UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATED COMMISSION

New York Independent System Operator, Inc.)Docket No. ___________

REQUEST FOR LIMITED TARIFF WAIVERS OF THE
NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.
FOR THE PROCUREMENT OF BLACK START SERVICE
FROM TC RAVENSWOOD, LLC ON AN INTERIM BASIS;

AND REQUEST FOR SHORTENED COMMENT PERIOD
AND EXPEDITED ACTION

The New York Independent System Operator, Inc. (“NYISO”) respectfully requests

limited waivers of certain provisions of Rate Schedule 5 of its Market Administration and

Control Area Services Tariff (“Services Tariff”)1 to permit it to procure black start service on an
interim basis from TC Ravenswood, LLC (“Ravenswood”) through Ravenswood’s stand-alone
black start rate schedule (“TCR Rate Schedule”) and to recover all associated costs. The NYISO
plans to procure black start service from Ravenswood to maintain the near-term reliability of the
Consolidated Edison Company of New York, Inc. (“Con Edison”) local portion of the New York
black start and system restoration program (“New York Restoration Program”), while the

NYISO works with its stakeholders to develop and implement long-term enhancements to the program. The NYISO requests that the Commission shorten the comment period to the extent required and take expedited action to grant the requested waivers by July 20, 2012, so that the NYISO can begin to procure the monthly black start service from Ravenswood on August 1, 2012. Neither the NYISO’s willingness to undertake this interim procurement, nor its
submission of this filing, represents, or should be construed as, an acceptance of the legality of the TCR Rate Schedule or a waiver of the NYISO’s right to challenge it.

1 Terms with initial capitalization that are not otherwise defined herein shall have the meaning set forth in the Services Tariff, and if not defined therein, in the NYISO’s Open Access Transmission Tariff (“OATT”).

I.Summary

The Ravenswood steam turbine units 10, 20, and 30 (“Ravenswood Units”) play an

important role in the effectiveness and robustness of the Con Edison portion of the New York
Restoration Program, which provides for the restoration of electric service to New York City in
the event of a system disturbance. However, the status of the Ravenswood Units’ participation
in the program is currently uncertain. Ravenswood withdrew the Ravenswood Units from the
black start program established in the NYISO Services Tariff on September 30, 2011, citing
testing and financial concerns.2 Prior to its withdrawal, the New York State Public Service

Commission (“PSC”) issued a declaratory ruling requiring that a generator obtain the PSC’s

consent to discontinue providing black start service in New York, and Ravenswood has not

sought the PSC’s consent.3 Instead, Ravenswood has challenged the PSC’s authority to require
its consent in a complaint currently pending before the Commission in Docket No. EL12-9-000.4
In the meantime, the NYISO has been working diligently with its stakeholders to develop
enhancements to its black start program that are intended to address generators’ concerns
regarding testing protocols and compensation to encourage their continued participation in the
program.

On March 30, 2012, Ravenswood filed the TCR Rate Schedule under which it would
provide monthly black start service on terms similar to those in Rate Schedule 5 of the NYISO

2 TC Ravenswood, LLC, 136 FERC ¶ 61,213 (September 27, 2011) (“Commission Black Start Order”). It is important to note that Ravenswood has not sought to withdraw the participation of its combustion turbine units from the local Con Edison portion of the New York Restoration Program, and those units continue to provide Black Start and System Restoration Services under Rate Schedule 5 of the NYISO Services Tariff.

3 N.Y.P.S.C., Case No. 11-E-0423, Petition of Consolidated Edison Company of New York, Inc. for a Declaratory Ruling Concerning the Discontinuance of Black Start Service, Declaratory Ruling Regarding Black Start Service (September 28, 2011) (“PSC Black Start Order”).

4 Complaint of TC Ravenswood, LLC Requesting Fast Track Processing, Docket No. EL12-9-000 (November 7, 2011) (“Ravenswood Complaint”).

