10 Krey Boulevard  Rensselaer, NY 12144

February 6, 2017

By Electronic Delivery

The Honorable Kimberly D. Bose Secretary

Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

Re: New York Independent System Operator, Inc.,
Docket No. ER17-___-000

Dear Ms. Bose:

In accordance with Section 205 of the Federal Power Act (“FPA”) and 18 C.F.R. Part 35 (2016) of the Federal Energy Regulatory Commission’s (“Commission”) regulations, the New York Independent System Operator, Inc. (“NYISO”) respectfully submits proposed revisions to the NYISO’s Market Administration and Control Area Services Tariff (“Services Tariff”) to amend the language in Section 23.4.5.5 governing the circumstances under which a Market
Party1 will be deemed to be a Pivotal Supplier in a Mitigated Capacity Zone.

Specifically, Section 23.4.5.5 allows a Responsible Market Party to rebut a presumption
of Control of Unforced Capacity. But it currently contains one rebuttal standard applicable to the
G-J Locality and a different standard applicable to other Mitigated Capacity Zones.2 The
Commission accepted the G-J Locality’s rebuttal standard in response to a NYISO compliance
filing in Docket No. ER13-1380 (the docket in which the tariff provisions were adopted to
establish the G-J Locality).3 When accepting the rebuttable standard for the G-J Locality, the
Commission held that any corresponding change to the rebuttal standard applicable to other
Mitigated Capacity Zones would have to be accomplished through a separate FPA Section 205
proceeding. In this filing, the NYISO respectfully proposes tariff revisions that would make the
rebuttal standard for the G-J Locality applicable to all Mitigated Capacity Zones.

1 Capitalized terms that are not otherwise defined in this filing shall have the meaning specified in the Services Tariff.

2 Currently, there is only one other Mitigated Capacity Zone, New York City (“Load Zone J”).

3 New York Indep. Sys. Operator, Inc., 144 FERC ¶ 61,126 (2013) (“August 2013 Order”).

Kimberly D. Bose, Secretary February 6, 2017

Page 2

I.LIST OF DOCUMENTS SUBMITTED

The NYISO respectfully submits the following documents:

1. This filing letter;

2. A blacklined version of the proposed modifications to Section 23.4.5 of the Services
Tariff (“Attachment I”); and

3. A clean version of the proposed modifications to Section 23.4.5 of the Services Tariff
(“Attachment II”).

II.BACKGROUND

Supplier-side capacity market power mitigation is applied to Pivotal Suppliers in

Mitigated Capacity Zones. The criteria for designation as a Pivotal Supplier set forth in Section

23.2.1 of the Services Tariff are as follows:

 For the New York City Locality, a Pivotal Supplier is defined as “a Market Party

that, together with any of its Affiliated Entities, (a) Controls 500 MW or more of Unforced Capacity, and (b) Controls Unforced Capacity some portion of which is necessary to meet the New York City Locality Locational Minimum Installed Capacity Requirement in an ICAP Spot Market Auction.”;

 For the G-J Locality, a Pivotal Supplier is defined as “a Market Party that,

together with any of its Affiliated Entities, (a) Controls 650 MW or more of

Unforced Capacity; and (b) Controls Unforced Capacity some portion of which is necessary to meet the G-J Locality Locational Minimum Installed Capacity
Requirement in an ICAP Spot Market Capacity Requirement in an ICAP Spot
Market Auction.”; and

 “For each Mitigated Capacity Zone except the New York City Locality and the G-

J Locality, if any, a Market Party that Controls at least the quantity of MW of

Unforced Capacity specified for the Mitigated Capacity Zone and accepted by the Commission.”4

Section 23.4.5.5 describes the criteria to rebut Control of Unforced Capacity. It states
that “Control of Unforced Capacity shall be rebuttably presumed from (i) ownership of an
Installed Capacity Supplier, or (ii) status as the Responsible Market Party for an Installed

4 Under the Services Tariff, the NYISO performs a study each Demand Curve Reset Filing Year, the results of which may require that it establish a new Locality. See Section 5.16 of the Services Tariff. Any new Locality is a Mitigated Capacity Zone. See Section 2.13 of the Services Tariff at definition of Mitigated Capacity Zone.

Kimberly D. Bose, Secretary February 6, 2017

Page 3

Capacity Supplier, but may also be determined on the basis of other evidence.” At the time of the April 2013 Filing, the presumption was rebuttable by demonstrating that (1) the Unforced Capacity had been sold in a Capability Period Auction or Monthly Auction, or (2) the ability to determine the price and quantity of offers to supply the Unforced Capacity has been conveyed to a person or entity that is not an Affiliated Entity.

The NYISO submitted the Pivotal Supplier criteria for the G-J Locality in its April 2013
filing that proposed the establishment of the G-J Locality.5 In the April 2013 Filing, the NYISO
noted that the independent Market Monitoring Unit for the NYISO (“MMU”) had expressed
concern that the existing rebuttal language could allow the Pivotal Supplier framework to be
“circumvented” through the sale of Unforced Capacity in advance of an ICAP Spot Market
Auction.6 The MMU explained that such capacity would be deducted from the Unforced
Capacity under a Market Party’s Control for purposes of the Pivotal Supplier calculation.
According to the MMU, such a deduction could result in a “large supplier with market power
[reducing] the amount of capacity that it is deemed to control by selling some of its capacity in
the Capability Period Auction or the Monthly Auction.”7 The MMU concluded that this issue
could be addressed by deleting the “current exclusion of forward capacity sales in Section

23.4.5.5(1).”8

The NYISO stated in the April 2013 Filing that it agreed with the MMU’s

recommendation. The NYISO also stated that the MMU’s proposed enhancement should apply to both the G-J Locality and New York City and thus that it would “favor conforming tariff revisions to provide for parallel treatment.”9 However, in its August 2013 Order addressing the April 2013 Filing, the Commission did not address this issue.

In a request for rehearing of the August 2013 Order, the Indicated New York

Transmission Owners10 (the “Indicated NYTOs”) raised this issue, arguing that allowing the
exclusion of forward capacity sales from the Pivotal Supplier determination “would, in many
cases, exempt from offer caps entities that have a financial incentive to withhold capacity and

5 See New York Independent System Operator, Inc., Proposed Tariff Revisions to Establish and Recognize a New Capacity Zone and Request for Action on Pending Compliance Filing, Docket No. ER13-1380-000 (filed April 30, 2013) (the “April 2013 Filing”).

6 See April 2013 Filing, Affidavit of Dr. David B. Patton, Ph.D (“Patton Affidavit”) at PP 27, 29-
30, and 32.

7 Id.

8 Id. at P 32.

9 Id. at 21.

10 The Indicated NYTOs consist of Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., New York Power Authority, New York State Electric & Gas
Corporation, Niagara Mohawk Power Corporation, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation.

Kimberly D. Bose, Secretary February 6, 2017

Page 4

thereby drive up capacity prices in” the G-J Locality.11 In its order on rehearing, the

Commission agreed and ordered the NYISO to revise the rebuttable presumption of its Pivotal Supplier threshold for the G-J Locality by deleting the current exclusion of forward capacity sales in Section 23.4.5.5(1).12 The Rehearing Order also stated that it had granted rehearing “only with respect to” the G-J Locality and that if the NYISO wished to propose similar
revisions for the New York City zone “it may do so in a separate proceeding.”13

In a June 2014 compliance filing,14 the NYISO amended Section 23.4.5.5 of the Services
Tariff to eliminate the forward capacity sales exclusion for the G-J Locality by specifying that,

For purposes of determining if a Responsible Market Party is a Pivotal Supplier in the G-J Locality, the presumption of Control of Unforced Capacity can be
rebutted by demonstrating to the reasonable satisfaction of the ISO that the ability to determine the price and quantity of offers to supply Unforced Capacity has
been conveyed to a person or entity that is not an Affiliated Entity without
limitation or condition, but cannot be rebutted by the sale of Unforced Capacity in a Capability Period or Monthly Auction.

The June 2014 Compliance Filing retained the original rebuttal language, and thus the
forward capacity sales exclusion, with respect to the New York City Locality, as instructed by
the Rehearing Order. However, the NYISO also argued that “the forward capacity sales
exclusion should be eliminated for all current and future Mitigated Capacity Zones (including
New York City) so that all will have an equally effective Control “test” and that “[h]aving
separate rebuttable presumption rules in New York City (i.e., Load Zone J) and the G-J Locality
creates incongruities for Market Parties that participate in the same market.”15 The NYISO
therefore asked “that the Commission direct it to make an additional compliance filing so that all
forward capacity sales will no longer be excluded for purposes of the Control of Unforced
Capacity test.”16 The Commission subsequently issued a delegated order accepting the NYISO’s
compliance filing, but not addressing the applicability of the new presumption criteria to the
New York City Locality.

11 Request for Rehearing of the Indicated New York Transmission Owners (filed Sept. 12, 2013) Rehearing Request at 18.

12 New York Independent System Operator, Inc., 147 FERC ¶ 61,152 at P 37 (2014) (“Rehearing
Order”).

13 Id. at n. 75.

14 See New York Independent System Operator, Inc., Compliance Filing, Docket No. ER13-1380-
004 (filed June 26, 2014) (“June 2014 Compliance Filing”).

15 Id. at 4.

16 Id. at 5.

Kimberly D. Bose, Secretary February 6, 2017

Page 5

III. PROPOSED TARIFF REVISIONS

The NYISO proposes to amend Section 23.4.5 of the Services Tariff to unify the
rebuttable presumption rules, and make them applicable to all Mitigated Capacity Zones.
Specifically, the NYISO proposes to revise Section 23.4.5.5 to read, in relevant part:

23.4.5.5 Control of Unforced Capacity shall be rebuttably presumed from (i)
ownership of an Installed Capacity Supplier, or (ii) status as the Responsible
Market Party for an Installed Capacity Supplier, but may also be determined on
the basis of other evidence. For purposes of determining if a Responsible Market
Party is a Pivotal Supplier in a Mitigated Capacity Zone except the G-J Locality,
the presumption of Control of Unforced Capacity can be rebutted by: (1) the sale
of Unforced Capacity in a Capability Period Auction or a Monthly Auction, or (2)
demonstrating to the reasonable satisfaction of the ISO that the ability to
determine the price and quantity of offers to supply Unforced Capacity has been
conveyed to a person or entity that is not an Affiliated Entity without limitation or
condition. For purposes of determining if a Responsible Market Party is a Pivotal
Supplier in the G-J Locality a Mitigated Capacity Zone, the presumption of
Control of Unforced Capacity can be rebutted by demonstrating to the reasonable
satisfaction of the ISO that the ability to determine the price and quantity of offers
to supply Unforced Capacity has been conveyed to a person or entity that is not an
Affiliated Entity without limitation or condition, but cannot be rebutted by the
sale of Unforced Capacity in a Capability Period or Monthly Auction...

This revision is justified by the same rationale outlined in the NYISO’s June 2014

Compliance Filing. Having different rebuttable presumption rules for different Mitigated

Capacity Zones creates the market incongruities that were described in the June 2014

Compliance Filing. The NYISO posited the example of two ICAP Suppliers both within New
York City, one with 1,000 MW and one with 600 MW. The NYISO pointed out that the ICAP
Supplier could sell 501 MW or more in the Capability Period or Monthly Auctions or through a
bilateral transaction and thus would fall below the Pivotal Supplier threshold in New York City.
The example noted that, because New York City is within the G-J Locality and because of the
differences in each Locality’s ICAP Demand Curve and Pivotal Supplier threshold,17 this ICAP
Supplier would nevertheless be a Pivotal Supplier in the G-J Locality and receive a must-offer
requirement. By contrast, the ICAP Supplier with 600 MW could sell 101 MW in the Capability
Period or Monthly Auction or through a bilateral transaction, and therefore would not be a

Pivotal Supplier in the New York City Locality or in the G-J Locality.

As also noted in the June 2014 Compliance Filing, having inconsistent standards for rebutting the presumption of Control in different Mitigated Capacity Zones is a market design inefficiency. It leaves open the opportunity for mitigation rules to be circumvented via the forward capacity sales exclusion.

17 See Section 23.2.1 at definition of Pivotal Supplier.

Kimberly D. Bose, Secretary February 6, 2017

Page 6

All of these concerns would be addressed through the adoption of the language that the NYISO proposes in this filing. Under the new language, all ICAP Suppliers will be treated the same, irrespective of the Mitigated Capacity Zone in which they are selling and the forward capacity sales exclusion would be uniformly eliminated. For these reasons, the proposed
revisions to the Services Tariff are just and reasonable and should be accepted.18

IV.EFFECTIVE DATE

In accordance with Section 205 of the FPA, the NYISO requests an effective date for

these tariff amendments of April 7, 2017, 60 days from the date the proposed changes have been

filed with the Commission.

V.STAKEHOLDER APPROVAL, BOARD AUTHORIZATION, and MMU

REVIEW

The Management Committee approved this proposal on November 30, 2016 without dissent. The Board of Directors has authorized this filing.

The MMU has reviewed the proposal and this filing. The MMU has authorized the NYISO to state that it supports the proposed tariff revisions.

VI.COMMUNICATIONS AND CORRESPONDENCE

All communications and service in this proceeding should be directed to:

18 Under 18 C.F.R. § 35.13 (2016), a public utility is required to “file the information required by
this section, as applicable, at the time it files with the Commission under §35.1 all or part of a rate
schedule, tariff or service agreement to supersede or otherwise change the provisions of a rate schedule,
tariff or service agreement filed with the Commission under §35.1.” Much of the information required by
Section 35.13 is related to costs incurred by traditional vertically integrated utilities and is designed to
allow the Commission to review changes in cost-of-service rates charged by investor-owned public
utilities. However, the NYISO is not such a utility, and, more importantly, this filing does not modify a
cost-of-service rate. Accordingly, the NYISO respectfully submits that § 35.13’s cost-of-service related
filing requirements are inapplicable and requests, to the extent necessary, that the Commission waive
them with respect to this filing.

Kimberly D. Bose, Secretary February 6, 2017

Page 7

rstalter@nyiso.com

gkavanah@nyiso.com

*persons designated to receive service

VII. SERVICE

The NYISO will send an electronic link to this filing to the official representative of each
of its customers, to each participant on its stakeholder committees, to the New York Public
Service Commission, and to the New Jersey Board of Public Utilities. In addition, the complete
filing will be posted on the NYISO’s website at www.nyiso.com. This is in accordance with 18
C.F.R. 35.2(e).

VIII. CONCLUSION

Wherefore, for the foregoing reasons, the New York Independent System Operator, Inc. respectfully requests that the Commission accept for filing the proposed tariff revisions that are attached hereto with an effective date of April 7, 2017.

Respectfully submitted,

/s/ Gloria Kavanah

Gloria Kavanah

Counsel for the New York Independent System Operator, Inc.

New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144 (518) 356-6103

gkavanah@nyiso.com

cc:Michael BardeeLarry Parkinson

Nicole BuellJ. Arnold Quinn

Anna CochraneDouglas Roe

Kurt LongoKathleen Schnorf

David MorenoffJamie Simler

Daniel NowakGary Will

23.4.5Installed Capacity Market Mitigation Measures

23.4.5.1If and to the extent that sufficient installed capacity is not under a

contractual obligation to be available to serve load in New York and if physical or economic withholding of installed capacity would be likely to result in a material change in the price for installed capacity in all or some portion of New York, the ISO, in consideration of the comments of the Market Parties and other interested parties, shall amend this Attachment H, in accordance with the procedures and
requirements for amending the Plan, to implement appropriate mitigation
measures for installed capacity markets.

23.4.5.2 Offers to sell Mitigated UCAP in an ICAP Spot Market Auction shall not

be higher than the higher of (a) the UCAP Offer Reference Level for the

applicable ICAP Spot Market Auction, or (b) the Going-Forward Costs of the
Installed Capacity Supplier supplying the Mitigated UCAP. Where an Installed
Capacity Supplier is a Pivotal Supplier in some, but not all, Mitigated Capacity
Zones in which it has Resources, such Installed Capacity Supplier’s offer to sell
Mitigated UCAP in any ICAP Spot Market Auction for any Resource for which it
is a Pivotal Supplier shall not be higher than the higher of (a) the lowest of the
UCAP Offer Reference Levels for each Mitigated Capacity Zone in which such
Installed Capacity Supplier has Resources; or (b) if an Offer for a Resource has an
applicable Going-Forward Cost, such Going-Forward Cost.

23.4.5.3 An Installed Capacity Supplier’s Going-Forward Costs for an ICAP Spot

Market Auction shall be determined upon the request of the Responsible Market
Party for that Installed Capacity Supplier. The Going-Forward Costs shall be

determined by the ISO after consultation with the Responsible Market Party,

provided such consultation is requested by the Responsible Market Party not later
than 50 business days prior to the deadline for offers to sell Unforced Capacity in
such auction, and provided such request is supported by a submission showing the
Installed Capacity Supplier’s relevant costs in accordance with specifications
provided by the ISO. Such submission shall show (1) the nature, amount and
determination of any claimed Going-Forward Cost, and (2) that the cost would be
avoided if the Installed Capacity Supplier is taken out of service or retired, as
applicable. If the foregoing requirements are met, the ISO shall determine the
level of the Installed Capacity Supplier’s Going-Forward Costs and shall
seasonally adjust such costs not later than 7 days prior to the deadline for
submitting offers to sell Unforced Capacity in such auction. A Responsible
Market Party shall request an updated determination of an Installed Capacity
Supplier’s Going-Forward Costs not less often than annually, in the absence of
which request the Installed Capacity Supplier’s offer cap shall revert to the UCAP
Offer Reference Level. An updated determination of Going-Forward Costs may
be undertaken by the ISO at any time on its own initiative after consulting with
the Responsible Market Party. Any redetermination of an Installed Capacity
Supplier’s Going-Forward Costs shall conform to the consultation and
determination schedule specified in this paragraph. The costs that an Installed
Capacity Supplier would avoid as a result of retiring should only be included in its
Going-Forward Costs if the owner or operator of that Installed Capacity Supplier

actually plans to mothball or retire it if the Installed Capacity revenues it receives are not sufficient to cover those costs.

