HUNTON & WILLIAMS LLP
RIVERFRONT PLAZA, EAST TOWER 951 EAST BYRD STREET
RICHMOND, VIRGINIA 23219-4074
HEATHER S. GLASS
DIRECT DIAL: 804.788.8691
EMAIL: HGLASS@HUNTON.COM
July 31, 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.’s Proposed Tariff Revisions
to Enhance External Transaction Credit Requirements; Docket No. ER15
- ___-000
Dear Ms. Bose:
Pursuant to Section 205 of the Federal Power Act,1 the New York Independent System
Operator, Inc. (“NYISO”) hereby submits revisions to Attachment K of its Market
Administration and Control Area Services Tariff (“Services Tariff”). 2 The NYISO is
proposing to change the timeframe for requiring credit support for External Transactions to
limit the number of days the NYISO holds this credit support and to better align the holding
period with the NYISO’s actual credit exposure. The Management Committee unanimously
approved the proposed tariff revisions, with abstentions, on March 31, 2015.
The NYISO requests that the Commission issue an order accepting the proposed tariff revisions by September 30, 2015, with an effective date of October 28, 2015, in accordance with the notice requirements in section 35.3(a)(1) of the Commission’s regulations. The
period between the date of the Commission’s order and the effective date provides time for the NYISO to finalize the software enhancements necessary to implement the proposed tariff revisions prior to the effective date.
1 16 U.S.C. § 824d.
2 Capitalized terms used in this filing letter but not defined herein shall have the meanings given to them in the Services Tariff.
ATLANTA AUSTIN BANGKOK BEIJING BRUSSELS CHARLOTTE DALLAS HOUSTON LONDON LOS ANGELES
McLEAN MIAMI NEW YORK NORFOLK RALEIGH RICHMOND SAN FRANCISCO WASHINGTON
www.hunton.com
Kimberly D. Bose, Secretary July 31, 2015
Page 2
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
Copies of correspondence concerning this filing should be served on:
Robert E. Fernandez, General Counsel
*Raymond Stalter, Director of Regulatory Affairs 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
* Persons designated to receive service.
III.Service
Kevin W. Jones
*Heather S. Glass
Hunton & Williams LLP 951 E. Byrd Street
Richmond, VA 23219
Tel: (804) 788-8691
Fax: (804) 343-4755
kjones@hunton.com
hglass@hunton.com
The NYISO will send an electronic link of this filing to the official representatives of
each of its Market Participants, 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.
IV. Background
In June 2013, the NYISO implemented credit requirements for External Transactions (i.e., imports to, exports from, and wheels through the New York Control Area (“NYCA”)) separate from those applicable to other energy market transactions.3 Under these
3 New York Independent System Operator, Inc., Order Accepting Credit Requirements for External Transactions, 143 FERC ¶ 61,229 (2013).
Kimberly D. Bose, Secretary July 31, 2015
Page 3
requirements, a Market Participant must post credit support upon its submission of a Bid to import, export, or wheel power through the NYCA.
Soon after implementation, some Market Participants expressed concern about the imposition of the credit requirements upon submission of a Bid. The NYISO has no credit exposure on an External Transaction Bid until it becomes binding one day prior to the
transaction date. Where a company submits Bids for External Transactions weeks or months in advance of the transaction date, the current credit policy requires the Market Participant to post credit support upon submission of a Bid, which, as noted, could be for an extended
period of time during which the NYISO has no credit exposure.
V. Description of Proposed Revisions
The NYISO is proposing revisions to Services Tariff Section 26.4.2.2 to change the
timeframe in which it evaluates and holds credit support for External Transactions. Under the
proposed tariff revisions, the NYISO will perform an initial evaluation to calculate the credit
requirement for pending Bids for External Transactions three days prior to the Day Ahead
Market (“DAM”) close for a market day. For example, for the market day of Friday, the
DAM closes at 5:00 a.m. on Thursday. On Monday (i.e., three days prior to the DAM close)
the NYISO will calculate the credit requirement for any pending Bids for External
Transactions with a Friday market day. For External Transaction Bids submitted after the
initial credit evaluation is performed, the NYISO will calculate the credit requirement upon
submission of the Bid.
This proposal limits the number of days the NYISO will hold credit support for
External Transaction Bids and better aligns the holding period with the NYISO’s actual credit exposure. If a Market Participant’s Bids are rejected for insufficient credit at the initial credit evaluation, this proposal still provides time for Market Participants to post additional credit support and resubmit those Bids.
VI. Effective Date
The NYISO respectfully requests Commission action within sixty days from the date of this filing (i.e., September 30, 2015) and an effective date of October 28, 2015. The period between the date of the Commission’s order and the effective date provides time for the
NYISO to finalize the software enhancements necessary to implement the proposed tariff
revisions prior to the effective date.
Kimberly D. Bose, Secretary July 31, 2015
Page 4
VII. Requisite Stakeholder Approval
The NYISO and Market Participants collaboratively developed the proposed tariff
revisions at meetings of the Credit Policy Working Group in July, October, and November
2013. In 2014, the software revisions required to implement the proposed tariff revisions
were added to the NYISO’s 2015 project plan. The Credit Policy Working Group affirmed
the proposed tariff revisions in January 2015. The Business Issues Committee and
Management Committee each approved unanimously, with abstentions, the proposed tariff
revisions on March 11, 2015 and March 31, 2015, respectively. On April 21, 2015, the Board of Directors authorized NYISO management to file the proposed tariff revisions pursuant to
Section 205 of the Federal Power Act.
VIII.Conclusion
WHEREFORE, for the foregoing reasons, the New York Independent System
Operator, Inc. respectfully requests that the Commission accept the proposed tariff revisions identified in this filing.
Respectfully submitted,
/s/ Heather S. Glass
Heather S. Glass
Counsel to the
New York Independent System Operator, Inc.
cc:Michael Bardee
Gregory Berson
Anna Cochrane
Morris Margolis
David Morenoff
Daniel Nowak
Kathleen Schnorf
Jamie Simler
Kevin Siqveland
