10 Krey Boulevard Rensselaer, NY 12144
March 22, 2016
By Electronic Delivery
Honorable Kimberly D. Bose Secretary
Federal Energy Regulatory Commission 888 First St, NE
Washington, DC 20426
Re: New York Independent System Operator, Inc., Compliance Filing, Docket Nos. ER13-
102-007, ER13-102-00_
Dear Secretary Bose:
The New York Independent System Operator, Inc. (“NYISO”)1 hereby submits this
compliance filing to fulfill the directives of the Federal Energy Regulatory Commission
(“Commission”) in its December 23, 2015, Order Conditionally Accepting Tariff Revisions and Requiring Further Compliance in the above-captioned proceeding (“December Order”) and in accordance with the Commission’s January 14, 2016 Notice of Extension of Time (“January Notice”).2 The NYISO submits the proposed revisions described in Parts IV through VII of this filing letter to the NYISO’s Open Access Transmission Tariff (“OATT”).3
The proposed tariff revisions comply with the Order No. 1000 regional transmission
planning requirements4 and the directives in the December Order.5 The proposed tariff revisions
1 Due to the nature of the matters addressed in this compliance filing that relate to the treatment of Developers of transmission and Transmission Owners that will apply to both the existing New York
Transmission Owners and non-incumbent Developers, the NYISO submits this compliance filing on its
own, with the understanding that the New York Transmission Owners and other interested parties may
file separate comments.
2 New York Independent System Operator, Inc., Order Conditionally Accepting Tariff Revisions
and Requiring Further Compliance, 153 FERC ¶ 61,341 (2015) (“December Order”); New York
Independent System Operator, Inc., Notice of Extension of Time, Docket No. ER13-102-007 (January 14,
2016).
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 the NYISO Market Administration and Control Area Services Tariff.
4 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
Honorable Kimberly D. Bose March 22, 2016
Page 2
included in this filing are expressly required by the directives in the December Order, are
necessary to implement or clarify the existing tariff language to accommodate those directives,
or are non-substantive organizational or clarifying adjustments. As these tariff revisions are
necessary to make the NYISO’s Order No. 1000-related tariff provisions clearer and more
accurate, it is consistent with Commission precedent to include them in this compliance filing.6
As described in Part VIII below, the NYISO requests that the Commission accept the proposed tariff revisions with an effective date of April 1, 2016.
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.
5 As described in Part VII.C below, the NYISO separately requested on March 17, 2016, that the Commission grant a partial extension of 180 days to address certain tariff implementation issues
associated with the pro forma operating agreement proposed in this filing. See New York Independent
System Operator, Inc., Motion for Partial Extension of Time of the New York Independent System
Operator, Inc., Docket No. ER13-102-007 (March 17, 2016). As described in the motion, the NYISO is already working diligently to identify and propose the necessary tariff revisions for review with all
interested parties and stakeholders.
6 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).
Honorable Kimberly D. Bose March 22, 2016
Page 3
TABLE OF CONTENTS
Page
I.COMMUNICATIONS....................................................5
II.LIST OF DOCUMENT SUBMITTED.......................................5
III.BACKGROUND........................................................6
IV.TRANSMISSION INTERCONNECTION PROCEDURES.......................7
A.The NYISO’s Existing Transmission Expansion and Interconnection
Requirements for Transmission Facilities...............................7
B.The December Order................................................8
C.Transmission Interconnection Procedures...............................9
D.Applicability of the New Transmission Interconnection Procedures..........10
1. Transmission Projects Subject to the New Transmission Interconnection
Procedures.................................................10
2. Transition Rule for Transmission Projects Already Under Evaluation......12
E.Transmission Interconnection Application..............................13
F.Transmission Interconnection Studies.................................15
1. Scoping Meeting................................................15
2. Optional Feasibility Study........................................15
3. System Impact Study............................................16
4. Facilities Study.................................................19
G.Base Case and NYISO Transmission Interconnection Standard.............20
1. Base Case.....................................................20
2. NYISO Transmission Interconnection Standard.......................20
H.Transmission Project Interconnection Agreement........................21
I.Conforming Revisions to the Transmission Expansion Process in OATT
Sections 3 and 4.5 and OATT Attachment D............................21
J.Conforming Revisions to Interconnection Provisions in OATT
Attachments S, X, and Z............................................26
K.Alignment of Interconnection and Planning Requirements.................28
V.RELIABILITY DEVELOPMENT AGREEMENT.............................31
A.Party Responsible for Executing a Development Agreement................31
B.Addressing a Developer’s Inability to Timely Complete Regulated Project....33
Honorable Kimberly D. Bose March 22, 2016
Page 4
C.Force Majeure Requirements........................................35
D.Impact of Delays by Transmission Owners.............................36
E.Liability and Indemnity............................................37
F.Interconnection Requirements.......................................37
G.Additional FERC Directives/Miscellaneous.............................38
VI.PUBLIC POLICY DEVELOPMENT AGREEMENT...........................40
A.Public Policy Process Scope and Terminology..........................41
B.Required Project In-Service Date Requirements.........................41
C.Other Differences in the Public Policy Development Agreement............42
D.Addressing Developer’s Inability to Complete Project....................42
E.Other Revisions to Section 31.4 of Attachment Y........................44
VII.OPERATING AGREEMENT.............................................44
A.Background......................................................44
B.Scope of the Pro Forma Operating Agreement..........................45
C.Non-Incumbent Transmission Owners.................................46
D.NTO Responsibilities..............................................47
E.NYISO Responsibilities............................................49
F.Limitations of Liability and Indemnification Requirements................50
G.Term and Termination Requirements..................................51
H.Other Differences Between ISO/TO Agreement and Operating Agreement....51
I.Requirements for Entering Into an Operating Agreement..................52
VIII.EFFECTIVE DATE.....................................................53
IX.SERVICE.............................................................53
X.CONCLUSION.........................................................54
Honorable Kimberly D. Bose March 22, 2016
Page 5
I. COMMUNICATIONS
Communications and correspondence regarding this filing should be directed to:
Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs Karen G. Gach, Deputy General Counsel
*Carl F. Patka, Assistant General Counsel
Sara B. Keegan, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
rstalter@nyiso.com
kgach@nyiso.com
cpatka@nyiso.com
skeegan@nyiso.com
*Persons designated to receive service
II. LIST OF DOCUMENT SUBMITTED
*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 Messonnier7
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
The NYISO respectfully submits the following documents with this filing letter:
1.A clean version of the proposed revisions to the OATT (Attachment I);
2.A blacklined version of the proposed revisions to the OATT (Attachment II);
3.A clean version of the OATT incorporating pending tariff revisions effective May
19, 2016. (Attachment III);8
4. A blackline of the Transmission Interconnection Procedures in new OATT
Attachment P set against the Standard Large Facility Interconnection Procedures in OATT Attachment X (Attachment IV);
7 Waiver of the Commission’s regulations (18 C.F.R. § 385.203(b)(3) (2014)) is requested to the extent necessary to permit service on counsel for the NYISO in Rensselaer, NY, Richmond, VA and
Washington, DC.
8 Attachment III incorporates revisions to Sections 25.1, 25.5, 25.8, 30.1, 30.3, 30.7, 30.14, and
32.5 of the OATT filed March 17, 2016, in Docket No. ER16-1213-000, with a proposed effective date that falls after the effective date requested for the tariff provisions proposed herein.
Honorable Kimberly D. Bose March 22, 2016
Page 6
5.A blackline of the Public Policy Development Agreement set against the Reliability
Development Agreement (Attachment V); and
6.A blackline of the new pro forma operating agreement set against the ISO/TO
Agreement (Attachment VI).
