10 Krey Boulevard Rensselaer, NY 12144
November 25, 2014
By Electronic Delivery
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. ER15-___-000;
Proposed Tariff Amendments to Clarify Eligibility for Certain Market Settlements
Dear Secretary Bose:
In accordance with Section 205 of the Federal Power Act1 and Part 35 of the
Commission’s regulations, the New York Independent System Operator, Inc. (“NYISO”) respectfully submits proposed amendments to its Market Administration and Control Area Services Tariff (“Services Tariff”) to clarify provisions regarding eligibility for Day Ahead Margin Assurance Payments (“DAMAP”) and Real-Time Bid Production Cost Guarantees (“BPCG”) for units that increase their minimum operating levels in real-time.
These proposed tariff amendments were approved by the NYISO’s Management
Committee unanimously on September 30, 2014. The NYISO is requesting an effective date sixty days from the date of this filing.
I.Documents Submitted
1.This filing letter;
2.A clean version of the proposed revisions to the NYISO’s Market Administration
and Control Area Services Tariff (“Attachment I”);
3. A blacklined version of the proposed revisions to the NYISO’s Market
Administration and Control Area Services Tariff (“Attachment II”);
1 16 U.S.C. §824d (2010).
Honorable Kimberly D. Bose November 25, 2014
Page 2
II.Background and Tariff Justification
A.Day Ahead Margin Assurance Payments
Market Participants include minimum operating levels for their Generators’ Day-Ahead
and real-time bids, informing the NYISO of the MW levels below which they do not want these
facilities to be dispatched. These minimums are typically established for physical reasons such
as air permit issues. Units bidding to be committed economically in the Day-Ahead market use
an ISO-Committed Flexible bid type and provide their minimum operating level in their
Minimum Generation Bid. Day-Ahead committed units will be dispatched in real-time to their
minimum operating level and, if their energy is economic, to a point on their incremental energy
bid curve.
Units bidding in the Day-Ahead market to be committed regardless of whether they are
economic use a Self-Committed bid type and provide their minimum operating level in their self
commitment bid.2 Self committed units that want to be committed regardless of whether they
are economic but also want to be dispatched to supply energy and ancillary services if their
incremental energy bids are economic will use a Self-Committed Flexible bid type, providing
their minimum operating level as the first or lowest step in their incremental energy bid curve.3
In real-time, these units will be dispatched no lower than the lowest point on their incremental
energy curve and will be dispatched above that point only if they are economic.4
The NYISO may request any on-line Generator to increase its minimum operating level
for reliability reasons when, for instance, a sudden change in the topology of the transmission
system requires a steady energy injection rather than one based on the economics of the unit’s
energy bid. An increase in a minimum operating level may expose a unit to balancing
obligations if the increase converts flexible MW that had supported a Day-Ahead Operating
Reserve or Regulation Service schedule to fixed MW that cannot support such a schedule. If the
NYISO-requested increase causes a balancing obligation for the hour that is greater than the
unit’s Day-Ahead bid costs for that product for that hour, the unit becomes eligible for a
DAMAP for the hour.
On the other hand, when the NYISO increases a unit’s minimum operating levels at a
generator’s request, the Services Tariff excludes DAMAP eligibility5 because generators should
2 Although such units also provide a minimum operating level in their Minimum Generation Bid, it is not used in any commitment or scheduling decision and if their self-commitment schedule is higher, they are dispatched to their self-commitment MW.
3 The lowest point on their incremental bid curve can be no lower than the minimum operating level provided in their Minimum Generation Bid but can be higher.
4 Units bidding only in the real-time market are committed and dispatched similarly although they need to be able to start within one hour.
5 See Services Tariff Section 25.2.2 Exceptions; “25.2.2.1 a Resource otherwise eligible for a
Day-Ahead Margin Assurance Payment in hours in which the NYISO has increased the Resource’s
Honorable Kimberly D. Bose November 25, 2014
Page 3
be at risk for settlement losses when changing their minimum operating levels in real-time. Until earlier this year, the settlement software applied this DAMAP exclusion only when the generator requested an increase in its minimum operating level through a communication directly with NYISO operations staff. In January 2014 it became apparent that a generator could also
effectuate a real-time increase in its minimum operating level through a change to or an increase in its self-commitment bid in the Hour-Ahead Market. The software was revised to also exclude DAMAP eligibility for hours in which a generator increased its minimum operating level
through a real-time adjustment to its self-commitment schedule.
The tariff amendment to Services Tariff Section 25.2.2 included in this filing is intended to clarify that DAMAP exclusions apply to instances when the NYISO increases a unit’s
minimum operating level at its request, whether that request is made directly or through a change in its self-commitment schedule.
B.Bid Production Cost Guarantee
The NYISO protects units that are committed or dispatched economically from supplying
energy over the course of a day at revenues that do not cover their as-bid costs. Should that be
the case, the NYISO will make a Bid Production Cost Guarantee (“BPCG”) payment for the
difference between as-bid costs and the day’s market revenues. Because commitments by units
using the Self-Committed bid types are not economic commitments, no BPCG is available for
the Self-Committed portion of such a unit’s output, unless the unit has been committed through
an Supplemental Resource Evaluation (“SRE”), an exception described below.6
Should an otherwise BPCG-eligible unit request an increase in its minimum operating
level, however, the Services Tariff excludes from BPCG eligibility the energy being injected as a result of such an increase because those injections are no longer instructed by the NYISO as
economic injections.7
As mentioned, generators that are otherwise BPCG-ineligible because they use an ISO-
Committed or Self-Committed bid type may be eligible for a real-time BPCG if they were not
minimum operating level either: (i) at the Resource’s request; or (ii) in order to reconcile the ISO’s
dispatch with the Resource’s actual output or to address reliability concerns that arise because the
Resource is not following Base Point Signals; or (iii) an Intermittent Power Resource that depends on
wind as its fuel.”
