interested party proposing a transmission need on a Transmission Owner’s
local system driven by a Public Policy Requirement shall submit its proposal to the ISO and the
relevant Transmission Owner, and will identify the specific Public Policy Requirement that is
driving the proposed transmission need and an explanation of why a local transmission upgrade
is necessary to implement the Public Policy Requirement. Any proposed local system
transmission need will be posted on the ISO website. The ISO will transmit proposed
transmission needs on a Transmission Owner’s local system driven by Public Policy
Requirements to the NYDPS, with a request that the NYDPS review the proposals and provide
the relevant Transmission Owner with input to assist the Transmission Owner in its
determination. The Transmission Owner, after considering the input provided by the NYDPS
and any information provided by a market participant or other party, will determine whether
there are transmission needs driven by Public Policy Requirements for which local transmission
solutions should be evaluated. The Transmission Owner will post on its website a list of the
transmission needs driven by Public Policy Requirements for which local transmission solutions
should be evaluated, with an explanation of why the Transmission Owner identified those
transmission needs and declined to identify other proposed transmission needs.

31.2.1.1.2.3 Evaluation of Proposed Local Transmission Solutions

In evaluating potential transmission solutions, if any, the Transmission Owner will give
consideration to the objectives of the Public Policy Requirement driving the need for a local
transmission solution. The Transmission Owner will evaluate solutions to identified
transmission needs, including transmission solutions proposed by market participants and other
parties for inclusion in its LTP. The Transmission Owner, in consultation with the NYDPS, will
evaluate proposed transmission solutions on its local system to determine the more efficient or
cost-effective transmission solutions. The Transmission Owner will consider the relative costs
and benefits of proposed transmission solutions and their impact on the Transmission Owner’s
transmission system and its customers. Any local transmission solution identified by the
Transmission Owner through the LTP process will be reviewed with stakeholders as part of each
Transmission Owner’s regular LTP process and will be included in the Transmission Owner’s
subsequent LTP. In conducting its evaluation the Transmission Owner will use criteria that are
relevant to the Public Policy Requirement driving the transmission need, which may include its
published local planning criteria and assumptions.

31.2.1.2 Process Timeline

31.2.1.2.1 Each Transmission Owner, in accordance with a schedule set forth in the

ISO Procedures, will post its current LTP on its website for review and comment by interested parties sufficiently in advance of the time for submission to the ISO for input to its RNA so as to allow adequate time for stakeholder review and comment. Each LTP will include:

• identification of the planning horizon covered by the LTP,

• data and models used,

• reliability needs, needs driven by Public Policy Requirements, and other needs
addressed,

• potential solutions under consideration, and,

• a description of the transmission facilities covered by the plan.

31.2.1.2.2 To the extent the current LTP utilizes data or inputs, related to the ISO’s

planning process, not already reported by the ISO in Form 715 and referenced on
its website, any such data will be provided to the ISO at the time each
Transmission Owner posts criteria and planning assumptions in accordance with
Section 31.2.1.1 and will be posted by the ISO on its website subject to any
confidentiality or Critical Energy Infrastructure Information restrictions or
requirements.

31.2.1.2.3 Each planning cycle, the ISO shall hold one or more stakeholder meetings

of the ESPWG and TPAS at which each Transmission Owner’s current LTP will
be discussed. Such meetings will be held either at the Transmission Owner’s
Transmission District, or at an ISO location. The ISO shall post notice of the
meeting and shall disclose the agenda and any other material distributed prior to
the meeting.

31.2.1.2.4 Interested parties may submit written comments to a Transmission Owner

with respect to its current LTP within thirty days after the meeting. Each

Transmission Owner shall list on its website, as part of its LTP, the person and/or
location to which comments should be sent by interested parties. All comments
will be posted on the ISO website. Each Transmission Owner will consider
comments received in developing any modifications to its LTP. Any such
modification will be explained in its current LTP posted on its website pursuant to

Section 31.2.1.2.2 above and discussed at the next meeting held pursuant to Section 31.2.1.2.3 above.

31.2.1.2.5 Each planning cycle, each Transmission Owner will submit the finalized

portions of its current LTP to the ISO as contemplated in Section 31.2.2.4.2 below for timely inclusion in the RNA.

31.2.1.3 ISO Evaluation of Transmission Owner Local Transmission Plans in
Relation to Regional and Local Transmission Needs

The ISO will review the Transmission Owner LTPs as they relate to the BPTFs as set

forth in Section 31.2.2.4.2. The ISO will also evaluate whether a regional transmission solution

- including, but not limited to, regional transmission solutions proposed by Developers pursuant
to this Attachment Y - could satisfy an identified regional transmission need on the BPTFs that
impacts more than one Transmission District more efficiently or more cost effectively than a
local transmission solution identified in a Transmission Owner’s LTP in accordance with Section

31.2.6.4.2 for the satisfaction of a regional Reliability Need, Section 31.3.1.3.6 for the reduction
of congestion identified in CARIS, or Section 31.4.7.2 for the satisfaction of a Public Policy
Transmission Need. The ISO will report the results of its evaluation solely for informational
purposes in the relevant ISO planning report prepared under this Attachment Y, and the
Transmission Owners shall not be required to revise their LTPs based on the results of the ISO’s
evaluation.

31.2.1.4 LTP Dispute Resolution Process

31.2.1.4.1 Disputes Related to the LTPP; Objective; Notice

Disputes related to the LTPP are subject to the DRP. The objective of the DRP is to assist parties having disputes in communicating effectively and resolving disputes as

expeditiously as possible. Within fifteen (15) calendar days of the presentation by a

Transmission Owner of its LTP to the ESPWG and TPAS, a party with a dispute shall notify in
writing the Affected TO, the ISO, the ESPWG and TPAS of its intention to utilize the DRP. The
notice shall identify the specific issue in dispute and describe in sufficient detail the nature of the
dispute.

31.2.1.4.2 Review by the ESPWG/TPAS

The issue raised by a party with a dispute shall be reviewed and discussed at a joint meeting of the ESPWG and the TPAS in an effort to resolve the dispute. The party with a dispute and the Affected TO shall have an opportunity to present information concerning the issue in dispute to the ESPWG and the TPAS.

31.2.1.4.3 Information Discussions

To the extent the ESPWG and the TPAS are unable to resolve the dispute, the dispute

will be subject to good faith informal discussions between the party with a dispute and the

Affected TO. Each of those parties will designate a senior representative authorized to enter into
informal discussions and to resolve the dispute. The parties to the dispute shall make a good
faith effort to resolve the dispute through informal discussions as promptly as practicable.

31.2.1.4.4 Alternative Dispute Resolution

In the event that the parties to the dispute are unable to resolve the dispute through

informal discussions within sixty (60) days, or such other period as the parties may agree upon,
the parties may, by mutual agreement, submit the dispute to mediation or any other form of
alternative dispute resolution. The parties shall attempt in good faith to resolve the dispute in
accordance with a mutually agreed upon schedule but in no event may the schedule extend

beyond ninety (90) days from the date on which the parties agreed to submit the dispute to alternative dispute resolution.

31.2.1.4.5 Notice of Results of Dispute Resolution

The Affected TO shall notify the ISO and ESPWG and TPAS of the results of the DRP and update its LTP to the extent necessary. The ISO shall use in its planning process the LTP provided by the Affected TO.

31.2.1.4.6 Rights Under the Federal Power Act

Nothing in the DRP shall affect the rights of any party to file a complaint with the Commission under relevant provisions of the FPA.

31.2.1.4.7 Confidentiality

All information disclosed in the course of the DRP shall be subject to the same

protections accorded to confidential information and CEII by the ISO under its confidentiality and CEII policies.

31.2.2Reliability Needs Assessment

31.2.2.1 General

The ISO shall prepare and publish the RNA as described below. The RNA will identify Reliability Needs. The ISO shall also designate in the RNA the Responsible Transmission Owner with respect to each Reliability Need.