III.BACKGROUND
In response to the Order No. 1000 regional transmission planning and cost allocation
directives, the NYISO and the New York Transmission Owners have submitted compliance
filings to revise the NYISO’s tariff requirements for its Comprehensive System Planning Process
(“CSPP”), which is composed of the NYISO’s reliability, economic, and public policy
transmission planning processes.9 The Commission has largely accepted the NYISO’s revised
CSPP as compliant with the Order No. 1000 requirements.10 In its May 18, 2015, compliance
filing, the NYISO submitted minor tariff revisions and a pro forma development agreement for
its reliability planning process in response to the Commission’s directives in an April 16, 2015,
order in this proceeding.11
The December Order determined that the NYISO had partially complied with the
Commission’s previous directives in this proceeding, and directed the NYISO to submit a further
compliance filing.12 Specifically, the December Order directed the NYISO to establish
interconnection requirements that apply the same interconnection process to competitive
transmission projects proposed in the NYISO’s transmission planning process by incumbent
Transmission Owners and non-incumbent Developers.13 In addition, the December Order
directed the NYISO to submit two new standard agreements - a pro forma development
agreement for the NYISO’s Public Policy Transmission Planning Process and an operating
agreement for non-incumbent Developers that is comparable to the existing agreement executed
9 See New York Independent System Operator, Inc. and New York Transmission Owners,
Compliance Filing, Docket No. ER13-102-007 (May 18, 2015); New York Independent System Operator,
Inc. and New York Transmission Owners, Compliance Filing, Docket No. ER13-102-006 (September 15,
2014); New York Independent System Operator, Inc. and New York Transmission Owners, Compliance
Filing, Docket No. ER13-102-002 (October 15, 2013); New York Independent System Operator, Inc. and
New York Transmission Owners, Compliance Filing, Docket No. ER13-102-000 (October 11, 2012).
10 See December Order; New York Independent System Operator, Inc., Order on Rehearing and Compliance, 151 FERC ¶ 61,040 (2015); New York Independent System Operator, Inc., Order on
Rehearing and Compliance, 148 FERC ¶ 61,044 (2014) (“July 2014 Order”); New York Independent System Operator, Inc., Order on Compliance Filing, 143 FERC ¶ 61,059 (2013).
11 See New York Independent System Operator, Inc., Order on Rehearing and Compliance, 151 FERC ¶ 61,040 (2015).
12 The December Order directed the NYISO to file its compliance filing within 30 days.
December Order at P 8. The Commission subsequently granted an extension for the compliance filing until March 22, 2016. New York Independent System Operator, Inc., Notice of Extension of Time, Docket No. ER13-102-007 (January 14, 2016).
13 See December Order at PP 67-76.
Honorable Kimberly D. Bose March 22, 2016
Page 7
by the incumbent New York Transmission Owners.14 Finally, the December Order directed the
NYISO to make certain revisions to its previously filed pro forma development agreement for
the reliability planning process and the related tariff provisions in Attachment Y of the OATT.15
The NYISO discussed the proposed tariff revisions and standard agreements with its
stakeholders and made additional revisions based on stakeholder input. The NYISO initially
discussed the directives of the December Order with stakeholders at the January 21, 2016
Electric System Planning Working Group (“ESPWG”) meeting. The NYISO then discussed
specific proposals for the tariff revisions and new agreements at the February 5, February 10,
February 25, and March 7 ESPWG meetings. Finally, the NYISO discussed its proposed
revisions and new agreements at the stakeholder Operating Committee meeting on March 17,
2016.
The NYISO submits with this filing letter proposed revisions to the NYISO OATT as
well as a pro forma development agreement for its Public Policy Transmission Planning Process and a pro forma operating agreement. The proposed tariff revisions and agreements are
described in Parts IV through VII of this letter.
IV.TRANSMISSION INTERCONNECTION PROCEDURES
A.The NYISO’s Existing Transmission Expansion and Interconnection
Requirements for Transmission Facilities
The NYISO OATT currently contains two processes for the evaluation of proposed expansions or additions to the New York State Transmission System - (1) the transmission expansion process set forth in Sections 3.7 and 4.5 of the OATT, and (2) the interconnection process set forth in Attachments X and Z of the OATT.16
The NYISO’s transmission expansion process is located in Sections 3.7 and 4.5 of the
OATT. Section 3.7 relates to requests for Firm Point-To-Point Transmission Service, while
Section 4.5 relates to requests for Network Integration Transmission Service. The latter has
never been requested by a NYISO Market Participant, likely because the ability to obtain
financial reservation-based transmission service in the NYISO market makes Network
Integration Transmission Services unnecessary.17 As a result, all requests that have been
14 See December Order at PP 19-20, 79.
15 See December Order at PP 48, 51-52, 57, 90-91, 94, 98, 100-101, 103-105, 117-120.
16 Attachment X of the OATT contains the NYISO’s Standard Large Facility Interconnection
Procedures. Attachment Z of the OATT contains the NYISO’s Small Generator Interconnection
Procedures.
17 Network Integration Transmission Service is a form of physical reservation-based transmission
service in which a Transmission Customer reserves physical capacity by designating Network Resources
to be used to serve designated Network Load. The principal advantage of such service is the opportunity
for a Transmission Customer to schedule service from a single Generator to a variety of Loads, or from a
variety of Generators to a single Load, without securing physical transmission reservations for each
Honorable Kimberly D. Bose March 22, 2016
Page 8
evaluated under the NYISO’s transmission expansion process have been evaluated pursuant to
Section 3.7. Section 3.7 has been used for proposals by Eligible Customers, including the New
York Transmission Owners, to expand or reinforce the New York State Transmission System.
Among the projects evaluated under Section 3.7 have been proposed upgrades and expansions by
New York Transmission Owners to existing transmission facilities, including projects in the
Transmission Owners’ Local Transmission Plans (or for the New York Power Authority
(“NYPA”) in the NYPA transmission plan). The Section 3.7 process provides for a System
Impact Study coordinated by the NYISO, a Facilities Study coordinated by the Transmission
Owner(s) whose facilities may be modified in performing the upgrade or addition (the “affected”
Transmission Owners), and a construction contract among the Eligible Customer, the affected
Transmission Owner(s) and, if other than the affected Transmission Owner(s), the entity(ies)
constructing the facilities.
The NYISO’s Standard Large Facility Interconnection Procedures are established in
Attachment X of the OATT, with related cost allocation requirements for required upgrade
facilities in Attachment S of the OATT. This process is used for the study and cost allocation of
the interconnection of Large Generating Facilities and Merchant Transmission Facilities.
Merchant Transmission Facilities currently include any transmission facility proposing to
interconnect to the New York State Transmission System that is being developed by an entity
other than a New York Transmission Owner, regardless of the Developer’s intended cost
recovery mechanism (i.e., even a transmission project that is responding to a solicitation in the
public policy or reliability planning process). The Attachment X and S interconnection process
provides for three interconnection studies coordinated by the NYISO - (1) an Interconnection
Feasibility Study; (2) an Interconnection System Reliability Impact Study; and (3) a Class Year
Interconnection Facilities Study (“Class Year Study”) - along with an Interconnection
Agreement among the Developer, the Connecting Transmission Owner, and the NYISO.
B.The December Order
The interconnection provisions rejected by the December Order were existing processes
under the NYISO’s OATT that were cross-referenced in the May 18, 2015 compliance filing.
