165 FERC ¶ 61,149
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Cheryl A. LaFleur and Richard Glick.
PJM Interconnection, L.L.C.Docket No. ER18-2442-000
New York Independent System Operator, Inc.
ORDER GRANTING REQUEST FOR WAIVER
(Issued November 19, 2018)
On September 17, 2018, PJM Interconnection, L.L.C. (PJM) and New York
Independent System Operator, Inc. (NYISO) (collectively, the RTOs) submitted a request
for temporary, limited waiver of sections 7.1.2, 8.1, and 8.2 of Schedule D to the Joint
Operating Agreement Among and Between NYISO and PJM (JOA).1 The RTOs state
that the waiver is required to authorize redispatch of generation in PJM to mitigate post-
contingency overload of transmission equipment on the NYISO side of the East Towanda
- Hillside 230 kV transmission line (the East Towanda - Hillside Tie Line).2 As
discussed below, we grant the request for waiver, to become effective one day after the
date of filing on September 18, 2018, and to expire on the earliest of: (1) the date on
which the Commission approves JOA revisions proposed in a Federal Power Act (FPA)
section 2053 filing submitted by the RTOs to implement a long-term solution to address
the concerns identified in the waiver request to become effective; (2) the date on which
the RTOs jointly request the waiver to end; or (3) September 17, 2019. Additionally, we
require the RTOs to submit quarterly reports regarding the status of JOA revisions to
implement a long-term solution to address the concerns identified in the waiver request,
as discussed below.
1 NYISO, Open Access Transmission Tariff (OATT), § 35, Attach. CC (0.0.0).
2 RTOs Sept. 17, 2018 Waiver Request at 5.
3 16 U.S.C. § 824d (2012).
Docket No. ER18-2442-000- 2 -
I.Background
The JOA sets forth the rules for coordination between the RTOs to allow any
transmission constraints that are significantly impacted by generation dispatch changes
and/or phase angle regulator control actions in both markets to be jointly managed in the security-constrained economic dispatch models of both RTOs.4 These transmission
constraints may exist in either market and are designated in the JOA as Market-to-Market (M2M) Flowgates5 for M2M coordination.6 The RTOs are not authorized to enter into
M2M coordination to manage congestion at transmission constraints that are not
designated as M2M Flowgates. The JOA describes the study process that will be used to determine which constraints should be jointly coordinated as M2M Flowgates.7 The
studies determine if a generator located in the Non-Monitoring RTO8 has a significant
impact on a studied constraint located in the Monitoring RTO.9 The RTOs must mutually agree to the introduction of each M2M Flowgate, and may mutually agree to add a M2M Flowgate that does not meet the specified study criteria.
The RTOs state that, as a result of the addition of the 850 MW combined cycle
Liberty (Asylum) Unit (Liberty Asylum Unit) in PJM’s footprint, contingency overloads
on the East Towanda - Hillside Tie Line between PJM and NYISO have occurred, and
will continue to occur, when the Liberty Asylum Unit is operating and there are
transmission outages in the area.10 According to the RTOs, the Limiting Element11 is a
4 NYISO, OATT, § 35.23, Attach. CC, Schedule D, § 1 (6.0.0).
5 M2M Flowgate is defined as a flowgate where constraints are jointly monitored and coordinated by the RTOs. See NYISO, OATT, § 35.2.1, Attach. CC (8.0.0).
6 NYISO, OATT, § 35.23, Attach. CC, Schedule D, § 2 (6.0.0).
7 NYISO, OATT, § 35.23, Attach. CC, Schedule D, § 3 (6.0.0).
8 Non-Monitoring RTO is defined as the entity that does not have operational control of a M2M Flowgate. See NYISO, OATT, § 35.2.1, Attach. CC (8.0.0).
9 Monitoring RTO is defined as the entity that has operational control of a M2M Flowgate. See NYISO, OATT, § 35.2.1, Attach. CC (8.0.0).
