155 FERC ¶ 61,243
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 System Operator, Inc.Docket Nos. ER14-2006-000
ER11-4338-002
ORDER ACCEPTING COMPLIANCE FILING
AND PARTIAL COMPLIANCE WITH ORDER NO. 745
(Issued June 3, 2016)
1. On June 17, 2013, Demand Response Supporters1 (Complainants) filed a
complaint (Complaint) against the New York Independent System Operator, Inc.
(NYISO) alleging that NYISO’s tariff provisions for its Day-Ahead Demand Response
Program (DADRP)2 discriminate against demand response facilitated by behind-the-
meter generation,3 in violation of the Federal Power Act (FPA), Order No. 745,4 and
1 Demand Response Supporters consist of: EnerNOC, Inc.; Viridity, Inc.;
Walmart Stores, Inc.; Comverge, Inc.; and EnergyConnect, a Johnson Controls Company.
2 NYISO’s DADRP is an economic demand response program pursuant to which a
demand response provider may offer into NYISO’s day-ahead energy market a quantity
of reduced electricity demand, a demand reduction, that is facilitated by a demand
response resource curtailing its load. A demand response provider may offer the demand
reduction of an individual demand response resource registered as a DADRP resource or
a group of demand response resources collectively registered as a single DADRP
resource.
3 “Behind-the-meter” generation refers to a generator located behind the retail
delivery point that can directly serve the host customer’s electrical demand in lieu of or in addition to electricity the customer takes through the NYISO grid.
4 Demand Response Compensation in Organized Wholesale Energy Markets,
Order No. 745, FERC Stats. & Regs. ¶ 31,322, order on reh’g, Order No. 745-A, 137
(continued ...)
Docket Nos. ER14-2006-000 andER11-4338-002- 2 -
other Commission orders and regulations. On November 22, 2013, the Commission
issued an order granting, in part, and denying, in part, the Complaint and directing
NYISO to make a compliance filing.5 On May 21, 2014, NYISO submitted its
compliance filing (May 2014 Filing). In this order, the Commission accepts the
May 2014 Filing. As set forth below, the Commission also grants NYISO's request and
accepts certain, limited tariff provisions filed in Docket No. ER11-4338-002 to comply
with Order No. 745, so that NYISO may implement the tariff provisions that we accept in Docket No. ER14-2006-000.
I.Background
A.November 22 Order
2.In the November 22 Order, the Commission agreed with Complainants that
NYISO’s DADRP tariff provisions are unduly discriminatory because they exclude from participation in the DADRP demand response facilitated by behind-the-meter generation, while permitting participation by similarly-situated demand response accomplished
without the use of such behind-the-meter generation.6 However, the Commission
declined to grant the specific relief requested, and instead, directed NYISO to undertake a stakeholder process and to file, within 180 days, proposed tariff provisions that will allow resources providing demand response facilitated by behind-the-meter generation to
participate in the DADRP on a comparable basis with all other demand response
resources.7 The Commission also stated that these tariff provisions should address
appropriate eligibility, measurement, verification, and control requirements to ensure that demand response facilitated by behind-the-meter generation is provided in a manner that maintains system reliability and ensures that the resources are compensated only for the
demand response service that they actually provide.8
FERC ¶ 61,215 (2011), reh’g denied, Order No. 745-B, 138 FERC ¶ 61,148 (2012),
vacated sub nom. Elec. Power Supply Ass’n v. FERC, 753 F.3d 216 (D.C. Cir. 2014),
rev’d & remanded sub nom. FERC v. Elec. Power Supply Ass’n, 136 S.Ct. 760 (2016).
5 Demand Response Supporters v. New York Independent System Operator, Inc., 145 FERC ¶ 61,162 (2013), denying motion for extension of time, 146 FERC ¶ 61,139 (2014) (November 22 Order).
6 November 22 Order, 145 FERC ¶ 61,162 at P 31.
7 Id. PP 31, 37 and 38.
8 Id. P 37.
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B.May 2014 Filing
3.In the May 2014 Filing, NYISO submits revisions to its Market Administration
and Control Area Services Tariff (Services Tariff) and its Open Access Transmission
Tariff (OATT) to permit participation in the DADRP by demand response facilitated by
behind-the-meter generation, which NYISO defines as a Local Generator.9 The proposed
tariff revisions include revised definitions, and metering and data reporting requirements.