The May 18, 2015 compliance filing proposed no modifications to the existing interconnection
and transmission expansion processes. Nonetheless, in the December Order, the Commission
determined that the NYISO’s existing process for evaluating the interconnection of transmission
projects proposed in the NYISO’s CSPP was unjust and unreasonable.18 Specifically, the
Commission found it to be unjust and unreasonable that the NYISO would evaluate transmission
projects proposed under the CSPP by incumbent Transmission Owners pursuant to the
transmission expansion process in Sections 3.7 and 4.5 of the OATT, while the NYISO would
transaction. In the NYISO, however, a Transmission Customer can obtain the same result through the NYISO’s bid-based financial rights version of Point-To-Point Transmission Service without having to proceed through the administrative complexity of Section 4.5 of the OATT.
18 December Order at PP 67-68.
Honorable Kimberly D. Bose March 22, 2016
Page 9
evaluate transmission projects proposed by non-incumbent Developers pursuant to the interconnection process in Attachments X and S of the OATT.19
The December Order directed the NYISO to revise its tariff to require “all Order No.
1000 projects to go through the same interconnection process.”20 While the December Order provided a specific suggestion that the NYISO evaluate all of these transmission projects under the interconnection process in Attachments X and S of the OATT,21 it also provided the NYISO with the flexibility to propose an alternative process other than the interconnection process in Attachments X and S as long as such alternative approach is not unduly discriminatory or
preferential.22 The NYISO proposes such an alternative approach that is not unduly
discriminatory or preferential and addresses the concerns the Commission raised regarding the evaluation of “Order 1000 transmission project proposals” under Attachments X and S along
with other projects in the NYISO interconnection queue.23
C.Transmission Interconnection Procedures
In considering how best to address the Commission’s concerns regarding the evaluation of transmission projects proposed by incumbent Transmission Owners and non-incumbent
Transmission Developers, the NYISO carefully considered the following options: (i) evaluating all transmission projects under the NYISO’s existing interconnection process in Attachments X and S of the OATT; (ii) evaluating all transmission projects under the existing transmission
expansion process in Section 3.7 of the OATT; and (iii) developing a hybrid interconnection
process for transmission evaluation incorporating aspects of existing interconnection and
transmission expansion processes. Based on its review and stakeholder input, the NYISO
determined that developing a new process with uniform procedures, specific to transmission,
would be preferential to using the existing interconnection process in Attachments X and S or the existing transmission expansion process in OATT Section 3.7.
As the Commission recognized in the December Order, there are potential drawbacks of
using the existing interconnection requirements for transmission facilities. Specifically, the
Commission recognized in the December Order that placing “Order 1000 transmission project
proposals” in Attachments X and S with other interconnection queue projects could pose the
following concerns: “(1) the interconnection queue may become backlogged, delaying project
19 December Order at PP 67-68.
20 December Order at P 68.
21 December Order at P 67.
22 December Order at P 73. The NYISO has requested clarification, out of an abundance of caution, of the December Order’s directives to confirm its understanding that it may propose that
transmission projects proposed in its regional planning process can be evaluated using processes other than those established under Attachments X and S. See New York Independent System Operator, Inc., Request for Rehearing and Clarification of New York Independent System Operator, Inc., Docket No. ER13-102-007 at pp 16-18 (January 27, 2016).
23 Id.
Honorable Kimberly D. Bose March 22, 2016
Page 10
development; and (2) NYISO may be unable to accurately study the impact of new proposed
projects on the system if the interconnection queue includes multiple Order No. 1000 project
proposals, only one of which will be selected and built.” 24 The NYISO considered these
concerns in developing its proposed approach to evaluating such projects, and developed
procedures intended to address these issues, as discussed in detail in Part IV.F(3) below.
In light of these concerns and to best address the Commission’s directives in the
December Order, the NYISO proposes to establish new Transmission Interconnection
Procedures to be located in Attachment P of the OATT. The new procedures are in many ways a
hybrid of the existing interconnection and existing transmission expansion processes. The
NYISO has structured the proposed Transmission Interconnection Procedures in Attachment P to
be largely consistent with the existing Standard Large Facility Interconnection Procedures
located in Attachment X of the OATT. With the exception of the NYISO’s Class Year Study
construct, the new procedures closely mirror the long-standing Standard Large Facility
Interconnection Procedures that were derived from the Commission’s pro forma Large Generator
Interconnection Procedures. The primary differences between the Transmission Interconnection
Procedures and the Standard Large Facility Interconnection Procedures reflect changes that were
required to make the procedures specific to transmission facilities and to remove provisions that
are not relevant to transmission, such as those provisions concerning the NYISO’s provision of
Energy Resource Interconnection Service and Capacity Resource Interconnection Service.
Parts IV.D through IV.H below describe the scope and the significant elements of these new Transmission Interconnection Procedures. For the Commission’s reference, a blackline version detailing the differences between the Transmission Interconnection Procedures and the Standard Large Facility Interconnection Procedures is included as Attachment IV to this letter. Parts IV.I and IV.J then describe conforming revisions in the OATT - Sections 3, 4 and
Attachments D, S, X and Z - to accommodate the new Transmission Interconnection Procedures. Finally, Part IV.K describes tariff revisions to Attachment Y of the OATT to align the new
Transmission Interconnection Procedures with the NYISO’s CSPP.
D. Applicability of the New Transmission Interconnection Procedures
1. Transmission Projects Subject to the New Transmission Interconnection
Procedures
The new Transmission Interconnection Procedures will apply to all “Transmission
Projects” as that term is defined in Attachment P of the OATT.25 Transmission Projects include,
with limited exceptions described below, “a Transmission Developer’s proposed new
transmission facility that will interconnect to the New York State Transmission System or a
24 December Order at P 73.
25 Proposed OATT Section 22.3.1.1.
Honorable Kimberly D. Bose March 22, 2016
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Transmission Developer’s proposed upgrade - an improvement to, addition to, or replacement of a part of an existing transmission facility - to the New York State Transmission System.”26
In accordance with this definition of Transmission Project, the NYISO will apply the new Transmission Interconnection Procedures broadly to any entity - whether an incumbent
Transmission Owner or a non-incumbent Developer - that is proposing a new transmission
facility or upgrade to the New York State Transmission System with limited exceptions. These
new procedures will apply to the interconnection of all transmission facilities with the two
exceptions described below.
The first type of transmission facility not subject to the Transmission Interconnection
Procedures is a new transmission facility or upgrade that is proposed by a Transmission Owner
in its Local Transmission Owner Plan or NYPA transmission plan that is not subject to the
NYISO’s competitive selection process in its CSPP and for which the Transmission Owner is not seeking cost allocation under the OATT.27 These projects will continue to be evaluated under
the transmission expansion process in OATT Section 3.7. This is consistent with the December
Order’s express direction that while all projects seeking regional cost allocation must submit to
the same interconnection process,
this finding does not alter or otherwise affect Transmission Owners’ ability to
propose expansions and upgrades to their own system for transmission projects
that are planned outside of NYISO’s regional transmission planning process, and
therefore would not be eligible for selection in the regional transmission plan for
purposes of cost allocation, through the process in sections 3.7 and 4.5 of the
NYISO OATT.28
In light of this clear directive, the NYISO proposes to allow transmission projects proposed as part of a Transmission Owner’s Local Transmission Owner Plan or NYPA transmission plan to continue to be evaluated pursuant to Section 3.7 of the OATT.