23.4.5.4 Mitigated UCAP shall be offered in each ICAP Spot Market Auction in

accordance with Section 5.14.1.1 of the ISO Services Tariff and applicable ISO procedures, unless (a) it has been exported to an External Control Area or sold to meet Installed Capacity requirements outside the Mitigated Capacity Zone in
which the ICAP Supplier is a Pivotal Supplier is located in a transaction that does not constitute physical withholding under the standards specified below, or (b) it is Net Unforced Capacity of a Behind-the-Meter Net Generation Resource that is sold to its Host Load in a transaction that does not constitute physical withholding under the standards specified in Section 23.4.5.4.1(b).

23.4.5.4.1 (a) An export to an External Control Area or sale to meet an Installed

Capacity requirement outside the Mitigated Capacity Zone in which the ICAP
Supplier or Generator with CRIS MW is electrically located (either of the
foregoing being referred to as “External Sale of Capacity”) may be subject to
audit and review by the ISO to assess whether such action constituted physical
withholding of UCAP from a Mitigated Capacity Zone. “External Sale UCAP”
shall mean the UCAP equivalent of the External Sale of Capacity if known, or
otherwise the reasonably projected UCAP equivalent as determined by the ISO.
External Sale UCAP shall be deemed to have been physically withheld on the
basis of a comparison between the net revenues from UCAP sales that would have
been earned by the sale of the External Sale UCAP in a Mitigated Capacity Zone
and the net revenues earned from the External Sale of Capacity. The comparison

shall be made for the period for which capacity is committed (the “Comparison
Period”) in each of the shortest term organized capacity markets (the “External
Reconfiguration Markets”) for the area and during the period in which the
External Sale of Capacity occurred. External Sale UCAP shall be deemed to have
been withheld from a Mitigated Capacity Zone if: (1) the Responsible Market
Party for the External Sale UCAP could have made all or a portion of the External
Sale UCAP available to be offered in the Mitigated Capacity Zone by buying out
of its external capacity obligation through participation in an External
Reconfiguration Market and timely meeting the requirements to be qualified as an
Installed Capacity Supplier; (2) the net revenues over the Comparison Period
from sale in the Mitigated Capacity Zone of the External Sale UCAP that could
have been made available for sale in that Locality would have been greater by
15% or more, provided that the net revenues were at least $2.00/kilowatt-month
more than the net UCAP revenues from that portion of the External Sale UCAP
over the Comparison Period; and (3) the Responsible Market Party for the
External Sale UCAP is a Pivotal Supplier, or would otherwise have been deemed
a Pivotal Supplier if the External Sale UCAP had been available to be offered in
the Mitigated Capacity Zone for the Comparison Period.

(b) Any Mitigated UCAP that is Net Unforced Capacity of a Behind-the-Meter

Net Generation Resource that is not offered into the ICAP Spot Market Auction in
accordance with Section 23.4.5.2 may be subject to audit and review by the ISO,
and shall be deemed to have been physically withheld unless (i) the Responsible
Market Party has obtained a determination from the ISO pursuant to Section

23.4.5.4.3(b) that the sale to its Host Load would not constitute physical

withholding, and (ii) the Mitigated UCAP that was the subject of the

determination pursuant to Section 23.4.5.4.3(b) is actually sold to its Host Load.

23.4.5.4.2 If Mitigated UCAP or External Sale UCAP is not offered or sold as

specified above, the Responsible Market Party for such Installed Capacity

Supplier or Generator electrically located in a MCZ Import Constrained Locality
shall pay the ISO an amount equal to the product of (A) 1.5 times the difference
between the Market-Clearing Price for the Mitigated Capacity Zone in the ICAP
Spot Market Auction with and without the inclusion of the Mitigated UCAP or
External Sale UCAP and (B) the total of (1) the amount of Mitigated UCAP or
External Sale UCAP not offered or sold as specified above, and (2) all other

megawatts of Unforced Capacity in the Mitigated Capacity Zone under common
Control with such Mitigated UCAP or External Sale UCAP. If the failure to offer
was associated with the same period as an External Sale of Capacity, and the
failure caused or contributed to an increase in UCAP prices in the Mitigated
Capacity Zone of 15 percent or more, provided such increase is at least
$2.00/kilowatt-month, the Responsible Market Party for such Generator or UDR
project electrically located in a MCZ Import Constrained Locality shall be
required to pay to the ISO an amount equal to 1.5 times the difference between
the average Market-Clearing Price for the Mitigated Capacity Zone in the ICAP
Spot Market Auctions for the relevant Comparison Period with and without the
External Sale of Capacity in those auctions, times the total of (1) the amount of
External Sale UCAP not offered or sold as specified above, and (2) all other

megawatts of Unforced Capacity in the Mitigated Capacity Zone under common
Control with such External Sale UCAP. The ISO will distribute any amounts
recovered in accordance with the foregoing provisions among the LSEs serving

Loads in regions affected by the withholding in accordance with ISO Procedures.

23.4.5.4.3 (a) Reasonably in advance of the deadline for submitting offers in an

External Reconfiguration Market the Responsible Market Party for External Sale
UCAP may request the ISO to provide a projection of ICAP Spot Auction
clearing prices for the Mitigated Capacity Zone over the Comparison Period for
the External Reconfiguration Market. Such requests, and the ISO’s response,
shall be made in accordance with the deadlines specified in ISO Procedures. Prior
to completing its projection of ICAP Spot Auction clearing prices for the
Mitigated Capacity Zone over the Comparison Period for the External
Reconfiguration Market, the ISO shall consult with the Market Monitoring Unit
regarding such price projection. The Responsible Market Party shall be exempt
from a physical withholding penalty as specified in Section 23.4.5.4.2, below, if at
the time of the deadline for submitting offers in an External Reconfiguration
Market its offers, if accepted, would reasonably be expected to produce net
revenues from the External Sale of Capacity that exceed the net revenues that
would have been realized from sale of the External Sale UCAP in the Mitigated
Capacity Zone at the ICAP Spot Auction prices projected by the ISO. The
responsibilities of the Market Monitoring Unit that are addressed in this section of
the Mitigation Measures are also addressed in Section 30.4.6.2.8(a) of Attachment
O to this Services Tariff.

(b) At least fifteen business days in advance of the opening of the ICAP Spot
Market Auction, a Behind-the-Meter Net Generation Resource can request that
the ISO make a determination that the sale of Net Unforced Capacity in a
Mitigated Capacity Zone to its Host Load does not constitute physical
withholding. The Responsible Market Party shall be exempt from a physical
withholding penalty as specified in Section 23.4.5.4.2 if the ISO determines that
the Behind-the-Meter Net Generation Resource has demonstrated that the Host
Load’s actual consumption is planned to exceed its Adjusted Host Load, and it
has a documented transaction to provide Net Unforced Capacity to its Host Load.
Prior to reaching its decision on a request by a Behind-the-Meter Net Generation
Resource that its sale of Net Unforced Capacity to its Host Load would not
constitute physical withholding, the ISO shall provide its preliminary
determination to the Market Monitoring Unit for review and comment. The
responsibilities of the Market Monitoring Unit that are addressed in this section of
the Mitigation Measures are also addressed in Section 30.4.6.2.8(b) of Attachment
O to this Services Tariff.

23.4.5.5 Control of Unforced Capacity shall be rebuttably presumed from (i)

ownership of an Installed Capacity Supplier, or (ii) status as the Responsible

Market Party for an Installed Capacity Supplier, but may also be determined on
the basis of other evidence. For purposes of determining if a Responsible Market
Party is a Pivotal Supplier in a Mitigated Capacity Zone except the G-J Locality,
the presumption of Control of Unforced Capacity can be rebutted by: (1) the sale
of Unforced Capacity in a Capability Period Auction or a Monthly Auction, or (2)

demonstrating to the reasonable satisfaction of the ISO that the ability to

determine the price and quantity of offers to supply Unforced Capacity has been
conveyed to a person or entity that is not an Affiliated Entity without limitation or
condition. For purposes of determining if a Responsible Market Party is a Pivotal
Supplier in a Mitigated Capacity Zonethe G-J Locality, the presumption of
Control of Unforced Capacity can be rebutted by demonstrating to the reasonable
satisfaction of the ISO that the ability to determine the price and quantity of offers
to supply Unforced Capacity has been conveyed to a person or entity that is not an
Affiliated Entity without limitation or condition, but cannot be rebutted by the
sale of Unforced Capacity in a Capability Period or Monthly Auction. For any
Mitigated Capacity Zone, if the presumption has not been rebutted, and if two or
more Market Parties each have rights or obligations with respect to Unforced
Capacity from an Installed Capacity Supplier that could reasonably be anticipated
to affect the quantity or price of Unforced Capacity transactions in an ICAP Spot
Market Auction, the ISO may attribute Control of the affected MW of Unforced
Capacity from the Installed Capacity Supplier to each such Market Party. Prior to
reaching its decision regarding whether the presumption of control of Unforced
Capacity has been rebutted, the ISO shall provide its preliminary determination to
the Market Monitoring Unit for review and comment. The responsibilities of the
Market Monitoring Unit that are addressed in this section of the Mitigation
Measures are also addressed in Section 30.4.6.2.9 of Attachment O to this
Services Tariff.

23.4.5.6 Audit, Review, and Penalties for Physical Withholding to Increase
Market-Clearing Prices

23.4.5.6.1 Audit and Review of Proposals or Decisions to Remove or Derate
Installed Capacity from a Mitigated Capacity Zone

Any proposal or decision by a Market Participant to retire or otherwise remove an

Installed Capacity Supplier from a Mitigated Capacity Zone Unforced Capacity market, or to de-
rate the amount of Installed Capacity available from such supplier, may be subject to audit and
review by the ISO if the ISO determines that such action could reasonably be expected to affect
Market-Clearing Prices in one or more ICAP Spot Market Auctions for a Mitigated Capacity
Zone in which the Resource(s) that is the subject of the proposal or decision is located,
subsequent to such action; provided, however, no audit and review shall be necessary if the
Installed Capacity Supplier is a Generator that is being retired or removed from a Mitigated
Capacity Zone as the result of a Forced Outage that began on or after May 1, 2015 that was
determined by the ISO to be a Catastrophic Failure. Such an audit or review shall assess whether
the proposal or decision has a legitimate economic justification or is based on an effort to
withhold Installed Capacity physically in order to affect prices. The ISO shall provide the
preliminary results of its audit or review to the Market Monitoring Unit for its review and
comment. The responsibilities of the Market Monitoring Unit that are addressed in this section
of the Mitigation Measures are also addressed in Section 30.4.6.2.10 of Attachment O to this
Services Tariff.

23.4.5.6.2 Audit and Review of the Reclassification of a Generator in a Mitigated
Capacity Zone From a Forced Outage to an ICAP Ineligible Forced
Outage

This Section 23.4.5.6.2 shall apply to a Market Party whose Installed Capacity Supplier is a Generator that began a Forced Outage on or after May 1, 2015.

23.4.5.6.2.1 Any reclassification of an Installed Capacity Supplier that is a Generator in
a Mitigated Capacity Zone from a Forced Outage to an ICAP Ineligible Forced
Outage by a Market Party or otherwise, pursuant to the terms of Section 5.18.2.1
of this Services Tariff, may be subject to audit and review by the ISO if the ISO
determines that such reclassification could reasonably be expected to affect the
Market-Clearing Price in one or more ICAP Spot Market Auctions for a Mitigated
Capacity Zone in which the Generator(s) that is the subject of the reclassification
is located, subsequent to such action; provided, however, if the Market Party’s
Generator experienced the Forced Outage as a result of a Catastrophic Failure, the
reclassification of a Generator in a Mitigated Capacity Zone from a Forced
Outage to an ICAP Ineligible Forced Outage shall not be subject to audit and
review pursuant to this Section 23.4.5.6.2.

The audit and review pursuant to the above paragraph shall assess whether the reclassification of the Generator in a Mitigated Capacity Zone from a Forced Outage to an ICAP Ineligible Forced Outage had a legitimate economic
justification or is based on an effort to withhold Installed Capacity physically in
order to affect prices.

The ISO shall provide the preliminary results of its audit or review to the
Market Monitoring Unit for its review and comment. The responsibilities of the
Market Monitoring Unit that are addressed in this section of the Mitigation
Measures are also addressed in Section 30.4.6.2.10 of Attachment O to this
Services Tariff.

23.4.5.6.2.2 The audit and review pursuant to Section 23.4.5.6.2.1 shall be deferred by
the ISO beyond the time period established in ISO Procedures for the audit and
review of a reclassification of a Generator from a Forced Outage to an ICAP
Ineligible Forced Outage if the Generator was in a Forced Outage for at least 180
days before the reclassification and one or more Exceptional Circumstances
delayed the acquisition of data necessary for the ISO’s audit and review.

The ISO shall conduct the audit and review after its receipt of data that it determines is necessary for the audit and review; provided, however, if, at the
time the ISO acquires the necessary data, the Market Party has Commenced
Repair of the Generator, or the Generator is determined by the ISO to have had a Catastrophic Failure, the Market Party shall not be subject to an audit and review pursuant to Section 23.4.5.6.2.1 of this Services Tariff. A Generator that
Commenced Repair while in an ICAP Ineligible Forced Outage but that ceased or unreasonably delayed that repair shall be subject to audit and review by the ISO pursuant to Section 23.4.5.6.2.1 of this Services Tariff.

23.4.5.6.2.3 The audit and review of the removal of a Generator from a Forced Outage
to an ICAP Ineligible Forced Outage, and the determinations of Catastrophic

Failure and Exceptional Circumstances, will be pursuant to specific timelines established in ISO Procedures.

23.4.5.6.2.4 The audit and review pursuant to Sections 23.4.5.6.2.1, and 23.4.5.6.2.2
shall be conducted to determine whether the decision not to repair a Generator
had a legitimate economic justification, consistent with competitive behavior; that
is, whether the cost of repair, including the risk-adjusted cost of capital, could not
reasonably be expected to be recouped over the reasonably anticipated remaining
life of the generator. The elements of such audit and review may include, as
appropriate, the historical revenue and maintenance cost data for the purpose of
the baseline, the duration of the repair, the costs including, but not limited to,
capital expenditures necessary to comply with federal or state environmental,
safety or reliability requirements that must be met in order to operate the
Generator, the anticipated capacity, energy and ancillary services revenues
following the repair, the projected costs of operating the Generator following the
repair, any benefits that would be foregone from using the site for a purpose other
than as the existing Generator (e.g., repowering), and other relevant data.

The criteria for the audit and review provided in this Services Tariff

Section 23.4.5.6.2.4 may be incorporated, as appropriate, in an audit and review required to be conducted pursuant to other provisions in this Services Tariff
Section 23.4.

issue a determination that a Market Party has experienced Exceptional

Circumstances after it has Commenced Repair and requests reclassification to an ICAP Ineligible Force Outage by the 40th day after the ISO’s receipt of data necessary to conduct the analysis.

For a requesting Market Party, a determination that a Generator has

experienced a Catastrophic Failure shall be made by the ISO by the 160th day of
the Forced Outage. If the ISO has determined that Exceptional Circumstances
will delay the submission of data necessary for the ISO to perform an audit and
review pursuant to Section 23.4.5.6.2.1 or 23.4.5.6.2, the ISO shall use reasonable
efforts to issue a determination that the Generator has experienced a Catastrophic
Failure by the 40th day after receipt of data necessary to conduct the analysis.

23.4.5.6.3 Penalties for Withholding Installed Capacity Physically In Order To
Affect Prices

If the ISO determines that either: i) pursuant to Section 23.4.5.6.1, the proposal or

and (B) the total of (1) the number of megawatts withheld in the month and (2) all other

megawatts of Installed Capacity in the Mitigated Capacity Zone under common Control with such withheld megawatts in the month. The requirement to pay such amounts shall continue
until the Market Party demonstrates that the removal from service, retirement, or de-rate, as
described in Section 23.4.5.6.1, or reclassification as described in Section 23.4.5.6.2 is justified by economic considerations other than the effect of such action on Market-Clearing Prices in the ICAP Spot Market Auctions for the Mitigated Capacity Zone. The ISO will distribute any
amount recovered in accordance with the foregoing provisions among the LSEs serving Loads in the Mitigated Capacity Zone(s) wherein the Market-Clearing Price was affected for the month corresponding to the penalty accordance with ISO Procedures.