1.Revised Definitions
4.NYISO proposes to revise the definition of “Demand Side Resource,” in
section 2.4 of its Services Tariff and section 1.4 of its OATT, to include resources that
are capable of operating a Local Generator to facilitate load reduction. NYISO also
proposes to revise the definition of “Demand Reduction Incentive Payment,” in
section 2.4 of its Services Tariff, to remove the existing restriction on a demand response
provider receiving an incentive payment for demand reductions by a Local Generator.
2.Measurement and Verification Requirements
5.NYISO explains that it measures a demand response resource’s load reduction in
comparison to an estimated baseline of load for that demand response resource. NYISO
states that it currently uses the Customer Baseline Load (CBL)10 methodology to
calculate the estimated baseline load. NYISO states that, in response to Order No. 745,11
9 NYISO states that a “Local Generator” is defined in Section 2.12 of the Services
Tariff as: “A resource operated by or on behalf of a Load that is either: (i) not
synchronized to a local distribution system; or (ii) synchronized to a local distribution
system solely in order to support a Load that is equal to or in excess of the resource’s
Capacity. Local Generators supply Energy only to the Load they are being operated to
serve and do not supply Energy to the distribution system.” NYISO May 2014 Filing
at 3 n.7.
10 The CBL for demand response resources bidding curtailable load is based upon the five highest energy consumption levels in comparable time periods over the past
ten days, beginning two days prior to the day for which the load reduction is bid. See Section 2.5 of the DADRP Manual, New York Independent System Operator, Day Ahead Demand Response Program Manual (July 2003),
http://www.nyiso.com/public/webdocs/markets_operations/documents/Manuals_and_Gui
des/Manuals/Operations/dadrp_mnl.pdf.
11 Supra note 4.
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it developed, and filed with the Commission, as section 24.2 of Attachment R of the
OATT, a new baseline load methodology: the Economic Customer Baseline Load
(ECBL) methodology.12 NYISO notes that this proposed ECBL methodology is
currently pending before the Commission in its August 14, 2013 compliance filing for Docket No. ER11-4338-002 (August 2013 Compliance Filing), which it submitted in response to an order issued May 16, 2013.13 NYISO states that, until the Commission acts on the proposed ECBL, it intends to continue to use its existing CBL methodology for all demand response resources participating in the DADRP, including demand
response resources that operate Local Generators to reduce load.14 NYISO states that, if the Commission accepts the ECBL, it will apply the new ECBL methodology to all demand response resources participating in the DADRP, including demand response
resources that operate Local Generators to reduce load.15
6. NYISO explains that, for purposes of calculating the CBL or ECBL and ensuring
that the baseline accurately represents the demand reduction being performed by the
demand response resource, it relies on meter data provided on behalf of the demand
response resource. NYISO states that, under section 6.1 of NYISO’s DADRP Manual,
it currently requires all demand response resources participating in the DADRP to have a
New York Public Service Commission (New York Commission)-approved revenue-grade
hourly-interval meter that measures the resource’s net load. NYISO proposes to
incorporate this meter requirement from the DADRP Manual into section 24.4 of
Attachment R of the OATT to require that a demand response resource that seeks to
enroll and participate in the DADRP and that has a Local Generator must have: (1) a
New York Commission-approved revenue-grade hourly-interval meter that measures the
net load of that resource for CBL or ECBL calculation and settlement purposes; and
(2) an hourly-interval meter that measures output of the Local Generator within a
12 NYISO states that the ECBL represents a better method for calculating the demand response resource’s baseline load, with distinct procedures for calculating the resource’s baseline load on weekdays and weekends. NYISO August 19, 2011
Compliance Filing, Docket No. ER11-4338-000, at 11.
