142 FERC ¶ 61,026
FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON, D.C. 20426
January 14, 2013
In Reply Refer To:
PJM Interconnection, L.L.C. and New York Independent System Operator
Docket No. ER12-718-003
Mr. James M. Burlew
PJM Interconnection, L.L.C.
955 Jefferson Avenue
Norristown, PA 19403
Mr. Alex M. Schnell
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Dear Messrs. Burlew and Schnell:
1. In a joint petition submitted December 24, 2012, PJM Interconnection, L.L.C.
(PJM) and the New York Independent System Operator, Inc. (NYISO) request a
temporary, limited waiver of sections 7 and 10 of Schedule D to the Joint Operating
Agreement (JOA) among and between NYISO and PJM (JOA), and of any other
provisions of the JOA, as may be necessary to permit NYISO and PJM (RTOs) to
temporarily suspend Market-to-Market Coordination in the event of a failure of: (i)
the data link between PJM and NYISO, (ii) an energy management system (EMS), or
(iii) real-time security constrained economic dispatch (RTD). You request that this
limited waiver be effective January 15, 2013, through June 30, 2013. As discussed
below, we grant the requested waiver.
2. You state that Market-to-Market coordination is a process to address certain
inter-regional transactions in, and around, the Lake Erie region. 1 You further state
that, under sections 7 and 10 of Schedule D of the JOA, PJM and NYISO are required
1 See New York Independent System Operator, Inc., 138 FERC ¶ 61,192 (2012) (accepting, subject to conditions, PJM and NYISO joint market-to-market
coordination process proposal); New York Independent System Operator, Inc., 140
FERC ¶ 61,205 (2012).
Docket No. ER12-718-003- 2 -
to initiate Market-to-Market coordination in certain scenarios unless a qualifying
exception in section 10 applies. You state that a procedure is necessary to suspend
Market-to-Market coordination in the event of data system failures. You assert,
however, that the existing provisions of Schedule D may not provide this necessary
authorization. You note that section 10.1.5 allows the RTOs to delay or suspend the
Market-to-Market coordination when either RTO is “experiencing system conditions
that require the system operator’s immediate attention.” You assert that this provision
clearly applies to bulk-electric system conditions (e.g., generation outages,
transmission outages, excessive loadings, etc.), but arguably may not apply to outages
of data “systems” like the data link between PJM and NYISO, or the RTOs’ EMS or
RTD systems. You state that while clarifying tariff revisions are currently being
prepared and will be filed with the Commission by June 30, 2013, out of an
abundance of caution PJM and NYISO seek the requested waiver of section 7 and 10
and any other provisions of the JOA as may be necessary for an interim period, i.e.,
from January 15, 2013, the date on which the requirement to conduct Market-to-
Market coordination becomes effective, through June 30, 2013.
3. Notice of your request was issued by the Commission with protests and
interventions due on or before January 4, 2013. The New York Transmission Owners
filed comments in support of PJM’s and NYISO’s limited waiver request. The New
York Transmission Owners request that the Commission grant the waiver for the
period requested to allow each RTO to obtain stakeholder approval for the needed
tariff changes.
4. Although not the only basis for a grant of waivers, the Commission has
previously granted one-time waivers of tariffs when: (i) an underlying error has been made in good faith; (ii) the waiver is of limited scope; (iii) a concrete problem needs to be remedied; and (iv) the waiver will not have undesirable consequences, such as harming third parties.2
5. NYISO and PJM seek the limited, temporary waiver requested here to provide
clarity in scenarios arguably not covered by an ambiguous provision in the JOA until
that ambiguity is addressed in proposed tariff revisions, i.e., the asserted failure of
Schedule D to provide express authorization to temporarily suspend Market-to-
Market coordination in the event of data, EMS, and RTD system failures. For the
2 See, e.g., Air Energy TCI, Inc., 142 FERC ¶ 61,005 (2012); PJM
Interconnection, LLC, 137 FERC ¶ 61,184 (2011); ISO New England, Inc, 134 FERC ¶ 61,182 (2011); Hudson Transmission Partners, 131 FERC ¶ 61,157 (2010); Stony Creek Energy LLC, 131 FERC ¶ 61,059 (2010); Central Vermont Public Service Corp., 121 FERC ¶ 61,225 (2007).
Docket No. ER12-718-003- 3 -
reasons discussed below, we find that your request satisfies the aforementioned
factors and that good cause therefore exists to grant the limited waiver, as requested.
6. First, we find that NYISO and PJM have acted in good faith in developing and
implementing Market-to-Market coordination; it was not until operational details
were addressed that it became apparent that the tariff is ambiguous, and so the
underlying failure to provide clear authority in the tariff to suspend Market-to-Market
coordination in the above-stated scenarios was made in good faith. We also find that
the requested waiver is of limited scope and duration as it will apply only during the
above-identified system failure conditions that occur during a limited, finite period,
i.e., from January 15, 2013, until June 30, 2013. In addition, we find that the waiver
is required to remedy a concrete problem, i.e., the need for clear authority to suspend
Market-to-Market coordination under the circumstances of the above-described data
system failures. Finally, we find that granting the waiver will have no undesirable
consequences, and will not harm third parties, given that the waivers to permit
suspension of Market-to-Market coordination will only apply when PJM and NYISO
are physically incapable of performing Market-to-Market coordination.
By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
