UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Linden VFT, LLC)
)
v.)Docket No. EL12-64-000
)
New York Independent System Operator, Inc. )
REQUEST FOR CLARIFICATION OR, IN THE ALTERNATIVE, REHEARING OF
THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.
Pursuant to Rules 212 and 713 of the Commission’s Rules of Practice and Procedure1 the
New York Independent System Operator, Inc. (“NYISO”) requests clarification or, in the
alternative, rehearing of the Commission’s October 1, 2012 Order on Complaint in the above-
captioned proceeding (“October Order”).2 The October Order directed the NYISO to adjust the
300 MW Capacity Resources Interconnection Service (“CRIS”)3 value previously awarded to the
Linden VFT, LLC project (“Linden VFT”), without requiring a new Interconnection Request, up
to 315 MW on the basis of a performance test that established the facility’s actual maximum
transmission capacity to be 315 MW. The NYISO seeks to clarify that the Commission did not
intend in a footnote to create a broad exemption to the NYISO’s current interconnection
procedures. Instead, the NYISO seeks to clarify that the language in the October Order—
indicating that Linden VFT did not need to submit a new Interconnection Request—is only
applicable to facilities permitted to increase their grandfathered CRIS4 on the basis of a
1 18 C.F.R. §§ 385.212 and 713 (2012).
2 New York Independent System Operator, Inc., 141 FERC ¶ 61,008 (2012) (“October Order”).
3 Terms with initial capitalization that are not otherwise defined herein shall have the meaning set forth in the NYISO’s Open Access Transmission Tariff, or if not defined therein in the NYISO’s Market Administration and Control Area Services Tariff.
4 “Grandfathered CRIS” refers to the level of CRIS provided to facilities, as part of the
implementation of the deliverability requirement, without conducting the deliverability test in OATT
performance test conducted after their establishment of the initial grandfathered CRIS level.
Further, as explained in more detail below, the Commission should clarify that any other
increases in capacity or material changes to the operating characteristics existing facilities
continue to require a new Interconnection Request pursuant to the NYISO’s tariff.
To the extent the Commission finds that the October Order applies to any wider group of facilities, the NYISO submits that it is an error that must be reversed on rehearing.
I.COMMUNICATIONS
Communications regarding this pleading should be addressed to:
Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs * Karen G. Gach, Deputy General Counsel Sara B. Keegan, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Tel: (518) 356-6103
Fax: (518) 356-7678
rfernandez@nyiso.com
rstalter@nyiso.com
kgach@nyiso.com
skeegan@nyiso.com
* -- Persons designated for service.
* Vanessa A. Colón
Hunton & Williams LLP
Bank of America Center
700 Louisiana St., Suite 4200 Houston, TX 77002
Tel: (713) 229-5724
Fax: (713) 229-5782
vcolon@hunton.com
*J. Kennerly Davis5
Hunton & Williams LLP
951 East Byrd Street
Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 788-8218
kdavis@hunton.com
Attachment S. Requests for CRIS above the grandfathered CRIS level must be evaluated for deliverability. See OATT Attachment S § 25.9.3.1.
5 The NYISO respectfully requests waiver of 18 C.F.R. § 385.203(b)(3) (2012) to permit service on counsel for the NYISO in both Richmond, VA and Houston, TX.
2
II.REQUEST FOR CLARIFICATION
The NYISO respectfully requests clarification of footnote 53 of the October Order, which
states:
Even though NYISO argues that Linden VFT is not grandfathered from the
Interconnection Procedures, Linden VFT points to materials presented in the
NYISO stakeholder process that the new tariffs for implementation of the
Interconnection Procedures (effective on October 5, 2004), which permitted “no
increase,” would only be applied “once the transition of pre-existing projects in
the queue has been completed.” This evidence justifies our finding that Linden
VFT was also grandfathered from the Interconnection Procedures. (citations
omitted).
