10 Krey Boulevard  Rensselaer, NY 12144

September 15, 2014

By Electronic Delivery

Ms. Kimberly D. Bose Secretary

Federal Energy Regulatory Commission 888 First St, NE

Washington, DC 20426

Re: New York Independent System Operator, Inc. and New York Transmission Owners,
Compliance Filing, Docket Nos. ER13-102-001, -002, -004

Dear Ms. Bose:

The New York Independent System Operator, Inc. (“NYISO”) and the New York

Transmission Owners (“NYTOs”)1 hereby jointly submit this compliance filing to fulfill the directives of the Federal Energy Regulatory Commission (“Commission”) in its July 17, 2014, Order on Rehearing and Compliance in the above-captioned proceedings (“July 2014 Order”).2 The NYISO and NYTOs are referred to jointly in this filing as the “Filing Parties.”3

In a compliance filing submitted on October 15, 2013, the Filing Parties proposed

revisions to the NYISO’s Open Access Transmission Tariff (“OATT”) and Market

Administration and Control Area Services Tariff (“Services Tariff”) (“October 2013 Filing”).4
The Filing Parties proposed the tariff revisions to comply with the Order No. 1000 regional

1 The NYTOs are Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Lighting Company d/b/a LIPA (“LIPA”), New York Power Authority
(“NYPA”), New York State Electric & Gas Corp., Niagara Mohawk Power Corp. d/b/a National Grid, Rochester Gas & Electric Corp., and Orange & Rockland Utilities, Inc. The Filing Parties note that LIPA and NYPA, as transmission owners not subject to the Commission’s jurisdiction under section 205 of the Federal Power Act, have voluntarily participated in the development of this filing. The Filing Parties each reserve the right to comment separately on this filing.

2 New York Independent System Operator, Inc., Order on Rehearing and Compliance, 148 FERC ¶ 61,044 (2014) (“July 2014 Order”).

3 Capitalized terms that are not otherwise defined in this filing letter shall have the meaning specified in Attachment Y of the NYISO OATT, and if not defined therein, in the NYISO OATT and NYISO Services Tariff.

4 New York Independent System Operator, Inc. and New York Transmission Owners, Compliance Filing, Docket No. ER13-102-002 (October 15, 2013) (“October 2013 Filing”).

Honorable Kimberly D. Bose September 15, 2014

Page 2

transmission planning requirements5 and the Commission’s directives in its order in this

proceeding issued April 18, 2013 (“April 2013 Order”).6 The July 2014 Order largely accepted the Filing Parties’ proposed tariff revisions and directed them to submit a further compliance filing to make certain additional tariff revisions.

The Filing Parties submit this further compliance filing to address the directives in the
July 2014 Order. The proposed tariff revisions included in this compliance filing are expressly
required by the July 2014 Order’s directives, necessary to implement or clarify the existing tariff
language to accommodate those directives, or are non-substantive organizational or clarifying
adjustments. Including all of these revisions in this compliance filing will make the NYISO’s
Order No. 1000-related tariff provisions clearer and more accurate, and are therefore consistent

with Commission precedent.7 As described below, the Filing Parties submit with this filing letter the NYISO’s tariff sections containing the Order No. 1000-related revisions with an effective date of January 1, 2014.

Since the July 2014 Order, the NYISO has held several discussions with its stakeholders
regarding its compliance obligations. The NYISO presented a detailed matrix of the compliance
requirements to stakeholders on August 7, 2014, presented the proposed tariff revisions to its
stakeholders on August 21, 2014 and September 2, 2014, accepted further written comments, and
made certain changes to the proposed revisions to address stakeholder input at these meetings.

The Filing Parties respectfully submit that - with the proposed tariff revisions set forth in this supplemental compliance filing - they fully comply with the requirements set forth in Order No. 1000 and the Commission’s April 2013 Order and July 2014 Order.

5 Transmission Planning and Cost Allocation by Transmission Owning and Operating Public
Utilities, Order No. 1000, 136 FERC ¶ 61,051 (2011) (“Order No. 1000), order on reh’g and
clarification, Order No. 1000-A, 139 FERC ¶ 61,132 (2012) (“Order No. 1000-A), order on reh’g and
clarification, 141 FERC ¶ 61,044 (2012) (“Order No. 1000-B”). For convenience, unless otherwise
specified, references in this filing to “Order No. 1000” should be understood to encompass Order Nos.
1000, 1000-A, and 1000-B. The NYISO’s and the NYTOs’ compliance with the Order No. 1000
interregional transmission planning requirements is addressed by their pending July 10, 2013 compliance filing in Docket No. ER13-1942-000.

6 New York Independent System Operator, Inc., Order on Compliance Filing, 143 FERC ¶ 61,059 (2013) (“April 2013 Order”).

7 The Commission has previously authorized the NYISO to include these kinds of limited, but
necessary, clarifications in compliance filings and should follow that precedent here. See New York
Independent System Operator, Inc., 125 FERC ¶ 61,206 (2008), reh’g, 127 FERC ¶ 61,042 (2009)
(accepting proposed additional tariff revisions that were necessary to implement the modifications
directed by the Commission and to correct drafting errors or ambiguities in a compliance filing).

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

Company representatives listed in Attachment I

*Persons designated to receive service

*Ted J. Murphy

Hunton & Williams LLP 2200 Pennsylvania Ave, NW Washington, DC 20037
Tel: (202) 955-1500

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

*Michael Messonnier8
Hunton & Williams LLP

Riverfront Plaza, East Tower 951 East Byrd Street

Richmond, VA 23219
Tel: (804) 788-8712
Fax: (804) 343-4646

mmessonnier@hunton.com

*Elias G. Farrah

Winston & Strawn LLP 1700 K Street, NW

Washington, DC 20006-3817 Tel: (202) 282-5503

efarrah@winston.com

*Paul L. Gioia

Whiteman Osterman & Hanna LLP One Commerce Plaza

Albany, NY 12260
Tel: (518) 487-7624
pgioia@woh.com

Honorable Kimberly D. Bose September 15, 2014

Page 4

II.LIST OF DOCUMENTS SUBMITTED

The Filing Parties respectfully submit the following documents:

1. This filing letter;

2. A list of the company representatives for the NYTOs (“Attachment I”);

3. A blacklined version of the NYISO OATT sections containing the proposed
compliance modifications (“Attachment II”); and

4. A clean version of the NYISO OATT sections containing the proposed compliance
modifications (“Attachment III”).

III.BACKGROUND

On October 11, 2012, the Filing Parties submitted a compliance filing proposing to revise the tariff requirements for the NYISO’s Comprehensive System Planning Process (“CSPP”) in response to the Order No. 1000 regional transmission planning and cost allocation requirements (“October 2012 Filing”).9 On April 18, 2013, the Commission issued an order accepting the Filing Parties’ proposed tariff revisions in part, and directing the Filing Parties to make
additional tariff revisions in a further compliance filing.10

On October 15, 2013, in response to the April 2013 Order, the Filing Parties submitted a
further compliance filing. The October 2013 Filing included significant revisions to the CSPP,
including revised tariff requirements regarding: (i) the NYISO’s identification and enrollment of
qualified Developers,11 (ii) the Developer’s submission of project information, (iii) the NYISO’s
performance of a comparable evaluation of the viability and sufficiency of transmission and non-
transmission solutions to an identified transmission need, (iv) the NYISO’s evaluation and

selection of the more efficient or cost-effective transmission solution to an identified Reliability Need or Public Policy Transmission Need, and (v) the determination of the cost allocation
methodology for transmission solutions to Public Policy Transmission Needs. The July 2014 Order largely accepted the Filing Parties’ proposed tariff revisions and directed the Filing Parties to make certain additional tariff revisions through a further compliance filing.