13 New York Independent System Operator, Inc., 143 FERC ¶ 61,134 (2013 (May 2013 Compliance Order).
14 NYISO May 2014 Filing at 6.
15 Id.
Docket Nos. ER14-2006-000 andER11-4338-002- 5 -
2 percent accuracy threshold to ensure that demand response resources with a Local Generator are compensated only for the demand reduction they actually provide.16
NYISO explains that this metering will be required for all demand response resources that are enrolled to participate in the DADRP and have a Local Generator, regardless of whether the resource plans at the time of enrollment to operate its Local Generator to provide demand reduction in the DADRP.17
7. NYISO states that certain stakeholders have questioned the need for metering a
Local Generator when the demand response resource does not plan to operate its Local
Generator to provide the demand reduction in the DADRP. NYISO asserts that it
requires the meter data of a Local Generator’s output to monitor the accuracy of the
CBL or ECBL of the demand response resource, and to confirm that the actual demand
reduction is occurring and is not the product of a resource improperly influencing the
calculation of its baseline through the use of a Local Generator. Furthermore, NYISO
asserts that the metering is consistent with the Commission’s directives in the
November 22 Order, because the metering is necessary to ensure that “resources are
compensated only for the demand response service that they actually provide.”18
8. NYISO also asserts that it needs meter information regarding the output of a Local
Generator to verify that its operation is in accordance with the registration of the demand
response resource in the DADRP.19 Without meter information regarding the output of a
Local Generator, NYISO states that a change in a Local Generator’s output would not be
16 NYISO notes that it initially proposed to stakeholders that the meters used to
measure the output of the Local Generator must also be New York Commission-approved
revenue-grade hourly-interval meters. However, in response to stakeholder concerns
regarding the cost of installing these meters, NYISO modified its proposal to only
require hourly interval meters that can measure the output of a Local Generator within
a 2 percent accuracy threshold, instead of the New York Commission approved revenue-
grade meter requirement it initially proposed. NYISO states that these hourly interval
meters that can measure the output of the Local Generator within a 2 percent accuracy
threshold should be sufficient to enable it to perform its monitoring obligations.
17 NYISO May 2014 Filing at 7.
18 Id. (citing November 22 Order, 145 FERC ¶ 61,162 at P 37).
19 NYISO states that it will include in the DADRP Manual a separate baseline that will determine the incremental output of the Local Generator, and this incremental output will be the difference between the Local Generator’s metered output and the monitoring baseline of that Local Generator. Id. at 7 n.24.
Docket Nos. ER14-2006-000 andER11-4338-002- 6 -
visible to NYISO, and a change in net load could be the result of either a change in the
base load generation of the Local Generator or a change in the actual load associated with
the resource. NYISO explains that a change in base load generation in conjunction with
an upcoming economic schedule could result in overstatement of the in-day adjustment to
the CBL, which would result in NYISO compensating the resource for more of a load
reduction than it actually reduced during the scheduled period. NYISO also explains that
the same could occur as a result of a change in load, which, if timed correctly, could also
affect the in-day adjustment. NYISO states that if the Local Generator meter data
supplied on behalf of the demand response resource demonstrates behavior that is
inconsistent with the baseline, it may audit the resource or take additional action to
ensure that the resource is only being compensated for the actual demand reduction it
performs.
3.Data Reporting Requirements
9.NYISO states that, in response to Order No. 745, it proposed a new section 24.3
of Attachment R of its OATT to provide it with the explicit authority to verify a demand
reduction, and to require demand reduction providers to report both their metered load
data and the data they use in making their baseline calculations. In its August 2013
Compliance Filing, NYISO states that it proposed a new section 24.4 of Attachment R
of the OATT that lists the specific data that a demand reduction provider must report to
the NYISO for: (1) the enrollment of demand response resources participating in the
DADRP; (2) the verification of demand reductions scheduled in NYISO’s energy market,
and (3) additional data required upon the NYISO’s request to verify participation in the
DADRP and the NYISO’s energy market.20 NYISO states that the data reporting
requirements set forth in sections 24.3 and 24.4 of its August 2013 Compliance Filing,
as amended by its proposed revisions in this proceeding, are necessary to ensure that
NYISO can verify that all demand response resources, including demand response
resources that operate a Local Generator to reduce load, satisfy enrollment requirements,
and provide a demand reduction that is consistent with their scheduling and
compensation.
10. In addition to adopting the data reporting requirements of the August 2013
Compliance Filing, NYISO proposes to amend the data reporting requirements in
Attachment R to include, among other things, technical details regarding a Local
Generator located at a demand response resource’s site, including its system, primary fuel
