155 FERC ¶ 61,166
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Norman C. Bay, Chairman;
Cheryl A. LaFleur, Tony Clark,
and Colette D. Honorable.
New York Independent SystemDocket No. ER16-1213-000
Operator, Inc.
ORDER ACCEPTING PROPOSED TARIFF REVISIONS
SUBJECT TO CONDITION
(Issued May 17, 2016)
1. On March 17, 2016, pursuant to section 205 of the Federal Power Act (FPA),1
the New York Independent System Operator, Inc. (NYISO) filed proposed revisions to
its Market Administration and Control Area Services Tariff (Services Tariff) and
Open Access Transmission Tariff (OATT) to provide rules for the participation of
Behind-the-Meter Net Generation Resources (Behind-the-Meter Resources)2 in NYISO’s
1 16 U.S.C. § 824d (2012).
2 NYISO proposes that a “Behind-the-Meter Net Generation Resource” be defined
as “a facility within a defined electrical boundary comprised of a Generator and a Host
Load located at a single point identifier (PTID), where the Generator routinely serves,
and is assigned to, the Host Load and has excess generation capability after serving that
Host Load. The Generator of the [Behind-the-Meter Generation] Resource must be
electrically located in the [New York Control Area], have a minimum nameplate rating of
2 MW and a minimum net injection to the [New York State] Transmission or distribution system of 1 MW. The Host Load of the [Behind-the-Meter Generation] Resource must also have a minimum ACHL [Average Coincident Host Load] of 1 MW. A facility that otherwise meets these eligibility requirements, but either (i) is an Intermittent Power
resource, (ii) whose Host Load consists only of Station Power, or (iii) has made an
election pursuant to Section 5.12.1.12, does not qualify to be a [Behind-the-Meter]
Resource. [Behind-the-Meter] Resources cannot simultaneously participate as a
[Behind-the-Meter] Resource and in any ISO and/or Transmission Owner administered demand response or generation buy-back programs.”
Docket No. ER16-1213-000- 2 -
energy, ancillary services, and capacity markets. In this order, we accept certain of
NYISO’s proposed tariff revisions3 to become effective May 19, 2016, as requested, and
the remaining proposed tariff revisions to become effective on or after October 1, 2016,
as requested, subject to condition. We further direct NYISO to submit a compliance
filing with no less than two weeks’ notice of the actual effective date of the remaining
tariff revisions.
I.Summary of NYISO’s Filing
2.NYISO states that there are currently two generators participating in NYISO’s
wholesale markets that serve a behind-the-meter load.4 Both resources participated in the New York Power Pool’s - NYISO’s predecessor’s - wholesale markets and were
permitted to continue operation when NYISO was established. NYISO has not permitted additional behind-the-meter generators to participate in its markets.5
3. According to NYISO, while its current market rules do not expressly prohibit
behind-the-meter generation from participating in its wholesale markets, its proposed
eligibility requirements and market rules will provide additional clarity and an
appropriate foundation for expanding NYISO’s resource base.6 NYISO states that, under
its proposed revisions, its currently-effective rules will apply to all Behind-the-Meter
Resources, except where otherwise noted. In addition, NYISO states that it is proposing
new rules to address the unique characteristics of Behind-the-Meter Resources and to
provide flexibility for market participants.7 NYISO asserts that such flexibility includes
allowing a resource to enroll with a single generator or an aggregation of generating units
3 OATT sections 25, 30, and 32 (Attachments X, S, and Z) and Services Tariff
section 23.4.5.7.3 (and sections 23.4.5.7.3.2, 23.4.5.7.3.3, 23.4.5.7.3.4, and 23.4.5.7.3.5) and the corresponding change to the definition of NCZ Examined Facility in Services Tariff Section 23.2.1.
4 Capitalized terms not otherwise defined herein shall have the meaning specified in section 1 of the OATT and section 2 of the Services Tariff.
5 NYISO Filling at n.5. NYISO states that upon the effective date of the revisions proposed herein, it will work with the two existing resources to transition them to become Behind-the-Meter Resources or another type of resource as appropriate.
6 Id. at 2.
7 Id. at 2-3.
Docket No. ER16-1213-000- 3 -
serving a host load8 or, where appropriate metering and other facility configuration
exists, with a single facility split into several distinct Behind-the-Meter Resources.