In response to the July 2014 Order’s directives, the Filing Parties propose additional
revisions to the NYISO OATT as described in Sections IV through IX of this filing letter.

9 New York Independent System Operator, Inc. and New York Transmission Owners, Compliance Filing, Docket No. ER13-102-000 (October 11, 2012) (“October 2012 Filing”).

10 April 2013 Order at P 13.

11 As defined in Section 31.1.1 of Attachment Y of the NYISO OATT, a “Developer” is “[a] person or entity, including a Transmission Owner, sponsoring or proposing a project pursuant to this Attachment Y.”

Honorable Kimberly D. Bose September 15, 2014

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IV.DEVELOPER QUALIFICATION AND PROJECT INFORMATION

REQUIREMENTS

A.Developer Qualification Requirements

The July 2014 Order generally accepted the Filing Parties’ proposed Developer

qualification process.12 Under this process, a Developer is required to provide the NYISO with certain information regarding its financial resources, technical expertise, and experience for purposes of the NYISO’s determination that the Developer is qualified to submit a transmission project to be evaluated for selection in the NYISO’s regional transmission plan for purposes of cost allocation under the NYISO OATT. The same qualification requirements apply for
Developers seeking to participate in the NYISO’s reliability planning process, economic
planning process, and Public Policy Transmission Planning Process.

While generally accepting the Filing Parties’ proposed Developer qualification process, the July 2014 Order found that the proposed qualification criteria could effectively prohibit a prospective Developer that does not have past experience in financing, developing, constructing, operating, and maintaining transmission facilities from qualifying even though such Developer could rely on third-party contractors with such experience.13 The July 2014 Order, therefore, directed the Filing Parties to revise the process to:

(1) allow a prospective transmission developer to submit a detailed plan for

financing, developing, constructing, operating, and maintaining a transmission
facility, such as the financial, technical, and engineering qualifications and
experience and capabilities of any third parties with which it will contract for
these purposes, in the absence of previous experience financing, developing,
constructing, operating, or maintaining transmission facilities; and (2) require a
prospective transmission developer to provide information about transmission
facilities that it has already developed to the extent that it has developed
transmission facilities.14

In response to these directives, the Filing Parties propose to clarify in Sections

31.2.4.1.1.1.215 and 31.2.4.1.1.1.3(1) (reliability), 31.3.2.4.1.1.1.2 and 31.3.2.4.1.1.1.3(1)
(economic), and 31.4.4.1.1.2, and 31.4.4.1.1.3(1) (public policy) that a Developer is only
required to provide a description regarding the transmission facilities that it has financed,
developed, constructed, maintained, or operated, if it has previously performed such action.

12 July 2014 Order at P 172.

13 Id. at P 176.

14 Id.

15 Citations in this compliance filing beginning with Section 31 are to Attachment Y (Section 31) of the NYISO OATT, and citations beginning with Section 6.10 are to Rate Schedule 10 (Section 6.10) of the NYISO OATT.

Honorable Kimberly D. Bose September 15, 2014

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In addition, the Filing Parties propose to insert new Sections 31.2.4.1.1.1.4 (reliability),

31.3.2.4.1.1.1.4 (economic), and 31.4.4.1.1.4 (public policy) to establish that a Developer may include as part of the submission of its qualifications a detailed plan describing how the
Developer, in the absence of previous experience financing, developing, constructing, operating, and maintaining a transmission facility, will perform such actions. The Developer’s detailed plan must include “the financial, technical, and engineering qualifications and experience and capabilities of any third parties with which it will contract for these purposes.” After it has been found qualified, the Developer will be required to provide the NYISO with the status of “any contracts with third-party contractors” as part of its submission of project information for
purposes of the NYISO’s evaluation and selection of projects.16

B.Project Information Requirements

The July 2014 Order generally accepted the Filing Parties’ proposal that the Developer of
a transmission project be required to submit a $100,000 study deposit to cover the NYISO’s
actual costs in evaluating whether the project is the more efficient or cost-effective transmission
solution to an identified Reliability Need or Public Policy Transmission Need.17 The July 2014
Order, however, directed the Filing Parties to make certain revisions to the study deposit
requirements.

First, the July 2014 Order directed that the NYISO include with any refund to the
Developer of its study deposit amount “interest calculated in accordance with section

35.19a(a)(2) of the Commission’s Rules and Regulations.”18 The Filing Parties, therefore,
propose to provide in Sections 31.2.6.2 (reliability) and 31.4.4.4 (public policy) that if the
NYISO is required to refund any portion of the study deposit amount to the Developer, such
refund will include “interest on the refunded amount calculated in accordance with Section

35.19a(a)(2) of FERC’s regulations.”

Second, the July 2014 Order directed the NYISO to “provide to each transmission

developer a description of the costs to which the deposit will be applied, how those costs will be calculated, and an accounting of the actual costs.”19 The Filing Parties propose to revise
Sections 31.2.6.2 and 31.4.4.4 to describe in the following manner how the NYISO will identify and invoice actual study costs and how the NYISO will apply the study deposit.

The NYISO will track its staff and administrative costs, including any costs associated
with using subcontractors, that it incurs when performing its evaluation of a Developer’s
proposed transmission solution20 and any supplemental evaluation or re-evaluation. If the

16 Proposed NYISO OATT, Attachment Y, Sections 31.2.4.4.2, 31.2.4.8.2, 31.3.2.4.2, 31.4.5.1.

17 July 2014 Order at P 196.

18 Id. at P 197.

19 Id.

20 The NYISO will perform this evaluation in accordance with: (i) the requirements set forth in

Section 31.2.6 for a transmission solution proposed to satisfy a Reliability Need, and (ii) the requirements

Honorable Kimberly D. Bose September 15, 2014

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NYISO or its subcontractors perform study work for multiple proposed transmission solutions on a combined basis, the costs of the combined study work will be allocated by the NYISO equally among the applicable Developers.

The NYISO will invoice Developers, and Developers will be responsible for making
payments, on a monthly basis for the NYISO’s study costs associated with evaluating the
Developer’s transmission project. The NYISO will include with its monthly invoice to the
Developer a description and an accounting of the invoiced study costs incurred by the ISO and
estimated subcontractor costs. The NYISO will only draw upon a Developer’s study deposit in
the limited circumstances in which the Developer does not timely pay its monthly invoice or
does not pay disputed amounts into an independent escrow account. To ensure that the
Developer’s study deposit remains sufficient to cover the NYISO’s actual study costs in
evaluating the Developer’s project, the NYISO will notify the Developer if it is required to draw
on the study deposit. In such case, the Developer will have thirty days to make payments to the
NYISO to restore the $100,000 amount. If the Developer fails to make such payments, the
NYISO may halt its evaluation of the Developer’s proposed transmission project and may
disqualify the project from further consideration. After the conclusion of the ISO’s evaluation of
the Developer’s proposed transmission solution, or if (i) the Developer withdraws it proposed
transmission solution, or (ii) the Developer fails to pay an invoiced amount and the ISO halts its
evaluation of the proposed transmission solution, the ISO will issue a final invoice and refund to
the Developer any remaining portion of the Developer’s study deposit, including interest on the
refunded amount calculated in accordance with the FERC’s regulations, as described above.