20 Id. at 8.
Docket Nos. ER14-2006-000 andER11-4338-002- 7 -
type, the year it was built, the year of any retrofit, its nameplate, and its horsepower, if applicable.21
11. NYISO also proposes to replace the meter data requirements from
section 24.4.2(c) and (d) of Attachment R of the OATT with a new section 24.4.2(c),
which provides that NYISO will require the hourly-interval metered load data for each of
the individual demand response resources that are registered as part of a single DADRP
resource for all hours of each of the thirty days preceding the day the DADRP resource is
scheduled.22 NYISO states that certain stakeholders have questioned the need to submit
this meter data for the preceding 30-day period. NYISO asserts that it requires this data
to ensure the accuracy of the baseline and to confirm that the actual demand reduction
occurred. NYISO notes that it requires meter data from ten preceding, eligible days for
the calculation of the CBL. NYISO explains that, to capture these 10 eligible days, it
may need to go back as far as 30 days, because weekend days and low usage days are excluded. In addition, NYISO states that, in order to determine which days must be
excluded due to low usage, it must first review the demand response resource’s peak
hourly load over the past 30 days to calculate the data that is used to determine which days should be excluded under the low usage criteria. In addition, NYISO states that, because a DADRP resource may be scheduled for multiple, non-contiguous hours during the course of a day, it is requiring meter data for all 24 hours of each day to ensure it can verify the in-day adjustment calculation of the CBL.
12. For comparison purposes, NYISO points out that its request for the DADRP
resource’s meter data for the 30-day period prior to the day in which the resource was
scheduled is in lieu of the data that is normally provided by resources in NYISO’s energy
market that are in communication with NYISO via telemetry. NYISO also points out that
the current requirement to submit meter data to NYISO for settlement purposes occurs at
55 days after the scheduled load reduction occurs, which provides the demand response
provider with sufficient time to verify the meter data, calculate the CBL, and determine
the actual load reduction prior to submitting that load reduction data to NYISO for
settlement. NYISO maintains that the submission of this limited amount of meter data to
NYISO should not be burdensome because demand response providers are already
required to maintain the data to calculate the CBL that is used to determine their energy
payments.23
21 Id. at 9.
22 Id. at 10.
23 Id. NYISO states that it also proposes a small number of non-substantive
changes to Attachment R of the OATT. It also states that, consistent with the proposed
(continued ...)
Docket Nos. ER14-2006-000 andER11-4338-002- 8 -
13. NYISO requests that the Commission make the proposed tariff changes effective
60 days after it issues an order accepting them, so that NYISO has sufficient time to
implement the procedures for participation of behind-the-meter generation in the
DADRP. NYISO also requests that, if the Commission has not yet accepted the proposed new sections 24.3 and 24.4 in the August 2013 Compliance Filing at the time that it acts on the instant filing, the Commission should authorize NYISO in the instant filing to
apply all of the requirements in sections 24.3 and 24.4 of the August 2013 Compliance Filing, as they are amended by the instant filing.
II.Notice and Responsive Pleadings
14.Notice of the May 2014 Filing was published in the Federal Register, 79 Fed.
Reg. 31,933 (2014), with interventions and protests due on or before June 11, 2014.
15.Timely interventions were filed by Multiple Intervenors,24 NRG Companies,25
New York Transmission Owners,26 and EnerNOC, Inc.
16.A timely protest was filed by Demand Response Supporters. On June 26, 2014,
NYISO filed an answer to the protest.
A.Protest
17.Demand Response Supporters argue that the Commission should reject
two aspects of the May 2014 Filing: (1) NYISO's proposal to impose metering
tariff provisions, it will make related changes to its non-tariff procedures, including its registration, enrollment, and qualification procedures for demand response resources participating in the DADRP. Id. at 10-11.
24 Multiple Intervenors is an unincorporated association of over 55 large industrial, commercial and institutional energy consumers with manufacturing and other facilities located throughout the State of New York.
25 NRG Companies include NRG Power Marketing LLC and GenOn Energy Management, LLC.
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.
Docket Nos. ER14-2006-000 andER11-4338-002- 9 -
requirements on all Local Generators sited at a demand response resource facility,
regardless of whether those Local Generators are participating in the DADRP; and
(2) NYISO's requested 30-day reporting period for hourly-interval metered load data.
18. Demand Response Supporters assert that NYISO's proposal to impose metering
requirements on all Local Generators sited at a demand response resource facility,
regardless of whether those Local Generators are participating in the DADRP, would
impose new metering requirements on customers that have Local Generators, but that
have solely relied on, and continue to rely on, load curtailment for their demand response.