The second type of transmission facility not subject to the Transmission Interconnection
Procedures is a proposed controllable transmission line for which the proposing entity is seeking
Capacity Resource Interconnection Service (“CRIS”) to receive Unforced Capacity
Deliverability Rights.29 A proposing entity seeking CRIS rights - whether for a generation or
transmission facility - must participate in the Class Year Interconnection Facilities Study
process, including the deliverability analysis, set forth in Attachments X and S of the OATT.
26 Proposed OATT Section 22.3.1.2. A “Transmission Developer” as defined in proposed OATT
Section 22.1, is: “any entity, including the Connecting Transmission Owner or any of its Affiliates or
subsidiaries, that proposes to interconnect its Transmission Project with the New York State Transmission
System.”
27 Proposed OATT Section 22.3.1.3; see also proposed revisions to OATT Section 3.7.
28 December Order at P 70.
29 Proposed OATT Section 22.3.1.3; see also proposed revisions to Sections 30.1 and 30.3.1.
Honorable Kimberly D. Bose March 22, 2016
Page 12
Controllable projects that are able to request CRIS and ultimately UDRs are more suitable for
evaluation in the Standard Large Facility Interconnection Procedures. Because these lines are
controllable, they can be dispatched up or down to address system conditions and are therefore
more similar in that regard to generation than to uncontrollable AC transmission. As a result, the
NYISO proposes that these types of transmission projects should continue to be evaluated
alongside generation in the Standard Large Facility Interconnection Procedures, including the
Class Year Study. In addition, controllable transmission seeking CRIS and UDRs should be
evaluated in a Class Year Deliverability Study to provide comparable treatment between them
and generators seeking CRIS with respect to: (i) access to any deliverability headroom there may
be in the system; and (ii) cost allocation for any System Deliverability Upgrades that may be
needed for all the Class Year CRIS requests to be deliverable. For these reasons, the NYISO
proposes to leave these projects in the Standard Large Facility Interconnection Procedures,
including the Class Year Study. This is reflected in the revisions to the definition of Merchant
Transmission Facility described below in Part IV.J of this letter.
Whether a project seeks CRIS and ultimately UDRs is fundamental to that developer’s
business model and likely a facet of the project the developer would know up front.
Nonetheless, it is theoretically possible that a developer may submit its project in the appropriate
interconnection process and then later decide to seek CRIS and UDRs. The NYISO is therefore
proposing a mechanism by which a controllable transmission project can transition from the
Transmission Interconnection Procedures to a Class Year Study. If a controllable transmission
project begins through the Transmission Interconnection Procedures, and later decides to seek
CRIS and UDRs, it can transition to the Standard Large Facility Interconnection Procedures. It
must submit an Interconnection Request30 and may then proceed as follows: (1) if the project
has completed a System Impact Study under the Transmission Interconnection Procedures, it can
proceed to a Class Year Interconnection Facilities Study under Attachment S; (2) if a System
Impact Study has not been completed under the Transmission Interconnection Procedures, the
project must complete an Interconnection System Reliability Impact Study under Attachment X
before entering a Class Year Interconnection Facilities Study under Attachment S.31 A proposed
controllable transmission project that completes the Transmission Interconnection Procedures
and subsequently decides to request CRIS and UDRs may enter a Class Year Deliverability
Study to request CRIS, subject to UDR eligibility requirements (including, for example, the
requirement that the transmission be new).32
2. Transition Rule for Transmission Projects Already Under Evaluation
There are currently a number of projects in the NYISO’s existing interconnection queue
that will satisfy the definition of a Transmission Project and will be subject to the Transmission
Interconnection Procedures upon the effective date of these procedures. The NYISO, therefore,
proposes the following transition rules between the existing interconnection and transmission
30 Proposed revisions to OATT Section 30.3.1.
31 Proposed revisions to OATT Sections 25.6.2.3.1 and 30.7.1.
32 OATT Section 25.5.9.
Honorable Kimberly D. Bose March 22, 2016
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expansion requirements and the new Transmission Interconnection Procedures. These transition rules have been designed to provide for a smooth transition between the processes and to
minimize the burden on the Transmission Developer resulting from the introduction of the new procedures. These proposed transition rules are also consistent with prior transition rules used for revisions to the NYISO’s interconnection procedures. 33
Pursuant to the proposed transition rules, a Transmission Developer will retain the
existing Queue Position for its Transmission Project and may, as applicable, consolidate multiple
Queue Positions that collectively address the Transmission Project into one Queue Position.34 If
a study agreement has been executed in the interconnection or transmission expansion process -
for any study - the Transmission Developer that executed the agreement (as a Developer or an
Eligible Customer, as applicable) may elect to either: (1) complete the study, or (2) execute the
agreement for the comparable Transmission Interconnection Study and proceed under the
Transmission Interconnection Procedures.35 Any study for which an agreement has not been executed or any subsequent study will proceed under the Transmission Interconnection
Procedures.36
For example, if a Transmission Developer has executed an Interconnection Feasibility
Study Agreement under Attachment X of the OATT, it may complete that study and proceed
next to the System Impact Study under the Transmission Interconnection Procedures or it may
proceed directly to the System Impact Study under the Transmission Interconnection Procedures. If the Transmission Developer has executed a System Reliability Impact Study under Attachment X of the OATT, it may complete that study and proceed next to a Facilities Study under the
Transmission Interconnection Procedures or it may halt its System Reliability Impact Study and
proceed to a System Impact Study under the Transmission Interconnection Procedures.
Similarly, a Transmission Owner that has executed a System Impact Study under Section 3.7 of
the OATT may complete that study and proceed next to a Facilities Study under the
Transmission Interconnection Procedures or it may proceed directly to a System Impact Study
under the Transmission Interconnection Procedures.
E. Transmission Interconnection Application
A Transmission Developer will initiate the Transmission Interconnection Procedures by
submitting to the NYISO a valid Transmission Interconnection Application and a $10,000 non-
refundable application fee.37 The Transmission Interconnection Application is a standard form
included as Appendix 1 to Attachment P. The form requires that the Transmission Developer
33 See, e.g., OATT Section 32.1.7 (providing the transition rule for interconnection requests
submitted prior to the effective date of the NYISO’s Small Generator Interconnection Procedures).
34 Proposed OATT Section 22.3.3.1.1.
35 Proposed OATT Section 22.3.3.1.3.
36 Proposed OATT Section 22.3.3.1.2, 22.3.3.1.3.
37 Proposed OATT Section 22.4.
Honorable Kimberly D. Bose March 22, 2016
Page 14
submit its contact information and basic project information (e.g., proposed Point(s) of
Interconnection, general description of equipment configuration and kV level, conceptual one-
line diagram, In-Service Date). The process requirements for submitting and reviewing the
Transmission Interconnection Application are consistent with the current requirements in
Attachment X of the OATT concerning the submission and review of an Interconnection
Request.38
A Transmission Project will be assigned a Queue Position based upon the date and time
of receipt of a valid Transmission Interconnection Application.39 The Transmission Project will
be included in same interconnection queue as generation and other transmission facilities. In the
December Order, the Commission indicated concern about possible delays resulting from
competitive project proposals being included in a combined interconnection queue.40 As
recently described by the NYISO in a separate proceeding before the Commission, the NYISO’s
interconnection queue approach differs significantly from the “hard” interconnection queue
approach used in other ISO/RTO regions.41 Once a developer has submitted a valid
Interconnection Request or Transmission Interconnection Application and the project has been
included in the interconnection queue, the developer’s advancement through the interconnection
process, including the identification of required facilities and related costs to reliably
interconnect its project, will be largely driven by its own project development and not the
progress, or lack thereof, of other projects with higher Queue Positions. To the extent
practicable, the NYISO evaluates Interconnection Requests and Transmission Interconnection
Applications in parallel, not sequentially.