V.RELIABILITY PLANNING PROCESS

A.Eligibility of Alternative Regulated Transmission Solutions for Cost Allocation

The July 2014 Order directed the Filing Parties to provide that the Developer of an

alternative regulated transmission solution will become eligible for cost allocation under the

NYISO OATT once the project is selected by the NYISO as the more efficient or cost-effective
transmission solution.21 The Filing Parties, therefore, propose to revise Section 31.2.6.5.2 to
specify that the Developer of an alternative regulated transmission solution will become eligible
for cost allocation under the NYISO OATT once the project is selected by the NYISO.22 The
Filing Parties also propose to make conforming revisions to Sections 31.2.8.2.3, 31.5.3.2.1,

31.5.3.2.1.6, 31.5.5.1, 6.10.1, 6.10.2, 6.10.2.2, 6.10.5.1, and 6.10.5.2 of the OATT to clarify that
the Developer of an alternative regulated transmission solution will become eligible for cost

set forth in Sections 31.4.7, 31.4.8. and 31.4.9 for a transmission solution proposed to satisfy a Public Policy Transmission Need.

21 July 2014 Order at P 71.

22 The NYISO notes that the date upon which a Developer becomes eligible for cost allocation and cost recovery under the NYISO OATT is not the same date upon which the Developer may actually begin to recover its costs. As described in Section 31.2.6.5.2, an eligible Developer may begin to recover its costs when its project is completed or halted under the requirements set forth in Rate Schedule 10 of the NYISO OATT or as otherwise determined by the Commission.

Honorable Kimberly D. Bose September 15, 2014

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allocation under the NYISO OATT once the project is selected by the NYISO, rather than when the NYISO triggers the project. The conforming revisions to Section 6.10.5 of the OATT
eliminate the potential inconsistency between Sections 6.10.5 and 31.2.8.2.7 of the OATT
identified in paragraph 283 of the July 2014 Order.

In addition, the Filing Parties propose to require under Section 31.2.6.5.2 that the

Developer of a selected project must submit to the NYISO for its approval a proposed schedule and scope of work, including a good faith cost estimate, describing any work that the Developer must perform prior to its project’s Trigger Date.23 This requirement will ensure that the
Developer of a selected project proceeds to develop its project and incur costs as needed on an appropriate schedule in light of its project’s Trigger Date, necessary development schedule, and updated project information.

As previously described to the Commission, the NYISO’s reliability planning process

strives to achieve market-based solutions to Reliability Needs, and the NYISO will not trigger a
regulated solution if it determines that sufficient market-based solutions are timely progressing to
satisfy the identified Reliability Need.24 As the Developer of an alternative regulated
transmission solution will now be eligible for cost allocation upon the selection, rather than the
triggering, of its project, the Filing Parties also propose revisions to Section 31.2.8.1.1 to specify
when the Developer’s eligibility for cost allocation will end if the NYISO decides not to trigger a
regulated solution because sufficient market-based solutions are progressing. Specifically, the
Filing Parties propose to provide that if the NYISO determines that sufficient market-based
solutions are progressing at the Trigger Date of the regulated solution, the NYISO will not
trigger the regulated solution, and the applicable Developer may recover its costs incurred up to
that date.

B. Triggering of Regulated Backstop Solution

The July 2014 Order accepted that the NYISO may - to ensure that a Reliability Need

will be satisfied - direct a Responsible Transmission Owner to proceed with the development of
a regulated backstop solution in parallel with an alternative regulated transmission solution that
was selected as the more efficient or cost-effective transmission solution. The July 2014 Order,
however, directed the Filing Parties to describe the circumstances under which the NYISO will
determine that it is necessary for a regulated backstop solution to proceed in parallel with a
market-based solution or a selected alternative regulated transmission solution.25

As described above, the Filing Parties propose to revise Section 31.2.8.1.1 to clarify that
the NYISO will review market-based solutions and, based on this review, will not trigger a
regulated solution if it determines prior to or at the Trigger Date of the regulated solution that

23 The NYISO will establish the Trigger Date of the project pursuant to Section 31.2.5.5 of Attachment Y.

24 October 2013 Filing at p 25.

25 July 2014 Order at P 75.

Honorable Kimberly D. Bose September 15, 2014

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sufficient market-based solutions are timely progressing to satisfy the Reliability Need.26 The
NYISO’s review of market-based solutions will include its viability and sufficiency
determination for market-based solutions in Section 31.2.5, its ongoing review of the ability of
the market-based solutions to timely satisfy the Reliability Need pursuant to Section 31.2.8.3,
and its monitoring of the status of market-based solutions pursuant to Section 31.2.12.1.

If the NYISO does not identify sufficient market-based solutions, the NYISO will trigger
the regulated solution(s) - including the selected alternative regulated transmission solution
and/or the regulated backstop solution, if required - at its Trigger Date in accordance with the
triggering requirements set forth in Sections 31.2.8.1.2 through 31.2.8.1.4. The Filing Parties
also propose to revise Section 31.2.8.1.5 (previously Section 31.2.8.2.1)27 to clarify the
requirement that the NYISO will make its determination regarding the triggering of a regulated
solution in the NYISO’s Comprehensive Reliability Plan (“CRP”) or at any time before the
approval of the next CRP. Moreover, the Filing Parties propose to delete from this section the
language regarding when a regulated solution will be triggered in parallel with a market-based
solution, because, as described above, that issue is addressed in Section 31.2.8.1.1.

In addition, the Filing Parties propose to revise Section 31.2.8.1.3 to clarify the

circumstances under which the NYISO will trigger a regulated backstop solution in parallel with
a selected alternative transmission solution. Section 31.2.8.1.3 addresses the scenario in which
the Trigger Date for a selected alternative regulated transmission solution precedes the Trigger
Date for a regulated backstop solution. In such case, assuming there are not sufficient market-
based solutions, the NYISO will trigger the selected alternative regulated transmission solution
at its Trigger Date. The Filing Parties propose to clarify in Section 31.2.8.1.3 that prior to the
later Trigger Date of the regulated backstop solution, the NYISO will perform a review of the

status of the development of the selected alternative regulated transmission solution. This review will include determining whether the alternative project has received its New York Public
Service Law Article VII transmission siting certification, has executed a development agreement with the NYISO, and has provided construction milestones to the NYISO.

If, based on its review, the NYISO determines that a selected alternative regulated

transmission solution may not be in service by the need date of the Reliability Need, it will also
trigger the regulated backstop solution to proceed in parallel with the selected alternative
solution to satisfy the Reliability Need. If it takes such action, the NYISO will report to its
stakeholders the reasons for its determination. If the NYISO determines that it is not necessary
to trigger the regulated backstop solution, the NYISO will inform the Responsible Transmission

26 The Filing Parties also propose to clarify in Section 31.2.7 that the NYISO’s Comprehensive Reliability Plan will include the NYISO’s determination regarding whether there are sufficient marketbased solutions “at the time of the issuance of the CRP.”

27 The Filing Parties propose to relocate the previous Section 31.2.8.2.1 to Section 31.2.8.1.5, as the provision fits more clearly with the determination of necessity provisions within Section 31.2.8.1 than the halting provisions in Section 31.2.8.2.