23.4.5.7 Buyer-Side Market Power Mitigation Measures for Installed Capacity

Unless exempt as specified below, offers to supply Unforced Capacity from a Mitigated
Capacity Zone Installed Capacity Supplier: (i) shall equal or exceed the applicable Offer Floor;
and (ii) can only be offered in the ICAP Spot Market Auctions. Except for Offer Floors applied
pursuant to Section 23.4.5.7.9.5.2 (i.e., after the revocation of a Competitive Entry Exemption,)
Section 23.4.5.7.13.3 (i.e., after the revocation of a Renewable Exemption) or Section

23.4.5.7.14.5 (i.e., after the revocation of a Self Supply Exemption), the ISP UCAP MW, or

when the Installed Capacity Supplier is an RMR Generator, the Offer Floor shall apply to offers
for Unforced Capacity from the Installed Capacity Supplier, if it is not a Special Case Resource,
starting with the Capability Period for which the Installed Capacity Supplier first offers to supply
UCAP. Offer Floors applied pursuant to Section 23.4.5.7.9.5.2 shall apply to offers for Unforced
Capacity from an Installed Capacity Supplier starting with all ICAP auction activity subsequent
to the date of the revocation. Offer Floors shall cease to apply to that portion of a resource’s

UCAP (rounded down to the nearest tenth of a MW) that has cleared for any twelve, not-

necessarily-consecutive, months (such cleared amount, “Cleared UCAP”) in which the

resource’s MW were not ISP UCAP MW or MW of an RMR Generator. Offer Floors shall also
cease to apply for the period an Installed Capacity Supplier is an Interim Service Provider but
only in the amount of its ISP UCAP MW, or an RMR Generator in which case the Installed
Capacity Supplier’s offers of UCAP shall be as set forth in Section 23.4.5.7.12. Offer Floors
shall be adjusted annually using the most recent inflation rate determined pursuant to Section

5.14.1.2.2.4.11.

23.4.5.7.1 Unforced Capacity from an Installed Capacity Supplier that is subject to

an Offer Floor may not be used to satisfy any LSE Unforced Capacity Obligation for Mitigated Capacity Zone Load unless such Unforced Capacity is obtained through participation in an ICAP Spot Market Auction.

23.4.5.7.2 An Installed Capacity Supplier, in a Mitigated Capacity Zone for which

Capability Period is projected by the ISO to be higher, with the inclusion of the
Installed Capacity Supplier, than the reasonably anticipated Unit Net CONE of
the Installed Capacity Supplier, (c) it has been determined to be exempt pursuant
to Section 23.4.5.7.9 (the “Competitive Entry Exemption”), (d) it has been
determined, and in the quantity of MW for which it has been determined, to be
exempt pursuant to Section 23.4.5.7.13 (the “Renewable Exemption”), or (e) it
has been determined, and in the quantity of MW for which it has been determined,
to be exempt pursuant to Section 23.4.5.7.14 (the “Self Supply Exemption”). For
purposes of the determinations pursuant to (a) and (b) of this section, the ISO
shall identify Unit Net CONE and the price on the ICAP Demand Curve projected
for a future Mitigation Study Period consistent with Sections 23.4.5.7.3.2 or

23.4.5.7.4, as appropriate, for each Examined Facility promptly after it (i) has
accepted its SDU Project Cost Allocation and deliverable MW, if any, from the
Final Decision Round and (ii) along with all other remaining members, has posted
any associated Security pursuant to OATT Section 25 (OATT Attachment S) (for
purposes of Section 23.4, a project that “remains a member of a completed Class
Year”). The first year value of an Examined Facility’s Unit Net CONE will be
calculated pursuant to Section 23.4.5.7, Section 23.4.5.7.2.4, or 23.4.5.7.3.2, will
be established at the time such Examined Facility first offers UCAP, and will be
used by the ISO in subsequent mitigation exemption or Offer Floor
determinations for Additional CRIS MW. Any determination received pursuant
to Sections 23.4.5.7.2, 23.4.5.7.6. or 23.4.5.7.7 shall not become final for the
relevant Examined Facility unless the Examined Facility accepts its SDU Project

Cost Allocation and deliverable MW, if any, from the Final Decision Round, and
posted any associated security pursuant to OATT Section 25, and remains a
member of the completed Class Year. The Unit Net CONE or exemption
determination pursuant to this Section shall be final on the date the ISO issues a
notice to stakeholders that the Class Year decisional process has been completed.

23.4.5.7.2.1 Promptly after Commission acceptance of the first ICAP Demand Curve
to apply to a Mitigated Capacity Zone, the ISO shall make an exemption and
Offer Floor determination for any NCZ Examined Project that is in a completed
Class Year and has received CRIS, unless exempt pursuant to section 23.4.5.7.6
or 23.4.5.7.8.

23.4.5.7.2.2 The ISO shall make an “Indicative Buyer-Side Mitigation Exemption

Determination” for any NCZ Examined Project if (i) the Commission has

accepted an ICAP Demand Curve for the Mitigated Capacity Zone that will

applicable Locality provided that such NCZ Examined Project (i) received CRIS
if the Class Year completed at the time the Commission accepts the Demand
Curve, or (ii) has not been removed from the Class Year Deliverability Study if
the Class Year is not completed. The Indicative Buyer-Side Mitigation
Exemption Determination is for informational purposes only. The exemption or
Offer Floor for an NCZ Examined Project to which this Section applies shall be
determined for such projects receiving CRIS using the Commission-accepted
Locality Demand Curve.

23.4.5.7.2.3 Any NCZ Examined Project not exempt pursuant to 23.4.5.7.8 shall

provide data and information requested by the ISO by the date specified by the ISO, in accordance with the ISO Procedures.

The ISO shall compute the reasonably anticipated ICAP Spot Market Auction forecast price based on Expected Retirements (as defined in subsection

23.4.5.7.2.3.1), plus each NCZ Examined Project.

23.4.5.7.2.3.1 Expected Retirements shall be determined based on any Generator that

provided written notice to the New York State Public Service Commission that it intends to retire, plus any UDR projects, or any Generator 2 MW or less that provided written notice to the ISO that it intends to retire.

23.4.5.7.2.3.2 The Load forecast shall be based on data used to develop the Indicative
Locational Minimum Installed Capacity Requirement, and Special Case
Resources based on data for the Mitigated Capacity Zone that is part of the
Special Case Resource data set forth in the most-recently published Load and
Capacity Data (Gold Book).

23.4.5.7.2.4 The ISO shall post on its website the inputs of the reasonably anticipated
ICAP Spot Market Auction forecast prices determined in accordance with

23.4.5.7.2.3 (except for the posting of an input which would disclose Confidential Information), the Expected Retirements, and the NCZ Examined Projects, before the exemption or Offer Floor determination under this Section.

When the ISO is evaluating more than one NCZ Examined Project

first year value of its Unit Net CONE, or (ii) the numerical value equal to 75

percent of the Mitigation Net Cone, then inflated in accordance with 23.4.5.7 for each of the year two and year three of the Mitigation Study Period.

23.4.5.7.2.5 When evaluating NCZ Examined Projects pursuant to Sections

23.4.5.7.2.1 or 23.4.5.7.2.2, the ISO shall seek comment from the Market

Monitoring Unit on matters relating to the determination of price projections and
cost calculations. The ISO shall inform the NCZ Examined Project of the Offer
Floor or Offer Floor exemption determination or Indicative Buyer-Side Mitigation

Exemption Determination promptly. The responsibilities of the Market

Monitoring Unit that are addressed in this Section 23.4.5.7.2.5 are also addressed in Section 30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.2.6 If an NCZ Examined Project under the criteria in 23.4.5.7.2.1 or

23.4.5.7.2.2 does not provide all of the requested data by the date specified by the
ISO, the MW of CRIS received at that time by the project shall be subject to the

Mitigation Net CONE Offer Floor for the period determined by the ISO in accordance with Section 23.4.5.7.

23.4.5.7.2.7 An NCZ Examined Project or Examined Facility located in more than one
Mitigated Capacity Zone shall be evaluated pursuant to the tests in Section

23.4.5.7.2 (a) and (b) or 23.4.5.7.3 (as applicable), calculating Mitigation Net
CONE for the smallest Mitigated Capacity Zone that contains the Load Zone in
which such NCZ Examined Project or Examined Facility is electrically located.

23.4.5.7.3 The ISO shall make such exemption and Unit Net CONE determination

for each “Examined Facility” (collectively “Examined Facilities”) which term

shall mean (I) each proposed new Generator and proposed new UDR project, and
each existing Generator that has ERIS only and no CRIS, that is a member of the
Class Year that requested CRIS, or that requested an evaluation of the transfer of
CRIS rights from another location, in the Class Year Facilities Study commencing
in the calendar year in which the Class Year Facility Study determination is being
made (the Capability Periods of expected entry as further described below in this
Section, the “Mitigation Study Period”) and (II) each (i) existing Generator that
did not have CRIS rights, and (ii) proposed new Generator and proposed new

UDR project, provided such Generator under Subsection (i) or (ii) is an expected recipient of transferred CRIS rights at the same location regarding which the ISO has been notified by the transferor or the transferee of a transfer pursuant to
OATT Attachment S Section 25.9.4 that will be effective on a date within the
Mitigation Study Period.

23.4.5.7.3.1 The commercial operation date to be used by the ISO solely for purposes
of identifying the Examined Facilities will be determined by the ISO at the time
of the Class Year Study as the date most-recently (A) identified by the project to
the ISO in the Interconnection Facilities Study process or (B) reflected in the
Interconnection Queue, or if neither of the foregoing is applicable, then the date
identified by the project to the Transmission Owner to which it has proposed
interconnecting.

23.4.5.7.3.2 The ISO shall compute the reasonably anticipated ICAP Spot Market
Auction forecast price for any Mitigated Capacity Zone based on Expected
Retirements (as defined in this subsection 23.4.5.7.3.2), plus each Examined
Facility in 23.4.5.7.3 (I) or (II).

Expected Retirements shall be determined based on any Generator that provided written notice to the New York State Public Service Commission that it intends to retire, plus any UDR projects or Generator 2 MW or less that provided written notice to the ISO that it intends to retire.

The load forecast and Special Case Resources shall be as set forth in the mostrecently published Load and Capacity Data (Gold Book).

When the ISO is evaluating more than one Examined Facility

concurrently, the ISO shall recognize in its computation of the anticipated ICAP Spot Market Auction forecast price that Generators or UDR projects will clear from lowest to highest, using for each Examined Facility the lower of (i) the first year value of its Unit Net CONE, or (ii) the numerical value equal to 75 percent of the Mitigation Net Cone, then inflated in accordance with 23.4.5.7 for each of the year two and year three of the Mitigation Study Period.

23.4.5.7.3.3 All developers, Interconnection Customers, and Installed Capacity

Facilities that meet 23.4.5.7.3 (II). When evaluating Examined Capacity pursuant
to this Section 23.4.5.7, the ISO shall seek comment from the Market Monitoring
Unit on matters relating to the determination of price projections and cost
calculations. The ISO shall provide to each project its revised price forecast and a
revised initial determination for a Subsequent Decision Period no later than the
ISO’s issuance of a Revised Project Cost Allocation. If a project remains a
member of a completed Class Year, the ISO shall inform the project of the final
determination of the Offer Floor or whether the Offer Floor exemption specified
above in this Section is applicable as soon as practicable after the date the ISO
issues a notice to stakeholders that the Class Year decisional process has been
completed, in accordance with methods and procedures specified in ISO
Procedures. The responsibilities of the Market Monitoring Unit that are addressed
in this section of the Mitigation Measures are also addressed in Section

30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.3.4 If an Examined Facility under the criteria in 23.4.5.7.3 (II) has not

provided written notice to the ISO on or before the date specified by the ISO, or any Examined Facility required to be reviewed does not provide all of the
requested data by the date specified by the ISO, the proposed Capacity shall be subject to the Mitigation Net CONE Offer Floor for the period determined by the ISO in accordance with Section 23.4.5.7.

determination if it meets the criteria in Section 23.4.5.7.3 (I) and was not

previously in a Class Year at the time of the completion of the Class Year either

(a) enters a new Class Year and requests CRIS or (b) intends to receive

transferred CRIS rights at the same location. An Examined Facility under the

criteria in Section 23.4.5.7.3 (II) that did receive CRIS rights will be bound by the determination rendered and will not be reevaluated. An Examined Facility under the criteria that had been set forth in Section 23.4.5.7.3 (III) prior to May 19,
2016, will not be reevaluated.

23.4.5.7.3.6 If an Installed Capacity Supplier demonstrates to the reasonable

satisfaction of the ISO that the value equal to the first of the three year values in
the Mitigation Study Period that comprise its Unit Net CONE is less than any
Offer Floor that would otherwise be applicable to the Installed Capacity Supplier,
then its Offer Floor shall be reduced to a numerical value equal to the first year of
its Unit Net CONE.

23.4.5.7.3.7 If the Installed Capacity Supplier first offers UCAP prior to the first

Capability Year of the Mitigation Study Period for which it was evaluated, its

Offer Floor shall be reduced using the inflation rate identified in Section 23.4.5.7. If the Installed Capacity Supplier first offers UCAP after the first Capability Year of the Mitigation Study Period for which it was evaluated, its Offer Floor shall be increased using the inflation rate identified in 23.4.5.7.

determine the likely projected net Energy and Ancillary Services revenues utilizing a methodology that reflects, as applicable, but is not limited to, the guiding principles set forth in Section 23.4.5.7.3.8.1. The ISO will implement this Section 23.4.5.7.3.8 in accordance with Section 23.4.5.7.3.8.2.

23.4.5.7.3.8.1 The methodology used for a specific UDR project shall reflect the
following guiding principles, where applicable:

(a) The design and characteristics of the UDR project as proposed in the Class Year,

including whether it is proposed to be uni-directional or bi-directional.

(b) The market structure, scheduling rules, price formation rules, and other relevant

characteristics and rules of the Control Area at each terminus of the UDR project.

NYCA and External Control Areas prices, including proxy bus prices.

(d) The reasonably projected cost to purchase energy, capacity, and ancillary services

that would be transmitted into, and if the UDR project is proposed in the Class

Year to be bi-directional also from, the Mitigated Capacity Zone, utilizing the

UDR project at the rate determined by: (i) market-based clearing price

mechanisms to the extent that the External Control Area uses them, or ISO market
prices if an internal UDR project; (ii) a reasonable substitute, in the ISO’s
judgment, to the extent that the External Control Area does not use market-based
clearing price mechanisms to determine prices. The costs to purchase energy and
capacity, and any other products associated therewith, shall not be based on
advantages or sources of revenue that would not reflect arm’s-length transactions,

or that are not in ordinary course of business for a competitive energy market participant.

(e) The reasonably anticipated fees for transmitting the ISO-projected energy,

capacity, and ancillary services transactions utilizing the UDR project. These fees shall include any export fees, transmission services charges, ancillary services fees, scheduling fees, and other fees and costs.

(f) The reasonably projected opportunity costs (including fees) of selling energy,

capacity, and any other products associated with the sale of energy, into an

External Control Area in lieu of a sale transaction into the Mitigated Capacity
Zone.

(g) The reasonably projected revenues from the sale of energy and ancillary services

that would be transmitted into, and if the UDR project is proposed in the Class
Year to be bi-directional also from, the Mitigated Capacity Zone, utilizing the
UDR project at the rate determined by: (i) market-based clearing price
mechanisms to the extent that the External Control Areas uses them, or ISO
market prices if an internal UDR project; (ii) a reasonable substitute, in the ISO’s judgment, to the extent that the External Control Area does not use market-based clearing price mechanisms to determine prices. The revenues from the sale of
energy, capacity, and any other products associated with the sale thereof, into an External Control Area shall not be based on advantages or sources of revenue that do not reflect arm’s-length transactions, or that are not in ordinary course of
business for a competitive energy market participant.

(h)The effect of scheduling uncertainty and imperfect arbitrage on the projected

costs and revenues from the purchase and sale of energy and ancillary services that are reasonably projected to be transmitted into, and if the UDR project is proposed in the Class Year to be bi-directional also from, the Mitigated Capacity Zone, utilizing the UDR project.

23.4.5.7.3.8.2 Implementation

(a) The ISO shall seek comment from the Market Monitoring Unit on the

methodology the ISO will use to project net Energy and Ancillary Services for each UDR project, and the inputs used to perform the calculation. The
responsibilities of the Market Monitoring Unit that are addressed in this section are also addressed in Section 30.4.6.2.12 of Attachment O.

(b) The ISO shall post on its website a description of the methodology used for each

UDR project, subject to any restrictions on the disclosure of Confidential Information or Critical Energy Infrastructure Information.

withdraws from a Class Year and then enters another Class Year (regardless of
whether it has the same or a different interconnection queue position,) the ISO
may utilize a different methodology than it previously used, provided it reflects,

where applicable, the guiding principles set forth in Section 23.4.5.7.3.8.1 and implemented in accordance with Section 23.4.5.7.3.8.2(a) and (b).

23.4.5.7.4 For purposes of Sections 23.4.5.7.2(b) and 23.4.5.7.6(b), the ISO shall

identify (A) the Unit Net CONE projected for a Mitigation Study Period using:
the most recent inflation rate determined pursuant to Section 5.14.1.2.2.4.11; and

(B) the price on the ICAP Demand Curve projected for a Mitigation Study Period using the most recent escalation factor determined pursuant to Section

5.14.1.2.2.1. For purposes of Section 23.4.5.7.2(a), the ISO shall use the most recent escalation factor determined pursuant to Section 5.14.1.2.2.1.