A Transmission Developer must submit to the NYISO in writing any modifications to the information in its Transmission Interconnection Application.42 The Transmission Developer will be permitted to make any modifications until the parties’ execution of a System Impact Study Agreement.43 At that point, a Transmission Developer may not make any modifications, except for changes to the project’s electrical characteristics that the NYISO determines do not constitute material modifications.44 If the change is a material modification, a new System Impact Study must be performed for the modified Transmission Project.45
38 Proposed OATT Section 22.4.1, 22.4.2.1, 22.4.2.2, 22.4.2.3.
39 Proposed OATT Section 22.5.1.
40 December Order at P 73.
41 See American Wind Energy Association, Motion to Intervene and Comments of the New York Independent System Operator, Inc., Docket No. RM15-21-000 (September 8, 2015).
42 Proposed OATT Section 22.5.4. Notwithstanding these requirements for the modification of information in a Transmission Interconnection Application, a Transmission Developer may not be
permitted to modify its project proposal that has been submitted in competition with other projects in the NYISO’s Comprehensive System Planning Process. Proposed OATT Section 22.5.4.5.
43 Proposed OATT Section 22.5.4.1.
44 Proposed OATT Section 22.5.4.2, 22.5.4.3.
45 Proposed OATT Section 22.5.4.4.
Honorable Kimberly D. Bose March 22, 2016
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F.Transmission Interconnection Studies
The NYISO will perform the following “Transmission Interconnection Studies” for
Transmission Projects under the Transmission Interconnection Procedures: (i) an Optional
Feasibility Study (at Transmission Developer’s election), (2) a System Impact Study, and (3) a
Facilities Study. The Transmission Developer’s election to proceed with an Optional Feasibility Study or System Impact Study will be among the topics to be discussed in a Scoping Meeting
among the parties.
1. Scoping Meeting
Following its receipt of a valid Transmission Interconnection Application, the NYISO
will hold a Scoping Meeting with the Transmission Developer and Connecting Transmission
Owner(s) to discuss the proposed interconnection for the Transmission Project.46 As described
below, the Transmission Developer may elect whether to pursue an Optional Feasibility Study
for its Transmission Project or to proceed to the System Impact Study. As part of the Scoping
Meeting, the NYISO, Transmission Developer, and Connecting Transmission Owner will
discuss this matter, and the Transmission Developer will inform the NYISO within five Business Days of the meeting which study it will pursue.47
2. Optional Feasibility Study
A feasibility study assists the NYISO, Transmission Developer, and Connecting
Transmission Owner in making a preliminary determination regarding whether a proposed
interconnection design for a Transmission Project is feasible. The feasibility study typically
involves: (i) the fundamental step of designing how the project will connect to the existing
system; (ii) identification of “fatal flaws” with regard to preliminary engineering, mechanical
and geographical feasibilities; and (iii) thermal, voltage and short circuit analyses that indicate
potential adverse impacts that the project may cause. In the NYISO’s current interconnection
process in Attachment X, a proposed transmission facility is required to undergo an
Interconnection Feasibility Study as the first study in that process, unless all parties - the
Connecting Transmission Owner(s), the Developer and the NYISO - agree to forego such study.
A Transmission Owner, however, is not required under the current transmission expansion
process in OATT Sections 3.7 and 4.5 to perform a feasibility study, as it already performs such
analysis of its own system before it elects to initiate the transmission expansion process for its
proposed project.
The NYISO proposes to make the feasibility study optional at the Transmission
Developer’s election for purposes of the Transmission Interconnection Procedures. As a result,
46 Proposed OATT Section 22.4.2.4. The term “Connecting Transmission Owner” includes all of
the Transmission Owners with which the Transmission Project will interconnect. Proposed OATT
Section 22.1.
47 Proposed OATT Section 22.4.2.4.
Honorable Kimberly D. Bose March 22, 2016
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the feasibility study is optional for both incumbent Transmission Owners and non-incumbent
Developers under this process. The Transmission Developer may still choose to have an
Optional Feasibility Study performed as it may benefit from the study results in designing its
project and in identifying any fatal flaws before proceeding further through the study process. If, however, a Transmission Developer elects to skip the Optional Feasibility Study and proceed directly to the System Impact Study, the NYISO and Connecting Transmission Owner will
evaluate the proposed interconnection design as an initial stage of the System Impact Study.48 This will potentially accelerate the study process while ensuring that all essential evaluations are performed and may reduce unnecessary administrative steps.
To proceed with an Optional Feasibility Study, the Transmission Developer must enter into an Optional Feasibility Study Agreement with the NYISO and Connecting Transmission Owner and must provide a $60,000 deposit and the technical data as required by the study
agreement.49 If the Transmission Developer fails to cure deficiencies in the required technical data within ten business days, the Transmission Interconnection Application will be
withdrawn.50 The Transmission Developer will be responsible for the actual study costs incurred by the NYISO and Connecting Transmission Owner.51
The scope of the Optional Feasibility Study will be set forth in the study agreement and may consist of the following technical analysis, subject to the Developer’s option: (i)
development of a conceptual breaker-level one-line diagram depicting the proposed
interconnection of the Transmission Project to the existing system where the project proposes to interconnect; (ii) review of feasibility/constructability of conceptual breaker-level one-line
diagram of the proposed interconnection; (iii) preliminary review of local protection,
communication, grounding issues associated with the proposed interconnection; (iv) power flow, short circuit and/or bus flow analyses; and/or (v) preliminary identification of Network Upgrade Facilities.52 The NYISO will provide an initial draft of the study report to the Transmission
Developer, the Connecting Transmission Owner and Affected Systems for review and comment, and will meet with the parties to discuss the study results.53
3. System Impact Study
As soon as practicable after a Transmission Developer elects to proceed with a System
Impact Study or simultaneously with the delivery of the Optional Feasibility Study to the
48 Proposed OATT Section 22.8.3.
49 The NYISO does not propose as part of this filing a pro forma study agreement for the
Optional Feasibility Study; however, the NYISO intends to use the pro forma study agreement for the
Interconnection Feasibility Study appended to Attachment X as the basis for this study agreement.
50 Proposed OATT Section 22.7.1.
51 Proposed OATT Section 22.7.1.
52 Proposed OATT Section 22.7.2.
53 Proposed OATT Section 22.7.3.
Honorable Kimberly D. Bose March 22, 2016
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Transmission Developer, the NYISO will tender an System Impact Study Agreement to the
Transmission Developer and Connecting Transmission Owner.54 The Transmission Developer must provide a $120,000 deposit and the technical data required by the agreement.55 The
Transmission Developer will be responsible for the actual study costs incurred by the NYISO and Connecting Transmission Owner.56
The System Impact Study scope must be approved by the NYISO’s Operating
Committee.57 The study process includes an evaluation under the new NYISO Transmission Interconnection Standard (described in Part IV.G below) that involves a transmission security analysis using thermal, voltage, stability, and short circuit analyses, as well as a transfer limit analysis to ensure that a Transmission Project does not degrade interface transfer capability.58 The Study Impact Study scope shall include technical analyses normally performed in a
feasibility study to the extent that such analyses were not provided by the Transmission
Developer or performed in an Optional Feasibility Study.