Honorable Kimberly D. Bose September 15, 2014

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Owner that the regulated backstop solution is no longer needed, and the Responsible

Transmission Owner will be eligible to recover the costs that it incurred up to that point.28

VI.PUBLIC POLICY TRANSMISSION PLANNING PROCESS

A.NYISO Board’s Discretion Not to Select Transmission Solution

The July 2014 Order accepted the NYISO Board’s discretion not to select a transmission
solution for cost allocation purposes to satisfy a Public Policy Transmission Need, finding the
NYISO’s proposal to be reasonable and not inconsistent with the requirements of Order No.
1000.29 The July 2014 Order, however, directed the Filing Parties to require that its Board
“provide an explanation of why any proposed solutions, determined to be sufficient and viable,
were not selected in the regional transmission plan for purposes of cost allocation.”30 In
addition, the July 2014 Order stated that the Commission expected that the NYISO Board, in
making its final decision, would consider any relevant stakeholder comments related to the
findings of the NYISO’s Market Monitoring Unit’s evaluation of the draft Public Policy
Transmission Planning Report.31

In response to the Commission’s directives, the NYISO proposes to set forth in Section

31.4.10.2 that if the NYISO Board determines not to select a transmission project, the NYISO Board shall state the reasons for its determination.32 In addition, to provide the Board the full benefit of the Management Committee’s input, the NYISO proposes to revise the requirement in Section 31.4.10.2 to state that the NYISO Board will not make a final determination on any
revisions to the draft Public Policy Transmission Planning Report until it has reviewed the
comments of the Management Committee, including the Management Committee’s “comments regarding the Market Monitoring Unit’s evaluation.”

B. NYPSC’s Role in the NYISO’s Public Policy Transmission Planning Process

The April 2013 Order accepted that the New York State Department of Public Service
(“NYDPS”) would review all proposed transmission need(s) driven by Public Policy
Requirements and identify the transmission need(s) for which the NYISO would request specific
transmission solutions to be evaluated.33 As accepted by the Commission, Section 31.4.2.1 of
Attachment Y provides that the NYDPS “will develop procedures to govern the process by

28 The NYTOs will provide the project-specific data for their regulated backstop solutions, as
required by paragraph 76 of the July 2014 Order, when making any section 205 filings to recover their
costs.

29 July 2014 Order at P 125.

30 Id.

31 Id. at P 126.

32 The NYTOs do not join in the filing to the extent that it seeks to make the changes in Section

31.4.10.2 and reserve the right to comment separately during the comment period on this filing.

33 April 2013 Order at PP 141-142.

Honorable Kimberly D. Bose September 15, 2014

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which it will review proposed transmission needs” to identify any transmission needs driven by Public Policy Requirements.

On August 15, 2014, the New York State Public Service Commission (“NYPSC”) issued
an order establishing the procedures through which it will identify any Public Policy
Requirements that may drive the need for transmission (“NYPSC Public Policy Order”).34 As
contemplated by Section 31.4.2.1, the Filing Parties propose to make clarifications to the Public
Policy Transmission Planning Process in Section 31.4 of Attachment Y to accommodate the
procedures adopted by the NYPSC for the identification of Public Policy Transmission Needs.
In particular, the NYPSC Public Policy Order clarified that “the determinations that are
necessary to the implementation of the public policy planning process should be made by the
Commission, rather than Staff.”35 For this reason, the Filing Parties have revised Sections 31.1
and 31.4 to clarify which actions must be performed by the NYPSC and which will be performed
by the NYDPS. The Filing Parties have confirmed these designations with NYDPS Staff.

As a result of these revisions, the Filing Parties also propose to revise Section 31.4.2.2
regarding the treatment of disputes to a determination regarding a proposed transmission need
driven by a Public Policy Requirement. As the existing tariff language envisioned that the
NYDPS would make the determination regarding the identification of a transmission need,
Section 31.4.2.2 currently provides that disputes regarding the NYDPS’s determination would be
addressed through the submission of a petition to the NYPSC for an order regarding the
transmission need. However, as the NYPSC, as the state decision making body, will be the
entity actually making the determination regarding transmission needs, the Filing Parties propose
to revise Section 31.4.2.2 to provide that any disputes concerning the NYPSC’s determination
regarding a transmission need will be addressed “through judicial review in the courts of the
State of New York pursuant to Article 78 of the New York Civil Practice Law and Rules.”

In addition, the NYPSC Public Policy Order provides that the NYPSC will review the

results of the NYISO’s viability and sufficiency analysis of proposed solutions to a Public Policy
Transmission Need and will issue a written order indicating whether the NYISO should continue
to evaluate transmission solutions or whether non-transmission solutions should be pursued.36 In
the latter case, the NYPSC will issue an order withdrawing its determination of a Public Policy
Transmission Need.37 The Filing Parties propose to insert a new Section 31.4.6.6 of Attachment
Y to provide that if the NYPSC withdraws its determination of a Public Policy Transmission

Need following the NYISO’s analysis of the viability and sufficiency of proposed solutions, the
NYISO will not perform an evaluation of, or select, a more efficient or cost-effective
transmission solution in that planning cycle. This provision is consistent with the NYPSC’s

34 Policy Statement on Transmission Planning for Public Policy Purposes, Proceeding on Motion of the Commission to Establish Policies and Procedures Regarding Transmission Planning for Public Policy Purposes, Case No. 14-E-0068 (August 15, 2014) (“NYPSC Public Policy Order”).

35 Id. at p 9.

36 Id. at p 9-10, Appendix Step 6.

37 Id.

Honorable Kimberly D. Bose September 15, 2014

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authority to determine whether there is a Public Policy Transmission Need for which the NYISO should solicit transmission solutions. Importantly, it will avoid the NYISO and Developers
spending time and resources on proposing, developing, evaluating and selecting a transmission project for which the NYPSC has determined there is no need and, therefore, would not grant siting certification under state law.

C.LIPA’s Proposed Tariff Revisions

In connection with the October 2013 Filing, LIPA offered as comments certain tariff

revisions to accommodate LIPA’s jurisdictional responsibilities for transmission planning on

Long Island and allow LIPA to participate in the NYISO’s Public Policy Transmission Planning
Process as a non-jurisdictional utility.38 While the NYISO and the Transmission Owners did not
object to the LIPA revisions, the July 2014 Order did not direct the Filing Parties to adopt these
tariff revisions as they were not included as revisions in the October 2013 Filing. However, the
July 2014 Order indicated that if the Filing Parties and LIPA agree on tariff modifications, the
Filing Parties could include them in a compliance filing for consideration by the Commission.39

The Filing Parties have agreed with LIPA to include a package of proposed tariff

revisions as part of this compliance filing. 40 The Filing Parties propose to insert LIPA’s

proposed tariff revisions in Sections 31.1, 31.4 and 31.5 of Attachment Y of the NYISO OATT, and to make conforming edits as necessary.41

For purposes of the Public Policy Transmission Planning Process, the LIPA-related tariff changes provide for the following:

(i) the Long Island Power Authority’s Board of Trustees identification of transmission
needs solely within the Long Island Transmission District that are driven by a Public
Policy;

38 New York Independent System Operator, Inc., Comments of the Long Island Power Authority and LIPA, Docket No. ER13-102-000 (November 14, 2013) (“LIPA Comments”).

39 July 2014 Order at PP 127, 341.

40 The consideration and development of these proposed tariff revisions was based on the

understanding that: (i) the Long Island Power Authority’s Board of Trustees has the authority for

transmission planning within the Long Island Transmission District; (ii) LIPA is an instrumentality of New York State formed pursuant to the Long Island Power Authority Act, subject to the jurisdiction of the Long Island Power Authority’s Board of Trustees; (iii) LIPA is a non-jurisdictional utility under section 201(f) of the Federal Power Act; and (iv) under state law, LIPA may only construct projects within the Long Island Transmission District.