31.2.2.2 Interested Party Participation in the Development of the RNA

The ISO shall develop the RNA in consultation with Market Participants and all other
interested parties. TPAS will have responsibility consistent with ISO Procedures for review of
the ISO’s reliability analyses. ESPWG will have responsibility consistent with ISO Procedures

for providing commercial input and assumptions to be used in the development of reliability assessment scenarios provided under Section 31.2.2.5, and in the reporting and analysis of
historic congestion costs. Coordination and communication will be established and maintained between these two groups and ISO staff to allow Market Participants and other interested parties to participate in a meaningful way during each stage of the CSPP. The ISO staff shall report any majority and minority views of these collaborative governance work groups when it submits the RNA to the Operating Committee for a vote, as provided below.

31.2.2.3 Preparation of the Reliability Needs Assessment

31.2.2.3.1The ISO shall evaluate bulk power system needs in the RNA over the

Study Period.

31.2.2.3.2 The starting point for the development of the RNA Base Case will be the

system as defined for the FERC Form No. 715 Base Case. The ISO shall develop
this system representation to be used for its evaluations of the Study Period by
primarily using: (1) the most recent NYISO Load and Capacity Data Report
published by the ISO on its web site; (2) the most recent versions of ISO
reliability analyses and assessments provided for or published by NERC, NPCC,
NYSRC, and neighboring Control Areas; (3) information reported by neighboring
Control Areas such as power flow data, forecasted load, significant new or
modified generation and transmission facilities, and anticipated system conditions
that the ISO determines may impact the BPTFs; and (4) data submitted pursuant
to paragraph 31.2.2.4 below; provided, however, the ISO shall not include in the
RNA Base Case an Interim Service Provider, an RMR Generator, or any other
interim Generator Deactivation Solution selected by the ISO pursuant to

Attachment FF of the ISO OATT; provided, further, the ISO will include in the RNA Base Case a permanent transmission Generator Deactivation Solution
selected by the ISO pursuant to Attachment FF of the ISO OATT if it meets the base case inclusion requirements in the ISO Procedures. The details of the
development of the RNA Base Case are contained in the ISO Procedures. The RNA Base Case shall also include Interregional Transmission Projects that have been approved by the NYPSC transmission siting process and meet the base case inclusion requirements in the ISO Procedures.

31.2.2.3.3 The ISO shall assess the RNA Base Case to determine whether the BPTFs

meet all Reliability Criteria for both resource and transmission adequacy in each
year, and report the results of its evaluation in the RNA. Transmission analyses
will include thermal, voltage, short circuit, and stability studies. Then, if any
Reliability Criteria are not met in any year, the ISO shall perform additional
analyses to determine whether additional resources and/or transmission capacity
expansion are needed to meet those requirements, and to determine the Target
Year of need for those additional resources and/or transmission. A short circuit
assessment will be performed for the tenth year of the Study Period. The study
will not seek to identify specific additional facilities. Reliability Needs will be
defined in terms of total deficiencies relative to Reliability Criteria and not
necessarily in terms of specific facilities.

31.2.2.4 Planning Participant Data Input

31.2.2.4.1 At the ISO’s request, Market Participants, Developers, and other parties

shall provide, in accordance with the schedule set forth in the ISO Procedures, the

data necessary for the development of the RNA. This data will include but not be
limited to (1) existing and planned additions to the New York State Transmission
System (to be provided by Transmission Owners and municipal electric utilities);

(2) proposals for merchant transmission facilities (to be provided by merchant

Developers); (3) generation additions and retirements (to be provided by

generator owners and Developers); (4) demand response programs (to be provided by demand response providers); and (5) any long-term firm transmission requests made to the ISO.

31.2.2.4.2 The Transmission Owners shall submit their current LTPs referenced in

Section 31.1.3 and Section 31.2.1 to the ISO. The Transmission Owners and the
ISO will coordinate with each other in reviewing the LTPs. The ISO will review
the Transmission Owners’ LTPs, as they relate to BPTFs, to determine whether
they will meet reliability needs identified in the LTPs, recommend an alternate
means to resolve the local needs from a regional perspective pursuant to Section

31.2.6.4, and indicate if it is not in agreement with a Transmission Owner’s

proposed additions. The ISO shall report its determinations under this section in the RNA and in the CRP.

31.2.2.4.3 All data received from Market Participants, Developers, and other parties

shall be considered in the development of the system representation for the Study Period in accordance with the ISO Procedures.

31.2.2.5 Reliability Scenario Development

The ISO, in consultation with the ESPWG and TPAS, shall develop reliability scenarios
addressing the Study Period. Variables for consideration in the development of these reliability

scenarios include but are not limited to: load forecast uncertainty, fuel prices and availability,

new resources, retirements, transmission network topology, and limitations imposed by proposed environmental or other legislation.

31.2.2.6 Evaluation of Reliability Scenarios

The ISO will conduct additional reliability analyses for the reliability scenarios

developed pursuant to paragraph 31.2.2.5. These evaluations will test the robustness of the needs assessment studies conducted under paragraphs 31.2.2.3. This evaluation will only identify
conditions under which Reliability Criteria may not be met. It will not identify or propose
additional Reliability Needs. In addition, the ISO will perform appropriate sensitivity studies to determine whether Reliability Needs previously identified can be mitigated through alternate
system configurations or operational modes. The Reliability Needs may increase in some
reliability scenarios and may decrease, or even be eliminated, in others. The ISO shall report the results of these evaluations in the RNA.

31.2.2.7 Consequences for Other Regions

The ISO will coordinate with the ISO/RTO Regions to identify the consequences of the reliability transmission projects on such ISO/RTO Regions using the respective planning criteria of such ISO/RTO Regions. The ISO shall report the results in the CRP. The ISO shall not bear the costs of required upgrades in another region.

31.2.2.8 Reliability Needs Assessment Report Preparation

Once all the analyses described above have been completed, ISO staff will prepare a draft of the RNA including discussion of its assumptions, Reliability Criteria, and results of the
analyses and, if necessary, designate the Responsible Transmission Owner. One or more

compensatory MW/ Load adjustment scenarios will be developed by the ISO as a guide to the development of proposed solutions to meet the identified Reliability Need.

31.2.3RNA Review Process

31.2.3.1 Collaborative Governance Process

The draft RNA shall be submitted to both TPAS and the ESPWG for review and

comment. The ISO shall make available to any interested party sufficient information to

replicate the results of the draft RNA. The information made available will be electronically

masked and made available pursuant to a process that the ISO reasonably determines is

necessary to prevent the disclosure of any Confidential Information or Critical Energy

Infrastructure Information contained in the information made available. Market Participants and other interested parties may submit at any time optional suggestions for changes to ISO rules or procedures which could result in the identification of additional resources or market alternatives suitable for meeting Reliability Needs. Following completion of the TPAS and ESPWG review, the draft RNA reflecting the revisions resulting from the TPAS and ESPWG review, shall be forwarded to the Operating Committee for discussion and action. The ISO shall notify the
Business Issues Committee of the date of the Operating Committee meeting at which the draft RNA is to be presented. Following the Operating Committee vote, the draft RNA will be
transmitted to the Management Committee for discussion and action.

31.2.3.2 Board Action

Following the Management Committee vote, the draft RNA, with working group,

Operating Committee, and Management Committee input, will be forwarded to the ISO Board
for review and action. Concurrently, the draft RNA will be provided to the Market Monitoring
Unit for its review and consideration of whether market rules changes are necessary to address

an identified failure, if any, in one of the ISO’s competitive markets. The Board may approve

the RNA as submitted, or propose modifications on its own motion. If any changes are proposed by the Board, the revised RNA shall be returned to the Management Committee for comment. The Board shall not make a final determination on a revised RNA until it has reviewed the
Management Committee comments. Upon approval by the Board, the ISO shall issue the final RNA to the marketplace by posting it on its web site.

The responsibilities of the Market Monitoring Unit that are addressed in the above

section of this Attachment are also addressed in Section 30.4.6.8.2 of the Market Monitoring Plan, Attachment O to the ISO Services Tariff.

