October 21, 2019

By Electronic Delivery

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

Washington, DC 20426

Re: Filing of an Executed Engineering, Procurement, Construction, Operation, and
Maintenance Agreement Among the New York Independent System Operator,
Inc., Alcoa Power Generating, Inc., and H.Q. Energy Services (U.S.) Inc.;
Request for Waiver of the 60-Day Notice Period; Docket No. ER20-____-000

Dear Ms. Bose:

Pursuant to Section 205 of the Federal Power Act1 and Section 35.13 of the

Commission’s regulations,2 the New York Independent System Operator, Inc. (“NYISO”)

hereby tenders for filing an executed Engineering, Procurement, Construction, Operation, and Maintenance Agreement (“EPC Agreement”) entered into by the NYISO, Alcoa Power
Generating Inc.’s Long Sault Division (“APGI”), as the Affected System Operator, and H.Q. Energy Services (U.S.) Inc. (“HQUS”), as the Transmission Developer.3 The NYISO, APGI, and HQUS are collectively the “Parties.” The EPC Agreement is labeled as Service Agreement No. 2476 under the NYISO’s Open Access Transmission Tariff (“OATT”).

HQUS is developing a Transmission Project to provide for an 80 MW increase in

transmission capacity on the Cedar Rapids Transmission Intertie. The Transmission Project will
predominantly upgrade the transmission facilities of Niagara Mohawk Power Corporation d/b/a
National Grid (“National Grid” or “Connecting Transmission Owner”). The Facilities Study for
the Transmission Project determined that the Transmission Project and the related Network
Upgrade Facilities will also have impacts on APGI’s transmission system. The EPC Agreement
governs the rates, terms, and conditions regarding the engineering, procurement, construction,
operation, and maintenance of the portion of the Transmission Project and Network Upgrade
Facilities on APGI’s system. The EPC Agreement is based on the NYISO’s pro forma Standard
Large Generator Interconnection Agreement (“Pro Forma LGIA”) contained in Attachment X to
the OATT, as modified to address a Transmission Project and the unique circumstances of this
interconnection. The modifications are described in Part II of this letter.

1 16 U.S.C. § 824d (2012).

2 18 C.F.R. § 35.13 (2017).

3 Capitalized terms that are not otherwise defined in this filing letter shall have the meaning specified in Attachment P of the NYISO OATT, and if not defined therein, in Attachments X or S of the NYISO OATT, or the NYISO OATT or NYISO Market Administration and Control Area Services Tariff (“Services Tariff”).

10 Krey Boulevard, Rensselaer, New York 12144 | www.nyiso.com

Honorable Kimberly D. Bose October 21, 2019

Page 2

The NYISO respectfully requests that the Commission accept the EPC Agreement for

filing. Further, as described in Part III of this letter, the NYISO respectfully requests a waiver of the Commission’s prior notice requirements4 to make the EPC Agreement effective as of
October 4, 2019, which is the date on which it was fully executed.

I.BACKGROUND

HQUS is developing a Transmission Project to provide for an 80 MW increase in

transmission capacity on the Cedar Rapids Transmission Intertie located in St. Lawrence County, New York, to increase imports from the Quebec Control Area to New York’s Rest of State
(“ROS”) region. The Transmission Project includes the reconductoring of National Grid’s 115 kV Alcoa-Dennison Line 12 (“Line 12”), the installation of a 25 MVAr rack mounted capacitor bank at National Grid’s Dennison Substation, and related Network Upgrade Facilities required
for the Transmission Project to connect reliably to the New York State Transmission System in a manner that meets the NYISO Transmission Interconnection Standard. HQUS is developing and will fund the Transmission Project and related Network Upgrade Facilities to receive Capacity
Resource Interconnection Service (“CRIS”) commensurate with the 80 MW of incremental
transfer capability created by the transmission upgrade.