41 The Filing Parties propose LIPA-related revisions to the following provisions of Attachment Y
of the NYISO OATT: Sections 31.1.1 (conforming edit), 31.4.1, 31.4.2, 31.4.2.3 (new), 31.4.3, 31.4.3.1,

31.4.3.2, 31.4.8.2, 31.5.5.4, 31.5.5.4.5 (new), 31.5.5.4.5.1 (new), 31.5.5.4.5.2 (new), 31.5.5.4.5.3 (new),

31.5.5.4.5.4 (new), and 31.5.5.4.6.

Honorable Kimberly D. Bose September 15, 2014

Page 13

(ii) determination by the NYSPC as to whether a transmission need identified by the

Long Island Power Authority’s Board of Trustees that is within the Long Island

Transmission District is a Public Policy Transmission Need warranting evaluation by the
NYISO;

(iii) evaluation and selection of transmission solutions for a Public Policy Transmission Need within the Long Island Transmission District by the NYISO;

(iv) clarification that a project selected by the NYISO under its Public Policy

Transmission Planning Process does not affect the obligation or responsibility of the

project developer to obtain all necessary permits or authorizations required by federal or state law for such project;42 and

(v) identification of procedures and standards for the adoption of cost allocation

methodologies and rates for a proposed solution to a Public Policy Transmission Need that is undertaken by LIPA.43

As agreed upon by the Filing Parties, LIPA will make a filing further explaining and

providing support for the LIPA-related tariff revisions. Accordingly, the Filing Parties propose that the Commission accept for filing the LIPA-related provisions.

VII. NYISO’S EVALUATION OF NYTOS’ LOCAL TRANSMISSION PLANS IN
RELATION TO REGIONAL TRANSMISSION NEEDS

The July 2014 Order directed the Filing Parties to clarify how the NYISO will evaluate
whether regional transmission solutions might satisfy regional transmission needs more
efficiently or cost-effectively than transmission projects contained in the NYTOs’ local
transmission plans. Specifically, the July 2014 Order directed the Filing Parties to address the
NYISO’s:

affirmative obligation to determine whether alternative transmission solutions

might meet the needs of the transmission planning region more efficiently or cost-
effectively than transmission solutions identified by individual public utility
transmission providers in their local transmission planning processes, regardless
of whether stakeholders, prospective transmission developers, or other interested

42 This clarification appears in Section 31.4.8.2 and does not create any new obligations on a project proponent. The clarification simply makes clear that the ISO’s selection does not eliminate the need of a project proponent to apply for and receive all necessary authorizations or permits that are required by federal or state law.

43 Sections 31.5.5.4.5 and 31.5.5.4.6 discuss adoption of cost allocation methodologies and rates
for projects undertaken by LIPA and Sections 31.5.5.4.4 and 31.5.5.4.6 apply to NYPA. With respect to
projects undertaken by LIPA, these tariff revisions are based on the understanding that the Long Island
Power Authority’s Board of Trustees has the authority for transmission planning within the Long Island
Transmission District and under state law, LIPA may only construct projects within the Long Island
Transmission District.

Honorable Kimberly D. Bose September 15, 2014

Page 14

parties propose potential transmission solutions for the region to consider. In

addition, NYISO must comply with this affirmative obligation in each of the

regional transmission planning process: reliability, economic, and public policy.44

The Filing Parties propose to revise Section 31.2.1.3 (previously Section 31.2.1.1.3) to provide that the NYISO will evaluate whether a regional transmission solution could satisfy a regional transmission need on the New York Bulk Power Transmission Facilities (“BPTFs”)
more efficiently or cost effectively than transmission solutions contained in the NYTOs’ local transmission plans.45

Section 31.2.1.3 provides that the NYISO’s evaluation will not be limited to the regional
transmission solutions that have been proposed in its planning process. Section 31.2.1.3 also
clarifies that the regional transmission needs on the BPTFs referenced in this provision are
transmission needs that impact more than one NYTOs’ Transmission District. These changes
make clear that the NYISO will affirmatively determine whether alternative transmission
solutions might meet the needs of the transmission planning region more efficiently or cost-
effectively than transmission solutions identified by individual NYTOs in their local
transmission planning processes. Finally, Section 31.2.1.3 indicates that the NYISO will
perform its evaluation in accordance with the requirements set forth in Section 31.2.6.4.2 for
Reliability Needs, Section 31.3.1.3.6 for the reduction of congestion identified in the NYISO’s
Congestion Assessment and Resource Integration Study, and Section 31.4.7.2 for the satisfaction
of a Public Policy Transmission Need. These provisions address the Commission’s directive that
the NYISO provide analysis of regional transmission solutions in substitution of local
transmission solutions in each of its reliability, economic and public policy transmission
planning processes.

The NYISO will report the results of its evaluation in the relevant planning reports.46 As previously accepted by the Commission,47 the NYISO will perform this evaluation for
informational purposes, and the NYTOs will not be required to revise their local transmission plans based on the results of the NYISO’s evaluation.48

44 July 2014 Order at P 87.

45 The proposed revisions to Sections 31.2.1.3, 31.2.6.4.2, 31.3.1.3.6, and 31.4.7.2 for the

evaluation of regional transmission solutions as they relate to local transmission projects and meeting regional transmission needs do not impact the NYISO’s requirements in Sections 31.2.4.4.2, 31.2.6.4.1 (previously 31.2.6.4), and 31.4.7.1 (previously 31.4.7) that address the NYISO’s evaluation of whether regional transmission solutions could satisfy a local reliability or local public policy need identified in the NYTOs’ local transmission plans more efficiently or cost-effectively than a local solution.

46 NYISO OATT, Attachment Y, Section 31.2.1.3.

47 July 2014 Order at P 88.

48 NYISO OATT, Attachment Y, Section 31.2.1.3.

Honorable Kimberly D. Bose September 15, 2014

Page 15

VIII. COST ALLOCATION AND COST RECOVERY

A. Public Policy Cost Allocation Process

The July 2014 Order generally accepted the Filing Parties’ proposed cost allocation

process for the NYISO’s Public Policy Transmission Planning Process. However, the July 2014 Order required the Filing Parties to: (1) explain how the proposed process will not cause
unnecessary delays for transmission developers to obtain the right to use the regional cost
allocation method for their proposed public policy transmission project; and (2) provide a
timeline for the proposed process so that a transmission developer will know how the costs of its project will be allocated in a timely manner.”49

The Filing Parties propose to revise Section 31.5.5.4 to establish the following timeline
for determining the applicable cost allocation methodology for a Public Policy Transmission
Project:

• The NYISO will file with the Commission within 60 days of the NYPSC’s determination

of a Public Policy Transmission Need any cost allocation methodology prescribed by the underlying Public Policy Requirement.50

• If there is no cost allocation methodology prescribed in the Public Policy Requirement or

the Other Developer or Transmission Owner wants to propose a different methodology, the Other Developer or Transmission Owner may submit to the NYPSC for its
consideration a proposed cost allocation methodology no later than 30 days after the NYISO’s selection of its transmission project as the more efficient or cost-effective transmission solution to a Public Policy Transmission Need.51

• The NYPSC will have 150 days to review the Transmission Owner’s or Other

Developer’s proposed cost allocation methodology and to inform the Developer whether it supports the methodology.52

• If the NYPSC supports the proposed cost allocation methodology, the Transmission

Owner or Other Developer will file the methodology with the Commission within 30 days of the NYPSC’s indication of its support.53

49 July 2014 Order at PP 330, 336-338.

50 NYISO OATT, Attachment Y, Section 31.5.5.4.1.

51 NYISO OATT, Attachment Y, Section 31.5.5.4.2.

52 NYISO OATT, Attachment Y, Section 31.5.5.4.2.1. The NYPSC has informed the NYISO that it may require up to 150 days to review and make its determination regarding the proposed cost allocation methodology to provide for the state statutory requirements for public notice and comment before state agency action. The NYPSC may comment further on the public notice and comment requirements for its actions under state law during the comment period on this filing.