The NYISO understands the footnote to mean that facilities able to increase their
grandfathered CRIS based on a “performance test”6 do not need to submit an Interconnection
Request in order to operate at the higher MW level and receive the additional grandfathered
CRIS.7 However, a facility that seeks any other increase to its capacity, or to make material
changes to its operating characteristics, will be required to submit a new Interconnection Request
pursuant to the NYISO’s tariff.8 The NYISO asks the Commission to make this clarification.
6 Intermittent Power Resources do not perform applicable performance tests since such resources’
Dependable Maximum Net Capability (“DMNC”) level and grandfathered CRIS level are set at
nameplate. See Installed Capacity Manual Section 4.2.2 at 4-6 (January 2012) available at
<http://www.nyiso.com/public/webdocs/documents/manuals/operations/icap_mnl.pdf>; see also OATT
Attachment S §25.9.3.1.
7 Under its OATT, the NYISO offers two levels of interconnection service. Facilities
interconnected taking Energy Resources Interconnection Service (“ERIS”) are eligible to sell Energy and
Ancillary Services in the NYISO administered markets, but not Capacity. Facilities electing to take CRIS
in addition to ERIS are eligible to sell Energy Ancillary Services and Capacity. See OATT Attachment X
§ 30.3.2.
8 The submission of an Interconnection Request requires the performance of necessary
Interconnection Studies under OATT Attachments S, X and/or Z, as applicable. If a facility is required to submit an Interconnection Request, the NYISO evaluates the reliability impact of the facility under ERIS. Such a facility may also request CRIS, which requires the NYISO to also evaluate whether the facility is deliverable under OATT Attachment S Section 25.7. A facility that is already interconnected under
ERIS, but has no CRIS, or only partial CRIS, can request evaluation for additional CRIS up to the
permitted levels without submitting an Interconnection Request (this option does not relieve a facility of the requirement to submit an Interconnection Request if changes are made to the facility). See OATT
Attachments S § 25.9.1 and X § 30.3.2.6.
3
The Commission must grant the requested clarification because it is consistent with:
(1) the Commission’s interpretation of the applicable sections of the NYISO’s tariff; (2) the
transition rule in Order No. 2003 and the NYISO’s Commission-accepted Large Facility
Interconnection Procedures (“LFIP”); (3) Commission precedent addressing when new
Interconnection Requests are required; (4) the purpose of the interconnection procedures which
is to ensure predictability in the interconnection process and to evaluate the reliability impacts of
such modifications; and (5) the scope of the issues raised in the Complaint and considered in the
October Order.
The October Order relied on Section 25.9.3.1 of OATT Attachment S in granting Linden VFT’s request for an additional 15 MW of grandfathered CRIS. Section 25.9.3.1 states, in
relevant part:
For a generator pre-dating Class Year 2007 and not having DMNC levels
recorded for five Summer Capability Periods prior to October 5, 2008, its CRIS capacity level will be set, and reset if necessary, at the maximum DMNC level achieved during successive Summer Capability Periods until it has DMNC levels recorded for five Summer Capability periods.
This section identifies a limited set of generators—those having DMNC levels from fewer than
five Summer Capability Periods—that had the ability to increase their grandfathered CRIS based
on certain DMNC tests performed after October 5, 2008. The October Order indicates that
Section 25.9.3.1 also allows Linden VFT to increase its grandfathered CRIS to 315 MW based
on the facility’s performance test.9 The statement in footnote 53 that Linden VFT is
“grandfathered from the Interconnection Process” appears to indicate that, in order to achieve
9 In its Complaint, Linden VFT argued that it had conducted, on October 15, 2009 a performance test comparable to the DMNC test used by Generators to establish its actual maximum capacity
transmission capability to be 315 MW. The Commission agreed and directed the NYISO to adjust the CRIS value of 300 MW previously awarded to Linden VFT upward to the established actual maximum of 315 MW. See October Order at P 32.
4
that higher grandfathered level permitted by Section 25.9.3.1, no new Interconnection Request is required.10
The Commission should clarify, however, that a new Interconnection Request11 must be
submitted for all increases in capacity other than those permitted by Section 25.9.3.1, including
those that are due to a physical equipment change, and for any material change in the operating
characteristics of a facility.12 That requirement is necessary because any material change in the
physical equipment or operating characteristics could impact reliability and, thus, should be the
subject of a new Interconnection Request. For example, if Linden VFT seeks additional MW
above the maximum 315 MW value it established under Section 25.9.3.1 using performance
testing, it would need to submit a new Interconnection Request. So would all generators that
already established their actual maximum grandfathered CRIS value through DMNC tests from
five Summer Capability Periods.