The NYISO, National Grid, and HQUS entered into a Transmission Project

Interconnection Agreement, pursuant to which National Grid will construct, own, operate, and

maintain the portions of the Transmission Project and Network Upgrade Facilities that impact its transmission facilities (“Interconnection Agreement”). The NYISO and National Grid jointly filed,5 and the Commission accepted the Interconnection Agreement.6 Additional details
regarding the Transmission Project and related Network Upgrade Facilities can be found in
Appendix A of the Interconnection Agreement.

The NYISO’s interconnection studies for the Transmission Project also identified impacts
of the Transmission Project and related Network Upgrade Facilities on APGI’s transmission
system.7 This includes the replacement of certain towers owned by APGI and related work in
connection with the reconductoring of National Grid’s Line 128 and upgrades at APGI’s Alcoa

4 See Prior Notice and Filing Requirements Under Part II of the Federal Power Act, 64 FERC ¶ 61,139, clarified, 65 FERC ¶ 61,081 (1993).

5 See New York Independent System Operator, Inc., et al., Joint Filing of an Executed Transmission Project Interconnection Agreement Among the New York Independent System Operator, Inc., Niagara Mohawk Power Corporation d/b/a National Grid, and H.Q. Energy Services (U.S.) Inc.; Request for Waiver of the 60 Day-Notice Period; Docket No. ER19-2645-000 (August 20, 2019).

6 See New York Independent System Operator, Inc., et al., Letter Order, Docket No. ER19-2645-000 (September 26, 2019).

7 In addition, Hydro-Québec TransÉnergie has determined that a special protection scheme is required to

accommodate the increase in transfer limit capacity associated with the Transmission Project and the related exports
from the Quebec Control Area to New York of 80 MW. The required upgrades will be addressed pursuant to a
separate agreement by and among Hydro-Québec TransÉnergie, its subsidiary Cedars Rapids Transmission Co., and
National Grid.

8 National Grid owns and will reconductor all of Line 12. The line is supported by a combination of square
base towers, steel flex towers, and wood pole structures, with a portion of the structures (i.e., 7 towers) owned by
APGI.

Honorable Kimberly D. Bose October 21, 2019

Page 3

Substation. The portion of the Transmission Project and Network Upgrade Facilities on APGI’s
transmission system are classified as the “Affected System Upgrade Facilities” and will be
constructed, owned, operated, and maintained by APGI pursuant to the EPC Agreement.
Additional details concerning the Affected System Upgrade Facilities can be found in Appendix
A of the Agreement.

II. DESCRIPTION OF THE EPC AGREEMENT

APGI, as the Affected System Operator, will construct, own, operate, and maintain the
Affected System Upgrade Facilities in accordance with the terms of the EPC Agreement.
Consistent with NYISO practice, as accepted by the Commission,9 the Agreement is based on
the Pro Forma LGIA as modified: (i) to reflect the different purpose of the EPC Agreement, (ii)
to reflect that the Agreement concerns a Transmission Project rather than a Large Generating
Facility and Attachment Facilities, (iii) to allocate the parties’ responsibilities for the
performance of the engineering, procurement, and construction of the Affected System Upgrade
Facilities (“EPC Services”), the subsequent operation and maintenance of these facilities, and the
payment for the EPC Services, and (iv) to set forth the scope of work, cost estimate, and
milestone schedule for the construction of the Affected System Upgrade Facilities.

The EPC Agreement varies from the Pro Forma LGIA primarily as follows:

• The EPC Agreement concerns a Transmission Project and related Network Upgrade

Facilities that will be constructed, owned, operated, and maintained by an Affected

System Operator. For these reasons, the EPC Agreement has been modified from the Pro Forma LGIA to reflect the different purpose of the agreement and the different
terminology (e.g., Affected System Operator, Transmission Developer, Transmission Project, and Network Upgrade Facilities terminology).

• The Transmission Project was evaluated under the NYISO’s Transmission

Interconnection Procedures in Attachment P of the OATT. For this reason, the EPC Agreement incorporates the defined terms from Attachment P, rather than the defined terms for Large Facilities included in the Standard Large Facility Interconnection Procedures in Attachment X of the OATT.

