10 Krey Boulevard  Rensselaer, NY 12144

April 30, 2014

By Electronic Delivery

Kimberly D. Bose, Secretary

Federal Energy Regulatory Commission 888 First Street, N.E.

Washington, D.C. 20426

Re: New York Independent System Operator, Inc.;

Proposed Tariff Revisions Regarding Offer Requirements for its Economic Demand Response Programs; and

Ministerial E-Tariff Correction;

Docket No. ________________

Dear Ms. Bose:

Pursuant to Section 205 of the Federal Power Act,1 the New York Independent System
Operator, Inc. (“NYISO”) hereby submits proposed revisions to its Market Administration and
Control Area Services Tariff (“Services Tariff”) to clarify that NYISO customers that participate
in its economic demand response programs may submit bids above one megawatt in tenths of a
megawatt.2 The proposed tariff revisions eliminate ambiguity within the NYISO’s Services
Tariff regarding the offer requirements for suppliers participating in the economic demand
response programs and clearly align such requirements with the general offer requirements for
suppliers in New York.

The NYISO initially required that transactions in its Energy market above one megawatt
be offered and scheduled in “whole” megawatts. In a December 2010 filing, the NYISO
proposed, and the Commission accepted, clarifications to these requirements to provide that a
supplier may offer a transaction above one megawatt in tenths of a megawatt, with limited
exceptions.3 The NYISO recently determined that it inadvertently failed to include in the
December 2010 filing conforming changes elsewhere in its Services Tariff to remove the
“whole” megawatt offer requirement for suppliers participating in its economic demand response

1 16 U.S.C. § 824d (2013).

2 Terms with initial capitalization not defined herein have the meaning set forth in the Services

Tariff.

3 New York Independent System Operator, Inc., Proposed Tariff Clarifications Regarding the

Bidding for and Scheduling of Energy in New York’s LBMP Market and the Scheduling of Transmission Service in the New York Control Area, FERC Docket No. ER11-2459-000 (December 21, 2010)
(“December 2010 Filing”); New York Independent System Operator, Inc., FERC Letter Order, FERC Docket No. ER11-2459-000 (February 10, 2011) (“February 2011 Order”).

Kimberley D. Bose, Secretary April 30, 2014

Page 2

programs - the Day-Ahead Demand Response Program (“DADRP”) and the Demand Side

Ancillary Services Program (“DSASP”). The NYISO, therefore, proposes to revise the Services
Tariff to remove references to the “whole” megawatt offer requirement for suppliers
participating in its economic demand response programs. The proposed revisions make clear
that suppliers participating in the DADRP and DSASP may offer Demand Reduction in the
NYISO’s Day-Ahead Market above one megawatt in increments of tenths of a megawatt. The
proposed tariff revisions were approved by NYISO stakeholders without objection or abstention
and by the NYISO Board.

The NYISO also submits with this filing a ministerial correction to the e-Tariff version of
the Services Tariff. As described in Part VII below, the Commission previously accepted
NYISO tariff revisions that inserted Section 30.6.6.3 of the Services Tariff. However, the
accepted tariff provision has been inadvertently removed from the e-Tariff version of the
Services Tariff. The NYISO re-submits the current tariff language with this filing for inclusion
in e-Tariff.

I.List of Documents Submitted

The NYISO submits the following documents:

1. This filing letter;

2. A clean version of the proposed revisions to the Services Tariff (Attachment I); and

3. A blacklined version of the proposed revisions to the Services Tariff (Attachment II).

II.Copies of Correspondence

Communications regarding this pleading should be addressed to:

Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs David Allen, Senior Attorney

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

dallen@nyiso.com

*Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, D.C. 20037
Tel: (202) 955-1500

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

Kevin W. Jones4

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

Kimberley D. Bose, Secretary April 30, 2014

Page 3

Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 344-7999

kjones@hunton.com

mmessonnier@hunton.com

* -- Persons designated for service.