They assert that this metering requirement goes beyond the scope of compliance with the
November 22 Order, which stated that "[t]hese tariff provisions should address
appropriate eligibility, measurement, verification, and control requirements to ensure that
demand response facilitated by behind-the-meter generation is provided in a manner that
maintains system reliability and ensures that the resources are compensated only for the
demand response service that they actually provide."27 They assert that this new
metering requirement could drastically change the economics of DADRP participation
for customers that have Local Generators but rely on load curtailment to participate in the
DADRP, and it therefore should be rejected.
19. Demand Response Supporters also argue that, for customers who wish to use a
Local Generator for DADRP participation, metering every Local Generator regardless of
whether it is used for program participation would impose significant, upfront fixed costs
that exceed the directives of Order No. 745 and the November 22 Order, and would be
cost-prohibitive to DADRP participation, notably for small Local Generators.28 They
also assert that, for larger customers who may have several distributed generators on site,
metering costs could provide a significant deterrent to participation in the DADRP. In
addition, they assert that NYISO's proposal ignores the fact that a significant portion of
the Local Generators that are being installed are renewable resources, which cannot be
reasonably controlled or manipulated, and that applying the metering requirement to such
resources is inexplicable.
20. Demand Response Supporters also assert that individual metering of all Local
Generators is unreasonable and unnecessary given that NYISO requires hourly integrated
metering devices to measure the net load of all demand response resources participating
27 Demand Response Supporters Protest at 5-6 (citing November 22 Order, 145 FERC ¶ 61,162 at P 37 (emphasis added)).
28 Demand Response Supporters state that, based on their experience, the
estimated per meter cost for a Local Generator ranges from $2,500 to $5,000. Id. at 6
n.19.
Docket Nos. ER14-2006-000 andER11-4338-002- 10 -
in the DADRP. Although NYISO suggests that the purpose of metering non-
participating Local Generators is to detect market manipulation, Demand Response
Supporters argue that the cost-prohibitive nature of the metering requirement far
outweighs any potential benefit NYISO might receive in detecting market manipulation.
They assert that, because of these costs, potential demand response participants, who
would have participated in the DADRP and lowered wholesale energy prices for all
New York customers, likely will not participate in the DADRP. With respect to
NYISO’s market manipulation concerns, Demand Response Supporters argue that it is
difficult to imagine that many customers would choose to turn off Local Generators to
inflate their baseline and, at the same time, incur higher energy and demand charges in
those hours and risk large penalties from the Commission’s Office of Enforcement.29
Moreover, they assert that metering every Local Generator would not necessarily prevent
market manipulation, because load could also be manipulated. Demand Response
Supporters state that, in the case of either form of manipulation, such large anomalies
could be easily detected at the net load meter, and NYISO’s internal market monitor
would investigate the matter.30 They therefore assert that the combination of the
metering at the net load meter and the enforcement consequences are sufficient to ensure
that demand response resources are compensated only for the service they actually
provide.
21. Demand Response Supporters also argue that NYISO's requested 30-day
reporting period for hourly-interval metered load data is unduly burdensome. They
explain that this requirement would mean that for just a one-hour event, demand response
aggregators would be required to validate 720 intervals of hourly-interval metered load
data, despite the fact that little, if any, of this data would have an impact on settlement.31
They note that the majority of the hours during a 24-hour period do not even meet the
threshold for bidding into the DADRP, and are consequently irrelevant for settlement
purposes. They therefore urge the Commission to reject NYISO's proposal, and assert
that a much more reasonable alternative is that NYISO should only require submission
and validation of data that impact settlements. They note that, if NYISO believes more
meter data is required to determine whether an actual demand reduction occurred, the
tariff already allows such a request.32
29 Id. at 7.
30 Id.
31 Id. at 8.
32 Id. at 9.
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B.Answer
22.In response to Demand Response Supporters’ protest of NYISO’s proposal that
a DADRP resource that has a Local Generator must have an hourly-interval meter
measuring the output of that generator, regardless of whether the resource plans to use the
Local Generator in the DADRP, NYISO argues that this proposal is consistent with the
Commission’s directive in the November 22 Order that NYISO develop tariff provisions
to ensure that resources “are compensated only for the demand response service they
actually provide.”33 NYISO reiterates that this proposal allows it to monitor the accuracy
of the resource’s baseline, and to confirm that the actual demand reduction is occurring in
response to NYISO’s scheduling of the resource in its Day-Ahead Energy market.
