Amanda C. Downey

Counsel

October 1, 2014

The Honorable Kimberly D. Bose Secretary

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

Washington, DC 20426

Re:Niagara Mohawk Power Corporation, d/b/a National Grid

Docket No. ER15-___-000

Amended and Restated Large Generator Interconnection Agreement with Selkirk Cogen Partners, LP

Dear Secretary Bose:

Pursuant to Section 205 of the Federal Power Act (“FPA”),1 and Part 35 of the
Federal Energy Regulatory Commission’s (“Commission”) regulations,2 Niagara
Mohawk Power Corporation d/b/a/ National Grid (“National Grid”) submits an Amended
and Restated Large Generator Interconnection Agreement (“LGIA”) between National
Grid and Selkirk Cogen Partners, LP (“Selkirk”). The attached LGIA (the “Selkirk
LGIA”) is designated as Service Agreement No. 2161 under the New York Independent
System Operator, Inc.’s (“NYISO”) Open Access Transmission Tariff (“OATT”).

The Selkirk LGIA is an undisputed agreement between National Grid and Selkirk for the continued provision of interconnection service to phase two of the generating facility owned by Selkirk and located in Selkirk, Albany County, New York (“Phase Two”). National Grid requests that the Commission accept the Selkirk LGIA as of the effective date set forth therein, September 1, 2014.

I.Background

National Grid is a public utility with a transmission system in the State of New York. National Grid’s transmission facilities have been placed under the operational control of the NYISO.

Selkirk owns and operates a natural gas-fired, combined-cycle facility rated at 435
MW that has two phases. Phase one consists of a gas turbine with an associated heat
recovery steam generator with supplemental firing, and a non-condensing steam turbine
generator (“Phase One”). Phase Two consists of two combustion turbines, two heat
recovery steam generators with supplemental firing, and a condensing steam turbine

The Honorable Kimberly Bose October 1, 2014

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generator.3 The Commission certified Phase One of the Plant as a “qualifying

cogeneration facility” (“QF”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”) in Docket No. QF89-274-000 on September 28, 1989. On June 9, 1992, the Commission acknowledged the completion of Phase Two and recertified the Plant,
including both Phase One and Phase Two, as a QF in that same docket. The Commission has since repeatedly recertified both phases of the Plant as a QF.4

National Grid and Selkirk are parties to an interconnection agreement regarding
Phase Two that was accepted by the Commission in Docket No. ER93-139-000 on March
5, 1993.5 Pursuant to that existing interconnection agreement, National Gird provides
interconnection service to Phase Two using the transmission system owned by National
Grid.

II.The Selkirk LGIA

National Grid and Selkirk have entered into the Selkirk LGIA to provide for

continued interconnection service to Phase Two of the Plant using the transmission

system owned by National Grid, pursuant to the terms of the Selkirk LGIA. The parties
intend the Selkirk LGIA to amend and restate, and to supersede and replace, the
interconnection agreement for Phase Two of the Plant that was accepted in Docket No.
ER93-139, effective as of September 1, 2014, as set forth in the Selkirk LGIA.6

With minor variations, the Selkirk LGIA follows the pro forma LGIA set forth in Appendix 6 of Attachment X to the NYISO OATT. The main difference between the Selkirk LGIA and the NYISO pro forma is that the Selkirk LGIA is a two-party
agreement between the transmission owner (National Grid) and the generation facility owner (Selkirk), whereas the pro forma NYISO LGIA is a three-party agreement among the transmission owner, the generation facility owner, and the NYISO.7

Commission precedent supports acceptance of the Selkirk LGIA as a two-party
agreement. In proceedings on two-party LGIAs between National Grid and generation
subsidiaries of Alliance Energy that were modeled on the pro forma NYISO LGIA

The entire facility, including Phase One and Phase Two, is referred to herein as the “Plant.”
Most recently, Selkirk filed a notice of recertification with respect to the QF status of Phase One

The Honorable Kimberly Bose October 1, 2014

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(collectively, the “Alliance Energy LGIAs”),8 the Commission found that the NYISO did
not need to be a party to the two-party Alliance Energy LGIAs, for the following reasons:

[T]hey are not the type of new generator interconnection agreements
envisioned by Order No. 2003; rather they are more like after-the-fact
interconnection operating agreements that govern the terms, conditions,
and rates associated with the continued operation and maintenance of
previously constructed facilities built to accommodate the interconnection
of the Alliance generators to Niagara Mohawk’s transmission system.
Accordingly, we will not require NYISO to be a signatory to these
unexecuted IAs.9

Like the Alliance Energy LGIAs, the Selkirk LGIA is not a new generator

interconnection agreement of the type envisioned by Order No. 2003. Instead, the

Selkirk LGIA governs the terms, conditions, and rates associated with the continued

operation and maintenance of the previously constructed facilities built to accommodate the interconnection of the existing Phase Two of the Plant to the National Grid
transmission system. Therefore, the Commission should accept the Selkirk LGIA as a two-party agreement.