Services Tariff, but with reduced testing and commitment requirements.5 The NYISO supported
the substance of the TCR Rate Schedule as a means for securing the Ravenswood Units’
participation in the Con Edison portion of the New York Restoration Program on an interim
basis. The NYISO objected, however, to Ravenswood’s use of a stand-alone rate schedule
outside of the NYISO tariffs because it unlawfully and unnecessarily addresses the same subject
matter as the black start provisions in the NYISO tariffs. In addition, Ravenswood’s use of a rate
schedule circumvents the NYISO’s shared governance system by unilaterally revising the terms
under which it provides black start service in violation of the tariff amendment process set forth
in Article 19 of the NYISO’s Independent System Operator Agreement (“ISO Agreement”),
which Ravenswood voluntarily executed.6 In a May 24, 2012, order, the Commission
acknowledged the NYISO’s objections, but declined to address them at this time. Instead, it
accepted the TCR Rate Schedule, subject to refund and further Commission orders, as a means
for Ravenswood to provide black start service on an interim basis while the NYISO and its
stakeholders develop and implement enhancements to the NYISO’s black start program.7
The NYISO’s tariffs and agreements provide it with general authority to procure black start service from generators and to recover associated costs.8 Pursuant to this authority, the
NYISO will procure black start service from Ravenswood under the TCR Rate Schedule on an
interim basis because it is the best means at this time for achieving certainty that Ravenswood

5 TC Ravenswood, LLC, Application of TC Ravenswood, LLC to implement a Black Start Service Rate Schedule, Docket No. ER12-1418-000 (March 30, 2012) (“Ravenswood Rate Schedule Application”).

6 TC Ravenswood, LLC, Motion to Intervene, Comments, Request for Limited Tariff Waivers, and

Alternative Protest of the New York Independent System Operator, Inc., Docket No. ER12-1418-000 at pp. 2-3 (April 12, 2012) (“NYISO Rate Schedule Comments”).

7 TC Ravenswood, LLC, Order Accepting and Suspending Proposed Rate Schedule, Subject to Conditions, and Establishing Settlement Judge Procedures, 139 FERC ¶ 61,151 at PP 38, 40 (May 24, 2012) (“Commission Rate Schedule Order”).

8 See NYISO Independent System Operator Agreement (“ISO Agreement”) § 6.02; NYISO Services Tariff § 15.5.1; NYISO OATT § 6.6.1.

will provide important black start service in the near-term. Sections 15.5.3.1 and 15.5.3.2 of
Rate Schedule 5 of the NYISO Services Tariff establish additional black start commitment,
testing, compensation, and cost recovery terms that are specific to the provision of black start
service in the Con Edison service territory. These black start terms differ in part from the terms
in the TCR Rate Schedule. The NYISO, therefore, respectfully requests that the Commission
grant it limited waivers, to the extent the Commission determines them to be necessary, of
Sections 15.5.3.1 and 15.5.3.2, along with any additional waivers that the Commission deems
necessary, to ensure that the NYISO can procure black start service from Ravenswood and
recover all associated costs. The NYISO requests that the Commission act expeditiously to grant
the requested waivers by July 20, 2012, so that the NYISO can begin to procure the monthly
black start service under the TCR Rate Schedule beginning on August 1, 2012. These waivers
will enable the NYISO to maintain the effectiveness and robustness of the Con Edison portion of
the New York Restoration Program, while the NYISO works with its stakeholders to develop
and implement long-term enhancements to the program.

The NYISO’s waiver request does not represent, and should not be construed to

represent, an acceptance of the legality of the TCR Rate Schedule. The NYISO has separately filed on June 25, 2012, a request for rehearing of the Commission’s May 24, 2012, order that renews its objections to the TCR Rate Schedule.9

9 TC Ravenswood, LLC, Request for Rehearing of the New York Independent System Operator, Inc., Docket No. ER12-1418-000 (June 25, 2012) (“NYISO Request for Rehearing”).

Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs
*Carl F. Patka, Assistant General Counsel
New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
rstalter@nyiso.com

cpatka@nyiso.com

* -- Persons designated for service.