NYISO largely restates its justification for requiring the additional metering requirement
for purposes of visibility and accuracy to avoid potential baseline manipulation and to
ensure that DADRP resources are compensated only for the demand response service
they actually provide.34 NYISO argues that, although Demand Response Supporters find
baseline manipulation difficult to imagine, the Commission has assessed penalties to
demand response providers in other regions who used their behind-the-meter generators
to manipulate and inflate their baselines, which allowed them to get paid for phantom
load reductions.35
23. NYISO also asserts that a demand response resource could selectively operate a
Local Generator to exclude from the calculation of its baseline certain days in which its
load is lower than usual, which would result in the resource being compensated based on
its load reduction from a higher, overstated baseline level. NYISO states that, on days
that a resource expects to have lower than usual load, such as during a planned partial or
full shutdown of a facility, the resource could operate its Local Generator differently
from its normal output level in a manner that would not draw the NYISO’s attention to a
significant change in net load, but would allow that resource to exclude the low load day
from the baseline calculation under NYISO’s low usage exclusion requirements.36
24. NYISO asserts that, in developing its compliance filing, it evaluated several
metering alternatives for addressing these concerns, and it modified its proposal in
response to stakeholder concerns about costs. NYISO notes that other suppliers
33 NYISO Answer at 3 (citing November 22 Order at P 37).
34 Id. at 4-5.
35 Id. at 4-5.
36 Id.
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participating in NYISO’s energy market are required to connect through their local
transmission owner and install real-time metering and telemetry that is then relayed to the
NYISO every six seconds. NYISO states, for example, that demand response resources
that provide real-time services, such as Operating Reserves and Regulation Service
through NYISO’s Demand Side Ancillary Services Program, are required to have real-
time metering and telemetry.37 NYISO states that it did not propose to adopt real-time
metering and telemetry for the DADRP because real-time metering and telemetry, which
are relatively expensive to install and maintain, are not required at this time to measure
and verify participation in the DADRP. NYISO reasserts its initial argument that in
response to stakeholder cost concerns, it revised its proposal to the more affordable
hourly-interval meter that measures output of a Local Generator within a 2 percent
accuracy threshold,38 which minimizes the cost to demand response resources, but still
provides NYISO with the data needed to verify participation in the DADRP.
25. In response to Demand Response Supporters’ assertion that applying the proposed
metering requirement to renewable resources is inexplicable because renewable resources
cannot control or manipulate their output, NYISO argues that the definition of demand
response requires a resource to be able to control its demand in a responsive, measurable
and verifiable manner within time limits.39 NYISO therefore maintains that metering
renewable resources is just as important as metering other behind-the-meter generation.
26. NYISO asserts that the metering requirement should apply to all demand response
resources that have a Local Generator, regardless of whether they use the Local
Generator in the DADRP, because the potential for baseline manipulation exists for any
resource with a Local Generator, regardless of whether the resource intends to use the
Local Generator to provide a demand reduction. Thus, the metering requirement would
37 NYISO notes that the Commission referenced these metering and telemetry
requirements in its November 22 Order as part of its determination that NYISO had
previously enacted measurement and verification requirements that ensure that demand
response facilitated by behind-the-meter generation is compensated only for the demand
reduction they actually provide. Id. at 5 (citing November 22 Order at P 37 n.46).
38 Id. at 6.
39 Id. at 7 (citing section 2.4 of the Services Tariff, defining a “Demand Side
Resource” as “A Resource located in the NYCA that is capable of controlling demand in a responsive, measurable and verifiable manner within time limits ).
Docket Nos. ER14-2006-000 andER11-4338-002- 13 -
treat demand response facilitated by behind-the meter generation comparable to all other demand response resources, consistent with the November 22 Order.40
27. In response to Demand Response Supporters’ assertion that the proposed metering requirement on Local Generators will negatively shift the economics of participating in the DADRP, NYISO notes that resources enrolled in the DADRP have chosen not to
participate in the DADRP at all over the past three years, so there is no basis to argue that this requirement will shift the economics of participation.41 NYISO also maintains that its proposed tariff revisions to permit demand response by behind-the-meter generation could facilitate new enrollees in the DADRP.
28. NYISO argues that the Commission should reject Demand Response Supporters’ protest of its proposed requirement that demand resources provide hourly-interval data for all hours of each of the thirty days preceding the day the resource is scheduled.