23.4.5.7.5 A Mitigated Capacity Zone Installed Capacity Supplier that is a Special

Case Resource shall be subject to an Offer Floor beginning with the month of its
initial offer to supply Installed Capacity, and until its offers of Installed Capacity
have been accepted in the ICAP Spot Market Auction at a price at or above its
Offer Floor for a total of twelve, not necessarily consecutive, months. A Special
Case Resource shall be exempt from the Offer Floor if (a) it is located in a
Mitigated Capacity Zone except New York City and is enrolled as a Special Case
Resource with the ISO for any month within the Capability Year that includes
March 31 in an ICAP Demand Curve Reset Filing Year in which the ISO
proposes a New Capacity Zone that includes the location of the Special Case
Resource, or (b) the ISO projects that the ICAP Spot Market Auction price will
exceed the Special Case Resource’s Offer Floor for the first twelve months that
the Special Case Resource reasonably anticipated to offer to supply UCAP. If a
Responsible Interface Party fails to provide Special Case Resource data that the
ISO needs to conduct the calculations described in the two preceding sentences by
the deadline established in ISO Procedures, the Special Case Resource will cease
to be eligible to offer or sell Installed Capacity. The Offer Floor for a Special
Case Resource shall be equal to the minimum monthly payment for providing
Installed Capacity payable by its Responsible Interface Party, plus the monthly

value of any payments or other benefits the Special Case Resource receives from
a third party for providing Installed Capacity, or that is received by the
Responsible Interface Party for the provision of Installed Capacity by the Special
Case Resource. The Offer Floor calculation for a Special Case Resource located
in New York City shall include any payment or the value of other benefits that are
awarded for offering or supplying Mitigated Capacity Zone Capacity unless such
payment or the value of other benefits is ruled exempt by Commission order in
response to a request for exemption filed under section 206 of the Federal Power
Act by New York State or a government instrumentality of New York State. The
Offer Floor calculation for a Special Case Resource located in a Mitigated
Capacity Zone except New York City shall include any payment or the value of
other benefits that are awarded for offering or supplying Mitigated Capacity Zone
Capacity, except for payments or the value of other benefits provided under
programs administered or approved by New York State or a government
instrumentality of New York State. Offers by a Responsible Interface Party at a
PTID shall be not lower than the highest Offer Floor applicable to a Special Case
Resource providing Installed Capacity at that PTID. Such offers may comprise a
set of points for which prices may vary with the quantity offered. If this set
includes megawatts from a Special Case Resource(s) with an Offer Floor, then at
least the quantity of megawatts in the offer associated with each Special Case
Resource must be offered at or above the Special Case Resource’s Offer Floor.
Offers by a Responsible Interface Party shall be subject to audit to determine
whether they conformed to the foregoing Offer Floor requirements. If a

Responsible Interface Party together with its Affiliated Entities submits one or
more offers below the applicable Offer Floor, and such offer or offers cause or
contribute to a decrease in UCAP prices in the Mitigated Capacity Zone of 5
percent or more, provided such decrease is at least $.50/kilowatt-month, the
Responsible Interface Party shall be required to pay to the ISO an amount equal to

1.5 times the difference between the Market-Clearing Price for the Mitigated
Capacity Zone in the ICAP Spot Auction for which the offers below the Offer
Floor were submitted with and without such offers being set to the Offer Floor,
times the total amount of UCAP sold by the Responsible Interface Party and its
Affiliated Entities in such ICAP Spot Auction. If an offer is submitted below the
applicable Offer Floor, the ISO will notify the Responsible Market Party and the
notification will identify the offer, the Special Case Resource, the price impact,
and the penalty amount. The ISO will provide the notice reasonably in advance
of imposing such penalty. The ISO shall distribute any amounts recovered in
accordance with the foregoing provisions among the entities, other than the entity
subject to the foregoing payment requirement, supplying Installed Capacity in
regions affected by one or more offers below an applicable Offer Floor in
accordance with ISO Procedures.

23.4.5.7.6 Exemption and Offer Floor Determinations for Additional CRIS MW:

be exempt from an Offer Floor (a) if the price that is equal to (x) the average of
the ICAP Spot Market Auction price for each month in the two Capability
Periods, beginning with the Summer Capability Period commencing three years
from the start of the Class Year (the “Starting Capability Period”) is projected by
the ISO, with the inclusion of the Additional CRIS MW, to be higher than (y) the
highest Offer Floor based on the Mitigation Net CONE that would be applicable
to such Additional CRIS MW in the same two (2) Capability Periods (utilized to
compute (x)); (b) if the price that is equal to the average of the ICAP Spot Market
Auction prices in the six Capability Periods beginning with the Starting
Capability Period is projected by the ISO, with the inclusion of the Installed
Capacity Supplier’s Additional CRIS MW, to be higher than the reasonably
anticipated Unit Net CONE computed in accordance with (i) and (ii) of Section

23.4.5.7.6.1 for the Installed Capacity Supplier’s Additional CRIS MW, or (c) for
the quantity of MW determined to be exempt pursuant to Section 23.4.5.7.13 or

23.4.5.7.14 (i.e., a Self Supply Exemption can be received for some Additional
CRIS MW and a Renewable Exemption for other Additional CRIS MW that
comprise all or part of the same request for Additional CRIS MW in a given
Class Year..

23.4.5.7.6.1 For Additional CRIS MW that have an exemption or Offer Floor

determined pursuant to this Section 23.4.5.7.6, the ISO shall compute Unit Net CONE as follows:

(i) Unit Net CONE for the Additional CRIS MW shall be based on the Additional
CRIS MW and the costs and revenues of and associated with the Additional CRIS
MW if:

(a) the most recent prior determination concluded that the Capacity for
which the Examined Facility accepted CRIS was exempt from the Offer Floor
pursuant to Section 23.4.5.7.2(b), 23.4.5.7.6(b), 23.4.5.7.7, or 23.4.5.7.8; or

(b) at the time of an Examined Facility’s request for Additional CRIS MW: (1) it has accepted CRIS MW equal to, or greater than, 95 percent of the Examined Facility’s maximum MW of electrical capability, net of auxiliary load, at an ambient temperature of 93° F as determined in accordance with ISO
Procedures and (2) the amount of Cleared UCAP is greater than or equal to the amount of UCAP calculated pursuant to Section 23.4.5.7.6.3; or

(c) the Examined Facility’s Total Evaluated CRIS MW includes exempted CRIS MW for which the Examined Facility did not receive a Unit Net CONE determination and thus did not provide data to the ISO because the determination for the exempt CRIS MW received was not based on Unit Net CONE and was made prior to November 27, 2010.

(ii) or in all other cases, Unit Net CONE, shall be the greater of two values, one based on the Total Evaluated CRIS MW, and the costs and revenues of the Total Evaluated CRIS MW, and one based on the Additional CRIS MW, and the costs and revenues of the Additional CRIS MW.

23.4.5.7.6.2 When calculating the Unit Net CONE of the Total Evaluated CRIS MW
for an Examined Facility, the ISO shall utilize the Examined Facility’s first year

Unit Net CONE determined pursuant to Section 23.4.5.7 and Sections 23.4.5.7.2.4
or 23.4.5.7.3.2, adjusted to the year’s dollars at the time of an Examined Facility’s
request for Additional CRIS MW using: (i) the relevant value from the price

index for non-farm business output published in the Survey of Current Business
by the Department of Commerce’s Bureau of Economic Analysis (“BEA Non-
Farm Price Index”), or its successor; or (ii) the most recent inflation rate

determined pursuant to Section 5.14.1.2.2.4.11 for any future year which is beyond the published BEA Non-Farm Price Index, or its successor.

23.4.5.7.6.3 For purposes of making the determination pursuant to Section

23.4.5.7.6.1(i)(b)(2), the amount of Cleared UCAP shall be compared to an

amount of UCAP calculated as the product of the CRIS MW held by the

Examined Facility immediately prior to its request for Additional CRIS MW and
(1-EFORd). Except as specified in the next paragraph, for purposes of this
calculation, if the Examined Facility is a Generator, its EFORd shall be derived
using the data in the 5-year average NERC-GADS Generating Availability
Report, or its successor, for the main class of the unit (hereinafter the “Class
Average EFORd”) that is current at the time of the request for Additional CRIS
MW, when available. If the Examined Facility is an Intermittent Power Resource
or Limited Control Run-of-River Hydro Resource, the ISO shall apply a 5-year
average derating factor based on ISO data to establish the EFORd to be utilized in
the calculation pursuant to this paragraph. In all other cases, the ISO will apply
the 5-year average derating factor from the ICAP/UCAP translation, for the
smallest Mitigated Capacity Zone in which the resource is located at the time of

the request. The EFORd applied by the ISO at the time that the Examined

Facility first offers or certifies UCAP in an Installed Capacity auction (“Initial Entry EFORd”) shall be used instead of Class Average EFORd when it is higher (i.e., a greater outage rate) than the Class Average EFORd calculated at the time of the Examined Facility’s request for Additional CRIS MW.

23.4.5.7.6.4 Additional CRIS MW shall be subject to the Mitigation Net CONE Offer
Floor for the period specified in Section 23.4.5.7, for any Examined Facility
whose Total Evaluated CRIS MW includes CRIS MW that are or have ever been
subject to the Mitigation Net CONE Offer Floor, pursuant to Section 23.4.5.7.3.4.

23.4.5.7.6.5 The Offer Floor for Additional CRIS MW shall be equal to the lesser of:

(a) the Unit Net CONE for the Additional CRIS MW; or (b) a numerical value equal to 75 percent of the Mitigation Net CONE translated into a seasonally adjusted monthly UCAP value for the Additional CRIS MW.

23.4.5.7.6.6 The results of this exemption determination shall apply only to the

Additional CRIS MW and shall not alter or affect any prior exemption or Offer
Floor determination for the Examined Facility. The Additional CRIS MW for
which CRIS is received shall be bound by the determination rendered and will not be reevaluated unless the Examined Facility enters a new Class Year for the
Additional CRIS MW.

Supplier with the Examined Facility’s first year Unit Net CONE value if the

Installed Capacity Supplier (a) requests that information, and (b) represents that it:

(i) will use that information solely for purposes of considering a request for Additional CRIS MW for the Examined Facility, and (ii) will not share that information with or make it available to any other person except those that are assisting it in considering a request for Additional CRIS MW.

23.4.5.7.6.8 The ISO shall post on its website the determination of whether the project
is exempt or non-exempt from an Offer Floor as soon as the determination is
final. Concurrent with the ISO’s posting, the Market Monitoring Unit shall
publish a report on the ISO’s determination, as further specified in Section

30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.7 (a) An In-City Installed Capacity Supplier that is not a Special Case

Resource shall be exempt from an Offer Floor if it was an existing facility on or
before March 7, 2008. (b) A Generator or UDR project that was an existing
facility on or before June 29, 2012, which: (i) is in a Mitigated Capacity Zone
except New York City, and (ii) was grandfathered from the deliverability
requirement at a certain quantity of MW of CRIS pursuant to Section 25.9.3.1 of
OATT Attachment S (“Deliverability Grandfathering Process”) shall be exempt
from an Offer Floor for the MW quantity of CRIS that was provided through the
Deliverability Grandfathering Process plus an additional 2 MW obtained through
Section 30.3.2.6 of Attachment X to the OATT. If the Generator or UDR project
subsequently received CRIS above the quantity established through the
Deliverability Grandfathering Process, this exemption shall not apply to any such

increase above the 2 MW allowed in Section 30.3.2.6 of Attachment X to the
OATT.

23.4.5.7.8 For any Mitigated Capacity Zone except New York City:

(I) Any existing or proposed Generator or UDR project that has the
characteristics specified in this Section 23.4.5.7.8(I) shall be exempt from an
Offer Floor with respect to the MW of CRIS that it received at the time, or for
which it satisfied the specific CRIS transfer requirements stated in this Section.
To be eligible for an exemption under this Section: (a) the existing or proposed
Generator or UDR project’s location must be included in the ISO’s March 31
Filing in the ICAP Demand Curve Reset Filing Year in which a Mitigated
Capacity Zone is first applied to such location; (b) prior to that March 31 Filing
the existing or proposed Generator or UDR project must have both: (i)
Commenced Construction and (ii) either (1) received the MW of CRIS in a Class
Year that was completed or (2) submitted to the ISO an Interconnection Request
that specifically states that the Generator or UDR project will be requesting or has
requested a transfer of a specific MW quantity of CRIS at the same location in
accordance with Section 25.9.4 of OATT Attachment S (provided that the transfer
is ultimately approved by the ISO and consummated); and (c) the existing or
proposed Generator or UDR project must demonstrate to the ISO no later than the
deadline established by the ISO that it satisfies the requirements of (b) (i) and (ii)
above; and

(II) An existing or proposed Generator or UDR project that is not subject
to a deliverability requirement (and therefore, is not in a Class Year and does not

receive CRIS MW) shall be exempt from an Offer Floor if it meets the following
requirements prior to the ISO’s March 31 Filing in an ICAP Demand Curve Reset
Filing Year in which a Mitigated Capacity Zone is first applied to such location:

(a) has Commenced Construction, (b) has an effective interconnection agreement,
and (c) provides specific written notification to the ISO that it meets requirements

(a) and (b) of this subsection 23.4.5.7.8(II) no later than the deadline established by the ISO.

The ISO shall consult with the Market Monitoring Unit prior to

determining whether an existing or proposed Generator or UDR project has

Commenced Construction. Prior to the ISO making its determination, the Market
Monitoring Unit shall provide the ISO a written opinion and recommendation
regarding whether an existing or proposed Generator or UDR project Commenced
Construction. The responsibilities of the Market Monitoring Unit that are
addressed in this section of the Mitigation Measures are also addressed in Section

30.4.6.2.12 of Attachment O. The ISO shall only make a determination pursuant to this Section for an existing or proposed Generator or UDR project for the
Mitigated Capacity Zone’s first application to the location of the project. The Market Monitoring Unit shall also provide a public report on its assessment of an ISO determination that an existing or proposed Generator or UDR project is
exempt from an Offer Floor pursuant to this Section 23.4.5.7.8.

23.4.5.7.9 Competitive Entry Exemption

23.4.5.7.9.1 Eligibility

23.4.5.7.9.1.1 A proposed new Generator or UDR project that becomes a member of a
Class Year after Class Year 2012 may request to be evaluated for a “Competitive
Entry Exemption” for its CRIS MW and shall qualify for such exemption if the
ISO determines that the proposed Generator or UDR project meets each of the
following requirements: (a) does not have, and at no time before the Generator
first produces or the UDR project first transmits energy (for purposes of this
Section 23.4.5.7.9, the “Entry Date”) shall have, (i) a direct or indirect “non-
qualifying contractual relationship,” as defined in Section 23.4.5.7.9.1.2, with a
Public Power Entity, a Transmission Owner with a Transmission District in the
NYCA, any other entity with a Transmission District in the NYCA, or an agency
or instrumentality of New York State or a political subdivision thereof,
(collectively “Non-Qualifying Entry Sponsors”); or (ii) an unexecuted agreement,
written or unwritten, with a Non-Qualifying Entry Sponsor that would support the
development of the project, except those agreements that would not constitute a
“non-qualifying contractual relationship,” as set forth in Section 23.4.5.7.9.1.3(i)

- (viii), (b) is not itself, and is not an Affiliate of, a Non-Qualifying Entry Sponsor.

the request for the Competitive Entry Exemption; (b) is for the energy or capacity
produced by or delivered from or by the Generator or UDR project, including an
agreement for rights to schedule or use a UDR; or (c) provides services, financial
support, or tangible goods to a Generator or UDR project. For purposes of
Section 23.4.5.7.9, an indirect “non-qualifying contractual relationship” is any
contract between the Generator or UDR project and an entity (for purposes of this
Section 23.4.5.7.9, a “third party”) if the third party has a non-qualifying
contractual relationship with a Non-Qualifying Entry Sponsor, the recital,
purpose, or subject of which includes, or has the effect of including, this
Generator or UDR project.

23.4.5.7.9.1.3 A contract with a Non-Qualifying Entry Sponsor shall not constitute a

accountant or appraiser with specific experience in such valuations; (v) an

easement or license to use real property; (vi) a contract, with any department,

agency, instrumentality, or political subdivision of New York State providing for
a payment-in-lieu of taxes (i.e., a “PILOT” agreement) or industrial or
commercial siting incentives, such as tax abatements or financing incentives,
provided the PILOT agreement or incentives are generally available to industrial
or commercial entities; (vii) a service agreement for natural gas entered into under
a tariff accepted by a regulatory body with jurisdiction over that service; or (viii) a
service agreement entered into under a tariff accepted by a regulatory body with
jurisdiction over that service at a regulated rate for electric Station Power, or
steam service, excluding an agreement for a rate that is a negotiated rate pursuant
to any such regulated electric, or steam tariff. Notwithstanding the foregoing, a
contract with a Non-Qualifying Entry Sponsor that includes a provision that is a
non-qualifying contractual relationship will render the entire contract described in

(i) through (viii) of this Section a non-qualifying contractual relationship.

23.4.5.7.9.1.4 The ISO shall determine whether a Generator or UDR project is eligible
for a Competitive Entry Exemption based on its review of the certifications
required by Section 23.4.5.7.9.2, below, and any other supporting data requested
by the ISO. When evaluating eligibility for a Competitive Entry Exemption, the
ISO shall consult with the Market Monitoring Unit. The responsibilities of the
Market Monitoring Unit that are addressed in this section of the Mitigation
Measures are also addressed in Section 30.4.6.2.12 of Attachment O to this
Services Tariff.

23.4.5.7.9.2 Certifications and Acknowledgements

23.4.5.7.9.2.1 A Generator or UDR project requesting a Competitive Entry Exemption
shall submit to the ISO in accordance with ISO Procedures, and shall be legally
bound by, the following Certification and Acknowledgement form executed by a
duly authorized officer:

CERTIFICATION AND ACKNOWLEDGMENT

I [NAME & TITLE] hereby certify on behalf of myself, [NAME OF PROJECT], and
[NAME OF DEVELOPER] that each of the following statements is true and correct:

1. I am an officer whose responsibilities include the development of the

[EXAMINED FACILITY], New York Independent System Operator, Inc.’s

(“NYISO”) Interconnection queue position Number [INSERT NUMBER] (the “Project”).