53 NYISO OATT, Attachment Y, Section 31.5.5.4.2.2.

Honorable Kimberly D. Bose September 15, 2014

Page 16

• If the NYPSC does not support the proposed cost allocation methodology, the

Transmission Owner or Other Developer will work with the NYPSC over a 60 day period to attempt to develop a mutually agreeable cost allocation methodology.54

• If they agree upon a cost allocation methodology, the Transmission Owner or Other
Developer will file the methodology with the Commission within 30 days of the
conclusion of the discussion period.55

• If they cannot agree upon a cost allocation methodology, the Transmission Owner or

Other Developer will file its preferred methodology with the Commission within 30 days of the conclusion of the discussion period, which filing will also include the methodology supported by the NYPSC.56

• If the Commission has not accepted a cost allocation methodology through the above

process, the NYISO will allocate the costs of the transmission project to all Load Serving Entities in the New York Control Area using the default cost allocation methodology, based upon a load ratio share methodology.57

The revised process will provide for the determination without undue delay of a cost

allocation methodology for a transmission solution to a Public Policy Transmission Need. The
timeline indicates that the NYISO will file with the Commission any cost allocation
methodology prescribed by the Public Policy Requirement at an early stage of the Public Policy
Transmission Planning Process. In addition, if a Transmission Owner or Other Developer
proposes a cost allocation methodology for its selected transmission project, such methodology
must be filed with the Commission shortly after a project’s selection, with sufficient time
provided for input by the NYPSC, which input could alleviate disputes and delays at the
Commission. The process for deciding the cost allocation methodology will run in parallel with
state siting proceedings under Article VII of the New York Public Service Law and other
permitting proceedings for major electric transmission facilities, which take well more than a
year to complete. Thus, the time frame described above, which will run between 60 and 330
days in total, will not cause undue delay in determining the cost allocation methodology that will
be available to developers for a public policy transmission project.

B. Cost Allocation for Solutions to Transmission Security Violations

The NYISO informed the Commission in the October 2013 Filing of a potential concern
that its current tariffs do not provide for allocation of the costs associated with transmission
projects that resolve transmission security violations, other than those that also resolve resource

54 NYISO OATT, Attachment Y, Section 31.5.5.4.2.3.

55 NYISO OATT, Attachment Y, Section 31.5.5.4.2.4.

56 NYISO OATT, Attachment Y, Section 31.5.5.4.2.5.

57 NYISO OATT, Attachment Y, Section 31.5.5.4.3.

Honorable Kimberly D. Bose September 15, 2014

Page 17

adequacy issues.58 For this reason, the NYISO proposed to insert a placeholder in Section

31.5.3.2.1.4 stating that the NYISO “will address through its stakeholder process the

development of a methodology to allow for the allocation of costs of transmission solutions to thermal or voltage security issues.”59 The NYISO also informed the Commission that it would initiate a stakeholder review process to develop this cost allocation methodology and would file the methodology with the Commission through a Section 205 filing by the end of the third
quarter of 2014.60 This timeline would enable the methodology to be in place by the time the NYISO begins to consider possible solutions to needs identified in the upcoming Reliability Needs Assessment (“RNA”).61 The July 2014 Order noted the placeholder and the NYISO’s commitment to file the cost allocation methodology.62 The Commission indicated that it would address the methodology at the time the NYISO makes this filing.63

Since the October 2013 Filing, the NYISO has been working on a cost allocation

methodology for transmission solutions to transmission security violations. The NYISO has
discussed a proposed cost allocation methodology with stakeholders at the Electric System
Planning Working Group. Based on stakeholder input, the NYISO is working on further
refinements to the methodology and examples for further discussions. Given the complexity of
the issues surrounding allocation of transmission security upgrade cost, the NYISO’s focus on
the instant compliance filing, and the work that remains for developing tariff revisions in
conjunction with its stakeholders, the NYISO currently anticipates that its filing of proposed
tariff revisions for the Commission’s acceptance will not occur until the first quarter of 2015.

IX. ADDITIONAL CHANGES AND MINISTERIAL MODIFICATIONS

A. Rights of Incumbent Transmission Owners

The July 2014 Order denied the Filing Parties’ proposed revisions in the October 2013
Filing to the first sentence of Section 31.6.4 as outside the scope of compliance with the April
2013 Order.64 For this reason, the Filing Parties propose to replace the revised language in this
sentence with the language as it existed prior to the proposed revisions in the October 2013
Filing.

In addition, the July 2014 Order found that the Filing Parties’ proposed definition of
“upgrade” in the second sentence of Section 31.6.4 is inconsistent with the definition in Order
No. 1000-A and directed the Filing Parties to modify the definition of “upgrade,” so that “only

58 October 2013 Filing at p 56.

59 Id.

60 Id.

61 Id.

62 July 2014 Order at P 298.

63 Id.

64 Id. at P 152.

Honorable Kimberly D. Bose September 15, 2014

Page 18

the replacement of part of an existing transmission facility can be considered an upgrade.”65 The Filing Parties, therefore, propose to revise the definition of upgrade in line with the language in Order No. 1000-A, so that the term shall refer to: “an improvement to, addition to, or
replacement of a part of an existing transmission facility and shall not refer to an entirely new
transmission facility.”66

B. Notice of Reliability Requirements

In the October 2013 Filing, the Filing Parties proposed to retain the requirement in

Section 31.6.5 of Attachment Y that an entity developing an approved project “must register with
NERC, and NPCC for appropriate reliability functions and must comply with all applicable
Reliability Criteria.” As described in the October 2013 Filing, “the purpose of this provision is
simply to provide notification to new entities developing transmission projects in New York that
they must register with the appropriate reliability organizations and comply with the applicable
Reliability Criteria.”67

The July 2014 Order found that a provision putting new transmission developers on

notice that they will need to register with NERC is consistent with Order No. 1000.68 However,
the July 2014 Order indicated that Section 31.6.5 could still be read as requiring new
transmission developers to register with NERC while developing a transmission project.69 The
July 2014 Order, therefore, directed the Filing Parties to revise Section 31.6.5 consistent with
their explanation that the section only puts new transmission developers on notice that they must
register with NERC and does not require new transmission developers to register with NERC.”70

The Filing Parties propose to revise Section 31.6.5 to expressly indicate that the provision
simply notifies a Developer that it is responsible for complying with the applicable reliability
requirements to the extent required by, and in accordance with, the procedures of the relevant
reliability organization. The proposed tariff language does not interpret the requirements of the
relevant reliability organizations or require that a Developer register with these organizations.71

65 Id. at P 151.

66 The NYTOs have separately requested that the Commission clarify or grant rehearing

regarding its determination rejecting the amendment proposed in the October 2013 Filing to the definition of a transmission “upgrade” that the NYTOs may undertake on their own outside of the NYISO’s
planning processes. New York Independent System Operator, Inc. and New York Transmission Owners, Docket Nos. ER13-102-001, ER13-102-002 and ER13-102-003, Request for Rehearing and Clarification of the New York Transmission Owners (August 18, 2014).