10 Every Generator and Merchant Transmission Facility taking CRIS under the NYISO OATT
also takes ERIS. Thus, under the October Order, when a facility increases its CRIS under Section
25.9.3.1 it also increases its ERIS level by the same number of MW.
11 The NYISO’s OATT Attachment X defines “Interconnection Request” as a “Developer’s
request, in the form of Appendix 1 to the Standard Large Facility Interconnection Procedures, in
accordance with the Tariff, to interconnect a new Large Generating Facility or Merchant Transmission
Facility to the New York State Transmission System, or to increase the capacity of, or make a material
modification to the operating characteristics of, an existing Large Generating Facility or Merchant
Transmission Facility that is interconnected with the New York State Transmission System.”
12 Such changes include any increases in capacity or any material modifications to a facility as it was previously evaluated in prior Interconnection Studies.
5
The NYISO’s requested clarification is also consistent with the interconnection procedure
transition rules established in Order Nos. 200313 and 2006,14 and the NYISO’s Commission-
accepted Tariff. Those orders, and the NYISO’s tariff, required all but a precisely defined,
narrow group of facilities to be processed under the newly-established interconnection
procedures. It is inappropriate for the October Order to be interpreted in a manner that would,
eight years after the establishment of those interconnection procedures, expand the set of
facilities grandfathered in all respects from the NYISO’s interconnection procedures.
Pursuant to Order No. 2003, facilities that had outstanding Interconnection Requests at the time of that order’s effectiveness were to transition to the new procedures “within a
reasonable period of time.”15 Order No. 2003 clearly established transition rules that required
facilities that had not executed an Interconnection Study Agreement as of the effective date to be
transitioned to the new interconnection procedures.16 Similarly, Order No. 2006 required that
any new Interconnection Study Agreements executed after the effective date of the Final Rule be
processed pursuant to the new interconnection procedures for small generating facilities.17
The NYISO’s LFIP complied with the Order No. 2003 transition period directive
requiring that “if an Interconnection Study Agreement has not been executed as of the effective
date of these Large Facility Interconnection Procedures, then such Interconnection Study, and
13 Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003,
FERC Stats. & Regs. ¶ 31,146 (2003), order on reh’g, Order No. 2003-A, FERC Stats. & Regs. ¶ 31,160, order on reh’g, Order No. 2003-B, FERC Stats. & Regs. ¶ 31,171 (2004), order on reh’g, Order No.
2003-C, FERC Stats. & Regs. ¶ 31,190 (2005), aff’d sub nom. Natl Ass’n of Regulatory Util. Comm’rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007).
14 Standardization of Small Generator Interconnection Agreements and Procedures, Order No. 2006, FERC Stats. & Regs. ¶ 31,180, order on reh’g, Order No. 2006-A, FERC Stats. & Regs. ¶ 31,196 (2005), order granting clarification, Order No. 2006-B, FERC Stats. & Regs. ¶ 31,221 (2006).