2.I am duly authorized to make representations concerning the Project, including

each of the certifications and acknowledgements that I have made in this

document.

3. I hereby [REQUEST ON BEHALF OF/ACKNOWLEDGE THE PRIOR

SUBMISSION IN THIS CLASS YEAR BY] the Developer a Competitive Entry Exemption for the Project.

4. I have reviewed and I understand the requirements established under the NYISO

Market Administration and Control Area Services Tariff (“Services Tariff”)
related to a “Competitive Entry Exemption” pursuant to Section 23.4.5.7.9.

5. I have personal knowledge of the facts and circumstances supporting the Project’s

request and eligibility for a Competitive Entry Exemption as of the date of this Certification and Acknowledgment, including all data and other information submitted by the Project to the NYISO.

6. To the best of my knowledge and having conducted due diligence that is current

as of the date of this Certification there [ARE/ARE NOT ANY] direct or indirect
contractual relationships for the Project with a “Non-Qualifying Entry Sponsor,”
as those terms are defined in Section 23.4.5.7.9 of the Services Tariff. I have
listed all contracts with Non-Qualifying Entry Sponsors on Schedule 1 to this
Certification.

7. If the Answer to (6) is that there are one or more direct or indirect contractual

relationships for the Project with a Non-Qualifying Entry Sponsor, then I certify
that to the best of my knowledge and having conducted due diligence that they are

“allowable contracts” as set forth in Section 23.4.5.7.9.1.3(i) - (viii) of the Services Tariff.

8. To the best of my knowledge and having conducted due diligence that is current

as of the date of this Certification, (a) no unexecuted agreements, written or
unwritten, with a Non-Qualifying Entry Sponsor exist that would support the
development of the Project except those agreements that would not constitute a
non-qualifying contractual relationship, as set forth in Section 23.4.5.7.9.1.3(i) -
(viii) of the Services Tariff, and (b) all agreements that would not constitute a
non-qualifying contractual relationship are on Schedule 1 to this certification.

9. To the best of my knowledge and having conducted due diligence, the Project is

not a Non-Qualifying Entry Sponsor, and it is not an “Affiliate” (as Affiliate is

defined in Section 2.1 of the Services Tariff) of, a Non-Qualifying Entry Sponsor.

10. The Project shall provide any information or cooperation requested by the NYISO

in connection with the Project’s request for a Competitive Entry Exemption.

11.All parents or Affiliates of the Project shall provide any information or

cooperation requested by the ISO.

I hereby acknowledge on behalf of myself, [INSERT NAME OF PROJECT], and [NAME OF DEVELOPER] that:

a. The submission of false, misleading, or inaccurate information, or the failure to

submit information requested by the NYISO related to the Project’s request for a Competitive Entry Exemption, including but not limited to information contained or submitted in this Certification and Acknowledgement on behalf of the Project, shall constitute a violation of Section 4.1.7 of the Services Tariff, and subject to the Commission’s review, a violation of the Commission’s regulations and
Section 316A of the Federal Power Act.

b. If the Project submits false, misleading, or inaccurate information, or fails to

submit requested information to the NYISO, including but not limited to

information contained or submitted in this Certification and Acknowledgement on
behalf of the Project, it shall cease to be eligible for a Competitive Entry
Exemption and, if the Project has already received a Competitive Entry
Exemption, that exemption shall be subject to revocation by the NYISO or the
Commission after which the Project shall be subject to an Offer Floor set at the
Mitigation Net CONE Offer Floor (such value calculated based on the date it first
Offers UCAP, in accordance with Section 23.4.5.7.3.7, and adjusted annually in
accordance with Section 23.4.5.7 of the Services Tariff,) starting with the date of
the revocation pursuant to Section 23.4.5.7.9.5.3 of the Services Tariff.

c. If the Project submits false, misleading, or inaccurate information, or fails to

submit requested information to the NYISO, including but not limited to

information contained or submitted in the Certification and Acknowledgement on
behalf of the Project, it may be subject to civil penalties that may be imposed by

the Commission for violations of Section 4.1.7 of Services Tariff, the
Commission’s rules, and/or Section 316A of the Federal Power Act.

[PRINT NAME]

[DATE]

Subscribed and sworn to before me
this [ ] day of [MONTH] [YEAR].

Notary Public

My commission expires:

PROJECT NAME] SCHEDULE 1 CERTIFICATION AND ACKNOWLEDGEMENT
[DATE]

Parties to agreement Date Executed Effective Date Date Performance Commences

23.4.5.7.9.2.2 A duly authorized officer of the Generator or UDR project shall also

submit a certification acknowledging that parents or Affiliates shall provide any information or cooperation requested by the ISO.

23.4.5.7.9.2.3 The certifying officers must have knowledge of the facts and

circumstances supporting the request and qualification for a Generator’s or UDR project’s Competitive Entry Exemption.

23.4.5.7.9.2.4 Such certifications shall be submitted concurrent with the request for a
Competitive Entry Exemption and each time the ISO requests a resubmittal of a
certification, until the Generator’s or UDR project’s Entry Date.

23.4.5.7.9.2.5 The Generator or UDR project must notify the ISO if information in a
certification ceases to be true, promptly upon such occurrence or learning
information previously provided was not true.

23.4.5.7.9.2.6 Failure to provide, without prior notification, information or cooperation
consistent with any certification shall be considered a false, misleading, or
inaccurate submission for purposes of Section 23.4.5.7.9.5.

23.4.5.7.9.2.7 Where a notification is provided to the ISO, within 2 business days of
receipt of a request from the ISO for information or cooperation, that the
information or cooperation requested will not be provided, such refusal will not
be considered a false, misleading, or inaccurate submission for purposes of
Section 23.4.5.7.9.5 as long as the information is provided by the earlier of a
mutually agreed upon deadline or thirty (30) calendar days. A refusal to provide
information or any other failure to provide information by that deadline will make
the Generator or UDR project requesting a Competitive Entry Exemption
ineligible for such exemption, and such Generator or UDR project shall be subject
to the Mitigation Net CONE Offer Floor (such value based on the date it first
offers UCAP, in accordance with Section 23.4.5.7.3.7, and adjusted annually in
accordance with Section 23.4.5.7 of the Services Tariff.)

23.4.5.7.9.3 Timing for Requests, Required Submittals, and Withdrawals

23.4.5.7.9.3.1 The executed Certification and Acknowledgement form required by

Section 23.4.5.7.9.2 shall be submitted concurrent with a request for a

Competitive Entry Exemption. The ISO may request additional information and
updated certifications at any time prior to a Generator’s or UDR project’s Entry

Date. A Generator or UDR project that is granted an exemption pursuant to this Section 23.4.5.7.9, shall be required to submit an executed Certification and Acknowledgement form set forth in Section 23.4.5.7.9.2 of the Services Tariff, updated as appropriate, upon its Entry Date.

23.4.5.7.9.3.2 Requests for Competitive Entry Exemptions for Generators or UDR

projects in Class Years subsequent to Class Year 2012 must be received by the
ISO no later than the deadline by which a facility must notify the ISO of its
election to enter the Class Year, such date as set forth in Section 25.5.9 OATT
Attachment S. A Generator or UDR project that requests a Competitive Entry
Exemption in a Class Year may not also request a Renewable Exemption or Self
Supply Exemption. A Generator or UDR project that remains a member of a
completed Class Year if such Class Year is Class Year 2012 or prior Class Year,
shall not be eligible to request or receive a Competitive Entry Exemption. The
ISO shall determine whether a Generator or UDR project is exempt, subject to
any required further submissions of information, or not exempt under the
Competitive Entry Exemption, prior to the Initial Decision Period within which a
Developer must provide an Acceptance Notice or Non-Acceptance Notice to the
ISO in response to the first Project Cost Allocation issued by the ISO to the
Developer.

written or unwritten, with a Non-Qualifying Entry Sponsor that would support the
development of the Project, except those agreements identified in 23.4.5.7. 9.1.3
that would not constitute a “non-qualifying contractual relationship, may
withdraw such request, provided that it notifies the ISO that it has entered into
such “non-qualifying contractual relationship” within 2 business days of doing so.
A Generator or UDR project seeking to withdraw its request pursuant to this
Section 23.4.5.7.9.3.3 shall be subject to the Mitigation Net CONE Offer Floor
(such value calculated based on its the date it first offers UCAP, in accordance
with Section 23.4.5.7.3.7, and adjusted annually in accordance with Section

23.4.5.7 of the Services Tariff,) but will not be subject to the provisions of Section

23.4.5.7.9.5.

23.4.5.7.9.4 Notifications

23.4.5.7.9.4.1 The ISO shall post on its website a list of each Generator or UDR project
that requests a Competitive Entry Exemption that becomes a member of the Class
Year, promptly after the deadline set forth in Section 30.8.1 of the OATT
(Attachment X) (by which the ISO must receive the Developer’s executed Class
Year Interconnection Facilities Study Agreement and deposit.) The ISO shall
update the list as necessary. The ISO shall also post on its website whether a
request for a Competitive Entry Exemption was denied, or granted, as soon as its
determination is final.

23.4.5.7.9.4.2 Concurrent with the ISO posting of its final determination, the Market

Monitoring Unit shall publish a report on the ISO’s determination in accordance with Section 30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.9.5 Revocation

23.4.5.7.9.5.1 The submission of false, misleading, or inaccurate information, or the
failure to submit requested information in connection with a request for a
Competitive Entry Exemption shall constitute a violation of the Services Tariff.
Such violation shall be reported, by the ISO, to the Market Monitoring Unit and to
the Commission’s Office of Enforcement (or any successor to its responsibilities).

23.4.5.7.9.5.2 Where the ISO reasonably believes that a request for a Competitive Entry
Exemption was granted based on false, misleading, or inaccurate information, the
ISO shall notify the Generator or UDR project that its Competitive Entry
Exemption may be revoked, and provided 30 days written notice has been given
to the Generator or UDR project (such notice to the extent practicable,) the ISO
may revoke the Competitive Entry Exemption and apply the Mitigation Net
CONE Offer Floor (such value calculated based on the date it first offers UCAP,
in accordance with Section 23.4.5.7.3.7, and adjusted annually in accordance with
Section 23.4.5.7 of the Services Tariff.) Prior to the revocation of a Competitive
Entry Exemption and the submission of a report to the Commission’s Office of
Enforcement (or any successor to its responsibilities,) the ISO shall provide the
Generator or UDR project an opportunity to explain any statement, information,
or action. The ISO cannot revoke the Competitive Entry Exemption until after the

30 days written notice period has expired, unless ordered to do so by the Commission.

23.4.5.7.10 The ISO shall post on its website the identity of the project in a Mitigated

Capacity Zone and the determination of either exempt or non-exempt as soon as the determination is final. Concurrent with the ISO’s posting, the Market

Monitoring Unit shall publish a report on the ISO’s determinations, as further specified in Section 30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.11 Mitigated UCAP that is subject to an Offer Floor shall remain subject to

the requirements of Section 23.4.5.4, and if the Offer Floor is higher than the

applicable offer cap shall submit offers not lower than the applicable Offer Floor, except as set forth in 23.4.5.7.12.

23.4.5.7.12 An Interim Service Provider that has UCAP subject to an Offer Floor shall

offer all ISP UCAP MW in each ICAP Spot Market Auction at $0.00/kW-month. For an RMR Generator that has UCAP subject to an Offer Floor, the UCAP
subject to the Offer Floor shall be offered at $0.00/kW-month.

23.4.5.7.13 Renewable Exemption

23.4.5.7.13.1 Eligibility

23.4.5.7.13.1.1 An Examined Facility or an NCZ Examined Project, may request

to be evaluated for a Renewable Exemption in the amount of its CRIS MW

requested in the Class Year or which it expects to receive through a transfer of

CRIS at the same location. For purposes of this Section 23.4.5.7.13, an Examined
Facility or NCZ Examined Project for which the ISO receives such a request shall
be referred to as a “Renewable Exemption Applicant.” A UDR project may not
be a Renewable Exemption Applicant. For purposes of this Section 23.4.5.7.13,
references to a Renewable Exemption Applicant’s CRIS MW shall be understood
to encompass Additional CRIS MW in cases where the Renewable Exemption

Applicant is an existing Generator seeking a Renewable Exemption for Additional
CRIS MW. An Examined Facility or an NCZ Examined Project that is a member

of a Class Year may not request a Renewable Exemption in the same Class Year
that it requests a Competitive Entry Exemption, and an Examined Facility or an
NCZ Examined Project that is the expected transferee of CRIS being considered
with a Class Year may not request a Renewable Exemption in respect of the same
Class Year that it requests a Competitive Entry Exemption. The ISO shall
evaluate requests for a Renewable Exemption from (x) members of Class Year
2015 that are received on or before April 28, 2016, (y) members of a Class Year
after Class Year 2015 provided that the CRIS rights are received no later than the
deadline by which the facility must notify the ISO of its election to enter the Class
Year, such date as set forth in Section 25.5.9 of OATT Attachment S, and (z)
expected recipients of transferred CRIS rights at the same location from which the
ISO has been notified, by the transferor or the transferee, of a transfer pursuant to
OATT Attachment S Section 25.9.4 that will be effective on a date within the
Mitigation Study Period for the Class Year, provided that they are received no
later than the Class Year Start Date for such Class Year. Examined Facilities and
NCZ Examined Projects will not be evaluated for a Renewable Exemption if the
ISO does not receive the request to be evaluated by the deadline established in
accordance with the preceding sentence, or if the Examined Facility or NCZ
Examined Project also submits a request for a Competitive Entry Exemption
prohibited by this paragraph.

CRIS MW specified by the Renewable Exemption Applicant in its exemption
request shall be exempt from an Offer Floor if it remains a member of the
completed Class Year (or if the transferee does not notify the ISO, on or before the date the Class Year is completed, that it no longer expects to be the recipient of the transferred CRIS) and the ISO determines that it meets the requirements of Section (a), subject to the limitation in Section (b) of this Section 23.4.5.7.13.1, and subject to Section 23.4.5.7.13.3.

(a)The Renewable Exemption Applicant:

(i)must have, for its Interconnection Queue position, a proposed design that

is a Generator to be powered solely by a device that can qualify as an Intermittent
Power Resource, or must be a Limited Control Run-of-River Resource, as such
terms are (A) defined on the date by which the ISO must receive the request for a
Renewable Exemption in accordance with Section 23.4.5.7.13.1.1,or (B) in the
ISO’s judgment, are reasonably expected to be defined at the time that the
Renewable Exemption Applicant is first qualified as an Installed Capacity
Supplier; and

(ii) (A) be proposed in the Class Year to be powered solely by a technology that is an Exempt Renewable Technology; or

(B) be determined by the ISO, in accordance with ISO Procedures, to have (1) high

projected costs of new entry and operation of the Renewable Exemption

Applicant, net of the likely projected revenues from the sale of Capacity, Energy
and Ancillary Services, and any other generally available revenues associated
with the production of those products, are greater than the reasonably estimated

cost savings to Loads due to a reduction in ICAP Market-Clearing Prices
projected to result from the entry of the Renewable Exemption Applicant’s
requested CRIS MW (or CRIS MW to be transferred at the same location.)

(b) A total amount not exceeding 1,000 MW of Installed Capacity may be determined

to be exempt pursuant to the Renewable Exemption in any one Class Year. This
amount includes any amount for which an NCZ Examined Project is determined
to be eligible at the time the ISO issues an Indicative Buyer Side Mitigation
Determination pursuant to Section 23.4.5.7.2.2, or a determination pursuant to
Section 23.4.5.7.2.1. If the ISO determines that more than 1,000 MW of
Installed Capacity would be eligible for a Renewable Exemption for any one
Class Year (including transferred CRIS at the same location) but for the 1,000
MW limitation, then each Renewable Exemption Applicant determined by the
ISO to be eligible for a Renewable Exemption other than those that were also
determined to be exempt pursuant to Sections 23.4.5.7.2(a) or (b) or Section

Exemption for the Class Year that are not also determined to be exempt pursuant to Sections 23.4.5.7.2(a) or (b) or Section 23.4.5.7.14.

23.4.5.7.13.2 Periodic Review and Determination of Exempt Renewable
Technologies

23.4.5.7.13.2.1 In each ICAP Demand Curve Reset Filing Year after 2016, the ISO

shall conduct a periodic review, in accordance with this Section and ISO

Procedures, to determine the technology types that should be Exempt Renewable Technologies for Class Years with a Class Year Start Date during the Capability Years covered by the ICAP Demand Curve periodic review conducted for the relevant ICAP Demand Curve Reset Filing Year.

23.4.5.7.13.2.1(a) The ISO’s periodic review will identify, by Mitigated Capacity

Zone, the technologies that, at the time of the periodic review, are technically feasible in the ISO Administered Markets (whether as a single unit, or a plant comprised of more than one unit) and that could qualify as either Intermittent Power Resources or Limited Control Run-of-River Hydro Resources (“candidate intermittent renewable technologies”).

23.4.5.7.13.2.1(b)For each candidate intermittent renewable technology, the ISO’s

periodic review will reasonably project:

(i)the costs of new entry and operation;

(ii)the revenues from the sale of Capacity, Energy and Ancillary Services, and any

other generally available revenues associated with the production of those products by it; and

(iii) the cost savings to Loads due to a reduction in ICAP Market-Clearing Prices from

the new entry of the candidate intermittent renewable technology.