• The Transmission Project and Network Upgrade Facilities will be constructed and

incorporated within APGI’s transmission system and will not have Points of

Interconnection with HQUS’s facilities or related Attachment Facilities. Accordingly,
the EPC Agreement has been modified to reflect the actual facilities that will be
constructed.

• The EPC Agreement predominantly addresses the performance of the EPC Services and

will terminate upon the latter of the completion of the EPC Services and the payment of

9 See, e.g., New York Independent System Operator, Inc. and New York State Electric & Gas Corporation, Letter Order, Docket No. ER15-2079-000 (August 5, 2015) (accepting an EPC Agreement among the NYISO, an Affected Transmission Owner, and Developer based on the Pro Forma LGIA).

Honorable Kimberly D. Bose October 21, 2019

Page 4

related invoices and release or refund of any remaining Security. Notwithstanding this termination requirement, the Parties have agreed that certain, limited operating and
maintenance (and related) requirements will survive the termination of the EPC
Agreement for purposes of ensuring that the new facilities on APGI’s system (and the related incremental transmission capacity) being funded by Transmission Developer are reliably operated and maintained.

• APGI will be responsible for all of the work to design, construct, install, place in service,

operate, and maintain its portion of the Transmission Project and Network Upgrade

Facilities.10 For this reason, the EPC Agreement does not include the requirements in the Pro Forma LGIA concerning a Developer’s responsibilities concerning a Large
Generating Facility or its options or responsibilities to perform work concerning
Attachment Facilities or Stand Alone System Upgrade Facilities.

• Consistent with the requirement for Transmission Projects participating in the

Transmission Interconnection Procedures, the EPC Agreement incorporates the standard
Security and related cost allocation requirements from Attachment S of the OATT that
are applicable to upgrades.11 Specifically, the EPC Agreement incorporates the OATT
requirement that the Developer’s Security is subject to forfeiture if it terminates or
abandons its project and the Security is required to defray the costs of constructing the
upgrades relied upon by subsequent projects.12 In addition, the EPC Agreement
incorporates requirements concerning the treatment of costs that differ from the amount
determined in the interconnection studies and for which the Transmission Developer has
provided Security.13 HQUS and APGI have, however, agreed that HQUS will be
responsible for the costs that are greater than the secured amount, except in cases where
those costs resulted from the modification of other projects. In such case, the costs will
be the responsibility of the developers of the modified projects or will be covered by
drawing on the cash that has been paid and the Security that has been posted for
terminated projects, depending on the factors that caused the additional cost.

• The payments made by HQUS for the Transmission Project are not expected to qualify

for the safe harbor provided by IRS Notices 88-129, 2001-82 and 2016-36.14 Therefore
the EPC Agreement was modified to remove provisions related to the safe harbor and to
provide for an income tax indemnity and gross-up payment to APGI related to the

10 For purposes of the EPC Agreement, the term “Transmission Project 1.A” refers to the portion of the
Transmission Project work being performed by APGI, which is detailed in Section 1.A of Appendix A of the EPC
Agreement. In addition, the term “Network Upgrade Facilities 1.B” refers to the portion of the Network Upgrade
Facilities work being performed by APGI, which is detailed in Section 1.B of Appendix A of the EPC Agreement.

11 Section 22.11.1 of Attachment P of the OATT establishes that the Transmission Project Interconnection Agreement “shall provide the mechanism through which a Transmission Developer shall post Security for required Network Upgrade Facilities.”

12 See OATT Attachment S Section 25.8.5.

13 See OATT Attachment S Section 25.8.6.

14 IRS Notice 2016-36, which is not included in the Pro Forma LGIA, modifies and supersedes IRS Notices 2001-82 and 88-129.

Honorable Kimberly D. Bose October 21, 2019

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payments HQUS will make with respect to the Transmission Project and Network Upgrade Facilities.