III.Background

*Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, DC 20037

Tel: (202) 955-1500
Fax: (202) 778-2201
tmurphy@hunton.com

*Kevin W. Jones10

Michael J. Messonnier, Jr. Hunton & Williams LLP 951 East Byrd Street

Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 344-7999
kjones@hunton.com

mmessonnier@hunton.com

A.The New York Restoration Program

The NYISO is responsible for maintaining the New York Restoration Program.11 This
program is composed of two separate, coordinated programs: (i) the NYISO’s statewide black
start and system restoration program, which provides for the restoration of electric service to
New York by means of the 345 kV transmission backbone of New York that is energized by
large hydropower units located in northern and western New York, and (ii) Con Edison’s local

10 The NYISO respectfully requests waiver of 18 C.F.R. § 385.203(b)(3) (2011) to permit service on counsel for the NYISO in both Washington, D.C. and Richmond, VA.

11 NYSRC Reliability Rules G-R1, Measurement G-M1. The term “New York Restoration Program” as used in this submission is the same as “NYCA System Restoration Plan” in the New York State Reliability Council (“NYSRC”) Reliability Rules.

black start and system restoration program, which provides for the restoration of electric service to its service territory by means of gas and steam turbine generators located there.12

B.The NYISO Has General Authority to Procure Black Start Service and

Recover Associated Costs

The NYISO’s tariffs and agreements provide it with general authority to procure black
start service from generators and to recover associated costs. The ISO Agreement broadly
authorizes the NYISO to procure services that are necessary to maintain reliability in New York.
Section 6.02 of the ISO Agreement states that: “The ISO will require and obtain by contract or
tariff sufficient control over Generators, transmission facilities, and other NYS Power System
facilities necessary for the reliable and efficient operation of the NYS Power System.” More
specifically, Rate Schedule 5 of the NYISO Services Tariff requires that the NYISO “establish
procedures for acquiring Black Start and System Restoration Services.”13 The NYISO’s related
procedures specify that the NYISO and transmission owners “shall secure adequate Black Start
Facilities to meet the requirements of the NYISO’s System Restoration Procedure.”14 The
NYISO is required under its tariffs to make payments directly to a generator acquired to provide
black start service in a transmission owner’s local plan.15 In addition, the NYISO is required to
recover the costs associated with these payments from the load serving entities located in the
applicable transmission owner’s service territory.16

12 NYSRC Reliability Rules G-R1, Measurement G-M1; see also NYISO System Restoration Manual § 2 (July 2010).

13 Services Tariff § 15.5.1.

14 NYISO System Restoration Manual § 3 (July 2010).

15 See Services Tariff § 15.5.1; OATT § 6.6.1.

16 See id.

C.Rate Schedule 5 Establishes Additional Requirements for Procuring Black

Start Service and Recovering Associated Costs in the Con Edison Service Territory

Sections 15.5.3.1 and 15.5.3.2 of Rate Schedule 5 of the NYISO Services Tariff establish
additional requirements for procuring black start service from generators in the Con Edison
service territory and recovering the associated costs from load serving entities located there.
Section 15.5.3.1 of Rate Schedule 5 provides that the NYISO will make black start
payments to a generator that commits to provide black start service in the Con Edison portion of
the New York Restoration Program for a three year period and that successfully performs an
annual black start capability test in accordance with the test criteria set forth in Appendix I of
Rate Schedule 5. These black start payments are set annual amounts that are based upon the
voltage level at which a generator is interconnected - $350,000 for 345 kV and $300,000 for
138 kV. Section 15.5.3.1 also establishes that a generator may be compensated for legitimate,
verifiable, and adequately documented variable costs associated with operator training and unit
testing, and may be reimbursed for certain equipment damage resulting from the provision of
black start service.

Section 15.5.3.2 of Rate Schedule 5 provides that the NYISO will recover the costs

associated with the payments that it makes to generators pursuant to Section 15.5.3.1 from load
serving entities located in the Con Edison service territory based on their share of the total load.