10 RTOs Sept. 17, 2018 Waiver Request at 2.
11 Limiting Element is defined as the element that is either operating at its
appropriate rating, or would be after a limiting contingency, such as an unexpected
failure or outage of a system component. “Thus, the Limiting Element establishes a
Docket No. ER18-2442-000- 3 -
New York State Electric and Gas Corporation (NYSEG) wave trap at Hillside on the
NYISO side of the East Towanda - Hillside Tie Line. The RTOs state that PJM has
previously dispatched down the Liberty Asylum Unit to manage overloads on the line, but later determined that such actions violated PJM’s Open Access Transmission Tariff (PJM Tariff), because the East Towanda - Hillside Tie Line is not a coordinated M2M Flowgate under the JOA.12 The RTOs state that PJM self-reported this potential tariff violation to the Commission.13
The RTOs state that, while adding the East Towanda - Hillside Tie Line as a
M2M Flowgate in the JOA would allow PJM to redispatch generation to address
constraints on the NYISO side of the line, the current provisions of section 7.1.2 of
Schedule D of the JOA would prevent the RTOs from consistently controlling the post-
contingency overload.14 This is because M2M coordination is limited to only those times when the Non-Monitoring RTO’s15 market flow is greater than its M2M Entitlement16 for the constrained M2M Flowgate.17
II.Waiver Request
The RTOs request waiver of three specific provisions of the JOA “and any other
provisions of the JOA that may be necessary.”18 The RTOs contend that waiver of these
system limit.” NERC, Glossary of Terms Used in NERC Reliability Standards (July
2018), http://www.nerc.com/files/glossary_of_terms.pdf (NERC Glossary).
12 RTOs Sept. 17, 2018 Waiver Request at 3.
13 Id.
14 Id. at 4.
15 Once the East Towanda - Hillside Tie Line is a M2M Flowgate and available
for coordination, the RTOs expect that PJM will be the Monitoring RTO and NYISO will be the Non-Monitoring RTO for that flowgate. Id. at 5 n.8.
16 M2M Entitlement is defined as the Non-Monitoring RTO’s share of a M2M Flowgate’s total capability to be used for settlement purposes. Pursuant to section 6 of Schedule D of the JOA, M2M Entitlements are calculated based on, among other things, historic dispatch patterns. See NYISO, OATT, § 35.2.1, Attach. CC (8.0.0).
17 RTOs Sept. 17, 2018 Waiver Request at 2.
18 Id. at 1.
Docket No. ER18-2442-000- 4 -
provisions would allow the RTOs to add the East Towanda - Hillside Tie Line as a M2M
Flowgate and protect the reliability of the bulk electric system (BES) by permitting PJM
to conduct redispatch operations to control flows to the most restrictive rating on the
NYISO side of the line without violating the PJM Tariff. Specifically, the RTOs request
waiver of: (1) Section 7.1.2 of Schedule D of the JOA to allow the RTOs to invoke M2M
coordination even when the Non-Monitoring RTO’s market flow is less than its M2M
Entitlement for the East Towanda - Hillside Tie Line when it is constrained; and
(2) sections 8.1 and 8.2 of Schedule D of the JOA to temporarily exclude from M2M
real-time redispatch settlements any redispatch events directly tied to the management of the East Towanda - Hillside Tie Line.19
The RTOs request that the Commission make the waiver effective September 17,
2018, and expire the earliest of: (1) the date on which the Commission approves JOA
revisions proposed in an FPA section 205 filing submitted by the RTOs to implement a
long-term solution to address the concerns identified in the waiver request to become
effective; (2) the date on which the RTOs jointly request the waiver to end; or
(3) September 17, 2019.20
The RTOs state that the requested waiver conforms to the Commission’s
applicable criteria and is in the public interest.21 First, the RTOs state that the need for
the waiver is based on a good faith objective to permit PJM to redispatch generation to
control constraints on the NYISO side of the East Towanda - Hillside Tie Line and
protect the reliability of the BES.22 Second, the RTOs contend that the requested waiver
19 Id. at 5.
20 Id. at 6.
21 RTOs Sept. 17, 2018 Waiver Request at 7 & n.9 (citing New York Independent
System Operator, Inc., 139 FERC ¶ 61,108, at P14 (2012); PJM Interconnection, LLC,
137 FERC ¶ 61,184, at P 13 (2011); PJM Interconnection, LLC, 137 FERC ¶ 61,109,
at P 11 (2011); PJM Interconnection, L.L.C., 135 FERC ¶ 61,069, at P 8 (2011); ISO-
New England, Inc., 134 FERC ¶ 61,182, at P 8 (2011); California Independent System
Operator Corp., 132 FERC ¶ 61,004, at P 10 (2010); Hudson Transmission Partners,
LLC, 131 FERC ¶ 61,157, at P 10 (2010); Pittsfield Generating Co., L.P., 130 FERC
¶ 61,182, at PP 9-10 (2010); ISO New England Inc. - EnerNOC, Inc., 122 FERC ¶ 61,297
(2008); Central Vermont Public Service Corp., 121 FERC ¶ 61,225 (2007); Waterbury
Generation LLC, 120 FERC ¶ 61,007 (2007); Acushnet Co., 122 FERC ¶ 61,045 (2008)).