15 Order No. 2003 at n.55.
16 See id. at PP 179-190.
17 Order No. 2006 at P 556.
6
any subsequent Interconnection Studies, shall be processed in accordance with these Large
Facility Interconnection Procedures.”18 The tariff also required that any facility that, at the time of the LFIP’s effective date, did not have an interconnection agreement that had been submitted for Commission-approval would be transitioned to the LFIP within sixty days.19 Those
Commission-accepted tariff provisions required facilities like Linden VFT, which had submitted an Interconnection Request for the originally requested 300 MW of capacity but had not
executed a study agreement, to complete the Interconnection Study process under the LFIP.20
The statements made at a NYISO Transmission Planning Advisory Subcommittee meeting
regarding the transition are fully consistent with the tariff requirement that most then-pending
facilities be evaluated under the new procedures.21
Similarly, the requested clarification is necessary to avoid a direct conflict with
Commission precedent requiring the submittal of an Interconnection Request where there is any
increase in capacity or material modification to an existing facility. Order No. 2003 clearly
established that, after the effective date of the Final Rule, a new Interconnection Request had to
be submitted to “increase the capacity of, or modify the operating characteristics of, an existing
18 OATT Attachment X § 30.5.1.1. These Commission-accepted tariff provisions were taken
nearly verbatim from the pro forma OATT provisions established by Order No. 2003. See Order
No. 2003 at Appendix C § 5.1.1.1 (providing that “If an Interconnection Study Agreement has not been
executed as of the effective date of th[ese interconnection procedures], then such Interconnection Study,
and any subsequent Interconnection Studies, shall be processed in accordance with” these interconnection
procedures). See New York Independent System Operator, Inc., 108 FERC ¶ 61,159 (2004).
19 OATT Attachment X § 30.5.1.2.
20 See Notice to Market Participants Concerning Transition to New Interconnection Procedures and attachment (dated October 1, 2004) (stating that “[w]hether and how a specific project will transition to the new procedures will depend on the project’s status as of the effective date of the LFIP” and
providing that facilities in “Group C - Have Not Executed a Study Agreement: The projects in Group C [which included Linden VFT] must complete all studies and enter into a three-party IA under the new procedures”). See Answer of the New York Independent System Operator, Inc. at 20-21 and
Attachment 4, Docket No. EL12-64 (filed May 24, 2012).
21 See id. at 21-22.
7
Generating Facility that is interconnected with the Transmission Provider’s Transmission
System.”22 Commission precedent interpreting this requirement has clearly required the
submission of a new Interconnection Request in such circumstances,23 including where there is a material change in a facility’s equipment or operating characteristics from those that were
studied. The requested clarification is also consistent with the NYISO’s Commission-accepted definition of a new Interconnection Request.24
The Commission’s stated purpose for requiring the submittal of a new Interconnection Request in such circumstances is to ensure predictability and minimize disputes, while also preserving bulk power system reliability. As Order No. 2003 held, the interconnection
procedures’ purpose was to “resolve most disputes, minimize opportunities for undue
discrimination, foster increased development of economic generation, and protect system reliability.”25 Order No. 2003-A affirmed that purpose, stating that:
We reaffirm here the legal and policy conclusions on which Order No. 2003 is
based. Adoption of the LGIP and LGIA will prevent undue discrimination,
preserve reliability, increase energy supply, and lower wholesale prices for
22 Order No. 2003 at n.5.
23 See, e.g, Midwest Independent Transmission System Operator, Inc., 124 FERC ¶ 61,277 at P 11
(2008) (finding that “any increase in generation capacity from an existing generator requires a new
interconnection request and a new LGIA conforming to the transmission provider’s current pro forma
LGIA” when interpreting Midwest ISO provisions regarding the submittal of Interconnection Requests
which use similar language to that found in the NYISO’s OATT Attachment X); Midwest Independent
Transmission System Operator, Inc., 132 FERC ¶ 61,241 at P 33 (2011) (same); Midwest Independent
Transmission System Operator, Inc., 122 FERC ¶ 61,019 at P 16 (2008) (holding that “[i]n Order No.
2003, and in company-specific cases, the Commission has found that any increase in generation capacity
from an existing generator requires a new LGIA conforming to the Transmission Provider's current pro
forma LGIA” citing, New England Power Co., 109 FERC ¶ 61,364 at P 13 (2004); Pacific Gas and
Electric Co., 109 FERC ¶ 61,392 (2004); Southern California Edison Co., 109 FERC ¶ 61,375 at P 10
(2004); Jersey Central Power & Light Co., 110 FERC ¶ 61,273 (2005); Midwest Independent
Transmission System Operator, Inc., 117 FERC ¶ 61,125 at P 3 (2006).
24 See supra n.11.
25 Order No. 2003 at P 12; see also Midwest Independent Transmission System Operator, Inc., 124 FERC 61,277 at P 11 (2008) (finding that “[i]nsisting that parties file new pro forma LGIAs when electing to increase generation capacity … provides consistency and eliminates confusion”).