D. The Uncertain Status of the Ravenswood Units as Black Start Providers

The Ravenswood Units have provided black start service in Con Edison’s service

territory both prior to the formation of the NYISO and since the current NYISO black start

provisions became effective. Due to their size (approximately 1,800 MW) and location, the

Ravenswood Units provide an important service to New York City through their inclusion in the

Con Edison portion of the New York Restoration Program, speeding restoration of electric service significantly under certain restoration scenarios. However, the current status of the Ravenswood Units as black start providers is uncertain.

Ravenswood withdrew the Ravenswood Units from the black start program set forth in

the NYISO Services Tariff at the conclusion of the most recent three-year commitment period on
September 30, 2011, citing testing and financial concerns.17 Ravenswood has consistently stated
that its units would assist in the event of an actual blackout, but has indicated that it would not
provide black start service under the terms established in the NYISO Services Tariff.18 Prior to
the Ravenswood Units’ withdrawal from the black start program, the PSC issued a declaratory
ruling that requires that a generator obtain the PSC’s consent prior to discontinuing its provision
of black start service in New York.19 To date, Ravenswood has not sought the PSC’s consent to
cease providing black start service in New York. Rather, Ravenswood has challenged the PSC’s
authority to require its consent to cease providing black start service in a complaint currently

pending before the Commission in Docket No. EL12-9-000.20

The NYISO has worked diligently with Con Edison, Ravenswood, and other generators
in the meantime to develop enhancements to its black start program that are intended to address
generators’ concerns regarding testing protocols and compensation to encourage generators, such
as Ravenswood, to continue to participate in the program. Based on these discussions, the
NYISO has developed a package of enhancements to its black start program and has discussed
them with stakeholders. The NYISO’s Business Issues Committee and its Operating Committee

17 Commission Black Start Order.

18 See e.g., Ravenswood Rate Schedule Application at p. 1.

19 PSC Black Start Order.

20 Ravenswood Complaint.

approved the proposed enhancements at a joint meeting on June 20, 2012. The NYISO will next
present the package of enhancements for a stakeholder vote at the NYISO Management
Committee in July. On June 28, the NYISO will report on the status of this stakeholder process
to the settlement judge appointed by the Commission, as described below, to assist the NYISO
and stakeholders with resolving disputed issues and developing enhancements to the NYISO’s
black start program.

E.The TCR Rate Schedule

On March 30, 2012, Ravenswood filed with the Commission a stand-alone rate schedule
under which it would provide black start service outside of the NYISO tariffs. Pursuant to the
TCR Rate Schedule, Ravenswood will provide “as a block” the entirety of its black start service
from its steam turbine units to a customer on a month-to-month basis.21 Ravenswood will begin
to provide this service on the first day of the month that follows the execution of the TCR Rate
Schedule and will stop providing this service on the last day of that month, unless the parties

mutually agree to extend the term of the TCR Rate Schedule.22 In addition, Ravenswood will
conduct certain tests of its critical black start facilities, but will not perform the full black start
capability tests set forth in the Rate Schedule 5 of the NYISO Services Tariff.23 Ravenswood
has asserted that the commitment and testing terms in the TCR Rate Schedule are the only
material differences between the TCR Rate Schedule and Rate Schedule 5 of the NYISO
Services Tariff.24

21 Ravenswood Rate Schedule Application at pp. 18-19.

22 Id. at Appendix A, Appendix 1, 3.0.

23 Id. at p. 18.

24 Id. at p. 17.

The TCR Rate Schedule also establishes the cost for procuring its monthly black start
service, which Ravenswood states is “directly parallel” to the amount set forth in the NYISO
Services Tariff.25 Specifically, the customer would be responsible for making a set monthly
payment of $79,166.67/month,26 which is consistent with the payment amount that would be due to Ravenswood if it were providing black start service under the terms of the NYISO Services Tariff. In addition, the TCR Rate Schedule contains provisions for the recovery of variable costs and the reimbursement for equipment damage that include similar, but not identical, terms to the corresponding provisions in the NYISO tariffs.27