NYISO states that this meter data is used to calculate the demand response resource’s baseline and restates the process it uses to calculate the baseline.42
29. NYISO maintains that the requirement to submit to NYISO, for measurement and
verification purposes, a small subset of the data that is already required to be maintained
by the demand response resource,43 and is already used by the demand response provider,
is reasonable and does not constitute an unreasonable burden to the resource.44 NYISO
states that it reviewed several alternatives to the proposed reporting requirement, and
determined that its proposed requirement was the least burdensome. NYISO notes that
its request for the prior thirty days of data is not a rolling requirement; it is only initiated
when the resource is scheduled. NYISO also emphasizes that this data reporting
requirement is in lieu of the data that is normally provided to NYISO by suppliers in
NYISO’s energy market that communicate with NYISO through telemetry.45 NYISO
40 Id. at 7 (citing November 22 Order, 145 FERC ¶ 61,162 at P 37).
41 Id. at 8 & n.17.
42 Id. at 9 (citing section 5.1.I.A of the NYISO DADRP Manual), Id. at 10 n.20.
43 Id. at 9 (citing, e.g., Article 10 of the NYISO Services Tariff, and section 6.4 of the NYISO DADRP Manual).
44 Id. at 10.
45 NYISO states, for comparison purposes, that its reporting requirements for
Demand Side Ancillary Services Program resources, real-time telemetry and after-the-
(continued ...)
Docket Nos. ER14-2006-000 andER11-4338-002- 14 -
explains that, because it is not requiring telemetry for the DADRP, it will not have access
to the data required to verify the value that allows for the exclusion of low usage days, or
sufficient data to confirm the CBL against which the resource’s performance is measured,
unless it establishes the proposed 30-day reporting requirement for each DADRP
schedule. NYISO explains that the current requirement to submit data to NYISO for
settlement purposes at 55 days after the scheduled load reduction occurs, provides the
demand response provider with sufficient time to verify the meter data, calculate the
baseline, and determine the actual load reduction prior to submitting that load reduction
data to the NYISO for settlement.
III.Discussion
A.Procedural Matters
30.Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2015), the timely, unopposed motions to intervene serve to make
the entities that filed them parties to this proceeding.46
31.Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R.
§ 385.213(a)(2)(2015), prohibits an answer to a protest unless otherwise ordered by the
decisional authority. We will accept NYISO’s answer because it has provided
information that assisted us in the decision-making process.
B.Substantive Matters
32.We accept NYISO’s proposed revisions to the relevant definitions, measurement
and verification, and data reporting requirements as in compliance with the Commission’s directives in the November 22 Order.
33. Demand Response Supporters argue that NYISO's proposal to impose metering requirements on all behind-the-meter generators sited at a demand response resource facility is beyond the scope of this compliance proceeding, which they assert is limited to consideration of requirements for demand response resources that use behind-the-meter generators to participate in the DADRP. We disagree for two reasons.
fact hourly interval meter data, are identical to those of other suppliers of Operating Reserves and Regulation Service. Id. at 10 n.21.
46 We note that EnerNOC, Inc. is a member of Demand Response Supporters, who filed the Complaint in this docket, which serves to make it a party to the compliance
filing in this docket.
Docket Nos. ER14-2006-000 andER11-4338-002- 15 -
34. First, in the November 22 Order, the Commission required NYISO to develop
proposed tariff provisions that “will allow resources providing demand response
facilitated by behind-the-meter generation to participate in the DADRP on a comparable basis as all other demand response resources.”47 We find that NYISO’s proposal to
impose metering requirements on all behind-the-meter generators sited at a demand
response resource facility responds to the November 22 Order by seeking to treat demand response resources that have behind-the-meter generation comparably. Thus, the
proposal is within the scope of this proceeding.
35. Second, we agree with NYISO that individually metering behind-the-meter
generation enables NYISO to monitor the accuracy of the demand response resource’s baseline, and to confirm that the actual demand reduction is occurring in response to NYISO’s scheduling of the resource in its day-ahead energy market.48 Therefore, we find that NYISO’s proposal is consistent with the directive in the November 22 Order to develop requirements that ensure that “the resources are compensated only for the
demand response service that they actually provide.”49
36. Demand Response Supporters also object to the costs of individually metering
behind-the-meter generators, and they argue that the cost of the metering requirement
outweighs any potential benefit NYISO might receive in detecting market manipulation.