A Transmission Project will trigger the need for a Network Upgrade Facility if: (i)
upgrades are necessary to mitigate adverse impacts of the project on existing equipment; or (ii) if
it degrades the pre-project transfer limits (i.e., has an adverse impact on the controlling of the
thermal, voltage, or stability limit as well as any adverse impact on the thermal limit) of any
NYISO transmission planning interface by more than 25 MW.59 A Transmission Project that
triggers an upgrade would have to fully restore the impacted transfer limits to the pre-project
limits.60 The System Impact Study will provide a list of the required Network Upgrade Facilities
and a non-binding good faith estimate of cost responsibility and estimated time to construct.61
54 Proposed OATT Section 22.8.1.
55 Proposed OATT Section 22.8.1. If the Transmission Developer is hiring a third-party
consultant to perform the analytical part of the study, the deposit amount is $40,000. Id. If the
Transmission Developer fails to cure deficiencies in the required technical data within ten business days, the Transmission Interconnection Application will be withdrawn. Proposed OATT Section 22.8.2.
56 Proposed OATT Section 22.8.1.
57 Proposed OATT Section 22.8.3. The NYISO may, at its option, cluster Transmission
Interconnection Applications for purposes of the System Impact Study or Facilities Study. Proposed OATT 22.5.2.
58 Proposed OATT Section 22.8.3.
59 Proposed OATT Section 22.8.3. Network Upgrade Facilities are “the least costly configuration of commercially available components of electrical equipment that can be used, consistent with good
utility practice and Applicable Reliability Requirements, to make the modifications or additions to the
New York State Transmission System that are required for the proposed Transmission Project to connect reliably to the system in a manner that meets the NYISO Transmission Interconnection Standard.”
Proposed OATT Section 22.1.
60 Proposed OATT Section 22.8.3.
61 Proposed OATT Section 22.8.4.
Honorable Kimberly D. Bose March 22, 2016
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Competing Transmission Projects that are proposed alternatives will be evaluated
individually without reference to competing projects (i.e., without including competing projects
in their interconnection base case). There is a possibility, however, that two or more
Transmission Projects that are not competing with each other may impact the manner in which
the others interconnect and the impact they have on the New York State Transmission System.
In light of this possibility, the proposed Transmission Interconnection Procedures allow the
NYISO to evaluate Transmission Projects moving forward in the same time frame - that are not
alternatives to each other (e.g., competing projects in the same Attachment Y process) - that both
contribute to Network Upgrade Facilities to determine their pro rata cost responsibility for the
facilities.62 This provides a mechanism outside of the Attachment S Class Year process by
which the NYISO can allocate costs for Network Upgrade Facilities shared by more than one
project. Addressing cost responsibility for shared upgrades in this manner avoids the need to
study competing alternative projects together, as would be required under the Class Year
construct. This addresses a concern the Commission recognized in its December Order.63 The
Transmission Interconnection Procedures thereby eliminate the difficulties that would arise in
trying to study multiple, alternative iterations of a project in one study, when in reality, only one
such project will likely be selected and built.
The proposed process for evaluating shared Network Upgrade Facilities also addresses
the Commission’s concerns regarding potential delays and backlogs.64 Delays are minimized by allowing transmission projects to proceed in parallel, not sequentially or serially, and by not requiring the project to satisfy state regulatory milestones or await the commencement of the next Class Year before proceeding to its Facilities Study. These concerns are further minimized by the following language proposed in the new Transmission Interconnection Procedures
allowing a project being evaluated under the Transmission Interconnection Procedures to go InService prior to all studies being completed under that process:
If a Transmission Developer requests to enter into service prior to the completion
of all Transmission Interconnection Studies and the completion of any required
Network Upgrade Facilities, the Connecting Transmission Owner and the ISO
will permit the Transmission Project’s early entry into service if: (i) there is a
Transmission Project Interconnection Agreement for the Transmission Project,
and (ii) the ISO and Connecting Transmission Owner(s) have determined that the
Transmission Project can enter into service without violating Applicable Laws
62 Proposed OATT Section 22.8.4.
63 December Order at P 73 (recognizing that by placing “Order 1000 transmission project
proposals” in Attachments X and S with other interconnection queue projects, “NYISO may be unable to accurately study the impact of new proposed projects on the system if the interconnection queue includes multiple Order No. 1000 project proposals, only one of which will be selected and built.”).
64 Id. (expressing concern that by placing “Order 1000 transmission project proposals” in
Attachments X and S with other interconnection queue projects, that “the interconnection queue may become backlogged, delaying project development.”)
Honorable Kimberly D. Bose March 22, 2016
Page 19
and Regulations, Applicable Reliability Standards, Good Utility Practice, and the Transmission Project Interconnection Agreement.65
The NYISO will provide an initial draft of the System Impact Study report to the
Transmission Developer, the Connecting Transmission Owner, and Affected Systems for review and comment, and will meet with the parties to discuss the study results.66 The NYISO’s
Operating Committee must approve the final System Impact Study.67
4. Facilities Study
A Transmission Developer may request that the NYISO tender a Facilities Study
Agreement for its Transmission Project at any time following the approval of the System Impact
Study by the NYISO’s Operating Committee.68 As soon as practicable after the request, the
NYISO will tender a Facilities Study Agreement to the Transmission Developer and Connecting
Transmission Owner.69 The Transmission Developer must provide a $100,000 deposit and the
technical data required by the agreement.70 The Transmission Developer is responsible for
actual study costs incurred by the NYISO and Connecting Transmission Owner.71
The Facilities Study will update and refine the description of Network Upgrade Facilities identified in the System Impact Study, including the equipment, work and related cost and time estimates necessary to construct the required Network Upgrade Facilities.72 The NYISO will provide an initial draft of the study report to the Transmission Developer, the Connecting
Transmission Owner, and Affected Systems for review and comment, and will meet with the
parties to discuss the study results.73
65 Proposed OATT Section 22.3.2.
66 Proposed OATT Section 22.8.5.
67 Proposed OATT Section 22.8.5.
68 Proposed OATT Section 22.9.1.
69 Proposed OATT Section 22.9.1.
70 Proposed OATT Sections 22.9.1 and 22.9.2. If the Transmission Developer fails to cure deficiencies in the required technical data within ten business days, the Transmission Interconnection Application will be withdrawn. Proposed OATT Section 22.9.2.
71 Proposed OATT Section 22.9.1.
72 Proposed OATT Section 22.9.3. This update and refinement may include additional analyses
that may be required due to the specific nature of the project (e.g., sub-synchronous resonance analysis
for a Transmission Project that involves series compensation). The Facilities Study will also contain a
non-binding estimate as to the feasible TCCs resulting from the construction of the new facilities, as
applicable. Id.
73 Proposed OATT Section 22.9.5.
Honorable Kimberly D. Bose March 22, 2016
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G. Base Case and NYISO Transmission Interconnection Standard
1. Base Case
The Base Cases for the Transmission Interconnection Studies will be developed using the
same inclusion rules that the NYISO currently uses to create the Annual Transmission Baseline
Assessment for the Class Year Interconnection Facilities Study in accordance with Attachment S
of the OATT, which data will be based on either the NYISO’s fifth year or tenth year case
included in the most recent FERC Form No. 715.74 If the proposed Transmission Project is
related to or in response to a system condition not reflected in the above requirements, the
NYISO may, as appropriate, amend the Base Cases to take that system condition into account in
evaluating the proposed Transmission Project.75 For example, if a Reliability Need were to arise
based on the deactivation of a Generator, the NYISO may modify the Base Case to reflect the
Generator not being in service for purposes of evaluating Transmission Projects proposed to
address the Reliability Need resulting from the Generator’s absence. This approach allows the
NYISO to evaluate Transmission Projects under the conditions that the project is intended to
address.