In an April 12, 2012, filing, the NYISO expressed its support for the underlying

substance of Ravenswood’s proposal as a means for Ravenswood to provide black start service
on an interim basis while the NYISO and its stakeholders completed the development and
implementation of enhancements to its black start program.28 The NYISO, however, objected to
Ravenswood’s use of a stand-alone rate schedule that addresses the same subject matter - the
provision of black start service in Con Edison’s service territory - that is already governed by
Rate Schedule 5 of the NYISO Services Tariff. The NYISO also objected that Ravenswood’s
use of a stand-alone rate schedule circumvents the NYISO’s shared governance system by
creating separate black start terms outside of the NYISO tariffs. This mechanism could establish
a troublesome precedent that would encourage other market participants to seek to modify their
tariff obligations in a similar fashion, in violation of the ISO Agreement signed by Ravenswood
and other market participants. The NYISO requested that the Commission instead grant certain

25 Ravenswood Rate Schedule Application at p. 19.

26 Id. at Appendix A, 4(a).

27 Id. at Appendix A, 4(b) and 4(c).

28 NYISO Rate Schedule Comments at pp. 2, 9.

waivers of the NYISO Services Tariff that would permit Ravenswood to provide black start
service consistent with the substance of its proposal, but within the framework of the NYISO
tariffs.29

In its May 24, 2012, order, the Commission accepted the TCR Rate Schedule, subject to refund and further order of the Commission, and established settlement judge procedures.30 The Commission acknowledged the NYISO’s objections regarding Ravenswood’s use of a standalone rate schedule, but declined to address the issue at that time.31 Rather, the Commission accepted the TCR Rate Schedule “as an interim solution subject to further orders of the
Commission to allow the parties an opportunity to work in the stakeholder process toward a mutually agreeable resolution under the NYISO Services Tariff.”32

F. NYISO Procurement of Black Start Service from Ravenswood

The NYISO will contract with Ravenswood on an interim basis to procure black start
service under the TCR Rate Schedule pursuant to its general authority, described above, to
procure black start service and recover associated costs. The NYISO will procure this service
because it is the best means at this time for achieving certainty that Ravenswood will provide
black start service in the near-term that is important for the effectiveness and robustness of the
Con Edison portion of the New York Restoration Program. The NYISO continues to object,
however, to Ravenswood’s use of a stand-alone rate schedule to provide black start service
outside of the NYISO’s tariffs, and has separately filed on June 25, 2012, a request for rehearing
of the Commission’s May 24, 2012, order that renews its objections to the TCR Rate Schedule.33

29 Id. at pp. 2-3, 9-12.

30 Commission Rate Schedule Order at P 37.

31 Id. at P 40.

32 Id. at P 38.

33 NYISO Request for Rehearing.

IV.Request for Limited Tariff Waiver

As described above, Sections 15.5.3.1 and 15.5.3.2 of Rate Schedule 5 establish

additional requirements for the NYISO’s procurement of black start service from generators in the Con Edison service territory and its recovery of the associated costs from load serving
entities located there. The terms in these provisions differ somewhat from those set forth in the TCR Rate Schedule, which includes reduced commitment and testing requirements and a similar, but not identical, compensation structure.

The NYISO, therefore, respectfully requests that the Commission grant the NYISO limited waivers, to the extent that the Commission deems them necessary, of:

(i) the black start compensation, commitment, and testing requirements in Section

15.5.3.1 of Rate Schedule 5 to permit the NYISO to procure black start service from, and make black start payments to, Ravenswood without Ravenswood having to meet the commitment and testing requirements set forth in Section 15.5.3.1;

(ii) the compensation requirements in Section 15.5.3.1 of Rate Schedule 5 to permit the
NYISO to pay Ravenswood the amounts set forth in the TCR Rate Schedule, including the
specified variable costs and any reimbursement costs for equipment damage; and
(iii) the cost recovery requirements in Section 15.5.3.2 of Rate Schedule 5 to permit the NYISO to recover the amounts that it pays to Ravenswood under the TCR Rate Schedule,
including all variable costs and any reimbursement costs for equipment damage, from load
serving entities in the Con Edison service territory on the basis of their share of the total load
there.