III.Background

The NYISO generally requires that each transaction in its Energy market be offered and
scheduled at a minimum size of one megawatt. The NYISO initially required that any bids
above this minimum size be offered and scheduled in “whole” megawatts. On December 21,
2010, the NYISO submitted tariff revisions to improve and clarify the requirements for the
bidding and scheduling of Energy, Ancillary Services, Installed Capacity and Transmission
Services in the New York Control Area.5 As part of this submission, the NYISO proposed
revisions to the requirements in Section 4.1.4 of the Services Tariff that establish the increments in which a supplier may offer transactions in the NYISO’s markets. Specifically, the NYISO
proposed to clarify Section 4.1.4: (i) to identify the transactions that are subject to the one
megawatt minimum scheduling requirement, and (ii) to specify that customers could bid above
this minimum size requirement in tenths of megawatts, with certain limited exceptions -
Bilateral Transactions and External Transactions - that must continue to be scheduled in “whole” megawatts. As described in the NYISO’s filing letter:

The NYISO proposes to identify those Transactions that are subject to a one (1)
megawatt minimum size by explaining that this restriction applies to Transactions
in the Energy, Installed Capacity and Ancillary Services market, other than to
offers for Regulation Service, and to all purchases in the Transmission Congestion
Contract market. The NYISO is also proposing to clarify that Installed Capacity
may be offered from Special Case Resources with a 100 kW minimum size. The
NYISO further clarifies that only Bilateral Transactions and External
Transactions in the LBMP Market must be scheduled in whole megawatts, all
other Transactions, above one megawatt, may be scheduled in tenths of a
megawatt.6

The NYISO implemented these clarifications in Section 4.1.4, as follows:

5 See December 2010 Filing. The NYISO developed the clarifications to its tariffs described in the December 2010 Filing as part of a comprehensive review of its tariffs to identify opportunities to improve and clarify them. The tariff revisions in the December 2010 Filing aligned the NYISO’s tariff requirements with the NYISO’s then-current bidding and scheduling processes and did not propose substantive changes to these processes. December 2010 Filing at p 1.

6 December 2010 Filing at pp 4-5 (emphasis added).

Kimberley D. Bose, Secretary April 30, 2014

Page 4

Pursuant to ISO Procedures, each Transaction offered in the Energy, Installed
Capacity, Ancillary Services or Transmission Congestion Contract market shall
be subject to a minimum size of one (1) megawatt (“MW”), provided however,
Regulation Service may be offered in tenths of a MW and provided further,
pursuant to ISO Procedures, Special Case Resources may offer a minimum of 100
kW of Unforced Capacity in the Installed Capacity Market. Each Transaction
above one (1) megawatt may be scheduled in tenths of a megawatt provided,
however, Bilateral Transactions and External Transactions in the LBMP
Market must be bid and scheduled in increments of one (1) megawatt.7

The Commission accepted these proposed clarifications in a February 10, 2011, order.8

The NYISO has recently determined that it inadvertently failed to include in its

December 2010 filing conforming changes elsewhere in its Services Tariff to remove references to the “whole” megawatt offer requirement for suppliers participating in its economic demand response programs. Specifically, Section 4.2.1.9 of the Services Tariff continues to indicate that a supplier participating in the DADRP or DSASP must submit a bid for Demand Reduction in “whole” megawatts. This language in Section 4.2.1.9 is a vestige of the NYISO’s initial “whole” megawatt offer and scheduling requirement that is no longer consistent with the revised offer and scheduling requirements in Section 4.1.4 or NYISO practice.

IV. Description of Proposed Tariff Revisions

The NYISO proposes to revise Section 4.2.1.9 of the Services Tariff in the following
manner to remove the “whole” megawatt bidding requirement and to clarify that suppliers
participating in the DADRP and DSASP may bid Demand Reduction in the NYISO’s Day-
Ahead Market above one megawatt in tenths of a megawatt pursuant to Section 4.1.4:

Demand Reduction Providers and DSASP Providers offering Energy from

Demand Side Resources shall submit: (i) bBids: in whole megawatts and (ii)

identifying the amount of dDemand Reduction, in MWs in accordance with

Section 4.1.4megawatts, that is available for commitment in the Day-Ahead

Market (for every hour of the dispatch day) and (iii) identifying the prices at

which the Demand Reduction Provider or DSASP Provider will voluntarily enter
into dispatch commitments to reduce demand; provided, however, the price at
which the Demand Reduction Provider or DSASP Provider will voluntarily enter
into dispatch commitments to reduce demand shall be no lower than $75/MW
hour.