The pro forma NYISO LGIA contains a number of provisions that are applicable
to new interconnections but are not applicable to existing interconnections, such as the
interconnection for Phase Two of the Plant. However, National Grid and Selkirk have
agreed to retain those provisions in the Selkirk LGIA.10 This approach is consistent with
the approach authorized in PJM Interconnection, L.L.C.11 In that order, the Commission
rejected a proposal to delete inapplicable provisions from an LGIA, stating that “[i]f a
provision of a contract is not applicable, it is not applicable,” and concluding that

“[u]nless confusion is likely, modifications to a pro forma agreement that ‘clarify’ matters not in doubt are not necessary.”12

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National Grid and Selkirk have agreed to a ten-year term for the Selkirk LGIA,
which is the standard term under the pro forma NYISO LGIA.13 National Grid and
Selkirk have also included clarifying provisions in the Selkirk LGIA that differ from
provisions in the pro forma NYISO LGIA. In Article 27.2, the parties have agreed to
have a third arbitrator selected by consensus of both parties, because this is a two-party
agreement. In Article 27.4, the parties have changed the allocation of costs for a single
arbitrator from one-third per party to one-half per party, because the Selkirk LGIA is a
two-party rather than a three-party agreement. In Appendix E to the Selkirk LGIA, the
parties have replaced the developer certification statement concerning Trial Operation

and commencement of Commercial Operation with a statement that Selkirk commenced
Commercial Operation of Phase Two of the Plant on January 8, 1993. The purpose of
this modification is to specify the date on which Phase Two of the Plant was
interconnected and began Commercial Operation. Each of the Alliance Energy LGIAs
accepted by the Commission contained similar clarifying provisions. In new Appendix H
to the Selkirk LGIA, the parties have clarified that, in accordance with Article 10.5 of the
Selkirk LGIA, Selkirk will be responsible for all reasonable operation and maintenance
expenses and will pay National Grid on a monthly basis for the actual invoiced cost for
all such expenses.

III.Effective Date

The Commission’s regulations require service agreements to be filed not more than 30 days after service under the agreements has commenced.14 As discussed above, the Selkirk LGIA is intended to go into effect as of September 1, 2014, i.e., 30 days before the date the Selkirk LGIA is being filed. Therefore, National Grid requests that the Commission accept the Selkirk LGIA effective September 1.

IV.Documents Enclosed

In addition to this filing letter, attached are the following documents:

i.The Selkirk LGIA (Service Agreement No. 2161 under the NYISO

OATT), provided in clean format (Attachment A)

ii.Black-lined revisions showing the differences between the Selkirk LGIA

and the pro forma NYISO LGIA (Attachment B)

13See Selkirk LGIA at Article 2.2.

1418 C.F.R. § 35.3.

Amanda C. Downey
National Grid USA

Service Company, Inc.

40 Sylvan Road

Waltham, MA 02451 (781)907-2136

amanda.downey@nationalgrid.com

William L. Malee

Director, Transmission Commercial National Grid USA

40 Sylvan Road

Waltham, MA 02451 (781) 907-2422

bill.malee@nationalgrid.com

Sean A. Atkins

Bradley R. Miliauskas Alston & Bird LLP The Atlantic Building 950 F Street, NW

Washington, DC 20004 (202) 239-3300

sean.atkins@alston.com
bradley.miliauskas@alston.com

National Grid requests waiver of 18 C.F.R. § 385.203(b) to allow four persons to be added to the

The Honorable Kimberly Bose October 1, 2014

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VI.Conclusion

For the reasons stated herein, National Grid respectfully requests that the Commission accept the Selkirk LGIA effective as of September 1, 2014.

Respectfully submitted,

/s/ Amanda C. Downey

Amanda Downey
Counsel

National Grid USA

Service Company, Inc.

40 Sylvan Road

Waltham, MA 02451

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