These waivers would permit the NYISO to procure black start service from Ravenswood
under the terms of the TCR Rate Schedule and to recover all of the costs associated with this

service, including all variable costs and any reimbursement costs for equipment damage, from load serving entities in the Con Edison service territory, based on their share of the total load there. With the requested waivers, the NYISO will be able to administer the payments and recovery of costs for Ravenswood’s provision of black start service in the same manner as it would for any other black start provider in the Con Edison service territory.

As described above, the terms of the TCR Rate Schedule establish that Ravenswood will
begin to provide black start service on the first day of the month following the execution of the
TCR Rate Schedule. The NYISO, therefore, requests that the Commission grant its requested
waivers with an effective date of July 20, 2012, to enable the NYISO, at its discretion, to execute
the TCR Rate Schedule in late July, so that it can procure black start service from Ravenswood
beginning on August 1, 2012. A July 20 effective date will enable the NYISO to take action

quickly to maintain the robustness and effectiveness of the Con Edison portion of the New York
Restoration Program - particularly during the peak load period of the summer months.
The Commission has previously granted tariff waivers where: (i) a concrete problem needs to be remedied, (ii) the entity seeking the waiver acted in good faith, (iii) the waiver is of a limited scope, and (iv) the waiver will not have undesirable consequences, such as harming third parties.34 The NYISO submits that its waiver request satisfies these factors as described below:

(i) A concrete problem exists in this instance. The Ravenswood Units play an important role in the Con Edison portion of the New York Restoration Program. Their continued inclusion in the program would contribute to the near-term reliability of the program, while the NYISO works with its stakeholders to develop revised black start provisions that will ensure the
reliability of the New York Restoration Program over the long-term.

34 See, e.g., ISO New England, Inc., 117 FERC ¶ 61,171 at P 21 (2006).

(ii) The NYISO has acted in good faith in this instance. Consistent with the

Commission’s stated intent in its May 24 order,35 the NYISO is seeking to procure black start

service under the TCR Rate Schedule on an interim basis, while it works with its stakeholders to
develop long-term improvements to the New York Restoration Program.
(iii) The scope of the waiver request is limited. The requested waivers are limited to the procurement of black start service from Ravenswood and would permit the NYISO to administer the procurement of black start service from Ravenswood and the recovery of associated costs in the same manner as it would for any other black start provider in the Con Edison service
territory.

(iv) The Commission’s granting the requested waivers will not have undesirable

consequences or harm third parties. Ravenswood is the only market participant that will be

directly impacted by the requested waiver, and it will not be harmed by the waiver. To the

contrary, Ravenswood will be paid to provide black start service under the terms of its own rate schedule. In addition, the waivers will enable the NYISO to procure important black start
service that will enhance the effectiveness and robustness of the Con Edison portion of the New York Restoration Program.

V. Request for Shortened Comment Period and Expedited Treatment

The NYISO respectfully requests that the Commission shorten the comment period to the
extent required to permit the Commission to act expeditiously and to grant the requested limited
waivers by July 20, 2012. Good cause exists for the Commission to act on an expedited basis.
As described above, the Ravenswood Units play an important role in the effectiveness and
robustness of Con Edison’s local portion of the New York Restoration Program, and their

35 Commission Rate Schedule Order at P 38.

absence from the program could result in a meaningful delay in the restoration of electric service to New York City in the event of an outage. The Commission’s granting of the requested
waivers by July 20, 2012, will enable the NYISO to execute the TCR Rate Schedule in time to procure black start service from Ravenswood beginning on August 1, 2012.

VI.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 electric utility regulatory agency of New Jersey. In addition, the
complete public version of this filing will be posted on the NYISO’s website at www.nyiso.com.

VII. Conclusion

WHEREFORE, for the foregoing reasons, the New York Independent System Operator, Inc. respectfully requests that the Commission grant the limited tariff waivers requested herein on an expedited basis effective as of July 20, 2012.

Respectfully Submitted,

/s/ Michael J. Messonnier, Jr.

Michael J. Messonnier, Jr. Counsel to

New York Independent System Operator, Inc.

Dated: June 28, 2012