4. NYISO proposes the following minimum eligibility requirements for
resources seeking to participate as a Behind-the-Meter Resource: a resource must have
(1) nameplate generation capability with a minimum rating of at least two MW; (2) a minimum load of at least one MW; and (3) an interconnection allowing an export of at least one MW to the New York State transmission system. NYISO contends that there may be behind-the-meter generators in New York that wish to sell energy, capacity, or ancillary services in the wholesale markets that do not meet these minimum eligibility requirements but that it intends to develop additional software, rules, and procedures to further integrate distributed generation in the wholesale markets and to align NYISO’s wholesale markets with the New York State Public Service Commission’s (NYPSC)
Reforming the Energy Vision proceeding.9
5. NYISO states that, to fully integrate Behind-the-Meter Resources into the Installed Capacity (ICAP) market, it proposes new calculations to determine a Behind-the-Meter Resource’s available ICAP and its Unforced Capacity. NYISO contends that both
calculations will determine “net” values whereby the resource’s gross generation is
reduced by NYISO’s calculation of its adjusted host load before determining the capacity available to the market.10 NYISO also states that it proposes to apply all of the existing market power mitigation measures to Behind-the-Meter Resources, but certain minor clarifications are needed in order to facilitate that application.11
8 “Host Load” is proposed to be defined as “[t]he Load that is electrically
interconnected within the defined electrical boundary of a [Behind-the-Meter] Resource
that is routinely served by, and assigned to, the Generator of a [Behind-the-Meter]
Resource. Station Power will be included in the calculation of the [Behind-the-Meter]
Resource’s Host Load if it is self-supplied by the Generator of the [Behind-the-Meter]
Resource, and it is not separately metered pursuant to Section 5.12.6.1.1 and ISO
Procedures.”
9 Id. at 3 (citing Case 14-M-0101 - Proceeding on Motion of the Commission in
Regard to Reforming the Energy Vision, Developing the REV Market in New York: DPS Staff Straw Proposal on Track One Issues (Aug. 22, 2014)).
10 Id. at 3-4.
11 Id. at 4.
Docket No. ER16-1213-000- 4 -
6. NYISO states that a key element of its proposal involves revisions to
section 5.12.1 of the Services Tariff and related revisions to OATT Attachment S.
NYISO states that, to guard against the possibility that Behind-the-Meter Resources
would not be subject to NYISO’s interconnection procedures, including the NYISO
Deliverability Interconnection Standard12 (e.g., because they are connected to or
proposing to connect to non-jurisdictional distribution facilities), it proposes a new
eligibility requirement for resources seeking to qualify as an ICAP Supplier (i.e., ICAP eligibility requirement). NYISO asserts this requirement will ensure that such resources are subject to the deliverability requirements that apply to similar resources over two
MW regardless of their point of interconnection.13
7. NYISO further states that, in fairness to existing resources that have already
made investment decisions and to avoid the application of such a standard retroactively,
it proposes that this new ICAP eligibility requirement apply only on a prospective basis.
NYISO states that, as with the introduction of the NYISO Deliverability Interconnection
Standard, it proposes a transition rule (described in proposed sections 25.9.3.3 and
25.9.3.4.1 of the OATT) that would apply to certain existing resources that would
otherwise be subject to this new ICAP eligibility requirement. According to NYISO,
under the proposed transition rule, certain existing resources, including Behind-the-Meter
Resources that connect to non-jurisdictional distribution facilities and large and small
generating facilities that pre-dated Class Year 2007, may obtain Capacity Resource
Interconnection Service (CRIS)14 during a limited window of time without having to
12 NYISO proposes to define “NYISO Deliverability Interconnection Standard” as
the standard that must be met, unless otherwise provided for by Attachment S, by (i) any
generation facility larger than 2 MW in order for that facility to obtain CRIS; (ii) any
Merchant Transmission Facility proposing to interconnect to the New York State
Transmission System or to the Distribution System and receive Unforced Capacity
Deliverability Rights; (iii) any entity requesting External CRIS Rights; and (iv) any entity
requesting a CRIS transfer pursuant to section 25.9.5 of Attachment S. To meet the
NYISO Deliverability Interconnection Standard, the Developer must, in accordance with
these rules, fund or commit to fund any System Deliverability Upgrades identified for its
project in the Class Year Deliverability Study. See proposed section 25.1.2 of
Attachment S to the OATT.
13 Id. at 4.
14 NYISO proposes to define “Capacity Resource Interconnection Service” as the
service provided by NYISO to Developers that satisfy the NYISO Deliverability
Interconnection Standard or that are otherwise eligible to receive CRIS in accordance
(continued...)