31.2.3.3 Needs Assessment Disputes

Notwithstanding any provision to the contrary in this Attachment, the ISO OATT, or the NYISO Services Tariff, in the event that a Market Participant raises a dispute solely within the NYPSC’s jurisdiction relating to the final conclusions or recommendations of the RNA, a
Market Participant may refer such dispute to the NYPSC for resolution. The NYPSC’s final determination shall be binding, subject only to judicial review in the courts of the State of New York pursuant to Article 78 of the NYCPLR.

31.2.3.4 Public Information Sessions

In order to provide ample exposure for the marketplace to understand the identified

Reliability Needs, the ISO will provide various opportunities for Market Participants and other potentially interested parties to discuss the final RNA. Such opportunities may include
presentations at various ISO Market Participant committees, focused discussions with various industry sectors, and/or presentations in public venues.

31.2.4Development of Solutions to Reliability Needs

31.2.4.1 Eligibility and Qualification Criteria for Developers and Projects

For purposes of fulfilling the requirements of the Developer qualification criteria in this
Section 31.2.4.1 and its subsections, the term “Developer” includes Affiliates, as that term is
defined in Section 2 of the ISO Services Tariff and Section 1 of the ISO OATT. To the extent
that a Developer relies on Affiliate(s) to satisfy any or all of the qualification criteria set forth in
Section 31.2.4.1.1.1, the Affiliate(s) shall provide to the ISO: (i) the information required in
Section 31.2.4.1.1.1 to demonstrate its capability to satisfy the applicable qualification criteria,
and (ii) a notarized officer’s certificate, signed by an authorized officer of the Affiliate with
signatory authority, in a form acceptable to the ISO, certifying that the Affiliate will participate
in the Developer’s project in the manner described by the Developer and will abide by the
requirements set forth in this Attachment Y, the ISO Tariffs, and ISO Procedures related and
applicable to the Affiliate’s participation.

31.2.4.1.1 Developer Qualification and Timing

The ISO shall provide each Developer with an opportunity to demonstrate that it has or
can draw upon the financial resources, technical expertise, and experience needed to finance,
develop, construct, operate and maintain a transmission project to meet identified Reliability
Needs. The ISO shall consider the qualifications of each Developer in an evenhanded and non-
discriminatory manner, treating Transmission Owners and Other Developers alike.

31.2.4.1.1.1 Developer Qualification Criteria

The ISO shall make a determination on the qualification of a Developer to propose to develop a transmission project as a solution to an identified Reliability Need based on the
following criteria:

31.2.4.1.1.1.1 The technical and engineering qualifications and experience of the

Developer relevant to the development, construction, operation and maintenance of a transmission facility, including evidence of the Developer’s demonstrated capability to adhere to standardized construction, maintenance, and operating
practices and to contract with third parties to develop, construct, maintain, and/or operate transmission facilities;

31.2.4.1.1.1.2 The current and expected capabilities of the Developer to develop and
construct a transmission facility and to operate and maintain it for the life of the
facility. If the Developer has previously developed, constructed, maintained or
operated transmission facilities, the Developer shall provide the ISO a description
of the transmission facilities (not to exceed ten) that the Developer has previously
developed, constructed, maintained or operated and the status of those facilities,
including whether the construction was completed, whether the facility entered
into commercial operations, whether the facility has been suspended or terminated
for any reason, and evidence demonstrating the ability of the Developer to address
and timely remedy any operational failure of the facilities; and

31.2.4.1.1.1.3 The Developer’s current and expected capability to finance, or its

experience in arranging financing for, transmission facilities. For purposes of the ISO’s determination, the Developer shall provide the ISO:

(1) evidence of its demonstrated experience financing or arranging financing for

transmission facilities, if any, including a description of such projects (not to

exceed ten) over the previous ten years, the capital costs and financial structure of
such projects, a description of any financing obtained for these projects through

rates approved by the Commission or a state regulatory agency, the financing
closing date of such projects, and whether any of the projects are in default;

(2) its audited annual financial statements from the most recent three years and its

most recent quarterly financial statement, or equivalent information;

(3) its credit rating from Moody’s Investor Services, Standard & Poor’s, or Fitch, or

equivalent information, if available;

(4) a description of any prior bankruptcy declarations, material defaults, dissolution,

merger or acquisition by the Developer or its predecessors or subsidiaries occurring within the previous five years; and

(5)such other evidence that demonstrates its current and expected capability to

finance a project to solve a Reliability Need.

31.2.4.1.1.1.4 A detailed plan describing how the Developer - in the absence of previous
experience financing, developing, constructing, operating, or maintaining
transmission facilities - will finance, develop, construct, operate, and maintain a
transmission facility, including the financial, technical, and engineering
qualifications and experience and capabilities of any third parties with which it
will contract for these purposes.

31.2.4.1.1.2 Developer Qualification Determination

Any Developer seeking to become qualified may submit the required information, or

update any previously submitted information, at any time. The ISO shall treat on a confidential
basis in accordance with the requirements of its Code of Conduct in Attachment F of the ISO
OATT any non-public financial qualification information that is submitted to the ISO by the
Developer under Section 31.2.4.1.1.1.3 and is designated by the Developer as “Confidential

Information.” The ISO shall within 15 days of a Developer’s submittal, notify the Developer if
the information is incomplete. If the submittal is deemed incomplete, the Developer shall submit
the additional information within 30 days of the ISO’s request. The ISO shall notify the
Developer of its qualification status within 30 days of receiving all necessary information. A
Developer shall retain its qualification status for a three-year period following the notification
date; provided, however, that the ISO may revoke this status if it determines that there has been a
material change in the Developer’s qualifications and the Developer no longer meets the
qualification requirements. A Developer that has been qualified shall inform the ISO within
thirty days of any material change to the information it provided regarding its qualifications and
shall submit to the ISO each year its most recent audited annual financial statement when
available. At the conclusion of the three-year period or following the ISO’s revocation of a
Developer’s qualification status, the Developer may re-apply for a qualification status under this
section.

Any Developer determined by the ISO to be qualified under this section shall be eligible to propose a regulated transmission project as a solution to an identified Reliability Need and shall be eligible to use the cost allocation and cost recovery mechanism for regulated
transmission projects set forth in Section 31.5 of this Attachment Y and Rate Schedule 10,
Section 6.10, of the ISO OATT for any approved project.

31.2.4.2 Interregional Transmission Projects

Interregional Transmission Projects may be proposed under Section 31.2.5.1 of this

Attachment Y as regulated backstop solutions, alternative regulated solutions, or market-based
solutions, in response to a request by the ISO for solutions to a Reliability Need under the
relevant provisions of Section 31.2.4. Interregional Transmission Projects proposed as regulated

backstop solutions, alternative regulated solutions or market-based solutions shall be: (i)

evaluated by the ISO in accordance with the applicable requirements of the reliability planning
process of this Attachment Y, and (ii) jointly evaluated by the ISO and the relevant adjacent
transmission planning region(s) in accordance with Section 7.3 of the Interregional Planning
Protocol.