22 The RTOs additionally state that the redispatching actions are consistent with applicable reliability standards such as North American Electric Reliability Corporation (NERC) TOP-001-4, R18. RTOs Sept. 17, 2018 Waiver Request at 3.
Docket No. ER18-2442-000- 5 -
is limited in scope because it is for a duration of no greater than 365 days, and limited to securing the East Towanda - Hillside Tie Line.23 Third, the RTOs argue that the
requested waiver will remedy the concrete problem of contingency overloads on the East Towanda - Hillside Tie Line resulting from operation of the Liberty Asylum Unit while there are transmission outages in the area.24 Finally, the RTOs contend that granting the waiver will not harm third parties because it will enable them to more efficiently protect system reliability and at less cost by avoiding the use of less desirable and potentially harmful measures to protect the reliability of the BES.25
III. Notice of Filing and Responsive Pleadings
Notice of the filing was published in the Federal Register, 83 Fed. Reg. 48,301
(2018), with interventions and protests due on or before October 9, 2018. Panda Power
Generation Infrastructure Fund, LLC (Panda); NRG Power Marketing LLC; New York
Transmission Owners;26 FirstEnergy Service Company; and American Municipal Power,
Inc. filed timely motions to intervene. Monitoring Analytics, LLC, in its capacity as the
Independent Market Monitor for PJM (IMM), and Public Service Electric and Gas
Company filed out-of-time motions to intervene. On October 9, 2018, Panda filed a protest. On October 25, 2018, the RTOs filed an answer to Panda’s protest.
A.Panda’s Protest
Panda contends that the RTOs have not satisfied three of the Commission’s four conditions for granting waiver requests.27
First, with regard to the limited in scope condition, Panda asserts that the RTOs’
request to waive “any other provisions of the JOA that may be necessary,” in addition to
23 Id.
24 Id. at 7-8.
25 Id. at 8.
26 New York Transmission Owners include 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.
27 Panda Oct. 9, 2018 Protest at 2, 4-8.
Docket No. ER18-2442-000- 6 -
sections 7.1.2, 8.1, and 8.2 of the JOA, is not limited in scope.28 Panda argues that the RTOs’ request would allow them the authority to ignore each provision of the JOA as they see fit.29
Second, as to addressing a concrete problem, Panda expresses concern that
granting the waiver request will not be sufficient to correct what it believes to be the
underlying concrete problem: poorly-designed transmission protocols between PJM and NYISO.30 Panda argues that the transmission planning protocols between the
Midcontinent Independent System Operator, Inc. (MISO) and PJM are an example of more effective transmission planning protocols that would allow for the identification and resolution of issues such as inadequately-sized wave traps.31
Third, Panda contends that the waiver request—and its preceding PJM Tariff
violation—constitute harm to third parties in the form of increased electricity production costs and environmental damages.32 However, Panda states, in the absence of a record of the time and duration of the PJM Tariff violation, it has been unable to quantify the harm it has experienced.33 For this reason, Panda requests that the RTOs be required to notify the Commission and their stakeholders of any violation of provisions of the JOA for
which the waiver applies by close of business on the day following the violation.34 Panda also requests that the RTOs be required to submit a report within 15 days of a violation detailing the time, duration, and cost of any redispatch.35
Panda argues that the Commission should grant a waiver limited to sections 7.1.2,
8.1, and 8.2 of the JOA. In addition to the reporting requirements requested above, Panda
28 Id. at 5 (citing RTOs Sept. 17, 2018 Waiver Request at 1).
29 Id.
30 Id. at 5-6.
31 Id. at 6 & n.10 (citing Midcontinent Indep. Sys. Operator, Inc., Rate Schedule 5, MISO-PJM Joint Operating Agreement, § 9.3 (40.0.0)).
