10 Krey Boulevard Rensselaer, NY 12144
February 6, 2015
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 Revise the Regulation Movement Multiplier
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 revise the uniform Regulation Movement Multiplier (“RMM”).2 These proposed tariff amendments were approved by the NYISO’s Management Committee with a show of hands on November 20, 2014.
I.Documents Submitted
1.This filing letter;
2.A clean version of the proposed revisions to the NYISO’s Services Tariff
(“Attachment I”);
3.A redline version of the proposed revisions to the NYISO’s Services Tariff
(“Attachment II”);
4.Affidavit of Mr. Rana Mukerji, Senior Vice President of Market Structures, NYISO
(Attachment III).
1 16 U.S.C. §824d (2010).
2 Capitalized terms not otherwise defined herein shall have the meaning specified in Section 1 of the NYISO’s Open Access Transmission Tariff and Section 2 of the Services Tariff.
Honorable Kimberly D. Bose February 6, 2015
Page 2
II.Background
The NYISO schedules Regulation Service suppliers by using their MW capacity offer for Regulation Service and a single, composite price offer made up of the sum of i) the price offered for Regulation Capacity and ii) the product of the price offered for Regulation Movement and the uniform RMM. The Commission has approved the use of a uniform RMM to support the
NYISO’s calculation of a single Regulation Service bid.3 Translating a Regulation Supplier’s
two bids into a single bid equips the scheduling and dispatch software with a better
representation of the likely cost of each Supplier in providing both the Capacity and Movement components of Regulation Service and allows a least cost comparison among individual offers.4 The RMM is set at the average ratio of Regulation Movement instructed in an interval to the
Regulation Capacity required for the same interval.
In the Commission’s November 6, 2012 Order5 in this docket, it requested an
informational report providing, among other things, the NYISO’s experience on the degree to
which the RMM accurately reflected the dispatched movement of Regulation Service providers.6
The NYISO replied in its August 26, 2014 compliance filing that the data on the ratio between
the amount of Regulation Movement provided by Regulation Suppliers when compared to the
Regulation Capacity offered showed that the uniform RMM may need to be adjusted to more
accurately reflect the current dispatched movement of Regulation Service providers. The
NYISO added that the data was not then sufficient, however, to reasonably establish a new ratio
because, in part, evidence as to the long term trend in the ratio of Regulation Movement to
Regulation Capacity was unavailable and the NYISO could not yet determine whether, over
time, the ratio was rising, declining, or had stabilized. 7 The NYISO indicated it would continue
to gather data in order to conclude whether a change was necessary and, if so, what it should be.
Further analysis has demonstrated that a revised RMM of 13 would more accurately
reflect the current dispatched movement of Regulation Service providers. As the affidavit from
Mr. Rana Mukerji indicates, the NYISO developed the revised RMM by analyzing historic data
for the time period October 25, 2012 through October 20, 2014.8 The NYISO used the same
methodology in analyzing the data that it had used to develop the initial RMM of 10. That is, for
each Regulation provider scheduled for Regulation Service during a given hour of this historic
period, the NYISO calculated a Movement MW value for each 6-second interval during the hour,
3 New York Independent System Operator, Inc. 143 FERC ¶ 61,194.
4 Affidavit from Rana Mukerji, Attachment I, (“Mukerji Affidavit”) ¶4.
5 New York Independent System Operator, Inc 141 FERC ¶ 61,105 (2012) (“November Order”).
6 November Order ¶56 and 60.
7 New York Independent System Operator, Inc. ER12-1653-005, Informational Filing August 26, 2014, p. 3.
8 Mukerji affidavit ¶6.
Honorable Kimberly D. Bose February 6, 2015
Page 3
where Movement MW is defined as the absolute change in Energy or Demand Reduction9 over a
6-second interval that a Regulation Service provider is instructed to deliver for the purpose of
providing Regulation Service. Directions to a resource to provide Energy were not counted as
Movement MWs. The Movement MWs were then summed across all Regulation Service
providers for the given hour, and divided by the NYISO Regulation (Capacity) Requirement (in
MWs) for that hour. Although the average of the Movement MWs-to-NYISO Regulation
Requirement ratio for each hour of the historic period is 15.3, the NYISO is proposing to revise
the RMM to 13. 10
The average hourly ratio of Movement MWs-to-NYISO Regulation Requirement (in
MWs) for the hour from the introduction of Regulation Movement to the market, June 26, 2013 to October 20, 2014 was 16.1 and for the two month period from August 21, 2014 to October 20, 2014 was 13.3.11
As Mr. Mukerji indicates, the NYISO is recommending a revised RMM of 13.12 The
NYISO expects this value will produce, when multiplied by the Regulation Supplier’s
Movement offer and added to the Regulation Supplier’s Capacity offer, a better estimate of
resource cost than one based on an older, though larger historical data set.13 The data for this
9 The Tariff offers Demand Side Resources the opportunity to participate in the Regulation Service market. However, during this period, the NYISO had no Demand Side Resources providing Regulation Service.
10 Mukerji Affidavit ¶7
11 Id.
12 Id.
13 Id.
Honorable Kimberly D. Bose February 6, 2015
Page 4
two-month period reflects a tuning of the NYISO’s Automatic Generation Control system in late
August, 2014. The tuning allows the NYISO to procure Regulation Movement more efficiently,
thus lowering the average ratio of Regulation Movement to Regulation Capacity.14 As Mr.
Mukerji also notes, the NYISO is proposing to continue use of a single RMM for all hours as the
ratio on which the RMM is based either did not vary significantly, or did not have a predictable
pattern of variation by any of the following: season, day of week, weekday versus weekend, on-
peak versus off-peak, or hour of day.15 The NYISO will continue to monitor and evaluate this
value for potential adjustments.
III.Tariff Modifications
The NYISO proposes to revise Section 2.18 of the Services Tariff to revise the RMM of
10 to an RMM of 13 as shown below:
Regulation Movement Multiplier: A factor with the value of ten thirteen
(1013), used with the Regulation Movement Bids, to schedule Regulation Service providers in both the Day-Ahead and Real-Time Energy markets. The ISO
calculates the Regulation Movement Multiplier based on the historical
relationship between the number of MW of Regulation Capacity that the ISO
seeks to maintain in each hour and the number of Regulation Movement MW
instructed by AGC in each hour.
IV.Effective Date
The NYISO requests an effective date of April 7, 2015, 60 days from the date of this
filing.
V.Requisite Stakeholder Approval
These amendments were approved by the NYISO Management Committee on November 20, 2014, with a show of hands, abstentions, and an opposition. It was approved by the NYISO’s Board of Directors on January 13, 2015.
VI.Communications and Correspondence
All communications and service in this proceeding should be directed to:
Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs *Mollie Lampi, Assistant General Counsel
10 Krey Boulevard
14 Id.
15 Mukerji Affidavit ¶8.
Honorable Kimberly D. Bose February 6, 2015
Page 5
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
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 Services Tariff revisions
that are attached hereto within sixty days of the date of this filing to become effective April 7,
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 Bardee
Gregory Berson
Anna Cochrane
Morris Margolis
David Morenoff
Daniel Nowak
Kathleen Schnorf
Jamie Simler
Kevin Siqveland