31.2.4.3 Regulated Backstop Solutions

31.2.4.3.1 When a Reliability Need is identified in any RNA issued under this tariff,

the ISO shall request and the Responsible Transmission Owner shall provide to

the ISO, as set forth in Section 31.2.5 below, a proposal for a regulated solution or
combination of solutions that shall serve as a backstop to meet the Reliability
Need if requested by the ISO due to the lack of sufficient viable market-based
solutions to meet such Reliability Needs identified for the Study Period. The
Responsible Transmission Owner shall be eligible to recover its costs for
developing its proposal and seeking necessary approvals under Rate Schedule 10
of the ISO OATT. Regulated backstop solutions may include generation,
transmission, or demand side resources. Such proposals may include reasonable
alternatives that would effectively address the Reliability Need; provided
however, the Responsible Transmission Owner’s obligation to propose and
implement regulated backstop solutions under this tariff is limited to regulated
transmission solutions. Prior to providing its response to the RNA, each
Responsible Transmission Owner will present for discussion at the ESPWG and
TPAS any updates in its LTP that impact a Reliability Need identified in the
RNA. The ISO will present at the ESPWG and TPAS any updates to its

determination under Section 31.2.2.4.2 with respect to the Transmission Owners’
LTPs. Should more than one regulated backstop solution be proposed by a
Responsible Transmission Owner to address a Reliability Need, it will be the
responsibility of that Responsible Transmission Owner to determine which of the
regulated backstop solutions will proceed following a finding by the ISO under
Section 31.2.8 of this Attachment Y. The determination by the Responsible
Transmission Owner will be made prior to the approval of the CRP which
precedes the Trigger Date for the regulated backstop solution with the longest
lead time. Contemporaneous with the request to the Responsible Transmission
Owner, the ISO shall solicit market-based and alternative regulated responses as
set forth in Sections 31.2.4.5 and 31.2.4.7, which shall not be a formal RFP
process.

31.2.4.4 Qualifications for Regulated Backstop Solutions

31.2.4.4.1 The submission of a regulated backstop solution to a Reliability Need for

purposes of the ISO’s evaluation under Section 31.2.5 of the viability and

technology, (5) a major milestone schedule; (6) the schedule for obtaining any permits and other certifications, if available; (7) status of ISO interconnection studies and interconnection agreement, if available; and (8) status of equipment availability and procurement, if available.

31.2.4.4.2 The submission of a regulated backstop solution to a Reliability Need for

purposes of the ISO’s evaluation of the proposed solution for possible selection as
the more efficient or cost effective solution to the Reliability Need shall include,
at a minimum, the following details: (1) updates to the information required
under Section 31.2.4.4.1; (2) the schedule for obtaining required permits and other
certifications; (3) a demonstration of Site Control or a schedule for obtaining such
control; (4) the status of any contracts (other than an Interconnection Agreement)
that are under negotiation or in place, including any contracts with third-party
contractors; (5) status of ISO interconnection studies and interconnection
agreement; (6) status of equipment availability and procurement; (7) evidence of
financing or ability to finance the project; (8) capital cost estimates for the
project; (9) a description of permitting or other risks facing the project at the stage
of project development, including evidence of the reasonableness of project cost
estimates, all based on the information available at the time of the submission;
and (10) any other information requested by the ISO.

A Responsible Transmission Owner shall submit the following

information to indicate the status of any contracts: (i) copies of all final contracts
the ISO determines are relevant to its consideration, or (ii) where one or more
contracts are pending, a timeline on the status of discussions and negotiations

with the relevant documents and when the negotiations are expected to be

completed. The final contracts shall be submitted to the ISO when available. The ISO shall treat on a confidential basis in accordance with the requirements of its Code of Conduct in Attachment F of the ISO OATT any contract that is submitted to the ISO and is designated by the Responsible Transmission Owner as
“Confidential Information.”

A Responsible Transmission Owner shall submit the following

information to indicate the status of any required permits: (i) copies of all final
permits received that the ISO determines are relevant to its consideration, or (ii)
where one or more permits are pending, the completed permit application(s) with
information on what additional actions must be taken to meet the permit
requirements and a timeline providing the expected timing for finalization and
receipt of the final permit(s). The final permits shall be submitted to the ISO
when available.

A Responsible Transmission Owner shall submit the following

information, as appropriate, to indicate evidence of financing by it or any Affiliate
upon which it is relying for financing: (i) evidence of self-financing or project
financing through approved rates or the ability to do so, (ii) copies of all loan
commitment letter(s) and signed financing contract(s), or (iii) where such
financing is pending, the status of the application for any relevant financing,
including a timeline providing the status of discussions and negotiations of
relevant documents and when the negotiations are expected to be completed. The
final contracts or approved rates shall be submitted to the ISO when available.

31.2.4.4.3If the regulated backstop solution does not meet the Reliability Needs , the

ISO will provide sufficient information to the Responsible Transmission Owner to
determine how the regulated backstop should be modified to meet the identified
Reliability Needs. The Responsible Transmission Owner will make necessary
changes to its proposed regulated backstop solution to address reliability
deficiencies identified by the ISO, and submit a revised proposal to the ISO for
review and approval.

31.2.4.5 Market-Based Responses

At the same time that a proposal for a regulated backstop solution is requested from the
Responsible Transmission Owner under Section 31.2.4.3, the ISO shall also request market-
based responses from the market place. Subject to the execution of appropriately drawn
confidentiality agreements and the Commission’s standards of conduct, the ISO and the
appropriate Transmission Owner or Transmission Owners shall provide any party who wishes to
develop such a response access to the data that is necessary to develop its response. Such data
shall only be used for the purposes of preparing a market-based response to a Reliability Need
under this section. Such responses will be open on a comparable basis to all resources, including
generation, demand response providers, and merchant transmission Developers.

31.2.4.6 Qualifications for a Valid Market-Based Response

The submission of a proposed market-based solution must include, at a minimum:

(1) contact information; (2) the lead time necessary to complete the project, including, if

available, the construction windows in which the Developer can perform construction and what, if any, outages may be required during these periods; (3) a description of the project, including type, size, and geographic and electrical location, as well as planning and engineering

specifications and drawings as appropriate; (4) evidence of a commercially viable technology;

(5) a major milestone schedule; (6) a schedule for obtaining any required permits and other

certifications; (7) a demonstration of Site Control or a schedule for obtaining Site Control; (8) the status of any contracts (other than an Interconnection Agreement) that are under negotiation or in place; (9) the status of ISO interconnection studies and interconnection agreement; (10) the status of equipment availability and procurement; (11) evidence of financing or ability to finance the project; and (12) any other information requested by the ISO.

A Developer shall submit the following information to indicate the status of any

contracts: (i) copies of all final contracts the ISO determines are relevant to its consideration, or (ii) where one or more contracts are pending, a timeline on the status of discussions and
negotiations with the relevant documents and when the negotiations are expected to be
completed. The final contracts shall be submitted to the ISO when available. The ISO shall treat on a confidential basis in accordance with the requirements of its Code of Conduct in
Attachment F of the ISO OATT any contract that is submitted to the ISO and is designated by the Developer as “Confidential Information.”

A Developer shall submit the following information to indicate the status of any required permits: (i) copies of all final permits received that the ISO determines are relevant to its
consideration, or (ii) where one or more permits are pending, the completed permit application(s) with information on what additional actions must be taken to meet the permit requirements and a timeline providing the expected timing for finalization and receipt of the final permit(s). The final permits shall be submitted to the ISO when available.

A Developer shall submit the following information, as appropriate, to indicate evidence
of financing by it or any Affiliate upon which it is relying for financing: (i) copies of all loan

commitment letter(s) and signed financing contract(s), or (ii) where such financing is pending, the status of the application for any relevant financing, including a timeline providing the status of discussions and negotiations of relevant documents and when the negotiations are expected to be completed. The final contracts shall be submitted to the ISO when available.

Failure to provide any data requested by the ISO within the timeframe set forth in Section

31.2.5.1 of this Attachment Y will result in the rejection of the proposed market-based solution from further consideration during that planning cycle.

31.2.4.7 Alternative Regulated Responses

31.2.4.7.1 The ISO will request alternative regulated responses to Reliability Needs

at the same time that it requests market-based responses and regulated backstop solutions. Such proposals may include reasonable alternatives that would
effectively address the identified Reliability Need.

31.2.4.7.2 In response to the ISO’s request, Other Developers may develop

alternative regulated proposals for generation, demand side alternatives, and/or
other solutions to address a Reliability Need and submit such proposals to the
ISO. Transmission Owners, at their option, may submit additional proposals for
regulated solutions to the ISO. Transmission Owners and Other Developers may
submit such proposals to the NYDPS for review at any time. Subject to the
execution of appropriately drawn confidentiality agreements and the
Commission’s standards of conduct, the ISO and the appropriate Transmission
Owner(s) shall provide Other Developers access to the data that is needed to
develop their proposals. Such data shall be used only for purposes of preparing
an alternative regulated proposal in response to a Reliability Need.