Docket No. ER16-1213-000- 5 -
enter a Class Year Study and satisfy the requirements under the NYISO Deliverability Interconnection Standard set forth in OATT Attachment S. NYISO states that, after the close of the transition period, Behind-the-Meter Resources and any other generator or controllable transmission project over two MW electrically located in the New York Control Area (regardless of whether the point of interconnection is a jurisdictional
facility) must obtain CRIS through the Class Year process or through a transfer of CRIS at the same location in order to participate as an ICAP supplier.15
8. In addition, NYISO proposes several miscellaneous revisions to capture changes
to the Services Tariff that it says do not exclusively relate to Behind-the-Meter Resource
participation in the energy, ancillary services, or capacity markets or to the mitigation
measures, but apply more generally to market participants. NYISO states that these
revisions eliminate antiquated language and add clarity to the Services Tariff.16
9. NYISO requests an effective date of May 19, 2016 for the proposed revisions
to OATT sections 25, 30, and 32 (Attachments X, S, and Z) to promptly begin
CRIS evaluation and interconnection process. NYISO explains that if the Commission were to grant this requested effective date, the 60-day period for the proposed
transition rule would expire before the potential start date for the next Class Year Study (September 2016). NYISO contends that the requested effective date (1) would provide certainty to market participants as to the rules to which they will be subject, (2) will allow NYISO to reflect CRIS awarded under the transition rule in the base case for its next
Class Year Study, and (3) will allow potential Behind-the-Meter Resources that are not subject to the transition rule to enter the upcoming Class Year.17
10. NYISO also requests a proposed effective date of May 19, 2016 for those
revisions to its Services Tariff that are unrelated to Behind-the-Meter Resource
participation, including section 23.4.5.7.3 (and sections 23.4.5.7.3.2, 23.4.5.7.3.3,
23.4.5.7.3.4, and 23.4.5.7.3.5) and the corresponding change to the definition of NCZ
Examined Facility in Services Tariff section 23.2.1. NYISO explains that, given its
with Attachment S; such service being one of the eligibility requirements for participation
as a NYISO ICAP Supplier. See proposed section 25.1.2 of Attachment S to the OATT.
15 Id. at 4-5.
16 Id. at 61.
17 Id.
Docket No. ER16-1213-000- 6 -
on-going application of the buyer-side market power mitigation rules, a date certain for
the effective date will avoid any risk of confusion about the specific tariff language.18
11. For all of the other tariff revisions (Remaining Tariff Revisions), NYISO requests
a flexible effective date no earlier than October 1, 2016. NYISO currently anticipates
such revisions becoming effective on or before October 15, 2016. NYISO states that it
will be unable to provide a precise effective date until the software changes necessary to
allow participation of Behind-the-Meter Resources is tested and ready for deployment.
NYISO proposes to submit a compliance filing at least two weeks prior to the proposed
effective date that will specify the requested effective date. NYISO states that, consistent with Commission precedent, the compliance filing will provide adequate notice to the Commission and market participants of the Remaining Tariff Revisions.19
II.Notice of Filing and Responsive Pleadings
12.Notice of NYISO’s filing was published in the Federal Register, 81 Fed.
Reg. 25,663 (2016), with interventions and protests due on or before April 7, 2016.
New York Association of Public Power, Entergy Nuclear Power Marketing, LLC, and New York Transmission Owners20 filed motions to intervene.
13. The NYPSC filed a notice of intervention and comments. Energy Spectrum, Inc.
(Energy Spectrum), Cubit Power One, Inc. (Cubit), ReEnergy Holdings LLC,
(ReEnergy), and Multiple Intervenors21 filed motions to intervene and comments.
18 Id.
19 NYISO Filing at 61 (citing New York Indep. Sys. Operator, Inc., 106 FERC
¶ 61,111, at P 10 (2004); New York Indep. Sys. Operator, Inc., Docket No. ER11-2544-
000, at 1 (Feb. 10 2011) (letter order); New York Indep. Sys. Operator, Inc., Docket No. ER15-485-000, at 2 (Jan. 15, 2015) (letter order); New York Indep. Sys. Operator, Inc., 151 FERC ¶ 61,057, at P 20 (2015)).
20 For purposes of this proceeding, New York Transmission Owners consist
of Central Hudson Gas & Electric Corporation; Consolidated Edison Company of New
York, Inc.; Power Supply Long Island; New York Power Authority; New York State
Electric & Gas Corporation; Niagara Mohawk Power Corporation d/b/a National Grid;
Orange and Rockland Utilities, Inc.; and Rochester Gas and Electric Corporation.
21 Multiple Intervenors state that they are an unincorporated association of over
55 large industrial, commercial, and institutional energy consumers with manufacturing and other facilities located throughout New York State.
Docket No. ER16-1213-000- 7 -
NY DG Holdings LLC (NY DG) and Independent Power Producers of New York, Inc.
(IPPNY) filed motions to intervene and limited protests.
14.On April 21, 2016, Cubit filed an answer to IPPNY’s limited protest, and on
April 22, 2016, NYISO filed an answer to the comments and protests filed by IPPNY,
NY DG, and ReEnergy.