2. NYISO Transmission Interconnection Standard
A Transmission Project must interconnect in compliance with the NYISO Transmission
Interconnection Standard.76 The NYISO Transmission Interconnection Standard is designed to
ensure that a proposed Transmission Project, as it proposes to interconnect to the New York
State Transmission System, is consistent with Applicable Reliability Standards and will not
degrade interface transfer capability by more than 25 MW.77 This is consistent with the
Minimum Interconnection Standard under which the NYISO determines whether transfer
capability degradation has an adverse reliability impact; however, unlike the Minimum
Interconnection Standard, the NYISO Transmission Interconnection Standard provides a precise
MW value for the maximum permissible degradation. This ensures a consistent and transparent
approach in determining when a Network Upgrade Facility will be triggered, in cases where such
upgrades are required to mitigate impacts the Transmission Project has on transfer capability.
The Transmission Interconnection Studies will evaluate Transmission Projects in line with the
NYISO Transmission Interconnection Standard and will identify the Network Upgrade Facilities
required for the reliable interconnection of Transmission Projects to the New York State
Transmission System in compliance with this standard.78
74 Proposed OATT Section 22.6.1. This provision incorporates the requirements from Section
25.5.5.1 of Attachment S of the OATT used by the NYISO in creating the base case for its Class Year
study.
75 Proposed OATT Section 22.6.1.
76 Proposed OATT Section 22.6.3.
77 Proposed OATT Section 22.6.4.
78 Proposed OATT Section 22.6.3.
Honorable Kimberly D. Bose March 22, 2016
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H. Transmission Project Interconnection Agreement
The NYISO will enter into a Transmission Project Interconnection Agreement with the
Transmission Developer and Connecting Transmission Owners.79 If, however, a Transmission
Developer’s proposed project is only interconnecting to its own, existing facilities, a
Transmission Project Interconnection Agreement is not required.80 The NYISO intends for the
Transmission Project Interconnection Agreement to be consistent with the Standard Large
Generator Interconnection Agreement set forth in Appendix 6 to Attachment X of the OATT, as
modified by the parties to address the Transmission Project.81 The NYISO will tender a draft of
the agreement after completion of the Facilities Study; however a Transmission Developer may
request that the NYISO tender the agreement after execution of the Facilities Study
Agreement.82
The Transmission Project Interconnection Agreement will provide the mechanism
through which a Transmission Developer shall provide Security for the required Network
Upgrade Facilities identified in the Facilities Studies.83 A Transmission Developer will be
required to provide Security with the applicable Connecting Transmission Owner for Network
Upgrade Facilities identified in the Facilities Study.84 If, however, the Transmission Developer
and Connecting Transmission Owner are the same entity, the Transmission Developer will not be
required to provide Security for the Network Upgrade Facilities required on its own facilities.85
I.Conforming Revisions to the Transmission Expansion Process in OATT
Sections 3 and 4.5 and OATT Attachment D
In order to accommodate the new Transmission Interconnection Procedures into the
existing transmission and interconnection evaluation procedures, the NYISO has proposed
revisions to Section 3 and 4.5 and Attachment D of the OATT, as well as to the interconnection provisions in Attachments S, X and Z of the OATT.
The NYISO’s proposed revisions to Section 3 and 4.5 of the OATT primarily clarify
what projects would remain subject to the transmission expansion procedures. The NYISO
proposes revisions to Section 3.7 to clarify that its study procedures apply only to transmission
projects that are (1) part of a Transmission Owner’s Local Transmission Owner Plan or a NYPA
transmission plan; or (2) Eligible Customer requests to conceptually evaluate a transmission
79 Proposed OATT Section 22.11.1.
80 Proposed OATT Section 22.11.1.
81 Proposed OATT Section 22.11.1.
82 Proposed OATT Section 22.11.1.
83 Proposed OATT Sections 22.9.3, 22.11.1.
84 Proposed OATT Section 22.11.1.
85 Proposed OATT Section 22.11.1.
Honorable Kimberly D. Bose March 22, 2016
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project.86 The latter category of projects differs from the first in that they are not concrete
transmission projects proposed by a Transmission Owner to address local needs on its
transmission system. Rather, they are requests from Eligible Customers for the NYISO to
identify potential projects that could meet a stated objective (e.g., a request to study how to
relieve the constraints currently curtailing a generator or a request to study how to create
incremental transfer capability resulting in incremental Transmission Congestion Contracts
(“TCCs”)).
The proposed revisions further clarify that an Eligible Customer that wants to pursue the development and construction of a transmission project conceptually identified through a System Impact Study under Section 3.7 must proceed through the Transmission Interconnection
Procedures. This is necessary because the proposed Transmission Interconnection Procedures can only function as intended if they are the sole mechanism through which AC transmission is evaluated, with the only exception being projects that are part of a Local Transmission Owner
Plan or a NYPA transmission plan - projects that the Commission specifically required the
NYISO to leave in Section 3.7 of the OATT.87
There are only three significant substantive changes to the existing language in Section
3.7 of the OATT.
First is the addition of language that makes clear that this study process is only available
for transmission projects that are part of a Local Transmission Owner Plan or NYPA
transmission plan that are not proceeding through a competitive selection process in the CSPP. A
Transmission Owner must submit a Transmission Interconnection Application and proceed under
the procedures set forth in Attachment P of the OATT if it is proposing a new transmission
facility or upgrade: (i) as part of any of the NYISO’s competitive selection processes in the
CSPP in Attachment Y of the OATT, and (ii) for which the Transmission Owner seeks cost
allocation under the NYISO OATT.88 This means that even if a Transmission Owner proceeds
through the Section 3.7 process for a transmission project, if the Transmission Owner later
decides to submit that transmission project as part of a competitive selection process under
Attachment Y of the OATT, that project must proceed through the full Transmission
Interconnection Procedures, just as any other proposed transmission solution would be required
to do. In other words, this language precludes a Transmission Owner from evading the
requirements of the Transmission Interconnection Procedures merely by including a project in its
Local Transmission Owner Plan or NYPA transmission plan.
The second significant change to Section 3.7 of the OATT is a set of revisions
incorporating existing ISO procedures into the tariff. Currently, the guidelines to determine
when a transmission project is subject to the transmission expansion process are described in the NYISO’s Transmission Expansion and Interconnection Manual. The NYISO proposes to
86 Proposed revisions to OATT Section 3.7.
87 December Order at P 70.
88 Proposed revisions to OATT Section 3.7.
Honorable Kimberly D. Bose March 22, 2016
Page 23
memorialize in Section 3.7.1 the de minimis threshold it has historically applied to transmission
expansion projects, requiring them to proceed under Section 3.7 of the OATT only if the
proposed transmission project involves upgrades or expansions that “(i) reduce the transfer
capability of a NYISO interface by greater than 10 MW or increase the transfer capability of a
NYISO interface by greater than 25 MW; or (ii) change the classification of affected facilities to
NPCC BPS facilities.” 89
The third major change to Section 3.7 of the OATT is a set of revisions limiting the scope
of the studies performed for Eligible Customers under this section of the OATT. These revisions
clarify that this section of the OATT only applies to Eligible Customers’ conceptual requests for
the NYISO to identify potential projects that could meet a stated objective (i.e., request to
identify possible transmission options).90 These revisions also distinguish these particular
requests from the “System Impact Studies” performed in relation to Transmission Owner Local
Transmission Owner Plan projects and NYPA transmission plan projects, referring to these
Eligible Customer requests as requests for “Transmission Service Studies.” The revisions
limiting the scope of Section 3.7 also specifically require that Eligible Customer requests to
proceed with development and construction of an option identified in a Transmission Service
Study must proceed through the Transmission Interconnection Procedures.91
Additional edits to Section 3 of the OATT are described below:
• Revisions in the preamble to Section 3.7 explaining which provisions of Section 3 of
the OATT apply to Eligible Customer’s request for a Transmission Service Study and
which apply to a Transmission Owner proposing a transmission project as part of a
Local Transmission Owner Plan or NYPA transmission plan;92
• Clarifying revisions to change “System Impact Study” to “Transmission Service
Study” when referring to the study requested by an Eligible Customer not proposing a transmission project as part of a Local Transmission Owner Plan or NYPA
transmission plan. This will distinguish between the two types of studies requested and performed under Section 3.7 - transmission projects proposed by a Transmission Owner (“System Impact Studies”) and conceptual transmission project evaluations requested by Eligible Customers (“Transmission Service Studies”);93
89 Proposed revisions to OATT Section 3.7.1.
90 Proposed revisions to OATT Section 3.7.1. An example of such a conceptual transmission project evaluation might be a request by an Eligible Customer for the NYISO to identify transmission upgrades that could increase transfer capability by a specified amount.