We disagree. We note that NYISO stated that it initially proposed to stakeholders that a
resource with a behind-the-meter generator participating in the DADRP must install a
New York Commission-approved revenue-grade, hourly-interval meter for its behind-
the-meter generator. NYISO stated that, in response to stakeholder cost concerns, it
revised its proposal to the more affordable hourly-interval meter that measures output of
a behind-the meter generator within a two percent accuracy threshold.50 We find that
NYISO’s proposal reasonably balances cost concerns and provides NYISO with the data
47 November 22 Order, 145 FERC ¶ 61,162 at P 37.
48 As NYISO notes, the Commission previously has assessed penalties where a
demand response resource improperly inflated the calculation of its baseline. NYISO
May 2014 Filing at 7 n.22 (citing Rumford Paper Company, Order Approving Stipulation and Consent Agreement, 142 FERC ¶ 61,218 (2013); Rumford Paper Company, Order to Show Cause and Notice of Proposed Penalty, 140 FERC ¶ 61,030 (2012)).
49 November 22 Order, 145 FERC ¶ 61,162 at P 37. Moreover, the Commission has previously accepted provisions requiring behind-the-meter generation to be metered. ISO New England Inc., Order on Compliance Filing, 138 FERC ¶ 61,042 (2012).
50 NYISO Answer at 6.
Docket Nos. ER14-2006-000 andER11-4338-002- 16 -
needed to perform its monitoring functions, verify participation in the DADRP, and address the potential baseline manipulation as explained above.
37. Demand Response Supporters assert that NYISO’s proposed requirement to
provide hourly-interval data for all hours of each of the 30 days preceding the day the
resource is scheduled, is unduly burdensome. We disagree. We note that DADRP
resources are already required to maintain 30 days of meter data requested by NYISO,
which is used calculate the demand response resource’s baseline. As NYISO explains,
the resource’s peak hourly load is reviewed for all hours of each of the past 30 days to
calculate the data that is used to properly determine the CBL calculation. We agree with
NYISO that maintaining the requirement to submit to NYISO, for measurement and
verification purposes, a small subset of the data that is already required to be maintained
by the demand response resource, and is already used by the demand response provider,
is reasonable and not unduly burdensome. We also note that NYISO’s request for the
prior 30 days of data is not a rolling requirement; it is only initiated when the resource is
scheduled.
38. Demand Response Supporters also argue that the Commission should not allow NYISO to apply the proposed metering requirement to renewable resources because
renewable resources cannot control or manipulate their output. We agree with NYISO that given the potential impact of behind-the-meter renewable resources on the load of a demand response resource, metering these resources is as important as metering other
behind-the-meter resources.
39. As requested by NYISO, we accept the tariff changes in the May 2014 Filing
and make them effective 60 days after the issuance of this order accepting them, so that
NYISO will have sufficient time to implement the procedures for participation in the
DADRP of demand response facilitated by behind-the-meter generation. NYISO also
requested that, if the Commission has not yet accepted the proposed new sections 24.3
and 24.4 of Attachment R of the OATT in the August 2013 Compliance Filing, in Docket
No. ER11-4338-002, at the time that it acts on the filing in the instant proceeding, the
Commission should authorize NYISO in the instant proceeding to apply all of the
requirements in sections 24.3 and 24.4 of the August 2013 Compliance Filing, as they
are amended by the instant filing. The proposed new sections 24.3 and 24.4 in the
August 2013 Compliance Filing describe the data that demand response resources must
report to NYISO for enrollment, registration, settlements, and verification of participation
in the DADRP. No party filed comments in Docket No. ER11-4338-002 concerning
these provisions. We find that these proposed provisions comply with the requirements
of the May 2013 Compliance Order, and the proposed provisions, as amended by the
instant filing in Docket No. ER14-2006-000, comply with our November 22 Order in
Docket No. ER14-2006-000. We therefore grant NYISO’s request and accept these
provisions. We will address the remaining, proposed provisions in Docket No. ER11-
4338-002 in a future order.
Docket Nos. ER14-2006-000 andER11-4338-002- 17 -
The Commission orders:
NYISO’s tariff changes in the May 2014 filing and certain, limited tariff
provisions filed to comply with Order No. 745 are hereby accepted, effective 60 days after the issuance of this order accepting them, as discussed in the body of this order.
By the Commission.
( S E A L )
Nathaniel J. Davis, Sr.,
Deputy Secretary.