31.2.4.8 Qualifications for Alternative Regulated Solutions

31.2.4.8.1 The submission of an alternative regulated solution to a Reliability Need

for purposes of the ISO’s evaluation under Section 31.2.5 of the viability and

sufficiency of the proposed solution and the determination of the Trigger Date for
the proposed solution shall include, at a minimum, the following details: (1)
contact information; (2) the lead time necessary to complete the project,
including, if available, the construction windows in which the Other Developer or
Transmission Owner can perform construction and what, if any, outages may be
required during these periods; (3) a description of the project, including type, size,
and geographic and electrical location, as well as planning and engineering
specifications and drawings as appropriate; (4) evidence of a commercially viable
technology; (5) a major milestone schedule; (6) the schedule for obtaining any
permits and other certifications, if available; (7) status of ISO interconnection
studies and interconnection agreement, if available; and (8) status of equipment
availability and procurement, if available.

31.2.4.8.2 The submission of a proposed alternative regulated solution to a

Reliability Need for purposes of the ISO’s evaluation of the proposed solution for
possible selection as the more efficient or cost effective solution for the
Reliability Need must include, at a minimum: (1) updates to the information
required under Section 31.2.4.8.1; (2) a demonstration of Site Control or a

permits and other certifications; (6) the status of equipment availability and

procurement; (7) evidence of financing or ability to finance the project; (8) capital
cost estimates for the project; (9) a description of permitting or other risks facing
the project at the stage of project development, including evidence of the
reasonableness of project cost estimates, all based on the information available at
the time of the submission; and (10) any other information requested by the ISO.
An Other Developer or Transmission Owner shall submit the following information to indicate the status of any contracts: (i) copies of all final contracts the ISO determines are relevant to its consideration, or (ii) where one or more contracts are pending, a timeline on the status of discussions and negotiations with the relevant documents and when the negotiations are expected to be
completed. The final contracts shall be submitted to the ISO when available. The
ISO shall treat on a confidential basis in accordance with the requirements of its
Code of Conduct in Attachment F of the ISO OATT any contract that is submitted
to the ISO and is designated by the Other Developer or Transmission Owner as
“Confidential Information.”

An Other Developer or Transmission Owner shall submit the following
information to indicate the status of any required permits: (i) copies of all final
permits received that the ISO determines are relevant to its consideration, or (ii)
where one or more permits are pending, the completed permit application(s) with
information on what additional actions must be taken to meet the permit
requirements and a timeline providing the expected timing for finalization and

receipt of the final permit(s). The final permits shall be submitted to the ISO when available.

An Other Developer or Transmission Owner shall submit the following

31.2.4.8.3 Failure to provide any data requested by the ISO within the timeframe

provided in Sections 31.2.5.1 and 31.2.6.1 of this Attachment Y will result in the
rejection of the proposed alternative regulated solution from further consideration
during that planning cycle. A proponent of a proposed alternative regulated
solution must notify the ISO immediately of any material change in status of a
proposed alternative regulated solution. For purposes of this provision, a material
change includes, but is not limited to, a change in the financial viability of the
developer, a change in the siting status of the project, or a change in a major
element of the project’s development. If the ISO, at any time, learns of a material
change in the status of a proposed alternative regulated solution, it may, at that
time, make a determination as to the continued viability of the proposed
alternative regulated solution.

31.2.4.9 Additional Solutions

Should the ISO determine that it has not received adequate regulated backstop or market-
based solutions to satisfy the Reliability Need, the ISO may, in its discretion, solicit additional
regulated backstop or market-based solutions. Other Developers or Transmission Owners may
submit additional alternative regulated solutions for the ISO’s consideration at that time.

31.2.5ISO Evaluation of Viability, Sufficiency, and Trigger Date of Proposed

Solutions to Reliability Needs

31.2.5.1 Timing for Submittal of Project Information and Developer Qualification
Information and Opportunity to Provide Additional Information

Within 60 days after a request for solutions to a Reliability Need is made by the ISO after
completion of the RNA, a Developer proposing a solution to an identified Reliability Need shall
submit to the ISO for purposes of its evaluation the project information, as applicable, for: (i) a
proposed regulated backstop solution under Section 31.2.4.4.1, (ii) a proposed market-based
solution under Section 31.2.4.6, or (iii) a proposed alternative regulated solution under Section

31.2.4.8.1 of this Attachment Y.

Any Developer that the ISO has determined under Section 31.2.4.1.1.2 or as set forth in
this Section 31.2.5.1 below to be qualified to propose to develop a project as a transmission
solution to an identified Reliability Need may submit the required project information; provided,
however, that: (i) the Developer shall provide a non-refundable application fee of $10,000 and
(ii) based on the actual identified need, the ISO may request that the qualified Developer provide
additional Developer qualification information. Any Developer that has not been determined by
the ISO to be qualified, but that wants to propose to develop a project, must submit to the ISO
the information required for Developer qualification under Section 31.2.4.1.1 within 30 days
after a request for solutions is made by the ISO. The ISO shall within 30 days of a Developer’s

submittal of its Developer qualification information, notify the Developer if this information is
incomplete. The Developer shall submit additional Developer qualification information or
project information required by the ISO within 15 days of the ISO’s request. A Developer that
fails to submit the additional Developer qualification information or the required project
information will not be eligible for its project to be considered in that planning cycle.

31.2.5.2 Comparable Evaluation of All Proposed Solutions

The ISO shall evaluate: (i) any proposed market-based solution submitted by a Developer
pursuant to Section 31.2.4.5, (ii) any proposed regulated backstop solution submitted by a
Responsible Transmission Owner pursuant to Section 31.2.4.3, and (iii) any proposed alternative
regulated solution submitted by a Transmission Owner or Other Developer pursuant to Section

31.2.4.7. The ISO will evaluate whether each proposed solution is viable and is sufficient to
satisfy the identified Reliability Need by the need date pursuant to Sections 31.2.5.3 and

31.2.5.4. The proposed solutions may include multiple components and resource types. When evaluating proposed solutions to Reliability Needs from any Developer, all resource types -
generation, transmission, demand response, or a combination of these resource types - shall be considered on a comparable basis as potential solutions to the Reliability Needs identified. All solutions will be evaluated in the same general time frame.

31.2.5.3 Evaluation of Viability of Proposed Solution

The ISO will determine the viability of a solution - transmission, generation, demand

response, or a combination of these resource types - proposed to satisfy a Reliability Need. For
purposes of its analysis, the ISO will evaluate whether: (i) the Developer has provided the
required Developer qualification data pursuant to Section 31.2.4.1 and the required project
information data under Sections 31.2.4.4.1, 31.2.4.6, or 31.2.4.8.1; (ii) the proposed solution is

technically practicable; (iii) the Developer has indicated possession of, or an approach for

acquiring, any necessary rights-of-way, property, and facilities that will make the proposal

reasonably feasible in the required timeframe; and (iv) the proposed solution can be completed in
the required timeframe. If the ISO determines that the proposed solution is not viable and, for
regulated solutions, the Developer does not address any identified deficiency pursuant to Section

31.2.5.6, the ISO shall reject the proposed solution from further consideration during that planning cycle.

31.2.5.4 Evaluation of Sufficiency of Proposed Solution

The ISO will perform a comparable analysis of each proposed solution - transmission,
generation, demand response, or a combination of these resource types - through the Study
Period to identify whether it satisfies the Reliability Need(s). The ISO will evaluate each
solution to determine whether the solution proposed by the Developer fully eliminates the
Reliability Need(s). If the ISO determines that a proposed regulated solution is not sufficient and
the Developer does not address any identified deficiency pursuant to Section 31.2.5.6, the ISO
shall reject the proposed regulated solution from further consideration during that planning cycle.