A.Comments, Protests, and Answers
15.Cubit, ReEnergy, Energy Spectrum, and Multiple Intervenors support NYISO’s
proposed tariff revisions.22 Energy Spectrum states that, during periods of peak load, excess capacity from an on-site generator can supplement traditional sources of energy and enhance system reliability. Multiple Intervenors state that Behind-the-Meter
Resources have excess capacity that can and should be used to support the grid and to avoid unnecessary infrastructure investments. Multiple Intervenors assert that some of these facilities are located in areas like New York City, where reliability could be
bolstered if additional generation is made available to the grid.23
16. While NYPSC also states that it generally supports NYISO’s proposal, it
protests NYISO’s application of its market power mitigation rules to Behind-the-Meter Resources, as discussed below. Similarly, IPPNY states that it supports NYISO’s
proposal to open its markets to Behind-the-Meter Resources and, wherever possible, to hold these resources to the same requirements as traditional generators; however, it protests the proposed transition period.
1.Market Power Mitigation
17.The NYPSC protests NYISO’s proposal to apply its market power mitigation rules
to Behind-the-Meter Resources because mitigation is unnecessary absent evidence of a
threat of an exercise of market power. The NYPSC contends that distributed generation
is still underdeveloped, small in size, and a resource that should be promoted rather than
mitigated.24
22 Cubit Comments at 12; ReEnergy Comments at 2; Energy Spectrum Comments at 4, 6; Multiple Intervenors Comments at 8.
23 Multiple Intervenors Comments at 1-2.
24 NYPSC Comments at 5-6.
Docket No. ER16-1213-000- 8 -
2.Transition Rule
18.Cubit supports the proposed transition rule,25 stating that it is consistent with
Commission precedent. Cubit asserts that the transition rule is analogous to the
grandfathering granted by the Commission following the issuance of Order No. 2003.26
Cubit states that to implement the deliverability requirements of Order No. 2003, NYISO
and the New York Transmission Owners filed a deliverability plan with the Commission
on October 5, 2007, which, among other things, proposed to grandfather projects prior to
Class Year 2007 from the then-proposed CRIS requirements. Cubit states that, when
the Commission accepted NYISO’s grandfathering rules, the Commission explicitly
acknowledged that it should protect the settled expectations of developers who
already made economic commitments to develop projects relying on existing tariffs
and that those developers should not be subject to additional requirements and costs
retroactively.27 Cubit asserts that the proposed transition rule achieves the same
balance as was found in the subsequent deliverability plan filed by NYISO and the
New York Transmission Owners’ in compliance with the Guidance Order, i.e., the
proposed transition rule would apply only to limited and narrowly defined projects,
including those projects that complete all necessary interconnection studies and execute
an interconnection agreement with the interconnecting utility.28 Multiple Intervenors add
that, in the Guidance Order, the Commission expressly rejected requests by some market
participants to require then-existing generators to be tested for deliverability when it
approved the 2007 deliverability plan.29
25 Cubit Comments at 12.
26 Id. at 7 (citing Standardization of Generator Interconnection Agreements and
Procedures, Order No. 2003, FERC Stats. & Regs. ¶ 31,146 (2003), order on reh’g,
Order No. 2003-A, FERC Stats. & Regs. ¶ 31,160, order on reh’g, Order No. 2003-B,
FERC Stats. & Regs. ¶ 31,171 (2004), order on reh’g, Order No. 2003-C, FERC Stats.
& Regs. ¶ 31,190 (2005), aff’d sub nom. Nat’l Ass’n of Regulatory Util. Comm’rs v.
FERC, 475 F.3d 1277 (D.C. Cir. 2007), cert. denied, 552 U.S. 1230 (2008)).
27 Id. at 8-9 (citing New York Independent System Operator, Inc., 122 FERC ¶ 61,267, at P 65 (2008) (Guidance Order)).
28 Id. (citing New York Independent System Operator, Inc. 126 FERC ¶ 61,046, at P 115 (2009)).
29 Multiple Intervenors Comments at 6 (citing Guidance Order, 122 FERC ¶ 61,267 at PP 63, 65).
Docket No. ER16-1213-000- 9 -
19. On the other hand, IPPNY challenges NYISO’s proposed transition rule.30 IPPNY
states that neither the amount nor the location of the capacity to which the transition
period would apply has been identified. However, given the results of NYISO’s recent
capacity zone studies, IPPNY asserts that allowing resources that have not shown that
they are deliverable to sell capacity in the NYISO markets could threaten the reliability of
the NYISO system because their capacity may not be deliverable to loads in their
respective sub-zones. Moreover, IPPNY argues that NYISO’s proposed transition rule
would unfairly diminish the value of resources that have demonstrated their deliverability
and, in some cases, have incurred significant costs to obtain their CRIS rights.31
20. Additionally, IPPNY argues that the Commission should reject NYISO’s proposed
transition rule because it is premised on NYISO’s flawed interpretation of its tariff.