8
customers by increasing the number and variety of generation resources
competing in wholesale electricity markets while ensuring that the reliability of the Transmission System is protected.26
Interpreting footnote 53 to grandfather any facility that was already interconnected and
operating, or that was being processed by the NYISO pursuant to an interconnection request submitted, prior to August 6, 200427 from the LFIP would reduce predictability and raise concerns regarding reliability, by creating uncertainty regarding what, if any, interconnection process would apply to those facilities.
Also, this clarification is consistent with the scope of the Complaint and the October Order which concerned the narrow question of the applicability, to Linden VFT, of the
Section 25.9.3.1 provisions allowing for a maximum CRIS level to be set using performance testing. The October Order28 clearly establishes that the Commission’s holdings are intended to allow Section 25.9.3.1 to be interpreted in a manner that enabled Linden VFT to establish its maximum 315 MW CRIS level based on its performance test,29 without broadly exempting the nearly 700 facilities already interconnected as of August 6, 2004.30
26 Order No. 2003-A at P 3.
27 August 6, 2004 is the effective date of the LFIP. See New York Independent System Operator, Inc., 108 FERC ¶ 61,159 (2004).
28 See October Order at PP 29-32.
29 See, e.g., October Order at P 29 (discussing the application of Section 25.9.3.1 to increases in CRIS); P 30 (establishing that Linden VFT is to be treated as a pre-2007 Generator for purposes of
Section 25.9.3.1); P 31 (finding that the NYISO’s ICAP Manual supports treating Linden VFT as a
Generator under Section 25.9.3.1); and P 32 (finding that Linden VFT is to be treated as a Generator, and thus eligible to adjust its grandfathered CRIS level pursuant to Section 25.9.3.1).
30 See NYISO, 2012 Load and Capacity Data - “Gold Book” (April 2012), available at
<http://www.nyiso.com/public/webdocs/services/planning/planning_data_reference_documents/2012_Go
ldBook_V3.pdf>.
9
Thus, the Commission’s statement in footnote 53 must be limited to the narrow instance
where a facility is eligible to increase and reset its maximum CRIS pursuant to Section 25.9.3.1.
III. ALTERNATIVE REQUEST FOR REHEARING
In the alternative, if the Commission denies the requested clarification, the October Order
must be reversed on rehearing because it is arbitrary and capricious and does not reflect “a
reasoned decision made based upon substantial evidence in the record.”31 Such a finding would
be a significant departure from prior Commission holdings requiring the transition of facilities to
the Order Nos. 200332 and 200633 processes. It would also directly conflict with the explicit
language in the NYISO’s tariff and the Commission’s well-established precedent requiring the
submittal of a new Interconnection Request where there is an increase in the capacity or material
modification of an existing facility’s operating characteristics.34 It would also be contrary to the
stated purpose of Order Nos. 200335 and 2006,36 as it would create uncertainty in the NYISO’s
interconnection process.
Additionally, such an interpretation of the October Order would create an entirely new
grandfathering provision over eight years after the interconnection procedures were implemented
in New York. This type of departure from the Commission’s prior precedent would raise
concerns over the NYISO’s ability to confirm that reliability requirements are satisfied since it
introduces uncertainty regarding what, or even if any, interconnection process would apply to
31 Pacific Gas & Electric Co. v. FERC, 373 F.3d 1315, 1319 (D.C. Cir. 2004) (internal citations
omitted).
32 See Order No. 2003 at n.55 and PP 179-190.
33 See Order No. 2006 at P 556.
34 See supra n. 23.
35 See Order No. 2003 at P 12 and Order No. 2003-A at P 3.
36 See Order No. 2006 at P 36 (holding that the small generator interconnection procedures “we
adopt in this Final Rule serve the same purposes as the” large generator interconnection procedures).