23.4.5.7.13.2.2The ISO will utilize pertinent factors including results of the

computation in accordance with Section 23.4.5.7.13.2.1(b) to determine, for each
Mitigated Capacity Zone, which candidate intermittent renewable technologies
have (a) high development costs and (b) a low capacity factor, such that
considering (a) and (b) there is limited or no incentive and ability to develop the
candidate intermittent renewable technology in order to artificially suppress
capacity prices.

23.4.5.7.13.2.3The ISO’s periodic review shall provide for:

(a)The ISO’s preliminary identification of candidate intermittent renewable

technologies for stakeholder review and comment;

(b) The ISO’s issuance of a draft list of recommended Exempt Renewable

Technologies and the basis for the recommendation, for stakeholder and Market
Monitoring Unit review and comment; (The responsibilities of the Market
Monitoring Unit that are addressed in this section of the Services Tariff are also
addressed in Section 30.4.6.2.12 of Attachment O to this Services Tariff.)

23.4.5.7.13.2.4 On or before the 60th day subsequent to the Commission issuance

of an order accepting ICAP Demand Curves based on the ICAP Demand Curve
periodic review, the ISO shall file with the Commission the results of its Exempt
Renewable Technology periodic review and determination pursuant to Section

23.4.5.7.13.2.2. If the ISO’s determination of technology types that satisfy the

accordance with its periodic determination, to be effective for Class Years with a
Class Year Start Date during the Capability Years covered by the ICAP Demand
Curve periodic review conducted for the relevant ICAP Demand Curve Reset
Filing Year. The ISO’s filing shall describe the basis for the ISO’s determination.

23.4.5.7.13.3 Revocation

23.4.5.7.13.3.1 A Renewable Exemption Applicant that received a Renewable

Exemption for any amount of CRIS MW shall notify the ISO in writing within
five (5) business days if (a) at the time it first qualifies as an Installed Capacity
Supplier, or at any time thereafter, it is not solely powered by the same
technology based on which it was evaluated for a Renewable Exemption, or (b) at
the time it first qualifies as an Installed Capacity Supplier it is not solely powered
by a technology that is defined as an Intermittent Power Resource or Limited
Control Run-of-River Hydro Resource, even if the Renewable Exemption
Applicant was determined to be eligible because, at the time it was evaluated, the
ISO expected the technology would become defined as an Intermittent Power
Resource or Limited Control Run-of-River Hydro Resource. Upon notification,
the ISO shall revoke the Renewable Exemption unless the Generator provides
documentation with its notice in accordance with the prior sentence that
demonstrates, to the ISO’s satisfaction, that after the change it will be solely
powered by an Exempt Renewable Technology as such term is defined on the
date that the Generator first transmits energy using the different technology.
Upon revocation, the ISO shall apply the Mitigation Net CONE Offer Floor (such
value calculated by the ISO based on the date that the Generator (or Additional

CRIS MW) first offers UCAP, in accordance with Section 23.4.5.7.3.7, and

adjusted annually in accordance with Section 23.4.5.7 of the Services Tariff) to all
offers of UCAP by the Generator or Additional CRIS MW subsequent to the
deadline for Unforced Capacity certification prior to an ICAP Spot Market
Auction (such date in accordance with ISO Procedures) next following
revocation. Nothing in this paragraph shall relieve a Generator from or alter any
obligation it may have under the ISO Tariffs or any other tariff, agreement, or
regulation to obtain permissions, authorizations provide notifications, or take any
other action in advance of changing the technology which powers it (in whole or
in part.)

23.4.5.7.13.3.2 The failure to provide the ISO written notice in accordance with

Section 23.4.5.7.13.3.1 shall constitute a violation of the Services Tariff. Such
violation shall be reported by the ISO to the Market Monitoring Unit and to the
Commission’s Office of Enforcement (or any successor to its responsibilities.)

23.4.5.7.13.3.3 If a Generator has not provided notice in accordance with Section

accordance with Section 23.4.5.7 of the Services Tariff) shall apply to all offers of
UCAP subsequent to the deadline for Unforced Capacity certification prior to an
ICAP Spot Market Auction (such date in accordance with ISO Procedures) next
following revocation. Prior to the revocation of a Renewable Exemption, the ISO
shall provide the Generator an opportunity to respond to the ISO’s determination.
The ISO cannot revoke the Renewable Exemption until after the 30 days written
notice period has expired, unless ordered to do so by the Commission.

23.4.5.7.13.4 Timing of Requests for a Renewable Exemption, Required
Submittals, and Determinations

23.4.5.7.13.4.1 Requests for a Renewable Exemption must be received by the ISO

no later than the deadline specified in Section 23.4.5.7.13.1. If any Examined

Facility or NCZ Examined Project submits both a request for a Renewable

Exemption and a Competitive Entry Exemption (i.e., seeking to be considered for
both exemptions at the same time,) the ISO shall not consider the request for a
Renewable Exemption. The ISO may request additional information and updated
information at any time regarding eligibility and continued eligibility. The
Renewable Exemption Applicant (if after entry, the Generator) shall timely
provide the information.

23.4.5.7.13.2 The ISO shall determine whether a Renewable Exemption Applicant is or
is not eligible for a Renewable Exemption, and whether it is eligible or is not
eligible for an exemption pursuant to Section 23.4.5.7.2(a) and (b) or Section

would be eligible for a Renewable Exemption (including MW of NCZ Examined
Projects) in a Class Year but for the 1,000 MW limitation. If at the time of the
ISO’s issuance of initial determinations, or the completion of the Class Year,

more than 1,000 MW, then remaining in the Class Year or associated with a

transfer of CRIS at the same location, are eligible for a Renewable Exemption, the
ISO shall (i) first, exclude from the 1,000 MW cap the CRIS MW of any
Examined Facility or NCZ Examined Project that was determined to be exempt
pursuant to Sections 23.4.5.7.2 (a), or (b) or Section 23.4.5.7.14, and (ii) second,
issue an initial determination (prior to the Initial Decision Period or at the time of
any Subsequent Decision Period) or a final determination (if a member of the
completed Class Year, or if a transfer of CRIS rights at the same location unless
the transferee has notified the ISO, on or before the date the Class Year is
completed, that it no longer expects to be the recipient of the transferred CRIS) of
the MW that will be exempt from an Offer Floor, equal to the proportion of the
requested CRIS MW as determined in accordance with Section 23.4.5.7.13.1.1(b).

23.4.5.7.13.4.3 Determinations made pursuant to Section 23.4.5.7.13.4.2 shall be

provided to the Renewable Exemption Applicants (other than NCZ Examined Projects) concurrent with the issuance of determinations in accordance with Section 23.4.5.7.3.3, and for an NCZ Examined Project at the time of the ISO’s determination pursuant to Section 23.4.5.7.2.1.

23.4.5.7.13.4.4 The ISO shall post on its website its determination of whether the

Renewable Exemption Applicant has been determined to be exempt for any

quantity of MW, and if exempt, the quantity of MW exempt, or non-exempt, from

an Offer Floor as soon as the determination is final. Concurrent with the ISO’s
posting, the Market Monitoring Unit shall publish a report on the ISO’s
determination, as further specified in Section 30.4.6.2.12 of Attachment O to this
Services Tariff.

23.4.5.7.14 Self Supply Exemption

23.4.5.7.14.1 Eligibility

23.4.5.7.14.1.1 In order to be evaluated for a Self Supply Exemption, each of the

following requirements must be satisfied, by the deadline, in the required form, and with the required information in accordance with ISO Procedures. If one or more of the requirements is not satisfied, the ISO shall not evaluate the request for a Self Supply Exemption.

(a) An Examined Facility or NCZ Examined Project, (for purposes of this Section

deadline by which a facility must notify the ISO of its election to enter the Class
Year, such date as set forth in Section 25.5.9 OATT Attachment S, or (iii) an
expected recipient of transferred CRIS rights at the same location and the ISO has
been notified, by the transferor or the transferee, of a transfer pursuant to OATT
Attachment S Section 25.9.4 that will be effective on a date within the Mitigation
Study Period for the Class Year, provided that the request is received no later than
the Class Year Start Date for such Class Year. An Examined Facility or an NCZ
Examined Project that is a member of a Class Year may not request a Self Supply
Exemption in the same Class Year that it requests a Competitive Entry
Exemption, and an Examined Facility or an NCZ Examined Project that is the
expected transferee of CRIS being considered with a Class Year may not request
a Self Supply Exemption in respect of the same Class Year that it requests a
Competitive Entry Exemption.

A proposed new Generator or UDR project that remained a member of

Class Year 2012 or a prior Class Year at the time of the completion of such Class Year, shall not be eligible to request or receive a Self Supply Exemption except in relation to a request for Additional CRIS MW.

(b) If the SSE Applicant is not the wholly owned property of the Self Supply LSE(s),

SSE Applicant must make its Self Supply Exemption request jointly, in a single
request, with the Self Supply LSE(s) with which it has a Long Term Contract. If
the proposed SSE Applicant is the wholly owned property of the Self Supply
LSE(s), or the wholly owned property of an entity that is wholly owned by the
Self Supply LSE(s) or that wholly owns the Self Supply LSE(s), then the SSE
Applicant must provide documentation at the time it requests the exemption that
demonstrates to the reasonable satisfaction of the ISO that it has a statutory,
regulatory, or organizational obligation to provide Energy and Capacity to meet
the Self Supply LSE’s (or Self Supply LSEs’) ICAP Obligation(s).

(1) Long Term Contract: For the purposes of a Self Supply Exemption, a
“Long Term Contract” shall mean (i) a fully executed contract between the SSE
Applicant that is a proposed new or existing Generator and a Self Supply LSE that
is joining it in requesting the exemption, pursuant to which the SSE Applicant is
obligated to provide to the Self Supply LSE (or LSEs if more than one Self
Supply LSE,) for a minimum of 10 years, Installed Capacity in an amount greater
than or equal to the CRIS MW for which the Self Supply Exemption is requested;
or (ii) a fully executed contract between a Self Supply Applicant that is a
proposed new or existing UDR project and a Self Supply LSE (or LSEs if more
than one Self Supply LSE,) that is joining it in requesting the exemption, pursuant
to which the Self Supply LSE(s) will have all rights to the UDRs and the use of
the facility, for a minimum of 10 years, in the amount greater than or equal to the
CRIS MW for which the Self Supply Exemption is requested.

(c)The Self Supply Applicant’s request for a Self Supply Exemption must specify

the total quantity of CRIS MW for which it is requesting a Self Supply

Exemption, and such quantity shall not exceed the MW of CRIS requested by it in
the Class Year, or the quantity of the transferred CRIS rights at the same location
it expects to receive. If there is more than one Self Supply LSE associated with
the request for a Self Supply Exemption received from an SSE Applicant then: (i)
the request shall identify the quantity of MW associated with each Self Supply
LSE, and (ii) the total quantity of MW associated with the Self Supply LSEs shall
not exceed the total MW for which the SSE Applicant requests a Self Supply
Exemption. (d) All Certification and Acknowledgement(s) required by
Section 23.4.5.7.14.2 must be received at the same time as the request for a Self
Supply Exemption, in accordance with ISO Procedures, along with other data and
information requested by the ISO.

23.4.5.7.14.1.2 The lesser of (i) the quantity of CRIS MW for which the Self

Supply Exemption was requested and (ii) the quantity determined in accordance with Section 23.4.5.7.14.3 shall be exempt from an Offer Floor if the SSE
Applicant is a member of the Class Year at the time of its completion and the ISO determines that the request satisfies all of the following requirements:

(a) The proposed Generator or UDR project terminus will be, or the existing

Generator or UDR project terminus is, electrically located in the same Mitigated Capacity Zone in which the Self-Supply LSE has Projected ICAP Requirements (as such term is defined in Section 23.4.5.7.14.1.3),

(b)The SSE Applicant and the Developer are not and will not be owned, in whole or

in part, by an LSE or an Affiliate of an LSE unless such entity is a Self Supply
LSE.

form set forth in Section 23.4.5.7.14.2.1 or 23.4.5.7.14.2.3, as applicable to it and
its request for a Self Supply Exemption, and satisfies each requirement stated
therein. If the SSE Applicant is not the wholly owned property of the Self Supply
LSE(s), or the wholly owned property of an entity that is either wholly owned by
the Self Supply LSE(s), or that wholly owns the Self Supply LSE(s), then both the
SSE Applicant and the Self Supply LSE(s) provide the applicable completed
Certification and Acknowledgement form set forth in Section 23.4.5.7.14.2 and
satisfy each requirement stated therein. The ISO must receive the required
completed Certification and Acknowledgement forms, in accordance with ISO
Procedures, (i) if the SSE Applicant is a member of Class Year 2015 and its
request is received on or before April 28, 2016, (ii) no later than the deadline by
which the SSE Applicant must notify the ISO of its election to enter the Class
Year, such date as set forth in Section 25.5.9 of OATT Attachment S, or (iii) if the
Self Supply LSE is an expected recipient of transferred CRIS rights at the same
location that will be effective on a date within the Mitigation Study Period for the
Class Year, no later than the Class Year Start Date of such Class Year. All other
information requested by the ISO must also be timely received.

(d)The ISO determines that the Self Supply LSE satisfies both the Net Short

Threshold set forth in Section 23.4.5.7.14.3.1 and the Net Long Threshold set forth in Section 23.4.5.7.14.3.2 for a specified quantity of CRIS MW.

(e) The SSE Applicant certifies that it does not have any contract, agreement,

arrangement, or relationship (for purposes of this Section 23.4.5.7.14.1.2(e), and
the Certification and Acknowledgment in Section 23.4.5.7.14.2, a “contract”) for
any material (in whole or in aggregate) payments, concessions, rebates, or
subsidies, connected to or contingent on the SSE Applicant’s: (i) construction or
operation, except as expressly permitted in Subsection (A) or (B) of this Section,
or (ii) clearing in the ISO’s Installed Capacity market except as expressly
permitted in Subsection (B).

(A) An SSE Applicant will not be ineligible for a Self Supply Exemption if it has an

executed contract, is associated with a contract, or there is a contract associated with it, that is listed in (I) through (VIII) of this Section that provides for a
material payment, concession, rebate or subsidy, and either (i) is not irregular or anomalous, and only reflects arms-length transactions, or (ii) is consistent with the overall objectives of the Self Supply Exemption.

Listed contracts:

(I)an Interconnection Agreement;

(II)an agreement for the construction or use of interconnection facilities or

transmission or distribution facilities, or directly connected joint use transmission
or distribution facilities (including contracts required for compliance with Articles

VII or 10 of the New York State Public Service Law or orders issued pursuant to Articles VII or 10);

(III) a grant of permission by any department, agency, instrumentality, or political

subdivision of New York State to bury, lay, erect or construct wires, cables or other conductors, with the necessary poles, pipes or other fixtures in, on, over or under public property;

(IV)a contract for the sale or lease of real property at or above fair market value as of

the date of the agreement was executed, such value demonstrated by an

independent appraisal at the time of execution prepared by an accountant or

appraiser with specific experience in such valuations;

(V)an easement or license to use real property;

(VI)a contract, with any department, agency, instrumentality, or political subdivision

of New York State providing for a payment-in-lieu of taxes (i.e., a “PILOT”

agreement) or industrial or commercial siting incentives, such as tax abatements or financing incentives, provided the PILOT agreement or incentives are
generally available to industrial or commercial entities;

(VII) a service agreement for natural gas entered into under a tariff accepted by a

regulatory body with jurisdiction over that service; or

(VIII) a service agreement entered into under a tariff accepted by a regulatory body with

jurisdiction over that service at a regulated rate for electric Station Power, or

steam service, excluding an agreement for a rate that is a negotiated rate pursuant to any such regulated electric, or steam tariff.

(B)An SSE Applicant that requests a Self Supply Exemption with only one Self

Supply LSE will not be ineligible for a Self Supply Exemption if the contract(s) that otherwise would render it ineligible under any clause of Section 23.4.5.7.14.2 is (or are) with its Self Supply LSE.

(C)Contract Review Opportunity

(i) (1) A proposed new Generator or UDR project or an existing Generator or UDR

project for Additional CRIS that is reasonably expected to be eligible to enter the
immediately following Class Year or be the recipient of transferred CRIS rights at
the same location on a date within the Mitigation Study Period of such Class
Year, and that in connection with its own Load or for the Load of one or more
Self Supply LSE(s) is planning on requesting a Self Supply Exemption; (2)
an SSE Applicant that is in a Class Year that is not completed (in
accordance with Section 25.5.9 of the OATT; or (3) an SSE Applicant that
received a Self Supply Exemption, may request that the ISO inform it whether, in
the ISO’s view, any specific executed contract, unexecuted but substantially
developed contract, or any pending request that if approved, granted, or otherwise
conferred, would constitute a contract pursuant to Subsection 23.4.5.7.14.1.2

(e)(i) and (e)(ii) would make it ineligible to obtain or (if previously granted) retain a Self Supply Exemption. Any such request must satisfy all of the following
requirements:

(a) The SSE Applicant (unless it is for its own Load) must make any such request

jointly with any Self Supply LSE(s) with which it has executed or has an

unexecuted but substantially developed Long Term Contract. Any such Self

Supply LSE(s) must make any such request jointly with the SSE Applicant, or

proposed new or existing Generator or UDR project, with which it would seek, or has sought, a Self Supply Exemption.