According to IPPNY, NYISO’s tariff is already clear that all ICAP suppliers must obtain
CRIS for the amount of MWs they wish to sell from their facilities into the ICAP market
by satisfying the NYISO Deliverability Interconnection Standard before they may make
such sales.32
21. IPPNY argues that NYISO’s attempt to draw an analogy to the grandfathering rule
is inapt. IPPNY contends that the grandfathered resources are permitted to hold their
CRIS rights only if they do not have a continuous period of three years where they do not
offer ICAP to the NYISO market or participate in bilateral transactions. IPPNY contends
that assuming, arguendo, that the grandfathering rule could be read to extend to non-
jurisdictional interconnections, to the extent any of these resources interconnected prior
to the 2007 Class Year, they are no longer able to apply the grandfathering rule because
their rights to obtain and maintain CRIS terminated when they did not offer ICAP or
participate in bilateral transactions for their excess generation capability after servicing
host load for three or more years.
30 IPPNY Protest at 2-3.
31 Id. at 5. For example, IPPNY states that the CPV Valley project was required to fund $14 million in System Deliverability Upgrades to be found deliverable. Id. (citing Class Year 2011 Facilities Studies System Deliverability Study: Third Round Addendum, NYISO (Sept. 24, 2013), at 3).
32 Id. at 6 (citing NYISO Services Tariff § 5.12.8; NYISO OATT, Attachment S § 25.7.4).
Docket No. ER16-1213-000- 10 -
22. IPPNY also disagrees with NYISO’s assertion that the proposed transition rule
treats Behind-the-Meter Resources comparably to pre-2007 Class Year facilities with
respect to CRIS rights. IPPNY contends that the two classes of resources are not
comparable given that the facilities that were operating prior to the 2007 Class Year and
that were grandfathered had already been selling ICAP on the bulk system for many
years. IPPNY states that, moreover, when NYISO initially proposed its NYISO
Deliverability Interconnection Standard, it performed an extensive analysis that showed
that the system was fully deliverable with the existing resources. In contrast, IPPNY
states, the resources to which the transition rule would apply do not currently have CRIS
rights, were not included in NYISO’s 2006 deliverability study, and have never otherwise
been studied for deliverability. According to IPPNY, they also have never been modeled
as part of the system in the deliverability studies that have been applied to units seeking
CRIS rights since 2007.33
23. IPPNY requests that the Commission direct NYISO to perform a transition-
targeted deliverability study to allow the resources in question to demonstrate whether they are deliverable. IPPNY proposes that NYISO could perform a Behind-the-Meter Resource transition Class Year Study in which the existing Behind-the-Meter Resources would be tested against the assumptions from the final Class Year 2015 studies to
determine whether they cause a deliverability problem. IPPNY states that any Behindthe-Meter Resource that is demonstrated to be deliverable would be granted CRIS rights and allowed to sell ICAP and those that are deemed to not be deliverable would be
required to enter a future Class Year study.
24. In its answer, NYISO contends that IPPNY’s claim that “NYISO’s proposed
transition rule would unfairly diminish the value of resources that have demonstrated
their deliverability” is unsupported, arguing that the purpose of the proposed transition
rule is to provide comparable treatment between Behind-the-Meter Resources and
traditional generators. NYISO explains that, when it proposed the currently-effective
provisions in section 25.9.3.1 of Attachment S to the OATT, Retaining CRIS Status,
it proposed that the new deliverability requirement be applied to projects in Class
Year 2007 and thereafter.34 NYISO states that its proposal included the grandfathering
rule because of concerns about applying a new standard to facilities retroactively.35
NYISO clarifies that, under the grandfathering rule, existing generators were given CRIS
based on the demonstrated maximum capability over a five year period, regardless of
33 Id. at 8.
34 NYISO Answer at 3.
35 Id. at 3-4.
Docket No. ER16-1213-000- 11 -
whether that capacity was deliverable. NYISO states that the original set of generators subject to the grandfathering rule were neither determined to be deliverable nor actually deliverable under the NYISO Deliverability Interconnection Standard that the
Commission ultimately accepted.36
25. NYISO explains that the proposed transition period is narrow in scope, allowing
Behind-the-Meter Resources only a 60-day window to request CRIS and only if they
meet certain specific requirements. NYISO points out that this is far more stringent than
the grandfathering rule, which set no deadline to request CRIS.37 NYISO contends that
the transition rule is intended to provide a fair transition mechanism to existing resources
that did not know when they were built that NYISO would propose this new
deliverability requirement for all generators seeking to become ICAP suppliers.38
NYISO finds IPPNY’s assertion that Behind-the-Meter Resources should pay for System
Deliverability Upgrades if they are found to be undeliverable is inappropriate,
impractical, and contrary to the treatment afforded to the original set of grandfathered
generators.39
26. In its answer, Cubit contends that IPPNY’s assertion that the transition rule could
shift significant and unanticipated costs to new developers is unfounded. Cubit argues
that costs accruing to participants in the following year’s Class Year Study would not be
unanticipated, as the universe of projects grandfathered under the transition rule will
already have been established. Cubit states that, to the extent that those interconnections
will create additional costs to upgrade the system, those costs will be partially, if not
36 Id. at 4-5.
37 Id. at 5. NYISO states that IPPNY’s argument that if subject to the
grandfathering rule, a facility has lost its CRIS if it has not participated in the market for
three years ignores the plain language of the tariff. NYISO explains that the
grandfathering provisions in section 25.9.3 did not require all pre-Class Year 2007
generators to come forward immediately to request CRIS if entitled to obtain CRIS under
the grandfathering provisions. Moreover, NYISO explains further that the three-year
“deactivation rule” included in section 25.9.3.3, providing that a facility’s CRIS
terminates after it is “CRIS-inactive” for three years, only applies once a generator has
obtained CRIS.