6 Units using the Self-Committed Flexible bid mode are entitled to a BPCG for the incremental
energy portion of their settlement, but units using the Self-Committed Fixed bid mode are not entitled to a BPCG at all, with the above mentioned exception.
7 See the definition of ‘Bid cost’ in Services Tariff Section 18.4.2 wherein the NYISO inserts
into the BPCG formula the “Bid cost submitted by Generator g, . . . in the RTD for the hour that includes
RTD interval i expressed in terms of $/MWh, . . . except in hours in which the NYISO has increased
Generator g’s minimum operating level, either (i) at the Generator’s request or (ii) in order to reconcile
the ISO’s dispatch with the Generator’s actual output or to address reliability concerns that arise because
the Generator is not following Base Point Signals, in which case CgiRT shall be deemed to be zero.”
Honorable Kimberly D. Bose November 25, 2014
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committed in the Day-Ahead Market but the NYISO or a Transmission Owner needs them to resolve a reliability issue. In such cases, the unit will be committed through a SRE and, if the unit’s energy revenues over its SRE schedule do not recover its as-bid costs over its SRE schedule, the NYISO will protect such a unit with a BPCG, regardless of bid type.
Earlier this year, the NYISO discovered that units that were being committed via a SRE
with a Self-Committed bid type which then increased their minimum operating level above the
level of their SRE were not being excluded from a BPCG for the energy injections made possible
by the increase in their minimum operating level. While such an increase is permissible, and a
BPCG was still appropriate for the SRE portion of the unit’s dispatch, the portion of its output
that resulted from its self-requested increase in its minimum operating level should be excluded
from a BPCG, for the same reasons an otherwise BPCG-eligible unit is excluded from a BPCG if
it has increased its minimum operating level, through a direct communication with the NYISO.8
III. Proposed Tariff Modifications
To ensure Market Participants understand that real-time adjustments in self-commitment schedules can cause DAMAP and real-time BPCG exclusions, the NYISO is proposing to clarify its tariff and explicitly recognize this settlement rule.
Services Tariff, Section 25.2.2, which lists the exceptions to Generator DAMAP eligibility9, is proposed for revision by adding the language shown below:
25.2.2 Exceptions
Notwithstanding Section 25.2.1 of this Attachment J, no Day-Ahead Margin Assurance Payment shall be paid to:
25.2.2.1 a Resource otherwise eligible for a Day-Ahead Margin Assurance
Payment in hours in which the NYISO has increased the Resource’s minimum
operating level either: (i) at the Resource’s request including through an
adjustment to the Resource’s self commitment schedule; or (ii) in order to
reconcile the ISO’s dispatch with the Resource’s actual output or to address
reliability concerns that arise because the Resource is not following Base Point
Signals; or (iii) an Intermittent Power Resource that depends on wind as its fuel.
Services Tariff, Section 18.4.2 contains the formula which describes the calculation of a
real-time BPCG. In it, the NYISO proposes to revise the definition of the factor CgiRT, which
describes how a Generator’s incremental energy bid is to be included in the BPCG calculation, as
shown:
CgiRT = Bid cost submitted by Generator g, or when applicable the mitigated Bid cost for
Generator g, in the RTD for the hour that includes RTD interval i expressed in terms of
8 Id.
9 Services Tariff Section 12.2.1 indicates that only Generators bidding as either ISO Committed Flexible or Self-Committed Flexible are eligible for a DAMAP.
Honorable Kimberly D. Bose November 25, 2014
Page 5
$/MWh, except in intervals in which the dispatch of the Generator is constrained by its
downward ramp rate for that interval, unless that Generator was scheduled to provide
Regulation Service in that interval and its RTD basepoint was less than its AGC
basepoint, and except in hours in which the NYISO has increased Generator g’s
minimum operating level, either (i) at the Generator’s request including through an
adjustment to the Resource’s self commitment schedule, or (ii) in order to reconcile the
ISO’s dispatch with the Generator’s actual output or to address reliability concerns that
arise because the Generator is not following Base Point Signals, in which case CgiRT shall
be deemed to be zero.
With the ministerial revisions proposed in this filing, the NYISO is eliminating any confusion with regard to DAMAP and BPCG eligibility for units increasing their self-
commitment MW.
IV.Effective Date
The NYISO requests an effective date of January 25, 2015, sixty days from the date of this filing.
V.Requisite Stakeholder Approval
These amendments were approved by the NYISO Management Committee, with an abstention and no opposition, on September 30, 2014. They were approved by the NYISO’s Board of Directors on October 21, 2014.
VI. Communications and Correspondence
All communications and service in this proceeding should be directed to:
Robert E. Fernandez, General Counsel
Ray Stalter, Director of Regulatory Affairs
*Mollie Lampi, Assistant General Counsel
10 Krey Boulevard
Rensselaer, NY 12144
Tel: (518) 356-7530
Fax: (518) 356-7678
rfernandez@nyiso.com
mlampi@nyiso.com
rstalter@nyiso.com
*Persons designated for receipt of 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
Honorable Kimberly D. Bose November 25, 2014
Page 6
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.
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 January 25, 2015.
Respectfully submitted,
/s/Mollie Lampi
Mollie Lampi
Assistant General Counsel
New York Independent System Operator, Inc.
10 Krey Blvd.
Rensselaer, New York 12144 (518) 356 7530
mlampi@nyiso.com
cc:Michael A. Bardee
Gregory Berson
Anna Cochrane
Jignasa Gadani
Morris Margolis
Michael McLaughlin
David Morenoff
Daniel Nowak
Jamie Simler