(b) As part of the submission of the request for a determination pursuant to

Subsection (a) of this Section, the SSE Applicant, or proposed new or existing
Generator or UDR project, and any relevant Self Supply LSE(s) as applicable,
must provide the ISO with all information regarding the contract or pending
request regarding which it is requesting the ISO’s view, and if the request is made
jointly with a Self Supply LSE, the executed or unexecuted and substantially
developed Long Term Contract that would form the basis of a Self Supply
Exemption Request, including copies of original documentation. In addition and
at the time of the submission of the request, the SSE Applicant, or proposed new
or existing Generator or UDR project, and any relevant Self Supply LSE shall
also provide any other information identified by the ISO in accordance with ISO
Procedures. They also must timely provide any further information that is
requested by the ISO.

the ISO in accordance with ISO Procedures, such date to be at least 60 days prior to the date that the ISO anticipates will be the deadline by which facilities must notify the ISO of their election to enter a Class Year (such Class Year deadline pursuant to Section 25.5.9 of OATT Attachment S.)

(ii)Provided that the ISO has timely received all of the information it needs to make a

determination, the ISO shall state its view in response to such requests within 60
days.

(iii) When evaluating any such request, the ISO shall consult with the Market

Monitoring Unit. (The responsibilities of the Market Monitoring Unit that are

addressed in this section of the Mitigation Measures are also addressed in Section

30.4.6.2.12 of Attachment O to this Services Tariff.)

23.4.5.7.14.2 Certifications and Acknowledgements

23.4.5.7.14.2.1 An SSE Applicant that is not the wholly owned property of the

Self Supply LSE(s), or the wholly owned property of an entity that is either

wholly owned by the Self Supply LSE(s), or that wholly owns the Self Supply

LSE(s), and that is requesting a Self Supply Exemption shall submit the following
completed Certification and Acknowledgment form. The submission must be
received by the ISO by the deadline pursuant to Section 23.4.5.7.14.1.2(c), and
thereafter upon the request of the ISO, in accordance with ISO Procedures. The
Self Supply Applicant shall be legally bound by the Certification and
Acknowledgement form which must be executed by a duly authorized officer:

CERTIFICATION AND ACKNOWLEDGMENT

I [NAME & TITLE] hereby certify on behalf of myself, [NAME OF PROJECT], and
[NAME OF DEVELOPER] that each of the following statements is true and correct:

1. I am an officer whose responsibilities include the development of the

[EXAMINED FACILITY OR NCZ EXAMINED PROJECT, New York

Independent System Operator, Inc.’s (“NYISO”) Interconnection queue position Number [INSERT NUMBER] (the “Project”).

2.I am duly authorized to make representations concerning the Project, including

each of the certifications and acknowledgements that I have made in this document.

3. I hereby [REQUEST ON BEHALF OF] the Developer, a Self Supply Exemption

for [MW REQUESTED FOR THE SELF SUPPLY EXEMPTION] for the Project
in connection with [LOAD SERVING ENTITY THAT IS THE SELF SUPPLY
LSE].

4. I have reviewed and I understand the requirements established under the NYISO

Market Administration and Control Area Services Tariff (“Services Tariff”) related to a “Self Supply Exemption” pursuant to Section 23.4.5.7.14.

5. I have personal knowledge of the facts and circumstances supporting the Project’s

request and eligibility for a Self Supply Exemption as of the date of this

Certification and Acknowledgment, including all data and other information submitted by the Project to the NYISO.

6. [NAME OF DEVELOPER] is not owned in whole or in part by, and is not an

Affiliate (as Affiliate is defined in Section 2.1 of the Services Tariff) of, a Load Serving Entity [OTHER THAN THE LOAD SERVING ENTITY THAT IS THE SELF SUPPLY LSE].

7. [NAME OF PROJECT] has a Long Term Contract (as such term is defined in

Services Tariff Section23.4.5.7.14.1.1 (b)(1)) with the Self Supply LSE[s], that is [are] the subject of the request for a Self Supply Exemption.

8. To the best of my knowledge and having conducted due diligence that is current

as of the date of this Certification there is no contract, arrangement, arrangement,
or relationship (for purposes of Section 23.4.5.7.14. 2(e) of the Services Tariff,
and this Certification and Acknowledgment, a “contract”) for any material (in
whole or in aggregate) payments, concessions, rebates or subsidies connected to
or contingent on the [PROJECT’s]: (i) construction or operation, except as
expressly permitted in Subsection (A) or (B) of Section 23.4.5.7.14.1. 2(e) of the
Services Tariff, or (ii) clearing in the NYISO’s Installed Capacity market except
as expressly permitted in Subsection (B) of Section 23.4.5.7.14. 1.2(e).

9. I have listed in Schedule 1 to this Certification all contracts that involve

payments, concessions, rebates, or subsidies connected to or contingent upon the
[PROJECT’S] construction or operation that are not material or that are otherwise
expressly permissible under Subsection (A) or (B) of Section 23.4.5.7.14.1.2(e).

10. The Project shall provide any information or cooperation requested by the NYISO

in connection with the Project’s request for a Self Supply Exemption.

I hereby acknowledge on behalf of myself, [INSERT NAME OF PROJECT], and [NAME OF DEVELOPER] that:

a.The submission of false, misleading, or inaccurate information, or the failure to

submit information requested by the NYISO related to the Project’s request for a Self Supply Exemption, including but not limited to information contained or submitted in this Certification and Acknowledgement on behalf of the Project, shall constitute a violation of Section 4.1.7 of the Services Tariff, and subject to the Commission’s review, a violation of the Commission’s regulations and
Section 316A of the Federal Power Act.

b. If the Project submits false, misleading, or inaccurate information, or fails to

submit requested information to the NYISO, including but not limited to

information contained or submitted in this Certification and Acknowledgement on
behalf of the Project, it shall cease to be eligible for a Self Supply Exemption and,
if the Project has already received a Self Supply Exemption, that exemption shall
be subject to revocation by the NYISO or the Commission after which the Project
shall be subject to an Offer Floor set at the Mitigation Net CONE Offer Floor
(such value calculated based on the date it first Offers UCAP, in accordance with
Section 23.4.5.7.3.7, and adjusted annually in accordance with Section 23.4.5.7 of
the Services Tariff,) starting with the next following deadline for Unforced
Capacity certification prior to an ICAP Spot Market Auction subsequent to the
date of revocation (such date in accordance with ISO Procedures) pursuant to
Section 23.4.5.7.9.5 of the Services Tariff.

c. If the Project submits false, misleading, or inaccurate information, or fails to

submit requested information to the NYISO, including but not limited to

information contained or submitted in the Certification and Acknowledgement on behalf of the Project, it may be subject to civil penalties that may be imposed by the Commission for violations of Section 4.1.7 of Services Tariff, the
Commission’s rules, and/or Section 316A of the Federal Power Act.

[PRINT NAME]

[DATE]

Subscribed and sworn to before me
this [ ] day of [MONTH] [YEAR].

Notary Public

My commission expires:

23.4.5.7.14.2.2 A Self Supply LSE that has a Long Term Contract (as such term is

defined in Section 23.4.5.14.1(b)(1)) with an SSE Applicant shall submit to the

ISO the following completed Certification and Acknowledgement Form as part of the SSE Applicant’s request for a Self Supply Exemption and thereafter upon the request of the ISO, in accordance with ISO Procedures. The Self Supply LSE shall be legally bound by the completed Certification and Acknowledgement form which must be executed by a duly authorized officer:

CERTIFICATION AND ACKNOWLEDGMENT

I [NAME & TITLE] hereby certify on behalf of myself and [NAME OF SELF SUPPLY LSE] (the “LSE”) that each of the following statements is true and correct:

1. I am an officer whose responsibilities include overseeing the capacity supply

portfolio and obligations, and addressing Load requirements of the [LSE], and
LSE’s Long Term Contract (as such term is defined in Services Tariff
Section23.4.5.7.14.1.1 (b)(1))with [EXAMINED FACILITY or NCZ
EXAMINED PROJECT], New York Independent System Operator, Inc.’s
(“NYISO”) Interconnection queue position Number [INSERT NUMBER] (the
“Project”).

2. I am duly authorized to make representations concerning the capacity supply

portfolio, and obligations, Load requirements of [the LSE], and LSE’s Long Term
Contract with the Project (the “Subject Long Term Contract”), including each of
the certifications and acknowledgements that I have made in this document.

3. I hereby [REQUEST ON BEHALF OF] the LSE, a Self Supply Exemption for

[MW REQUESTED FOR THE SELF SUPPLY EXEMPTION] for the Project associated with the Subject Long Term Contract.

4. I have reviewed and I understand the requirements established under the NYISO

Market Administration and Control Area Services Tariff (“Services Tariff”) related to a “Self Supply Exemption” pursuant to Section 23.4.5.7.14.

5. I have personal knowledge of the facts and circumstances supporting the Subject

Long Term Contract and LSE’s Load Obligations and supply obligations related
to the Project’s request and eligibility for a Self Supply Exemption as of the date

of this Certification and Acknowledgment, including all data and other information submitted by LSE to the NYISO.

6.The LSE is a Self Supply LSE [INSERT SUBSECTION OF DEFINITION BY

WHICH THE LSE MEETS THE REQUIREMENTS OF THAT TERM] of that

term.

7. [NAME OF DEVELOPER] [is // is not] owned in part by, and [is // is not] an

Affiliate (as Affiliate is defined in Section 2.1 of the Services Tariff) of, LSE.

Appendix A to this Certification and Acknowledgement fully and completely sets
forth and describes the organizational relationship between or among LSE,
Developer and the Project, or any Affiliate of the foregoing entities in relation to
the project; and any ownership or investment interest of LSE, Developer, and the
Project, in either of the other entities, or any of the Affiliates thereof in relation to
the Project.

8.[NAME OF PROJECT] and LSE are parties to the Subject Long Term Contract.

9.To the best of my knowledge and having conducted due diligence that is current

as of the date of this Certification there are no arrangements for any payments or
subsidies, that are directly or indirectly tied to the Unforced Capacity from the
Project clearing in the NYISO’s Installed Capacity market other than those
between the [NAME OF DEVELOPER],[PROJECT] and [SELF SUPPLY LSE]
that is provided to the ISO with this Certification and Acknowledgement [and
other than agreements between [NAME OF DEVELOPER], [PROJECT] and
[NAME OF OTHER SELF SUPPLY LSE(S) ASSOCIATED WITH THE SELF
SUPPLY APPLICANT’S REQUEST FOR A SELF SUPPLY EXEMPTION].

10. I have listed in Schedule 1 to this Certification all contracts that involve

11. LSE shall provide any information or cooperation requested by the NYISO in

connection with the LSE and the Project’s request for a Self Supply Exemption.

I hereby acknowledge on behalf of myself and LSE that:

a. The submission of false, misleading, or inaccurate information, or the failure to

submit information requested by the NYISO related to the LSE’s and the Project’s request for a Self Supply Exemption, including but not limited to information
contained or submitted in this Certification and Acknowledgement on behalf of the Project, shall constitute a violation of Section 4.1.7 of the Services Tariff, and subject to the Commission’s review, a violation of the Commission’s regulations and Section 316A of the Federal Power Act.

b. If the LSE or the Project submits false, misleading, or inaccurate information, or

fails to submit requested information to the NYISO, including but not limited to

information contained or submitted in this Certification and Acknowledgement on
behalf of the LSE, the Project shall cease to be eligible for a Self Supply
Exemption in respect of Subject Long Term Contract and, if the Project has
already received a Self Supply Exemption, that exemption shall be subject to
revocation by the NYISO or the Commission after which the Project shall be
subject to an Offer Floor set at the Mitigation Net CONE Offer Floor (such value
calculated based on the date it first Offers UCAP, in accordance with Section

23.4.5.7.3.7, and adjusted annually in accordance with Section 23.4.5.7 of the

Services Tariff,) starting with the next following deadline for Unforced Capacity
certification prior to an ICAP Spot Market Auction subsequent to the date of
revocation (such date in accordance with ISO Procedures) pursuant to Section

23.4.5.7.9.5 of the Services Tariff.

c. If the LSE submits false, misleading, or inaccurate information, or fails to submit

requested information to the NYISO, including but not limited to information contained or submitted in the Certification and Acknowledgement on behalf of the Project, it may be subject to civil penalties that may be imposed by the
Commission for violations of Section 4.1.7 of Services Tariff, the Commission’s rules, and/or Section 316A of the Federal Power Act.

[PRINT NAME]

[DATE]

Subscribed and sworn to before me
this [ ] day of [MONTH] [YEAR].

Notary Public

My commission expires:

Acknowledgment Form. The submission must be received by the ISO by the

deadline pursuant to Section 23.4.5.7.14.1.2(c), and thereafter upon the request of the ISO, in accordance with ISO Procedures. The Self Supply Applicant shall be legally bound by the following Certification and Acknowledgement form which must be executed by a duly authorized officer:

CERTIFICATION AND ACKNOWLEDGMENT

I [NAME & TITLE] hereby certify on behalf of myself, [NAME OF PROJECT], and
[NAME OF DEVELOPER/LSE] that each of the following statements is true and correct:

1. I am an officer whose responsibilities include; (i) the development of the

[EXAMINED FACILITY or NCZ EXAMINED PROJECT], New York

Independent System Operator, Inc.’s (“NYISO”) Interconnection queue position Number [INSERT NUMBER] (the “Project”); and (ii) overseeing the capacity supply portfolio and obligations, and addressing Load Obligations of the Self Supply LSE and its obligations to serve retail customers.

2. I am duly authorized to make representations concerning the Project and the

capacity supply portfolio, and obligations, Load requirements of [the

DEVELOPER/LSE], including, if applicable the Long Term Contract between the Project and any entity performing the Self Supply LSE function (the “Subject Long Term Contract”), and also including each of the certifications and
acknowledgements that I have made in this document.

3. I hereby [REQUEST ON BEHALF OF] the [DEVELOPER/LSE], a Self Supply

Exemption for [MW REQUESTED FOR THE SELF SUPPLY EXEMPTION] for the Project associated with [DEVELOPER/LSE’S] self supply arrangements, including, if applicable, any Subject Long Term Contract.

4. I have reviewed and I understand the requirements established under the NYISO

Market Administration and Control Area Services Tariff (“Services Tariff”) related to a “Self Supply Exemption” pursuant to Section 23.4.5.7.14.

5. I have personal knowledge of the facts and circumstances supporting: (i) the

Project’s request and eligibility for a Self Supply Exemption; and (ii) the Load Obligations and supply obligations related to the Project’s request and eligibility for a Self Supply Exemption, as of the date of this Certification and
Acknowledgment, including all data and other information submitted by the Project and by [DEVELOPER/LSE] to the NYISO.

6.The LSE is a Self Supply LSE pursuant to Section [INSERT SUBSECTION OF

DEFINITION BY WHICH THE LSE MEETS THE REQUIREMENTS OF THAT TERM] of that term.

7. [NAME OF DEVELOPER/LSE] is not owned in whole or in part by, and is not

an Affiliate (as Affiliate is defined in Section 2.1 of the Services Tariff) of, any other Load Serving Entity. Appendix A to this Certification and
Acknowledgement fully and completely sets forth and describes the
organizational relationship between [DEVELOPER/LSE’s] Self Supply LSE and Developer functions or affiliates and the Project.

8. To the best of my knowledge and having conducted due diligence that is current

as of the date of this Certification there is not any contract, agreement,

arrangement, or relationship (for purposes of Section 23.4.5.7.14.1. 2(e), and this Certification and Acknowledgment, a “contract”) for any material (in whole or in aggregate) payments, concessions, rebates, or subsidies, connected to or
contingent on the [PROJECT’s]: (i) construction or operation, except as expressly permitted in Subsection (A) or (B) of Section 23.4.5.7.14.1.2(e) of the Services Tariff, or (ii) clearing in the NYISO’s ICAP market except as expressly permitted in Subsection (B) of Section 23.4.5.7.14.1.2(e).

9. I have listed in Schedule 1 to this Certification all contracts that involve

10.The Project and [DEVELOPER/LSE] shall provide any information or

cooperation requested by the NYISO in connection with the Project’s request for a Self Supply Exemption.

I hereby acknowledge on behalf of myself, [INSERT NAME OF PROJECT], and [NAME OF DEVELOPER/LSE] that:

a. The submission of false, misleading, or inaccurate information, or the failure to

submit information requested by the NYISO related to the Project’s and

[DEVELOPER/LSE’s] request for a Self Supply Exemption, including but not
limited to information contained or submitted in this Certification and
Acknowledgement on behalf of the Project, shall constitute a violation of Section

4.1.7 of the Services Tariff, and subject to the Commission’s review, a violation
of the Commission’s regulations and Section 316A of the Federal Power Act.

b. If the DEVELOPER/LSE or the Project submits false, misleading, or inaccurate

information, or fails to submit requested information to the NYISO, including but
not limited to information contained or submitted in this Certification and
Acknowledgement on behalf of the Project, it shall cease to be eligible for a Self
Supply Exemption and, if the Project has already received a Self Supply
Exemption, that exemption shall be subject to revocation by the NYISO or the
Commission after which the Project shall be subject to an Offer Floor set at the
Mitigation Net CONE Offer Floor (such value calculated based on the date it first
Offers UCAP, in accordance with Section 23.4.5.7.3.7, and adjusted annually in
accordance with Section 23.4.5.7 of the Services Tariff,) starting with the next
following deadline for Unforced Capacity certification prior to an ICAP Spot
Market Auction subsequent to the date of revocation (such date in accordance
with ISO Procedures) pursuant to Section 23.4.5.7.9.5 of the Services Tariff.

c. If the DEVELOPER/LSE or the Project submits false, misleading, or inaccurate

information, or fails to submit requested information to the NYISO, including but
not limited to information contained or submitted in the Certification and
Acknowledgement on behalf of the Project, it may be subject to civil penalties
that may be imposed by the Commission for violations of Section 4.1.7 of
Services Tariff, the Commission’s rules, and/or Section 316A of the Federal
Power Act.