38 Id. at 5.
39 Id.
Docket No. ER16-1213-000- 12 -
fully, mitigated by the payments the projects must make to the interconnecting utilities to ensure they can safely interconnect to the system.40
27. Cubit also asserts that IPPNY’s reference to requirements imposed on
pre-Class Year 2007 grandfathered projects to retain their CRIS rights after the fact is
irrelevant to whether the transition rule is appropriate. Cubit states that, while the
2007 grandfathering rule imposes additional limitations on grandfathered projects going
forward, the grandfathering itself already has occurred. Cubit states that, for the purposes
of creating a transition rule to grandfather projects that are not currently subject to
NYISO interconnection procedures, the existence of this post-grandfathering limitation
has no bearing on whether a generator should be grandfathered initially under the
transition rule.41
28. Contrary to IPPNY, Cubit also contends that the 2007 grandfathering rule was not applicable only to projects in service as of the date of the rule. Rather, Cubit contends, the 2007 grandfathering rule provided mechanisms for granting CRIS rights to projects that had not yet begun selling ICAP in the NYISO market.42
29. NYISO asserts that IPPNY incorrectly argues that NYISO’s existing tariff
already requires non-jurisdictional facilities to satisfy the NYISO Deliverability
Interconnection Standard. NYISO asserts that, currently, the only way to subject
facilities to the NYISO Deliverability Interconnection Standard is through NYISO’s
interconnection process, which applies only to large facilities and to certain small
facilities (both of which are connecting to jurisdictional transmission or distribution, per
Order Nos. 2003 and 2006).43 Further, NYISO argues that IPPNY misinterprets the
40 Cubit Answer at 9-10.
41 Id. at 6-7.
42 Id. at 7-8.
43 NYISO Answer at 6 (citing Standardization of Generator Interconnection
Agreements and Procedures, Order No. 2003, FERC Stats. & Regs. ¶ 31,146 (2003)
(Order No. 2003), order on reh’g, Order No. 2003-A, FERC Stats. & Regs. ¶ 31,160,
order on reh’g, Order No. 2003-B, FERC Stats. & Regs. ¶ 31,171, at P7 (2004), order on
reh’g, Order No. 2003-C, FERC Stats. & Regs. ¶ 31,190 (2005), aff'd sub nom. Nat’l
Ass’n of Regulatory Util. Comm’rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007);
Standardization of Small Generator Interconnection Agreements and Procedures,
Order No. 2006, FERC Stats. & Regs. ¶ 31,180 (2005), order on reh’g,
Order No. 2006-A, FERC Stats. & Regs. ¶ 31,196 at PP 481 and 487 (2005)).
Docket No. ER16-1213-000- 13 -
language of section 5 of the Market Administration and Control Area Services Tariff
(MST) to mean that all generators must have obtained CRIS to become ICAP suppliers.
NYISO explains that MST section 5.12.1 only requires that they comply with the
applicable deliverability standards (of which there are none for non-jurisdictional
facilities).44
30. NYISO asserts that IPPNY’s argument that the proposed transition rule may
adversely affect reliability is unsupported. NYISO explains that a capacity resource
deemed “fully deliverable” or having a certain MW level of CRIS rights does not give
the facility an absolute ability to inject that MW level; rather, it permits the unit to
participate in the NYISO’s ICAP market. NYISO also contends that a limitation on the
“deliverability” of the transmission system does not necessarily imply that reliability is
jeopardized and that the bulk power system cannot be operated within reliability criteria
even if some generation cannot be delivered to some segment of load.45 According to
Cubit, under the proposed transition rule, projects are required to have completed all
required interconnection studies and have an effective interconnection agreement by the
effective date of the proposed tariff revisions in order to obtain CRIS rights. Cubit
states that those interconnection studies will already have been performed by the
interconnecting utility to ensure that the new generation can safely interconnect to the
electric system without compromising or otherwise degrading system reliability.