• The Parties agreed to include in the EPC Agreement the standard indemnity and

insurance requirements from the Pro Forma LGIA with limited changes to clarify the scope and applicability of the language.

• National Grid, as the Connecting Transmission Owner, signed the EPC Agreement solely
for the limited purpose of acknowledging that its representatives had read and were fully
apprised of the terms of the agreement.

• The EPC Agreement also includes minor clean-ups and revisions, agreed upon among all
of the Parties, that are consistent with the terms of the Agreement.

The NYISO provides in Attachment I to this filing letter a matrix that describes in greater detail the differences between the EPC Agreement and the Pro Forma LGIA.15

III.PROPOSED EFFECTIVE DATE AND REQUEST FOR WAVIER OF THE 60-

DAY NOTICE PERIOD

The NYISO requests an effective date of October 4, 2019, for the EPC Agreement, which
is the date of its full execution. The NYISO respectfully requests that the Commission waive its
prior notice requirement to permit the requested effective date. The Commission has previously
permitted interconnection agreements to become effective upon the date of execution.16

15 As described in this filing letter, “Developer” has been replaced by “Transmission Developer,” “Large

Generating Facility” has been replaced by “Transmission Project,” and “System Upgrade Facility” has been replaced by “Network Upgrade Facilities” throughout the EPC Agreement. The NYISO has not highlighted these changes, which apply in most provisions of the EPC Agreement, in the matrix in Attachment I.

16 See, e.g., New York Independent System Operator, Inc. and New York State Electric & Gas Corporation,
Docket No. ER11-2953-000 (April 7, 2011) (accepting interconnection agreement effective as of date of execution);
see also New York Independent System Operator, Inc. and Niagara Mohawk Power Corp., Letter Order, Docket No.
ER08-985-000 (June 26, 2008) (same); New York Independent System Operator, Inc. and New York Power
Authority, Letter Order, Docket No. ER08-861-000 (May 27, 2008) (same); New York Independent System
Operator, Inc. and New York Power Authority, Letter Order, Docket No. ER08-699-000 (May 16, 2008) (same).

Robert E. Fernandez, General Counsel
Karen Georgenson Gach, Deputy General Counsel

*Sara B. Keegan, Senior Attorney

New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702

skeegan@nyiso.com

V.DOCUMENTS SUBMITTED

*Ted J. Murphy

Hunton Andrews Kurth LLP 2200 Pennsylvania Avenue, NW Washington, D.C. 20037
Tel: (202) 955-1500

Fax: (202) 778-2201

tmurphy@hunton.com

*Michael J. Messonnier Jr. Sevren R. Gourley

Hunton Andrews Kurth LLP 951 East Byrd Street

Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 344-7999

mmessonnier@hunton.com

The NYISO submits the following documents with this filing letter:

• A matrix describing the differences between the EPC Agreement and the Pro Forma
LGIA (Attachment I);

• A clean version of the EPC Agreement (Attachment II);

• A blacklined version of the EPC Agreement showing the changes from the Pro Forma
LGIA (Attachment III); and

• The signature pages for the EPC Agreement (Attachment IV).

VI.SERVICE

The NYISO will send an electronic link to this filing 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, a complete

17 The NYISO respectfully requests waiver of 18 C.F.R. § 385.203(b)(3) (2014) to permit service on counsel in both Washington, D.C. and Richmond, VA.

Honorable Kimberly D. Bose October 21, 2019

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copy of the documents included with this filing will be posted on the NYISO’s website at
www.nyiso.com.

VII. CONCLUSION

Wherefore, the NYISO respectfully requests that the Commission accept the EPC Agreement for filing with an effective date of October 4, 2019.

Respectfully submitted,

Sara B. Keegan

Counsel for the

New York Independent System Operator, Inc.

cc:Anna Cochrane

James Danly
Jignasa Gadani
Jette Gebhart
Kurt Longo
John C. Miller
David Morenoff
Daniel Nowak
Larry Parkinson
Douglas Roe
Frank Swigonski
Gary Will