32 Id. at 8.
33 Id. at 7-8.
34 Id. at 9.
35 Id. at 3-4, 9.
Docket No. ER18-2442-000- 7 -
requests that the Commission use its authority under section 206 of the FPA36 to direct the immediate replacement of the JOA’s transmission planning protocols.37 Panda states that in the absence of efficient market-to-market planning protocols, the harm to Panda, as well as to PJM and NYISO’s customers, will only continue.38
B.RTOs’ Answer
In their answer, the RTOs argue that Panda mischaracterizes the waiver request as a “broad unlimited waiver” because the RTOs request waiver of only sections 7.1.2, 8.1, and 8.2 of Schedule D of the JOA.39 The RTOs state that the catchall phrase “and any other provisions of the JOA that may be necessary” was included only to allow the
Commission to grant further waivers as it deemed necessary. The RTOs formally
withdraw the phrase to ensure that there is no further misunderstanding.40
The RTOs argue that Panda’s requested reporting requirements are overly
burdensome and unnecessary because Panda will be able to obtain the information
requested in its protest through the normal course of business. The RTOs explain that
any instance of M2M redispatch for any M2M Flowgate is already posted in real-time to
both RTOs’ limiting constraints postings located on their respective Open Access Same-
Time Information System (OASIS) sites. The RTOs state that the OASIS postings
describe the time, duration, and shadow price associated with M2M redispatch events.41
Moreover, the RTOs explain that Panda, and any other owners of redispatched resources,
will receive additional relevant information through the normal PJM Tariff settlements
and billing procedures, allowing them to calculate their redispatch costs.42 The RTOs
detail a four-step procedure that Panda or other resource owners could use to calculate
their redispatch costs.43
36 16 U.S.C. § 824e (2012).
37 Panda Oct. 9, 2018 Protest at 4, 10.
38 Id. at 8.
39 RTOs Oct. 24, 2018 Answer at 1, 4.
40 Id. at 4.
41 Id. at 5.
42 Id. at 6.
43 Id. at 6-7.
Docket No. ER18-2442-000- 8 -
The RTOs contend that Panda’s request for the Commission to use its authority
under section 206 of the FPA to direct the RTOs to replace the JOA’s transmission
planning provisions is outside the scope of the instant proceeding because transmission
planning provisions are distinct from M2M coordination provisions. Nevertheless, the
RTOs state that they are committed to continually improving transmission planning
coordination along their common border, and across other RTOs in the region, through
the Amended and Restated Northeast ISO/RTO Planning Coordination Protocol between
the RTOs and ISO New England Inc., and the Joint ISO/RTO Planning Committee and
the Interregional Planning Stakeholder Advisory Committee (IPSAC).44
IV. Discussion
A.Procedural Matters
Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,45 the timely, unopposed motions to intervene serve to make the entities that filed them parties to this proceeding.
Pursuant to Rule 214(d) of the Commission’s Rules of Practice and Procedure,46 the Commission will grant the IMM’s and Public Service Electric and Gas Company’s late-filed motions to intervene given their interest in the proceeding, the early stage of the proceeding, and the absence of undue prejudice or delay.
Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure47 prohibits an answer to a protest unless otherwise ordered by the decisional authority. We will accept the RTOs’ answer because it has provided information that assisted us in our decision-making process.
B.Commission Determination
For the reasons discussed below, we grant the request for waiver effective one day
after the date of filing on September 18, 2018. The Commission has granted waiver of
tariff provisions where: (1) the applicant acted in good faith; (2) the waiver is of limited
44 Id. at 7-8.
45 18 C.F.R. § 385.214 (2018).
46 Id. § 385.214(d).
47 Id. § 385.213(a)(2).
Docket No. ER18-2442-000- 9 -
scope; (3) the waiver addresses a concrete problem; and (4) the waiver does not have undesirable consequences, such as harming third parties.48
We find that the RTOs’ need for the waiver is based on a good faith objective to
permit PJM to redispatch its generation to manage the overloaded wave trap on the
NYISO side of the East Towanda - Hillside Tie Line and protect the reliability of the
BES in real-time. Moreover, it appears that the RTOs did not anticipate the need to enter
into M2M coordination when the Non-Monitoring RTO’s market flow is less than its
entitlement when they entered into the JOA, and thus have requested waiver of
section 7.1.2 of Schedule D of the JOA in good faith while continuing to work toward a
long-term solution.