31. NY DG states that it does not oppose NYISO’s proposal but opposes the proposed effective date of May 19, 2016 for the transition period, arguing that all provisions should go into effect on the same day as the October 2016 flexible effective date. NY DG
argues that, by requiring an October 2016 effective date, generators may have until
October 2016 to meet the transition rules, and if they do not, they may prepare to enter
the next open Class Year. NY DG asserts that, because these resources may not be aware of the change, they would only have three days from the May 16, 2016 requested
issuance date for the order to the May 19, 2016 effective date in order to meet the
transition rule. NY DG asserts that an October 2016 effective date for the entire proposal would also allow NYISO to get its forms, rules, and procedures in place to process these
requests in an efficient manner and to allow generators to understand the implications and rules for participating in a Class Year process.46
44 Id. at 6-7 (citing MST § 5.12.1).
45 Id. at 7 (citing New York Independent System Operator, Inc., Compliance Filing and Request for Further Extension of Time, Docket No. ER04-449-005 at 5 (Feb. 7, 2005)).
46 NY DG Protest at 4-5.
Docket No. ER16-1213-000- 14 -
32. In response, NYISO states that its proposal provides 60 days, not three days,
within which to exercise these rights.47 NYISO also contends that NY DG appears to
misunderstand the Class Year entry requirements. NYISO explains that Behind-the-
Meter Resources do not need to meet a regulatory milestone or have an Operating
Committee-approved System Reliability Impact Study to enter a Class Year
Deliverability Study unless they are subject to the NYISO’s interconnection procedures
and required to enter a Class Year Study. NYISO explains that those requirements only
apply to facilities that are subject to the full Class Year Study. NYISO clarifies that a
facility entering a Class Year Study solely for the purpose of requesting CRIS is subject
only to an executed study agreement and a $50,000 deposit.48 NYISO asserts that it is
unclear how these requirements would be so complicated that Behind-the-Meter
Resources would require additional time to understand the requirements of participating
in a Class Year Deliverability Study.
3.Effective Date for Remaining Tariff Provisions
33.ReEnergy requests that the Commission order the Remaining Tariff Revisions to
be effective no later than October 15, 2016.49 ReEnergy argues that the lack of a firm effective date continues the uncertainty for Behind-the-Meter Resources, asserting that the effective date could be even further delayed.
34. In its answer, NYISO asserts that ReEnergy’s request for a firm effective date is
inconsistent with NYISO’s experience with deploying major software upgrades. NYISO
explains that implementation of the Remaining Tariff Revisions requires significant
changes to numerous software applications, including testing and processes NYISO
utilizes. NYISO explains that the exact date of that software deployment cannot be
finalized at this time, but it still expects to integrate Behind-the-Meter Resources in a
software release in October 2016.50 NYISO contends that the lack of a firm effective
date should not aggravate or prolong uncertainty because it has been informing
stakeholders of the expected implementation timeline over several stakeholder meetings.
NYISO asserts that the Commission has granted flexible effective dates in similar
47 NYISO Answer at 7-8 (citing Proposed OATT § 25.9.3.3 and 25.9.3.4.1).
48 Id. (citing Proposed OATT § 30.8.1).
49 ReEnergy Comments at 4.
50 NYISO Answer at 8-9.
Docket No. ER16-1213-000- 15 -
circumstances when the proposed tariff revisions required further development or
coordination after filing.51
III.Discussion
A.Procedural Matters
35.Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2015), the notice of intervention and timely, unopposed motions to
intervene serve to make the entities that filed them parties to this proceeding.
36.Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R.
§ 385.213(a)(2), prohibits an answer to a protest unless otherwise ordered by the
decisional authority. We accept Cubit’s and NYISO’s answers because they have
provided information that has assisted us in our decision-making process.
B.Commission Determination
37.The Commission accepts this filing subject to condition, as discussed below.52
Specifically, the Commission accepts subject to condition certain of NYISO’s proposed revisions to its OATT and Services Tariff,53 to become effective May 19, 2016, and the Remaining Tariff Revisions, to become effective on or after October 1, 2016, subject to the condition that NYISO submit a compliance filing with no less than two weeks’ notice of the actual effective date.
51 Id. at 10-11 (citing New York Indep. Sys. Operator, Inc., 146 FERC ¶ 61,097, at P 34 (2014); New York Indep. Sys. Operator, Inc., 153 FERC ¶ 61,158, at 1 (2015); New York Indep. Sys. Operator, Inc., Docket No. ER15-485-000, at 2 (Jan. 15, 2015) (unpublished letter order).
52 The Commission can revise a proposal filed under section 205 of the FPA as long as the filing utility accepts the change. See City of Winnfield v. FERC, 744 F.2d 871, 875-77 (D.C. Cir. 1984). A utility is free to indicate that it is unwilling to accede to the Commission’s conditions in this order by withdrawing its filing.