67 October 2013 Filing at p 58.

68 July 2014 Order at P 179.

69 Id.

70 Id.

71 The proposed language is consistent with the Commission’s determination that “procedures for
registering as a Functional Entity are set by NERC and approved-by the Commission under section 215[],
and it is not appropriate for the Commission to amend or interpret those procedures here…to provide that

Honorable Kimberly D. Bose September 15, 2014

Page 19

In addition, the revised tariff language replaces the references to NERC and NPCC with references to all applicable reliability entities and their reliability requirements.

C. Additional Ministerial Modifications in Attachment Y and OATT Rate Schedule 10

The Filing Parties also propose the following non-substantive clarifications and

ministerial modifications that are related to the implementation of the tariff revisions proposed to comply with the July 2014 Order or that were identified in the course of drafting those changes, all of which need to be addressed for the tariff to read logically and consistently.

Tariff Section(s)

Att. Y §§ 31.1.1,

31.2.5.5, 31.2.5.7,

31.2.6.1, 31.2.6.5.2,

31.2.7, 31.2.8.1.2,

31.2.8.1.3, 31.2.8.1.4,

31.4.6.5

Att. Y §§ 31.2.6.5.2;

31.5.5.3

Att. Y §§ 31.2.8.1.3,

31.2.8.1.4

Att. Y §§ 31.2.5.1,

31.2.6.1, 31.2.6.2,

Reason for Modification

Created defined term “Viability and Sufficiency Assessment,” which
shall mean “[t]he results of the ISO’s assessment of the viability and
sufficiency of proposed solutions to a Reliability Need under Section

31.2.5 or a Public Policy Transmission Need under Section 31.4.6, as applicable.” The defined term does not change the NYISO’s process, as accepted by the Commission, pursuant to which the NYISO will provide to stakeholders and interested parties the results of its

assessment of the sufficiency and viability of solutions to an identified Reliability Need or Public Policy Transmission Need. The proposed defined term merely improves readability by replacing the lengthy

description of this process step in multiple locations in Attachment Y with a defined term.

Revised Section 31.2.6.5.2 to clarify that a Developer that is eligible for cost recovery under the NYISO OATT and has its project halted may recover its costs permitted under the OATT when the project is halted. Without this clarification, halted projects would fall under the general rule that cost allocation does not begin until project

completion or as otherwise determined by the Commission.

Revised Section 31.5.5.3 to clarify distinction between when a Developer becomes eligible for cost recovery and when the Developer can actually begin recovering its costs.

Revised to replace the term “reliability backstop solution,” which is not defined in Attachment Y, with the correct term “regulated

backstop solution.”

Revised to replace the term “project qualification information” with “project information” for consistent use of terms regarding the

31.3.2.4.1.3, 31.4.4.3,

31.4.4.4

Att. Y §§ 31.2.4.1.1,

31.3.2.4.1.1, 31.4.4.1

Att. Y §§

31.2.4.1.1.1.2,

31.3.2.4.1.1.1.2,

31.4.4.1.1.2

Att. Y §§ 31.2.4.1,

31.2.4.1.1.1,

31.2.4.1.1.2, 31.2.5.1,

31.3.2.4.1,

31.3.2.4.1.1.1,

31.3.2.4.1.1.2,

31.3.2.4.1.3, 31.4.4,

31.4.4.1.1, 31.4.4.1.2,

31.4.4.3

Att. Y §§ 31.2.4.1.1.2;

31.3.2.4.1.1.1.2;

31.4.4.1.1.2

Att. Y § 31.2.5.4;

31.4.6.4

Att. Y §§ 31.2.5.4;

31.4.6.4

separate “project information” and “developer qualification” requirements.

Revised the first sentence in Sections 31.2.4.1.1, 31.3.2.4.1.1, and

31.4.4.1 to include “finance” in the introductory language regarding Developer qualification requirements for consistency with the detailed qualification requirements described in that section.

Revised the Developer qualification criteria described in Sections

31.2.4.1.1.1.2, 31.3.2.4.1.1.1.2, and 31.4.4.1.1.2 to delete “finance” as the “finance” related criteria are addressed in a later provision.

Revised to insert subheadings “Developer Qualification Criteria” and “Developer Qualification Determination” as the current requirements for a Developer to become qualified are contained under the last

subheading of the Developer qualification criteria. The revisions include conforming changes to internal cross-references.

Revised to insert missing “the” in second sentence.

Revised to replace the term “comparative” with “comparable” in the
first sentence of Section 31.2.5.4 to clarify that the NYISO will be
performing a comparable analysis of the sufficiency of transmission
and non-transmission solutions to satisfy a Reliability Need, rather
than comparing transmission versus non-transmission solutions. This

is consistent with the overarching language in Section 31.2.5.2, which provides for the NYISO’s evaluation of all resource types on “a

comparable basis.” The revisions include a conforming change to the similar provision in Section 31.4.6.4 for the Public Policy

Transmission Planning Process.

Revised Section 31.2.5.4 to clarify that the NYISO will evaluate each proposed solution to a Reliability Need to determine whether it “fully” eliminates the need and will reject proposed regulated solutions that do not fully satisfy the need.

Revised Section 31.4.6.4 to relocate the word “independently” to clarify that the NYISO will evaluate each solution to a Public Policy Transmission Need to measure the degree to which the proposed

Att. Y §§ 31.2.5.5,

31.2.5.7, 31.2.6.1,

31.2.6.5.2, 31.2.7,

31.2.8.1.2, 31.2.8.1.3,

31.2.8.1.4

Att. Y § 31.2.6.1

Att. Y §§ 31.2.6.2,

31.4.4.4

Att. Y §§ 31.2.6.5.1.1,

31.4.8.1.1

Att. Y §§ 31.2.6.5.1.6,

31.4.8.1.6

Att. Y §§ 31.2.8.1.3,

31.2.8.2.2

Att. Y §§ 31.2.8.1.3,

31.2.8.1.4, 31.2.8.2.2

Att. Y §§ 31.2.8.2.2,

31.2.8.2.3

Att. Y § 31.2.8.2.4

Revised to clarify date upon which the ISO will present the Viability and Sufficiency Assessment to stakeholders.

Revised to insert missing language “have a Trigger Date that” and to clarify that the NYISO will not request additional project information from a Developer if the NYISO is not required to perform an

evaluation and selection of a transmission solution during a planning cycle.

Revised to use the term “subcontractors” in place of “third-party contractors” throughout for consistent terminology.

Revised to insert missing “to” in the following sentence: “The work sheets should itemize to the extent applicable and available all

equipment for: (i) the proposed project; (ii) interconnection facilities (including Attachment Facilities and Direct Assignment Facilities); and (iii) System Upgrade Facilities, System Deliverability Upgrades, Network Upgrades, and Distribution Upgrades.”

Revised to delete extra “a” as follows: “or (iii) has a specified a plan
or approach for determining routing and acquiring property rights.”

Revised requirement that Developer receive New York Public Service Law Article VII certification for its transmission project to provide for “other applicable siting permits or authorizations under New York

State law,” as certain transmission projects may not require Article VII certification.

Revised to insert “selected” before “alternative regulated transmission solution” to clarify that the relevant project is the project that has been selected by the NYISO as the more efficient or cost-effective

transmission solution.