We also find that the requested waiver is limited in scope. The RTOs request
waiver of three specific sections of the JOA—sections 7.1.2, 8.1, and 8.2 of Schedule
D—necessary to address the concrete problem discussed below.49 Moreover, the RTOs
request the waiver for a period of no longer than one year while they work toward a long-
term solution.
In addition, we find that the requested waiver addresses a concrete problem by
enabling M2M coordination to allow PJM to initiate redispatch operations to manage
post-contingency overloads on the NYISO side of the East Towanda - Hillside Tie Line. We disagree with Panda’s argument that the requested waiver only addresses a symptom of a problem, and not the underlying problem of transmission planning along the RTOs’ common border. The specific M2M coordination issue that the RTOs identify is
appropriately concrete and will be addressed by the requested waiver. The broader issue of coordinated transmission planning between the RTOs is outside the scope of the
instant proceeding, which is limited to M2M coordination of transmission constraints on the East Towanda - Hillside Tie Line.
Finally, we find that the requested waiver will not have undesirable consequences,
such as harming third parties. While any manual redispatch actions taken to manage
transmission constraints within an RTO or between RTOs may result in additional
operating costs, we find that, in balancing competing considerations, those costs are
48 See, e.g., Midcontinent Indep. Sys. Operator, Inc., 154 FERC ¶ 61,059, at P 13
(2016).
49 We note that the RTOs withdrew their request for waiver of “any other
provisions of the JOA that may be necessary,” so we do not address Panda’s protest on this point. RTOs Oct. 24, 2018 Answer at 4.
Docket No. ER18-2442-000- 10 -
minimal when weighed against the costs of not executing the redispatch and continuing to jeopardize the reliability of the BES.50
Regarding Panda’s request that the Commission require the RTOs to provide
notice of JOA violations to which the waiver applies, and reports documenting the time,
duration, and cost of redispatch events,51 we are concerned that imposing this
requirement would place undue burden on the RTOs and produce little additional
valuable information. The procedure for calculating M2M coordination redispatch costs
outlined by the RTOs in their answer52 provides sufficient information to resource
owners that are redispatched as part of the M2M coordination process, including Panda.
However, because we agree that the RTOs have identified a problem that will continue
absent revisions to the JOA, we require the RTOs to submit quarterly reports regarding
the status of JOA revisions to implement a long-term solution to address the concerns
identified in the waiver request.53
For the reasons discussed above, we grant the waiver request, effective one day after the date of filing on September 18, 2018, and to expire on the earliest of: (1) the date on which the Commission approves JOA revisions proposed in an FPA section 205 filing submitted by the RTOs to implement a long-term solution to address the concerns identified in the waiver request to become effective; (2) the date on which the RTOs jointly request the waiver to end; or (3) September 17, 2019.
The Commission orders:
(A) The RTOs’ request for waiver of sections 7.1.2, 8.1, and 8.2 of Schedule D
of the JOA is hereby granted, effective September 18, 2018, as discussed in the body of
this order.
(B) The waiver granted in this order will expire on the earliest of: (a) the date on which the Commission approves JOA revisions proposed in an FPA section 205 filing submitted by the RTOs to implement a long-term solution to address the concerns
50 See, e.g., Southwestern Public Service Company, 153 FERC ¶ 61,020,
at P (2015) (“It is true that where a waiver may potentially harm third parties, the
Commission may consider whether there are beneficial considerations in granting the waiver that outweigh the harm.”).
51 Panda Oct. 9, 2018 Protest at 9-10.
52 RTOs Oct. 24, 2018 Answer at 6-7.
53 The reports will be for informational purposes and will not be noticed for comment or subject to Commission order.
Docket No. ER18-2442-000- 11 -
identified in the waiver request to become effective; (b) the date on which the RTOs jointly request the waiver to end; or (c) September 17, 2019.
(C) The RTOs are directed to submit quarterly reports, starting three months from the date of this order and continuing while the waiver is in effect, regarding the status of JOA revisions to implement a long-term solution to address the concerns identified in the waiver request, as discussed in the body of this order.
By the Commission. Commissioner McIntyre is not voting on this order. ( S E A L )
Kimberly D. Bose,
Secretary.