The proposed revisions to Section 4.2.1.9 simply conform the offer requirement for the
NYISO’s economic demand response programs with the general offer and scheduling
requirements set forth in Section 4.1.4, which establish the NYISO’s current practice. These

7 Emphasis added.

8 See February 2011 Order.

Kimberley D. Bose, Secretary April 30, 2014

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revisions eliminate the unintended ambiguity in the Services Tariff regarding the applicable offer
requirement for the economic demand response programs that was created when the NYISO
revised Section 4.1.4, but inadvertently failed to make conforming revisions to the related
requirements in Section 4.2.1.9. In clarifying these requirements, the proposed revisions may
encourage additional participation in the NYISO’s economic demand response programs, as the
revisions remove any ambiguity regarding a suppliers’ ability to bid in fractional increments
above one megawatt, which increments may better align with suppliers’ ability to reduce
demand.

For the above-stated reasons, the NYISO requests that the Commission accept its proposed revisions.

V. Proposed Effective Date

The NYISO requests that the proposed tariff revisions become effective on June 29, 2014, which date complies with the Commission’s notice requirements.9

VI. Requisite Stakeholder Approval

The tariff revisions proposed in this filing were discussed with stakeholders at the March 4, 2014, Market Issues Working Group. The proposed revisions were discussed at the March 12, 2014, Business Issues Committee and approved without objection or abstention. The tariff
revisions were then discussed at the March 26, 2014, Management Committee meeting and were approved without objection or abstention. On April 15, 2014, the NYISO Board of Directors approved the proposed tariff revisions for filing with the Commission.

VII. Ministerial Correction

In a September 12, 2011, filing in Docket No. ER11-3312-001, the NYISO submitted the following language in Section 30.6 of its Market Monitoring Plan in Attachment O to the
Services Tariff to comply with a Commission directive concerning the provision of Protected Information to other RTOs/ISOs’ market monitoring units:

30.6.6.3 If the ISO discloses Protected Information to a Requesting Entity that
is a jurisdictional ISO or RTO, the ISO shall also provide the Protected
Information to the Requesting Entity’s market monitoring unit as soon
as the Requesting Entity’s market monitoring unit satisfies the
requirements of Section 30.6.6.1.1, above.10

9 See 18 C.F.R. §35.3.

10 New York Independent System Operator, Inc., Compliance Filing, FERC Docket No. ER11-
3312-001 (September 12, 2011).

Kimberley D. Bose, Secretary April 30, 2014

Page 6

The Commission accepted this tariff language in a letter order dated October 21, 2011.11

However, the revised tariff language has been inadvertently removed from the e-Tariff version of
the Services Tariff. For this reason, the NYISO re-submits with the filing a clean version of the
currently effective Section 30.6 of Attachment O, as accepted by the Commission, for inclusion
in eTariff.

VIII.Service List

This filing will be posted on the NYISO’s website at www.nyiso.com. In addition, the
NYISO will e-mail an electronic link to this filing to the official representative of each party to
this proceeding, to 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.

IX. Conclusion

WHEREFORE, for the foregoing reasons, the New York Independent System Operator,
Inc. respectfully requests that the Commission accept the proposed tariff changes identified in
this filing.

Respectfully submitted,

/s/ David Allen

David Allen,

Senior Attorney

New York Independent System Operator, Inc.

cc:Michael Bardee

Gregory Berson

Anna Cochrane

Jignasa Gadani

Morris Margolis

Michael McLaughlin
David Morenoff
Daniel Nowak

11 New York Independent System Operator, Inc., Letter Order, FERC Docket No. ER11-3312-001 (October 21, 2011).