130 FERC ¶ 61,166
FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON, D.C. 20426
March 8, 2010
In Reply Refer To:
New York Independent System Operator Docket No. ER09-1682-000
Hunton & Williams LLP 1900 K Street NW
Washington, DC 20006-1109
Attn: William F. Young, Esq.
Counsel for New York Independent System Operator, Inc.
Subject: Request for Waiver
Dear Mr. Young:
1. On September 4, 2009, pursuant to sections 1(b) and 3.2.3 of Attachment H of its
Market Services Tariff, the New York Independent System Operator, Inc. (NYISO) filed
a proposed Rate Schedule Market Mitigation No. 1 (Rate Schedule M-1) to become
effective September 8, 2009. NYISO proposed Rate Schedule M-1 to apply market
power mitigation measures to three specific generators. In its filing, NYISO also
requested waiver of the limit of six months on the application of mitigation set forth in
section 4.7 of that Attachment H.1 NYISO requested that the Commission permit it to
apply the proposed mitigation measure to the identified generators until such time as
NYISO completes its stakeholder process and the Commission accepts amendments to
NYISO’s market mitigation measures implementing rules for the mitigation of all
Generators committed for reliability outside the New York City Constrained Area.
1 Section 4.7 provides: “Any mitigation measure imposed as specified above shall expire not later than six months after the occurrence of the conduct giving rise to the
measure, or such earlier time as may be specified by the ISO.” New York Independent
System Operator, Inc. FERC Electric Tariff, Original Volume No. 2, Attachment H, Sixth Revised Sheet No. 477.
Docket No. ER09-1682-000- 2 -
2. Seneca Power Partners, L.P. and Sterling Power Partners, L.P. (Generation
Owners); Independent Power Producers of New York, Inc. (IPPNY); AES Eastern
Energy, L.P. (AES); Electric Power Supply Association (EPSA); PSEG Energy
Resources & Trade LLC and PSEG Power New York LLC (collectively, PSEG);
TransCanada Power Marketing Ltd. and TC Ravenswood, LLC (collectively,
TransCanada) submitted comments and protests urging the Commission to deny
NYISO’s request for waiver of section 4.7. Seneca and Sterling asserted that there is no
evidence that the reliability events will occur again prior to next summer and that the
six-month limit adds urgency to the stakeholder process and incentivizes speedy
resolution of the issues. IPPNY also requests that the Commission deny NYISO’s
request for waiver of the six month limit for mitigation measures and direct NYISO to
develop measures with its stakeholders that apply to all generators needed for reliability
located outside of the New York City constrained zone. Otherwise, IPPNY stated, there
will be no pressure to affect a long-term solution. TransCanada, EPSA, PSEG, and AES
supported IPPNY’s comments.
3. In an order issued November 3, 2009,2 the Commission accepted and suspended
the proposed rate schedule, to become effective as requested, subject to refund,
conditions, and further orders, but did not address NYISO’s request for waiver of
section 4.7.
4. On February 17, 2010, NYISO submitted a letter (February 17, 2010 Letter)
noting its request for a waiver of the six-month limit in section 4.7 of Attachment H of
NYISO’s Market Services Tariff. NYISO states that its stakeholder process for
amending its market mitigation rules has not yet been completed; nor have the other
factors underlying the NYISO’s waiver request changed since the September 4, 2009
filing was submitted. NYISO states that the period of six months from the NYISO’s
proposed effective date for Rate Schedule M-1 ends on March 9, 2010. NYISO further
states that the conditions enabling the three identified generators to submit bids that are
not consistent with the bids NYISO would expect them to submit under competitive
conditions at times when they are committed for reliability have not changed. NYISO
states that action by the Commission on the waiver request reasonably in advance of
March 9, 2010, would avoid a lapse in the NYISO’s authority to apply Rate
Schedule M-1 to the three identified Generators at times when they are committed for
local or NYCA reliability, and, possibly, the need for the NYISO to submit a second
request to apply mitigation to one or more of these three Generators.
2 New York Independent System Operator, Inc., 129 FERC ¶ 61,103 (2009).
Docket No. ER09-1682-000- 3 -
5. On March 2, 2010, Generation Owners filed an answer to NYISO’s February 17,
2010 Letter,3 asserting that the requested waiver should be denied because (1) “denial
will push along a stakeholder process that apparently has no end in sight” and (2) denial
will prevent further harm. Generation Owners assert that the imposition of Rate Schedule
M-1 has resulted in Generation Owners’ facilities being ordered to run at a non-
compensatory rate and causes Generation Owners’ a significant financial hardship.
6. We find that NYISO has shown good cause to grant the requested waiver. The
stakeholder process concerns a mitigation proposal that is not before the Commission in
this case. Accordingly, any arguments related to that process are irrelevant. In any
event, grant of the requested waiver should not be an excuse to hold up that stakeholder
process. Further, because proposed Rate Schedule M-1 will only apply to the identified
generators’ guarantee payments, NYISO has stated that, should the Commission later
reject the proposed Rate Schedule, NYISO will be able to retroactively “undo” any
mitigation it has imposed.4 Accordingly, we hereby grant, to the extent necessary,
NYISO’s requested waiver of the six-month time limit of section 4.7 on the application
of mitigation under Rate Schedule M-1, subject to further orders of the Commission.
By direction of the Commission.
Kimberly D. Bose,
Secretary.
3 Contrary to Generation Owners’ characterization of NYISO’s February 17, 2010 letter as a request for waiver, the letter only purports to urge action before March 9, 2010, on the pending request for waiver in its September 4, 2009 filing.
4 See NYISO’s September 4, 2009 filing, Docket No. ER09-1682-000, Transmittal
at 4.