31.2.5.5 Establishment of Trigger Date of Proposed Regulated Solutions

Upon receipt of all Developers’ proposed regulated solutions pursuant to Section

31.2.5.1, the ISO will notify all Developers if any Developer has proposed a lead time for the
implementation of its regulated solution that could result in a Trigger Date for the regulated
solution within thirty-six months of the date of the ISO’s presentation of the Viability and
Sufficiency Assessment to the ESPWG, provided that the ISO will not disclose the identity of
such Developer or the details of its project at that time. The ISO will independently analyze the
lead time proposed by each Developer for the implementation of its regulated solution. The ISO

will use the Developer’s estimate and the ISO’s analysis to establish the ISO’s Trigger Date for each regulated solution. The ISO will also establish benchmark lead times for proposed marketbased solutions.

31.2.5.6 Resolution of Deficiencies

Following initial review of the proposals, as described above, ISO staff will identify any
reliability deficiencies in each of the proposed solutions. The Responsible Transmission Owner,
Transmission Owner or Other Developer will discuss any identified deficiencies with the ISO
staff. Other Developers and Transmission Owners that propose alternative regulated solutions
shall have the option to remedy their proposals to address any deficiency within 30 days of
notification by the ISO. With respect to regulated backstop solutions proposed by a Responsible
Transmission Owner pursuant to Section 31.2.4.3, the Responsible Transmission Owner shall
make necessary changes to its proposed backstop solution to address any reliability deficiencies
identified by the ISO, and submit a revised proposal to the ISO for review within 30 days. The
ISO shall review all such revised proposals to determine whether the identified deficiencies have
been resolved.

31.2.5.7 ISO Report of Evaluation Results

The ISO shall present its Viability and Sufficiency Assessment to stakeholders, interested parties, and the NYDPS for comment and will indicate at that time whether any of the proposed regulated solutions found to be viable and sufficient under this Section 31.2.5 will have a Trigger Date within thirty-six months of the date of the ISO’s presentation of the Viability and
Sufficiency Assessment to the ESPWG.

The ISO shall report in the CRP the results of its evaluation under this Section 31.2.5: (i)
whether each proposed regulated backstop solution, alternative regulated solution, and market-

based solution is viable and is sufficient to satisfy the identified Reliability Need by the need date, and (ii) the Trigger Dates for the proposed regulated solutions.

31.2.6ISO Evaluation and Selection of Proposed Regulated Transmission

Solutions

31.2.6.1 Submission of Project Information for Selection of Proposed Regulated
Transmission Solution

If the ISO determines that the Trigger Date of any Developer’s proposed regulated

solution that was found to be viable and sufficient under Section 31.2.5 will occur within thirty-
six months of the date of the ISO’s presentation of the Viability and Sufficiency Assessment to
the ESPWG, the ISO will request that all Developers of regulated transmission solutions that the
ISO determined were viable and sufficient submit to the ISO their project information, as
applicable, for: (i) a proposed regulated backstop transmission solution under Section 31.2.4.4.2,
or (ii) a proposed alternative regulated transmission solution under Section 31.2.4.8.2. If the ISO
determines that none of the Developers’ proposed regulated solutions that were found to be
viable and sufficient under Section 31.2.5 have a Trigger Date that will occur within the thirty-
six month period, the ISO will not request further project information, perform the evaluation, or
make a selection of a more efficient or cost effective regulated solution under this Section 31.2.6
for that planning cycle.

The ISO will make its request, if necessary, for project information under this Section

31.2.6.1 sufficiently in advance of the earliest Trigger Date of the viable and sufficient regulated
solutions to enable the ISO to evaluate and select the more efficient or cost effective
transmission solution. Upon the ISO’s request for project information, the Developer shall
submit such information for its regulated transmission solution within thirty (30) days or such
other additional period as the ISO determines is reasonable. The Developer shall submit

additional project information required by the ISO within 15 days of the ISO’s request. A

Developer that fails to submit the required project information will not be eligible for its project to be considered in that planning cycle.

31.2.6.2 Study Deposit for Proposed Regulated Transmission Solutions

A Developer that proposes a regulated backstop transmission solution or an alternative regulated transmission solution to satisfy the identified Reliability Need shall submit to the ISO, at the same time that it provides the project information required pursuant to Section 31.2.6.1, a study deposit of $100,000, which shall be applied to study costs and subject to refund as
described in this Section 31.2.6.2.

The ISO shall charge, and a Developer proposing a regulated backstop transmission

solution or an alternative regulated transmission solution shall pay, the actual costs of the ISO’s
evaluation of the Developer’s proposed transmission solution for purposes of the ISO’s selection
of the more efficient or cost effective transmission solution to satisfy a Reliability Need for cost
allocation purposes, including costs associated with the ISO’s use of subcontractors. The ISO
will track its staff and administrative costs, including any costs associated with using
subcontractors, that it incurs in performing the evaluation of a Developer’s proposed
transmission solution under this Section 31.2.6 and any supplemental evaluation or re-evaluation
of the proposed transmission solution. If the ISO or its subcontractors perform study work for
multiple proposed transmission solutions on a combined basis, the ISO will allocate the costs of
the combined study work equally among the applicable Developers. The ISO shall invoice the
Developer monthly for study costs incurred by the ISO in evaluating the Developer’s proposed
transmission solution as described above. Such invoice shall include a description and an
accounting of the study costs incurred by the ISO and estimated subcontractor costs. The

Developer shall pay the invoiced amount within thirty (30) calendar days of the ISO’s issuance
of the monthly invoice. The ISO shall continue to hold the full amount of the study deposit until
settlement of the final monthly invoice; provided, however, if a Developer: (i) does not pay its
monthly invoice within the timeframe described above, or (ii) does not pay a disputed amount
into an independent escrow account as described below, the ISO may draw upon the study
deposit to recover the owed amount. If the ISO must draw on the study deposit, the ISO shall
provide notice to the Developer, and the Developer shall within thirty (30) calendar days of such
notice make payments to the ISO to restore the full study deposit amount. If the Developer fails
to make such payments, the ISO may halt its evaluation of the Developer’s proposed
transmission solution and may disqualify the Developer’s proposed transmission solution from
further consideration. After the conclusion of the ISO’s evaluation of the Developer’s proposed
transmission solution or if the Developer: (i) withdraws its proposed transmission solution or (ii)
fails to pay an invoiced amount and the ISO halts its evaluation of the proposed transmission
solution, the ISO shall issue a final invoice and refund to the Developer any portion of the
Developer’s study deposit submitted to the ISO under this Section 31.2.6.2 that exceeds
outstanding amounts that the ISO has incurred in evaluating that Developer’s proposed
transmission solution, including interest on the refunded amount calculated in accordance with
Section 35.19a(a)(2) of FERC’s regulations. The ISO shall refund the remaining portion within
sixty (60) days of the ISO’s receipt of all final invoices from its subcontractors and involved
Transmission Owners.

In the event of a Developer’s dispute over invoiced amounts, the Developer shall: (i)

timely pay any undisputed amounts to the ISO, and (ii) pay into an independent escrow account
the portion of the invoice in dispute, pending resolution of such dispute. If the Developer fails to

meet these two requirements, then the ISO shall not be obligated to perform or continue to

perform its evaluation of the Developer’s proposed transmission solution. Disputes arising under
this section shall be addressed through the Dispute Resolution Procedures set forth in Section

2.16 of the ISO OATT and Section 11 of the ISO Services Tariff. Within thirty (30) Calendar Days after resolution of the dispute, the Developer will pay the ISO any amounts due with interest calculated in accordance with Section 35.19a(a)(2) of FERC’s regulations.