Revised to clarify that if the NYISO has triggered a regulated backstop solution or an alternative regulated transmission solution and then

halts the project, the NYISO will notify the relevant Developer, post such notice on its website, and will state in the next CRP that the

solution is no longer needed.

Revised to insert missing “to” and to include missing cross-reference.

Att. Y §§ 31.2.8.2.6,

31.2.8.2.7

Att. Y § 31.2.11.3

Att. Y § 31.4.4.3

Att. Y § 31.4.3,

31.5.5.4

Att. Y § 31.5.5.4.2

Sch. 10 § 6.10.4.3

Revised Section 31.2.8.2.6 to relocate “triggered” and Section

31.2.8.2.7 to delete “a” to clarify that the sections refer to both a “triggered regulated backstop solution” and a “triggered alternative regulated transmission solution.”

Revised first sentence in confidentiality provisions in Section

31.2.11.3 to delete reference to a partial solution to a Reliability Need, as the NYISO will be evaluating whether a Developer’s proposed

solution eliminates the entire identified Reliability Need. Revised
second sentence in Section 31.2.11.3 to insert missing “shall” as

follows: “Thereafter, the ISO shall disclose the alternative regulated response to the Market Participants and other interested parties;

however, any preliminary cost estimates that may have been provided to the ISO shall not be disclosed.”

Revised to clarify that a Developer shall submit the required project
information for its proposed solution to a Public Policy Transmission
Need within 60 days of “the ISO’s request for solutions” to that need,
rather than within 60 days of the NYPSC’s determination of the need.
This clarification provides internal consistency concerning the timing
of a Developer’s proposal of its proposed solution under Sections

31.4.3.1, 31.4.4.3, and 31.4.4.4.

Revised to replace “a transmission need driven by a Public Policy Requirement” and “a transmission need identified by the NYDPS” with the defined term “Public Policy Transmission Need.”

Revised to delete “Adjusted Load Ratio Share” as the defined term in not used in Section 31.5.

Revised to replace “recovery” with “recover.”

Made several non-substantive modifications to correct grammatical, formatting, and typographical errors.

Honorable Kimberly D. Bose September 15, 2014

Page 23

Needs Assessment, soliciting proposed Public Policy Transmission Needs, and drafting manuals, forms and other related documents, are unaffected by the tariff changes proposed in this filing. Moreover, the implementation of the tariff changes, including those proposed in this compliance filing, remains feasible in the current 2014-2015 planning cycle.

The Filing Parties, therefore, submit the proposed tariff revisions for filing with a January
1, 2014 effective date. The Filing Parties also submit for filing with a January 1, 2014, effective
date Sections 3.8, 3.10, and 31.7 of the OATT, which provisions were previously accepted by the
Commission in this proceeding, but did not include the January 1, 2014 effective date.73 To
clarify the remaining matters addressed in this compliance filing in time for the NYISO to carry
out the reliability and public policy planning processes this year and next, the NYISO
respectfully requests that the Commission issue an order approving the proposed tariff revisions
within 60 days.

XI.SERVICE

The NYISO will send an electronic copy of this filing to the official representative of
each party to this proceeding, to the official representative of each of its customers, to each
participant on its stakeholder committees, to the New York Public Service Commission and the
New Jersey Board of Public Utilities. In addition, the complete public version of this filing will
be posted on the NYISO’s website at www.nyiso.com.

XII. CONCLUSION

WHEREFORE, the New York Independent System Operator, Inc. and the New York Transmission Owners respectfully request that the Commission accept this compliance filing, without requiring any modifications.

Respectfully submitted,

NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.

By: /s/ Carl F. Patka

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

10 Krey Boulevard

Rensselaer, NY 12144

Email: rfernandez@nyiso.com Email: rstalter@nyiso.com

NEW YORK TRANSMISSION OWNERS

By: /s/ Elias G. Farrah

Elias G. Farrah

Winston & Strawn LLP 1700 K Street, NW

Washington, DC 20006-3817
Email: efarrah@winston.com

*Paul L. Gioia
Whiteman Osterman & Hanna LLP

Email: cpatka@nyiso.com

Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Ave, NW
Washington, DC 20037
Email: tmurphy@hunton.com

Michael Messonnier
Hunton & Williams LLP
951 East Byrd Street
Richmond, VA 23219

Email: mmessonnier@hunton.com

/s/ John Borchert

John Borchert

Senior Director of Energy Policy and Transmission Development

Central Hudson Gas & Electric Corporation 284 South Avenue

Poughkeepsie, NY 12601
Email: jborchert@cenhud.com

/s/ Jacqueline Hardy

Jacqueline Hardy

Assistant General Counsel
Long Island Power Authority

333 Earle Ovington Boulevard Suite 403

Uniondale, NY 11553
Email: jhardy@lipower.org

One Commerce Plaza Albany, NY 12260

Email: pgioia@woh.com

/s/ Richard B. Miller

Consolidated Edison Company of New York, Inc. Orange and Rockland Utilities, Inc.

Richard B. Miller

Director of Energy Markets Policy Group Consolidated Edison Co.

of New York, Inc.

4 Irving Place
Room 2315-s

New York, NY 10003
Email: millerrich@coned.com

/s/Kristina Nifora

Consolidated Edison Company of New York, Inc. Orange and Rockland Utilities, Inc.

Kristina Nifora, Esq. Associate Counsel

Consolidated Edison Co. of New York, Inc.

4 Irving Place

Room 1850-s

New York, NY 10003
Email: niforak@coned.com

/s/ Andrew Neuman

New York Power Authority Andrew Neuman, Esq.

New York Power Authority 123 Main Street

White Plains, NY 10601-3170
Email: andrew.neuman@nypa.gov

Andrew Antinori, Director Market Issues

David Clarke

Director of Power Markets Policy Long Island Power Authority

99 Washington Avenue 10th Floor

Albany, NY 12210-2822
Email: dclarke@lipower.org

/s/ R. Scott Mahoney

R. Scott Mahoney, Esq.

New York State Electric & Gas Corporation Rochester Gas and Electric Corporation

Iberdrola USA

18 Link Drive
P.O. Box 5224

Binghamton, NY 13902-5224

Email: scott.mahoney@iberdrolausa.com

cc:Michael Bardee

Gregory Berson
Anna Cochrane
Jignasa Gadani
Morris Margolis

Michael McLaughlin David Morenoff

Daniel Nowak

New York Power Authority 123 Main Street

White Plains, NY 10601-3170
Email: andrew.antinori@nypa.gov

/s/ Daniel Galaburda

Niagara Mohawk Power Corporation d/b/a/ National Grid

National Grid USA Service Company, Inc. Assistant General Counsel and Director

40 Sylvan Road

Waltham, MA 02451-1120

Email: daniel.galaburda@us.nrid.com

David Lodemore
Senior Counsel

Niagara Mohawk Power Corporation d/b/a National Grid

40 Sylvan Road

Waltham, MA 02451-1120
david.lodemore@nationalgrid.com

Bart Franey

Director of Federal Regulation

Niagara Mohawk Power Corporation d/b/a National Grid

300 Erie Boulevard West Syracuse, NY 13202

bart.franey@nationalgrid.com

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 15th day of September, 2014.

/s/ Joy A. Zimberlin

Joy A. Zimberlin

New York Independent System Operator, Inc.

10 Krey Blvd.

Rensselaer, NY 12144 (518) 356-6207