[PRINT NAME]
[DATE]

Subscribed and sworn to before me
this [ ] day of [MONTH] [YEAR].

Notary Public

My commission expires:

23.4.5.7.14.3 Net Short Threshold and Net Long Threshold

For the purposes of Section 23.4.5.7.14.3, “SSE Evaluated ICAP” shall mean the quantity of MW of CRIS for which a Self Supply Exemption is requested by an individual Self Supply LSE (or by an SSE Applicant in respect of its own Load) in accordance with Section

23.4.5.7.14.1.1(c), unless reduced as follows: If (i) following a notice that an additional System
Deliverability Upgrade study(ies) will be conducted in accordance with Section 25.7.7.1 of the
OATT, an SSE Applicant elects to keep its CRIS request but with no System Deliverability
Upgrade identified to make the project fully deliverable (as provided for in Section 25.7.7.1(3),)
and (ii) the total quantity of MW of CRIS for which the Self Supply Exemption is requested
exceeds the total amount of Deliverable MW, as specified in the next Class Year Interconnection
Facilities Study report, the ISO shall reduce the total quantity of MW of CRIS for which a Self
Supply Exemption is requested to the total amount of Deliverable MW identified in such
Interconnection Facilities Study Report. If there is more than one LSE associated with the SSE
Applicant, the ISO shall reduce the quantity of MW of CRIS for each Self Supply LSE by the
ratio of Deliverable MW to the total MW of CRIS for which Self Supply exemptions were
initially requested.

The ISO shall compute the Net Short Threshold and Net Long Threshold, and determine
whether each is satisfied, based on its computation of each of the values specified in this Section.

If there is more than one Self Supply LSE associated with the SSE Applicant’s request for a Self
Supply Exemption, the MW associated with each Self Supply LSE shall be considered
separately.

If the Self Supply LSE or its Affiliates are associated with more than one request for a

Self Supply Exemption in the Class Year (including any associated with a transfer of CRIS at the
same location,) and the Self Supply LSE and its Affiliates satisfy the Net Long Threshold in a
non-zero amount that is greater than the “Cumulative Affiliated Quantity” (as defined in Section

23.4.5.7.14.3,) then remaining in the Class Year, the ISO shall reduce the quantity of MW for

which they are eligible to receive a Self Supply Exemption by the ratio of (a) the quantity of MW by which the Self Supply LSE and its Affiliates satisfy the Net Long Threshold, to (b) the
Cumulative Affiliated Quantity associated with SSE Applicant(s) then remaining in the Class
Year or associated with a transfer of CRIS at the same location (provided the transferee does not notify the ISO, on or before the date the Class Year is completed, that it no longer expects to be the recipient of the transferred CRIS.)

For the purposes of Section 23.4.5.7.14.3, “Projected ICAP Requirements” is the

reasonably projected ICAP MW that the Self Supply LSE and all its Affiliates will be required to purchase in each Locality and the NYCA. Such projection shall be based on the Self Supply
LSE’s and all its Affiliates’ share(s) of the Locational Minimum Unforced Capacity
Requirements and the NYCA Minimum Unforced Capacity Requirement, as applicable and in
accordance with ISO Procedures, over the three most recently completed Capability Years
preceding the Class Year Start Date. Such projection shall also reflect that ICAP MW purchased in a Locality may be used to meet capacity requirements for each Locality in which they are
contained, as well as for the NYCA.

When calculating the Self Supply LSE’s and all its Affiliates’ Projected ICAP

Requirements, each of their shares of the Locational Minimum Unforced Capacity Requirements
and the NYCA Minimum Unforced Capacity Requirement over these three Capability Years
shall be translated to their ICAP MW equivalent(s) using the derating factor that was applied to
translate the Installed Capacity Requirement into the Unforced Capacity Requirement in the
same Capability Period and Locality, or the NYCA if applicable, in which the purchase was
made.

For the purposes of Section 23.4.5.7.14.3, “Excess Award Percentage” is the reasonably projected amount of excess capacity that the Self Supply LSE and all its Affiliates will be
required to purchase in each Locality, and the NYCA, expressed as a percentage of its “Projected ICAP Requirements”, Such projection shall be based on the total excess UCAP MW awarded in each ICAP Spot Market Auction, divided by the Locational Minimum Unforced Capacity
Requirement, or the NYCA Minimum Unforced Capacity Requirement, for the same Capability Period and Locality (or the NYCA) in which the award was made, over the three most recent completed Capability Years preceding the Class Year Start Date.

For the purposes of Section 23.4.5.7.14.3, “Capacity Obligations without Entry”,

calculated for each Locality and the NYCA, is the product of (a) Projected ICAP Requirements and (b) one plus the Excess Award Percentage.

For the purposes of Section 23.4.5.7.14.3, “Capacity Obligations with Entry”, calculated
for each Locality and the NYCA, is the product of (a) Projected ICAP Requirements and (b) one
plus the Excess Award Percentage, adjusted to reflect the projected increase in excess that the
Self Supply LSE would be obligated to purchase as a result of the entry of the SSE Applicant.

For the purposes of Section 23.4.5.7.14.3, “Self Supply Capacity” for a given Locality (or
the NYCA,) is (a) the full amount of ICAP MW associated with each Generator or UDR project
that the Self Supply LSE or any of its Affiliates own directly or indirectly, in at least a 50.01%
interest (in the aggregate) as of the Class Year Start Date, or have the power to direct the
management or policies of, excluding any whose CRIS MW are projected by the ISO to be
expired on or before the date that marks the end of Mitigation Study Period, based on a
demonstration by the Self Supply LSE, and (b) the ICAP MW that the Self Supply LSE and all
its Affiliates are reasonably projected by the ISO to receive, including ICAP MW which they
have a call option to receive, either by way of ownership or under “Existing Long Term
Commitments” in that Locality (or the NYCA), and that are associated with a Generator or UDR
project that the Self Supply LSE or any of its Affiliates do not own directly or indirectly, at least
a 50.01% interest (in the aggregate) as of the Class Year Start Date, and that they do not have the
power to direct the management or policies of, excluding those that are associated with any
Expected Retirement. For purposes of Self Supply Capacity, “Existing Long Term
Commitments” is the amount of Capacity that the Self Supply LSE or any of its Affiliates are
projected by the ISO to receive, including ICAP which they have a call option to receive, under a
written agreement (whether stated in ICAP or otherwise,) with a minimum term of ten years, and
a minimum of six years remaining thereon on the Class Year Start Date. When calculating the
term and remaining term of a written agreement for the purposes of this section, the ISO, using
its independent judgment and at its sole discretion, will determine whether to reflect in its
calculation any potential extension to the current term of a written agreement that may
reasonably result from renewal provisions.

For the purposes of Section 23.4.5.7.14.3, “Additional Self Supply Capacity”, for a given
Locality (or the NYCA,) is the ICAP MW of a Generator or UDR project that were granted a
Self Supply Exemption at the time of the completed Class Year based on the Self Supply LSE or
any of its Affiliates’ being a Self Supply LSE for such Generator or UDR project, in the 10 year
period immediately preceding the Class Year Start Date of the Class Year, in that Locality (or
the NYCA), excluding: (i) any ICAP MW that are included in Self Supply Capacity, (ii) any
ICAP MW associated with a Generator or UDR project that the Self Supply LSE and any of its
Affiliates own directly or indirectly, at least a 50.01% interest(in the aggregate) as of the Class
Year Start Date, or have the power to direct the management or policies of, and that the CRIS of
which is projected by the ISO to be expired on or before the date that marks the end of
Mitigation Study Period, based on a demonstration by the Self Supply LSE; and (iii) any ICAP
MW of a Generator or UDR project that neither the Self Supply LSE nor any of its Affiliates
own directly or indirectly, at least a 50.01% interest (in the aggregate) as of the Class Year Start
Date, or have the power to direct the management or policies of, and that is an Expected
Retirement.

23.4.5.7.14.3.1 Net Short Threshold

The Net Short Threshold will be satisfied for the “SSE Evaluated ICAP” if the ISO

determines that, summed over all Localities and the NYCA, the Self Supply LSE’s and all of its Affiliates’ “Total Capacity Costs without Entry” are expected to be less than the Self Supply LSE’s and all of its Affiliates’ “Total Capacity Costs with Entry”.

23.4.5.7.14.3.1.1 The ISO will calculate the estimated “Total Capacity Costs without

Entry” as the sum over all Localities, and the NYCA, of the product of (a) the

“ICAP Spot Auction Price without Entry” and (b) the “Capacity Exposed to Market Prices without Entry”.

(a) “ICAP Spot Market Auction Price without Entry” shall be based on the ICAP

Spot Market Auction prices for each Locality and the NYCA, averaged over the
three most recently completed Capability Years preceding the Class Year Start
Date.

(b)“Capacity Exposed to Market Prices without Entry” is calculated for each

Locality and the NYCA as:

“Capacity Obligations without Entry” for each Locality and the NYCA, translated from
ICAP MW into UCAP MW using the average derating factor for each Locality
and the NYCA corresponding to the ICAP Spot Market Auctions used to
determine the ICAP Spot Market Auction Price without Entry;

minus

“Self Supply Capacity” for each Locality and the NYCA, translated from ICAP MW into
UCAP MW using a derating factor, as determined by the ISO, that is reasonably
anticipated to be associated with ICAP Suppliers included in this Self Supply
Capacity;

minus

“Additional Self Supply Capacity” for each Locality and the NYCA, translated from
ICAP MW into UCAP MW using a derating factor, as determined by the ISO,
that is reasonably anticipated to be associated with ICAP Suppliers included in
this Additional Self Supply Capacity;

23.4.5.7.14.3.1.2 The ISO will calculate “Total Capacity Costs with Entry” as the sum of
“Proportional Entry Costs” and the sum over all Localities, and the NYCA, of the
product of (a) “ICAP Spot Market Auction Price With Entry” and (b) “Capacity
Exposed to Market Prices With Entry”.

“Proportional Entry Costs” is the percentage of the Unit Net CONE (expressed in dollars)
of the SSE Applicant (calculated in accordance with Section 23.4.5.7.3 if an
Examined Facility, or in accordance with Section 23.4.5.7.2.1 if an NCZ
Examined Project, or in accordance with Section 23.4.5.7.6.1 if Additional CRIS
MW) that is equal to the SSE Evaluated ICAP divided by the total MW of CRIS
requested by the SSE Applicant in the Class Year.

(a) The “ICAP Spot Market Auction Price with Entry” shall be based on the ICAP

Spot Market Auction prices calculated for each Locality and the NYCA, averaged over the three most recently completed Capability Years preceding the Class Year Start Date, and adjusted to reflect the entry of the SSE Applicant.

(b) the “Capacity Exposed to Market Prices with Entry” is calculated for each

Locality and the NYCA as:

“Capacity Obligations with Entry” for each Locality and the NYCA, translated from
ICAP MW into UCAP MW using the average derating factor for each Locality
and the NYCA corresponding to the ICAP Spot Market Auctions used to
determine the ICAP Spot Market Auction Price with Entry;

minus

“Self Supply Capacity” for each Locality and the NYCA, translated from ICAP MW into
UCAP MW using a derating factor, as determined by the ISO, that is reasonably

anticipated to be associated with ICAP Suppliers included in this Self Supply Capacity;

minus

“SSE Evaluated ICAP”, translated from ICAP MW into UCAP MW using a derating
factor, as determined by the ISO that is reasonably anticipated to be associated
with the SSE Applicant.

23.4.5.7.14.3.2Net Long Threshold

If the Self Supply LSE and any of its Affiliates are associated with more than one Self
Supply Exemption Request in the Class Year, the Net Long Threshold determination will be
made based on the sum of the Self Supply LSE’s and all of its Affiliates’ SSE Evaluated ICAP
(“Cumulative Affiliated Quantity”) prior to the Initial Decision Period. The ISO shall
recalculate the Cumulative Affiliated Quantity prior to the ISO’s issuance of a Revised Project
Cost Allocation Subsequent Decision Period if any SSE Applicant with which it is associated is
no longer in the Class Year.

equal to the “Future Capacity Obligation.” The Net Long Threshold will be satisfied for the

smallest of these determined amounts of SSE Evaluated ICAP MW, and will be considered not satisfied if the smallest of these amounts is less than or equal to zero.

(i) The “Total Self Supply Capacity” is the sum, in each Mitigated Capacity Zone, of

ICAP MW of (A) Self Supply Capacity, (B) Additional Self-Supply Capacity, and

(ii) the “Future Capacity Obligation” is the product of (A) ICAP MW of Capacity

Obligations without Entry, and (B) the higher of (x) one plus the “10 year growth
rate of peak demand” and (y) one plus one percent. The “10 year growth rate of
peak demand” shall be determined based on the longest available NYSO Baseline
forecast of non-coincident peak demand for the corresponding Mitigated Capacity
Zone found in the “Baseline Forecast of Non-Coincident Peak Demand” table, or
its successor in the most current Gold Book, published by the Class Year Start

Date of the Class Year, for each Mitigated Capacity Zone.

23.4.5.7.14.4 Timing of Determinations

23.4.5.7.14.4.1Determinations.

(a)Prior to the Initial Decision Period, the ISO shall determine whether all or a

commencement of the Initial Decision Period, and prior to the ISO’s issuance of a
Revised Project Cost Allocation. When evaluating eligibility for a Self Supply
Exemption, the ISO shall consult with the Market Monitoring Unit. The
responsibilities of the Market Monitoring Unit that are addressed in this section of
the Mitigation Measures are also addressed in Section 30.4.6.2.12 of Attachment
O to this Services Tariff.

(b) Determinations made pursuant to Section 23.4.5.7.14.4 shall be provided to the

SSE Applicant concurrent with the issuance of determinations in accordance with Section 23.4.5.7.3.3, and to an NCZ Examined Project at the time of the ISO’s determination pursuant to Section 23.4.5.7.2.1.

(c ) The ISO shall post on its web site and concurrently notify the Self Supply LSE of

the ISO’s determination of exempt, and if exempt the quantity of MW exempted, or non-exempt, from an Offer Floor as soon as the determination is final.
Concurrent with the ISO’s posting, the Market Monitoring Unit shall publish a report on the ISO’s determination, as further specified in Sections 30.4.6.2.12 of Attachment O to this Services Tariff.

23.4.5.7.14.5 Revocation of a Self Supply Exemption

(a) If, at the time prior to the SSE Applicant first producing or transmitting, Energy it

or the Self Supply LSE no longer satisfies the requirements of Section

the ISO shall revoke the Self Supply Exemption and apply the Mitigation Net

CONE Offer Floor (such value calculated based on the date it first offers UCAP, in accordance with Section 23.4.5.7.3.7, and adjusted annually in accordance with Section 23.4.5.7 of this Services Tariff.)

(b) The failure to provide the ISO written notice in accordance with Section

23.4.5.7.14.5(a) shall constitute a violation of the Services Tariff. Such violation
shall be reported by the ISO to the Market Monitoring Unit and to the
Commission’s Office of Enforcement (or any successor to its responsibilities.)

was granted based on (i) false, misleading, or inaccurate information, or (ii) the
Self Supply LSE’s inclusion within “Self Supply Capacity” (as that term is used
in Section 23.4.5.7.14.3) of a Generator or UDR project’s capacity that was
identified by the Self Supply LSE whose CRIS was projected to expire before the
end of the Mitigation Study Period but has not expired on or before the date that
marked the end of the Mitigation Study Period, the ISO shall notify the SSE
Applicant and the Self Supply LSE that the Self Supply Exemption may be
revoked. Provided that 30 days written notice has been given to the SSE
Applicant (such notice to the extent practicable,) the ISO may revoke the Self
Supply Exemption and apply the Mitigation Net CONE Offer Floor (such value
calculated based on the date the SSE Applicant first offers UCAP, in accordance
with Section 23.4.5.7.3.7, and adjusted annually in accordance with Section

23.4.5.7 of this Services Tariff.) Prior to the revocation of a Self Supply
Exemption and the submission of a report to the Commission’s Office of

Enforcement (or any successor to its responsibilities,) the ISO shall provide the SSE Applicant an opportunity to explain any statement, information, or action, and if a statement information or action of the Self Supply LSE, it shall also provide an opportunity to that entity. The ISO cannot revoke the Self Supply Exemption until after the 30 days written notice period has expired, unless
ordered to do so by the Commission.

23.4.5.8RMR Agreement Capacity Price and Offer Requirements

23.4.5.8.1All ISP UCAP MW shall be offered in each ICAP Spot Market Auction.

All UCAP from an RMR Generator shall be offered in each ICAP Spot Market
Auction, except if and only to the extent expressly authorized in an RMR
Agreement due to the existence of a commitment under a bilateral agreement that

(a) was effective at the time the RMR Agreement became effective and (b) is effective and executory, requiring the provision of UCAP, for the Obligation Procurement Period.

23.4.5.8.2Except as provided in Section 23.4.5.7.12, all UCAP offered by an RMR

Generator shall be offered at $0.00/kW-month.