31.2.6.3 Evaluation of System Impact of Proposed Regulated Transmission
Solution

A proposed regulated transmission solution that will have a significant adverse impact on
the reliability of the New York State Transmission System shall not be eligible for selection by
the ISO under Section 31.2.6.5. The ISO shall evaluate the system impacts for the entire Study
Period of a proposed regulated transmission solution that the ISO has determined under Section

31.2.5 is viable and sufficient. The ISO shall perform power flow and short circuit studies for the proposed regulated transmission solutions and additional studies, as appropriate. If the ISO identifies a significant adverse impact based on these studies, the ISO shall request that the
Developer make an adjustment to its proposed regulated transmission solution to address this impact and remain eligible for selection. The Developer shall submit the adjustment within 30 days of the ISO’s notification.

If the Developer modifies its proposed regulated transmission solution, the ISO shall
confirm that the adjusted solution still satisfies the viability and sufficiency requirements set
forth in Section 31.2.5. If the ISO determines that the proposed regulated transmission solution
does not satisfy the viability and sufficiency requirements or continues to have a significantly
adverse impact on the reliability of the New York State Transmission System, the ISO shall
remove the proposed solution from further consideration during that planning cycle.

31.2.6.4 Evaluation of Regional Transmission Solutions to Address Local and
Regional Reliability Needs More Efficiently or More Cost Effectively
Than Local Transmission Solutions

The ISO will review the LTPs as they relate to BPTFs. The results of the ISO’s analysis will be reported in the CRP.

31.2.6.4.1 Evaluation of Regional Transmission Solutions to Address Local

Reliability Needs Identified in Local Transmission Plans More Efficiently or More Cost Effectively than Local Transmission Solutions

The ISO, using engineering judgment, will determine whether proposed regional

transmission solutions on the BPTFs may more efficiently or cost effectively satisfy reliability needs identified in the LTPs. If the ISO identifies that a regional transmission solution on the BPTFs has the potential to more efficiently or cost effectively satisfy the reliability need
identified in the LTPs, it will perform a sensitivity analysis to determine whether the proposed regional transmission solution on the BPTFs would satisfy the reliability needs identified in the LTPs. If the ISO determines that the proposed regional transmission solutions on the BPTFs
would satisfy the reliability need, the ISO will evaluate the proposed regional transmission
solution using the metrics set forth in Section 31.2.6.5.1 to determine whether it may be a more efficient or cost effective solution on the BPTFs to satisfy the reliability needs identified in the LTPs than the local solutions proposed in the LTPs.

31.2.6.4.2 Evaluation of Regional Transmission Solutions to Address Regional

Reliability Needs More Efficiently or More Cost Effectively than Local Transmission Solutions

As referenced in Section 31.2.1.3, the ISO, using engineering judgment, will determine
whether a regional transmission solution might more efficiently or more cost effectively satisfy
an identified regional Reliability Need on the BPTFs that impacts more than one Transmission
District than any local transmission solutions identified by the Transmission Owners in their

LTPs in the event the LTPs specify such transmission solutions are included to address local reliability needs.

31.2.6.5 ISO Selection of More Efficient or Cost Effective Transmission Solution
for Cost Allocation Purposes

A proposed regulated transmission solution - including a regulated backstop transmission
solution submitted by a Responsible Transmission Owner pursuant to Section 31.2.4.3 and an
alternative regulated transmission solution submitted by a Transmission Owner or Other
Developer pursuant to Section 31.2.4.7 - that the ISO has determined satisfies the viability and
sufficiency requirements in Section 31.2.5 and the system impact requirements in Section

31.2.6.3 shall be eligible under this Section 31.2.6.5 for selection in the CRP for the purpose of
cost allocation and recovery under the ISO Tariffs. The ISO shall evaluate any eligible proposed
regulated transmission solutions for the planning cycle using the metrics set forth in Section

31.2.6.5.1 below. For purposes of this evaluation, the ISO will review the information submitted
by the Developer and determine whether it is reasonable and how such information should be
used for purposes of the ISO evaluating each metric. The ISO may engage an independent
consultant to review the reasonableness and comprehensiveness of the information submitted by
the Developer and may rely on the independent consultant’s analysis in evaluating each metric.
The ISO shall select in the CRP for cost allocation purposes the more efficient or cost effective
transmission solution to satisfy a Reliability Need in the manner set forth in Section 31.2.6.5.2
below.

31.2.6.5.1 Metrics for Evaluating More Efficient or Cost Effective Regulated
Transmission Solution to Satisfy Reliability Need

In determining which of the eligible proposed regulated transmission solutions is the

more efficient or cost effective solution to satisfy the Reliability Need, the ISO will consider, and

will consult with the NYDPS regarding, the following metrics set forth in this Section 31.2.6.5.1 and rank each proposed solution based on the quality of its satisfaction of these metrics:

31.2.6.5.1.1 The capital cost estimates for the proposed regulated transmission

solutions, including the accuracy of the proposed estimates. For this evaluation,
the Developer shall provide the ISO with credible capital cost estimates for its
proposed solution, with itemized supporting work sheets that identify all material
and labor cost assumptions, and related drawings to the extent applicable and
available. The work sheets should include an estimated quantification of cost
variance, providing an assumed plus/minus range around the capital cost estimate.
The estimate shall include all components that are needed to meet the
Reliability Need throughout the Study Period. To the extent information is
available, the Developer should itemize: material and labor cost by equipment,
engineering and design work, permitting, site acquisition, procurement and
construction work, and commissioning needed for the proposed solution, all in
accordance with Good Utility Practice. For each of these cost categories, the
Developer should specify the nature and estimated cost of all major project
components and estimate the cost of the work to be done at each substation and/or
on each feeder to physically and electrically connect each facility to the existing
system. The work sheets should itemize to the extent applicable and available all
equipment for: (i) the proposed project; (ii) interconnection facilities (including
Attachment Facilities and Direct Assignment Facilities); and (iii) System Upgrade
Facilities, System Deliverability Upgrades, Network Upgrades, and Distribution
Upgrades.

31.2.6.5.1.2 The cost per MW ratio of the proposed regulated transmission solutions.
For this evaluation, the ISO will first determine the present worth, in dollars, of
the total capital cost of the proposed solution in current year dollars. The ISO will
then determine the MW value of the solution by summing the Reliability Need, in
MW, with the additional improvement, in MW, that the proposed solution offers
beyond serving the Reliability Need. The ISO will then determine the cost per
MW ratio by dividing the present worth of the total capital cost by the MW value.

31.2.6.5.1.3 The expandability of the proposed regulated transmission solution. The

ISO will consider the impact of the proposed solution on future construction. The ISO will also consider the extent to which any subsequent expansion will continue to use this proposed solution within the context of system expansion.

31.2.6.5.1.4 The operability of the proposed regulated transmission solution. The ISO
will consider how the proposed solution may affect additional flexibility in
operating the system, such as dispatch of generation, access to operating reserves,
access to ancillary services, or ability to remove transmission for maintenance.
The ISO will also consider how the proposed solution may affect the cost of
operating the system, such as how it may affect the need for operating generation
out of merit for reliability needs, reducing the need to cycle generation, or
providing more balance in the system to respond to system conditions that are
more severe than design conditions.

31.2.6.5.1.5 The performance of the proposed regulated transmission solution. The
ISO will consider how the proposed project may affect the utilization of the
system (e.g. interface flows, percent loading of facilities).

31.2.6.5.1.6 The extent to which the Developer of a proposed regulated transmission

solution has the property rights, or ability to obtain the property rights, required to implement the solution. The ISO will consider whether the Developer: (i) already possesses the rights of way necessary to implement the solution; (ii) has

completed a transmission routing study, which (a) identifies a specific routing

plan with alternatives, (b) includes a schedule indicating the timing for obtaining
siting and permitting, and (c) provides specific attention to sensitive areas (e.g.,
wetlands, river crossings, protected areas, and schools); or (iii) has specified a

plan or approach for determining routing and acquiring property rights.

31.2.6.5.1.7 The potential issues associated with delay in constructing the proposed

regulated transmission solution consistent with the major milestone schedule and the schedule for obtaining any permits and other certifications as required to timely meet the need.