53 See supra Note 3.
Docket No. ER16-1213-000- 16 -
38. We recognize the potential benefits of reducing obstacles to using excess capacity of Behind-the-Meter Resources to support New York’s grid.54 NYISO’s proposal
advances this goal, as Behind-the-Meter Resources that meet NYISO’s eligibility
requirements will be permitted to bid energy and capacity in a comparable way to other suppliers and receive payments if they are dispatched. Their participation should
improve the competiveness, efficiency, and reliability of those markets.
39. NYPSC asserts that the mitigation of Behind-the-Meter Resources is unnecessary. NYPSC, however, has not provided any support for its assertion. Therefore, we dismiss NYPSC’s comment on this issue.
40. We also accept NYISO’s proposed transition rule. NYISO’s proposed transition
rule closes a loophole identified by NYISO. Currently, generators that are connected to
non-jurisdictional facilities are not required to satisfy the NYISO Deliverability
Interconnection Standard in order to obtain CRIS and sell capacity into the NYISO
markets. The instant proposal closes that loophole but also provides a limited window of
time for existing resources that have already made their investment decisions based upon
NYISO’s existing tariff to obtain CRIS without having to enter a Class Year Study and
satisfy the deliverability requirements proposed herein in order to continue to sell
capacity into the NYISO market. We find that the proposed limited 60-day transition
period is narrow in scope and reasonable given the substantial investment decisions
developers have made based on the existing tariff rules and likely harm they would face
without such transition period.
41. We find that the concerns raised by IPPNY regarding reliability are unsupported.
As stated above, the resources that will be grandfathered under the proposed transition
rule are not currently required to satisfy the requirements of the NYISO Deliverability
Interconnection Standard in order to sell capacity into the NYISO market. Also,
reliability concerns will be reasonably mitigated by the limited duration of the transition
period and the requirement that any grandfathered projects must have completed all
required interconnection studies and have an effective interconnection agreement by
May 19, 2016 in order to obtain CRIS. The transition rule is also consistent with the
manner in which existing generators were grandfathered when the NYISO Deliverability
Interconnection Standard was first implemented, as those existing generators were not
required to be tested for deliverability.55 For these reasons, we accept the transition rule.
54 Multiple Intervenors Comments at 1-2.
55 Guidance Order, 122 FERC ¶ 61,267 at PP 52, 63, 65.
Docket No. ER16-1213-000- 17 -
42. We find that NYISO’s proposed length of the transition period is reasonable.
Under NYISO’s proposal, the transition period would begin May 19, 2016 and continue
for 60 days thereafter. Parties, therefore, would have 60 days to exercise rights in order
to comply with the transition rule and obtain CRIS rights, as opposed to three days, as
NY DG contends. Further, as NYISO explains, ending the transition period within
60 days is necessary to allow NYISO to reflect CRIS awarded under the transition period
in the base case for its next Class Year Study and potential Behind-the-Meter resources
that are not subject to the transition rule to enter the upcoming Class Year Deliverability
Study. In light of the foregoing, we find that NYISO’s proposed 60-day transition period
is reasonable.
43. Regarding the effective date of the Remaining Tariff Revisions, NYISO states that
it is currently unable to provide such a date and has agreed to submit a compliance filing
at least two weeks prior to the proposed effective date that will specify the date on which
the provisions will take effect. However, to provide greater certainty to market
participants as to when implementation will begin, we require that, in the event NYISO is
unable to implement the Remaining Tariff Revisions during the fourth quarter of 2016,
NYISO file with the Commission by December 1, 2016 a status report on its software
development, including the reason for the delay in implementation, and the new expected
implementation date.56 In the meantime, we expect that NYISO will continue to keep
market participants informed of its progress towards implementation through its
stakeholder processes. Accordingly, we accept NYISO’s Remaining Tariff Revisions, to
become effective on or after October 1, 2016, subject to the condition that NYISO submit
a compliance filing with no less than two weeks’ notice of the actual effective date.57
The Commission orders:
(A) NYISO’s proposed tariff revisions are hereby accepted, subject to
condition, to become effective as discussed in the body of this order. NYISO is hereby
directed to submit a compliance filing with at least two weeks’ notice of the actual
effective date of the Remaining Tariff Revisions, as discussed in the body of this order.
56 The report will be for informational purposes and will not be noticed for comment or subject to Commission order.
57 We find good cause to grant NYISO’s request for waiver of the prior notice requirements of section 35.3 of the Commission's Rules and Regulations, 18 C.F.R. § 35.3, to permit the filing to be made more than 120 days in advance of the proposed effective date because this will allow NYISO additional time to develop the software changes necessary to implement its proposed revisions.
Docket No. ER16-1213-000- 18 -
(B) If NYISO is unable to implement the Remaining Tariff Revisions during
the fourth quarter of 2016, NYISO is directed to file with the Commission December 1,
2016 a status report on its software development, including the reason for the delay in
implementation, and the new expected implementation date, as discussed in the body of
this order.
By the Commission. ( S E A L )
Nathaniel J. Davis, Sr.,
Deputy Secretary.