10
these newly grandfathered facilities. The October Order’s creation of such a potential process
gap could also have a significant impact outside the NYISO, as it could be applicable to any
other Independent System Operator/Regional Transmission Operator and other entity that has the
same standardized language in its tariff. If the Commission’s purpose was to depart from its
well-established precedent, it failed to provide a reasoned, or any, explanation for such an abrupt
and complete reversal.37 Thus, the Commission must overturn the October Order on rehearing to
the extent it would exempt any broader group of facilities from the NYISO’s interconnection
processes.
IV. SPECIFICATION OF ERRORS AND STATEMENT OF ISSUES
In accordance with Rule 713(c),38 the NYISO submits the following specification of error and statement of the issues on which it seeks rehearing of the October Order to the extent that its request for clarification is denied:
• The October Order is arbitrary and capricious and is not based on reasoned decision-
making to the extent that it would require the NYISO to grandfather, from the
interconnection procedures, any facility that was already interconnected and operating, or
that was being processed by the NYISO pursuant to a pending interconnection request
submitted, prior to the effective date of the LFIP because it: (1) contravenes Order Nos.
2003 and 2006; (2) departs without reasonable explanation from well-established
Commission precedent requiring the submittal of a new Interconnection Request where
there is an increase in the capacity or modification of an existing facility’s operating
characteristics; (3) would directly conflict with the explicit language in the NYISO’s
tariff; (4) would create uncertainty in the NYISO’s interconnection process creating
disputes and affecting the NYISO’s ability to evaluate the reliability impacts of such
modifications; and (5) would create an entirely new grandfathering provisions over eight
years after the implementation of the interconnection procedures, which could have an
impact not only on the NYISO but any other entity with an OATT that contains these
provisions. Pacific Gas & Electric Co. v. FERC, 373 F.3d 1315, 1319 (D.C. Cir. 2004);
ANR Pipeline Co. v. FERC, 71 F.3d 897, 901 (D.C. Cir. 1995); Standardization of
37 ANR Pipeline Co. v. FERC, 71 F.3d 897, 901 (D.C. Cir. 1995) (holding that an “where an
agency departs from established precedent without a reasoned explanation, its decision will be vacated as arbitrary and capricious”).
38 18 C.F.R. § 385.713(c) (2012).
11
Generator Interconnection Agreements and Procedures, Order No. 2003, FERC Stats. &
Regs. ¶ 31,146 (2003), order on reh’g, Order No. 2003-A, FERC Stats. & Regs. ¶
31,160, order on reh’g, Order No. 2003-B, FERC Stats. & Regs. ¶ 31,171 (2004), order
on reh’g, Order No. 2003-C, FERC Stats. & Regs. ¶ 31,190 (2005), aff’d sub nom. Natl
Ass’n of Regulatory Util. Comm’rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007); Midwest
Independent Transmission System Operator, Inc., 124 FERC ¶ 61,277 at P 11 (2008);
Midwest Independent Transmission System Operator, Inc., 132 FERC ¶ 61,241 at P 33
(2011); Midwest Independent Transmission System Operator, Inc., 122 FERC ¶ 61,019 at
P 16 (2008); Midwest Independent Transmission System Operator, Inc., 117 FERC
¶ 61,125 at P 3 (2006).
V.CONCLUSION
WHEREFORE, for the foregoing reasons, the New York Independent System Operator, Inc., respectfully requests that the Commission grant clarification, or in the alternative rehearing, of the October Order, as described above.
Respectfully submitted,
/s/Vanessa A. Colón
Vanessa A. Colón
Counsel to the
New York Independent System Operator, Inc.
Date: October 31, 2012
cc:Travis Allen
Michael A. Bardee
Gregory Berson
Anna Cochrane
Jignasa Gadani
Morris Margolis
Michael Mc Laughlin
Joseph Mc Clelland
Daniel Nowak
12
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in this proceeding in accordance with the requirements of Rule 2010 of the Rules of Practice and Procedure, 18 C.F.R. §385.2010.
Dated at Rensselaer, NY this 31st day of October, 2012.
/s/ Joy A. Zimberlin
Joy A. Zimberlin
New York Independent System Operator, Inc.
10 Krey Blvd.
Rensselaer, NY 12144 (518) 356-6207