31.2.6.5.2 ISO Selection of More Efficient or Cost Effective Regulated Transmission
Solution to Satisfy Reliability Need

project is selected pursuant to this Section 31.2.6.5.2. Once such project is selected, the Other
Developer or Transmission Owner shall be eligible for cost allocation and cost recovery under
the ISO OATT for its project. Within thirty (30) days of the ISO’s selection of an alternative
regulated transmission solution, the Other Developer or Transmission Owner shall submit to the
ISO for the ISO’s approval a proposed schedule and scope of work that describe the preparation
work, if any, that the Developer must perform prior to the Trigger Date of the project, including
a good faith estimate of the costs of such work. Costs will be recovered when the project is

completed or halted in accordance with the cost recovery requirements set forth in Rate Schedule

10 of the ISO OATT, or as otherwise determined by the Commission. Actual project cost recovery, including any issues related to cost recovery and project cost overruns, will be submitted to and decided by the Commission.

31.2.7Comprehensive Reliability Plan

Following the ISO’s evaluation of the proposed market-based and regulated solutions to
Reliability Need(s), the ISO will prepare a draft CRP that sets forth the ISO’s findings regarding
the viability and sufficiency of solutions, the trigger dates of regulated solutions, and any
recommendations that implementation of regulated solutions (which may be a Gap Solution) is
necessary to ensure system reliability. The draft CRP will reflect any input from the NYDPS. If
the CRP cannot be completed in the two-year planning cycle, the ISO will notify stakeholders
and provide an estimated completion date and an explanation of the reasons the additional time is
required.

The ISO will include in the draft CRP the list of Developers that qualify pursuant to
Section 31.2.4.1 and will identify the proposed solutions that it has determined under Section

31.2.5 are viable and sufficient to satisfy the identified Reliability Need(s) by the need date. The

ISO will identify in the CRP the regulated backstop solution that the ISO has determined will

meet the Reliability Need by the need date and the Responsible Transmission Owner. If the ISO
determines at the time of the issuance of the CRP that sufficient market-based solutions will not
be available in time to meet a Reliability Need, and finds that it is necessary to take action to
ensure reliability, it will state in the CRP that the development of regulated solutions (regulated
backstop or alternative regulated solution) is necessary. The draft CRP will also include the
results of the ISO’s analysis of the LTPs consistent with Section 31.2.6.4.
The draft CRP shall indicate whether the ISO has determined that the Trigger Date to any proposed regulated solution will occur within thirty-six months of the date of ISO’s presentation of the Viability and Sufficiency Assessment to the ESPWG. If the Trigger Date of any proposed regulated solution will occur within the thirty-six month period and the ISO makes a selection of the more efficient or cost effective transmission solution under Section 31.2.6.5.2, the draft CRP shall include the regulated transmission solution selected for cost allocation purposes pursuant to Section 31.2.6.5.2 as the more efficient or cost effective transmission solution to satisfy the
Reliability Need(s) and shall indicate whether that transmission solution should be triggered. If:

(i) none of the proposed regulated solutions has a Trigger Date within the thirty-six month

period, or (ii) the Trigger Date of any proposed regulated solution will occur within the thirty-six
month period but the ISO determines in its discretion that it is not necessary at that time to select
a more efficient or cost effective transmission solution under Section 31.2.6.5.2 prior to the
completion of the CRP, the draft CRP will not select a regulated transmission solution. If: (i) the
Trigger Date of any proposed regulated solution will occur within the thirty-six month period,
and (ii) the ISO selects a more efficient or cost effective solution subsequent to the completion of
the CRP but prior to the completion of that thirty-six month period, the ISO shall issue an

updated CRP report pursuant to Section 31.2.7.3 that includes the regulated transmission solution selected for cost allocation purposes pursuant to Section 31.2.6.5.2 as the more efficient or cost effective transmission solution to satisfy the Reliability Need(s) and shall indicate whether that transmission solution should be triggered.

The draft CRP shall include a comparison of a proposed regional solution to an identified
Reliability Need to an Interregional Transmission Project identified and evaluated under the
“Analysis and Consideration of Interregional Transmission Projects” section of the Interregional
Planning Protocol, if any. An Interregional Transmission Project proposed in the ISO’s
reliability planning process may be selected as a market based response, regulated backstop
solution, or an alternative regulated solution under the provisions of the ISO’s reliability
planning process.

31.2.7.1 Collaborative Governance Process

The ISO staff shall submit the draft CRP to the TPAS and ESPWG for review and
comment. The ISO shall make available to any interested party sufficient information to
replicate the results of the draft CRP. The information made available will be electronically
masked and made available pursuant to a process that the ISO reasonably determines is
necessary to prevent the disclosure of any Confidential Information or Critical Energy
Infrastructure Information contained in the information made available. Following completion
of the TPAS and ESPWG review, the draft CRP reflecting the revisions resulting from the TPAS
and ESPWG review shall be forwarded to the Operating Committee for a discussion and action.
The ISO shall notify the Business Issues Committee of the date of the Operating Committee
meeting at which the draft CRP is to be presented. Following the Operating Committee vote, the
draft CRP will be transmitted to the Management Committee for a discussion and action.

31.2.7.2 Board Review, Consideration, and Approval of CRP

Following the Management Committee vote, the draft CRP, with working group,

Operating Committee, and Management Committee input, will be forwarded to the ISO Board
for review and action. Concurrently, the draft CRP will also be provided to the Market
Monitoring Unit for its review and consideration of whether market rule changes are necessary to
address an identified failure, if any, in one of the ISO’s competitive markets. The Board may
approve the draft CRP as submitted or propose modifications on its own motion, including the
recommendations regarding the selection of transmission projects for cost allocation and cost
recovery under the ISO Tariffs if such selection will occur during that planning cycle. If any
changes are proposed by the Board, the revised CRP shall be returned to the Management
Committee for comment. The Board shall not make a final determination on the draft CRP until
it has reviewed the Management Committee comments. Upon final approval by the Board, the
ISO shall issue the CRP to the marketplace by posting the CRP on its website. The ISO will
provide the CRP to the appropriate regulatory agency(ies) for consideration and appropriate
action.

The responsibilities of the Market Monitoring Unit that are addressed in the above

section of Attachment Y to the ISO OATT are also addressed in Section 30.4.6.8.3 of the Market Monitoring Plan, Attachment O to the ISO Services Tariff.

31.2.7.3 Updated CRP Report

If, pursuant to Section 31.2.7, the ISO identifies a proposed regulated transmission

solution as the more efficient or cost effective transmission solution following the completion of
the CRP, the ISO will prepare a draft updated CRP report that indicates the regulated
transmission solution recommended for selection for cost allocation purposes pursuant to Section

31.2.6.5.2 as the more efficient or cost effective transmission solution to satisfy the Reliability Need(s) and shall indicate whether that transmission solution should be triggered at that time. The draft updated CRP report shall be reviewed in accordance with the stakeholder process set forth in Section 31.2.7.1 and will be then forwarded to the ISO Board for its review and action pursuant to Section 31.2.7.2.

31.2.7.4 Reliability Disputes

Notwithstanding any provision to the contrary in this Attachment, the ISO OATT, or the
ISO Services Tariff, in the event that a Market Participant or other interested party raises a
dispute solely within the NYPSC’s jurisdiction concerning ISO’s final determination in the CRP
that a proposed solution will or will not meet a Reliability Need, a Market Participant or other
interested party seeking further review shall refer such dispute to the NYPSC for resolution, as
provided for in the ISO Procedures. The NYPSC’s final determination of such disputes shall be
binding, subject only to judicial review in the courts of the State of New York pursuant to Article

78 of the New York Civil Practice Law and Rules.

31.2.7.5 Posting of Approved Solutions

The ISO shall post on its website a list of all Developers that have undertaken a

commitment to the ISO to build a project (which may be a regulated backstop solution, marketbased response, alternative regulated response or gap solution) that is necessary to ensure system reliability, as identified in the CRP and approved by the appropriate governmental agency(ies)
and/or authority(ies).