91 Proposed revisions to OATT Sections 3.7.3.2.2 and 3.7.4.
92 Proposed revisions to OATT Section 3.7.
93 Proposed revisions to OATT Sections 3.5 and 3.7.
Honorable Kimberly D. Bose March 22, 2016
Page 24
•Revisions to clarify that the referenced Study Requests are those requested or
submitted “pursuant to Section 3.7.1”;94
• Clarifying revisions to refer to the study agreement and study procedures as simply
the “Study agreement” and “Study procedures” without the qualifier that it is the
“System Impact Study” agreement or procedures since under the NYISO’s proposed revisions, Section 3.7 applies to two types of studies - Transmission Service Studies and System Impact Studies;95
• Revisions to clarify the study request and agreement referenced are those for either a
Transmission Service Study or System Impact Study performed under Section 3.7;96
• Revisions to clarify that an Eligible Customer that proceeds from Section 3.7 of the
OATT to the Transmission Interconnection Procedures will ultimately be tendered a Transmission Interconnection Agreement rather than a Service Agreement pursuant to Section 3.1.4 of the OATT;97
• Revision to clarify that the modifications are changes from what was studied in the
Facilities Study performed pursuant to Section 3.7.4;98
• Revisions to clarify that the prioritization rules set forth in Section 3.10 apply to all
the projects listed in the existing Section 3.10 as well as the transmission proposals submitted pursuant to Attachment P;99
• Revisions to clarify that Section 3.9 of the OATT applies to new “Load and Large
Facility” interconnections (in order to prevent confusion regarding the application of this section to transmission projects);100 and
• Ministerial edits to (1) correct stray underlining;101 (2) add “of the ISO OATT” to
references to OATT attachments;102 (3) revise “Tariff” to “this ISO OATT;”103 and
94 Proposed revisions to OATT Sections 3.7.1 and 3.7.2.
95 Proposed revisions to OATT Section 3.7 (throughout Section 3.7 and its subsections).
96 Id.
97 Proposed revisions to OATT Section 3.5.6.
98 Proposed revisions to OATT Section 3.7.5.
99 Proposed revisions to OATT Section 3.10.
100 Proposed revisions to OATT Sections 3.7 and 3.9.
101 Proposed revisions to OATT Sections 3.7.3.2.2 and 3.7.10. 102 Proposed revisions to OATT Section 3.7.1.
103 Proposed revisions to OATT Section 3.10.
Honorable Kimberly D. Bose March 22, 2016
Page 25
(4) replace outdated cross-references to other OATT Sections with the correct section references.104
With the revisions to Section 3.7 of the OATT discussed above, all Transmission Owner
projects that qualify for review under the transmission expansion process - those included in a
Local Transmission Owner Plan or NYPA transmission plan - will proceed through Section 3.7
of the OATT. Thus the only transmission expansion projects left to proceed under Section 4.5 of
the OATT are Eligible Customer requests for Network Integration Transmission Service. As a
result, the NYISO proposes revisions to Section 4.5 and its subsections to clarify that it only
applies to Network Integration Transmission Service requests by Eligible Customers.
As with Section 3.7, the NYISO proposes to revise Section 4.5 of the OATT to limit the scope of the studies performed for Eligible Customers under this section of the OATT to
conceptual requests (i.e., request to identify possible transmission options), and requiring
requests that proceed with development and construction of an identified transmission option to proceed through the Transmission Interconnection Procedures.105
Additional edits to Section 4.5 of the OATT are described below:
• Clarifying revisions to the cross-reference to the studies performed under Section 3 of
the OATT to comport with the revisions proposed to Section 3.7 of the OATT that
distinguish between the two types of studies requested and performed under Section
3.7 - System Impact Studies and Transmission Service Studies106 - collectively referenced in Section 4.5 as “Firm Transmission Service Studies;”107
• Clarifying revisions to indicate that the same clustering procedures set forth in
Section 3.7.10 apply to Network Integration Transmission Service studies under
Section 4.5;108
• Revisions to clarify that Section 4.5.8 of the OATT applies to new “Load and Large
Facility” interconnections (in order to prevent confusion regarding the application of
this section to transmission projects);109
• Ministerial edits throughout Section 4.5 of the OATT to revise “Part” to “Section” in
references to other sections of the OATT.110
104 Proposed revisions to OATT Sections 3.5.5, 3.7, 3.7.4.2.2, and 3.7.5. 105 Proposed revisions to OATT Sections 4.5.4 and 4.5.7.3.
106 Proposed revisions to OATT Sections 3.5 and 3.7.
107 Proposed revisions to OATT Section 4.5.5.
108 Proposed revisions to OATT Section 4.5.6.
109 Proposed revisions to OATT Sections 4.5.8.
Honorable Kimberly D. Bose March 22, 2016
Page 26
In light of the revisions described above to Sections 3.7 and 4.5 of the OATT, the NYISO
has proposed corresponding edits to Attachment D of the OATT, which contains the
methodology for completing the studies referenced in Section 3.7 and 4.5. The only edits the
NYISO proposes to Attachment D are to add references to the Transmission Service Study and
Network Integration Transmission Service Study - the new study names introduced into Sections
3.7 and 4.5, respectively, in this filing.
J.Conforming Revisions to Interconnection Provisions in OATT Attachments
S, X, and Z
The NYISO proposes revisions to the interconnection provisions in OATT Attachments S, X and Z to provide a mechanism through which it can distinguish transmission projects
evaluated in the new Transmission Interconnection Procedures (“Transmission Projects”) from Merchant Transmission Facilities and through which it can recognize Transmission Projects in base cases used for interconnection studies under Attachments S, X and Z. The NYISO also
proposes to revise the definition of Merchant Transmission Facility, consistent with the
Commission’s directive in the December Order, and proposes a few minor clarifying and
ministerial edits to these provisions.
Specifically, the NYISO proposes the following revisions:
• Revisions to the definition of Merchant Transmission Facility as follows to: (1) reflect
that only controllable transmission seeking CRIS and UDRs is subject to the Standard Large Facility Interconnection Procedures; and (2) comport with the Commission’s directive in the December Order to revise this definition to be consistent with the definition in Order No. 1000:111
Merchant Transmission Facility shall mean Developer’s device for the
transmission of electricity identified in the Interconnection Request,
proposing to interconnect to the New York State Transmission System, for
which the Developer is eligible to request and does request Capacity
Resource Interconnection Service, subject to the eligibility requirements
for Unforced Capacity Deliverability Rights set forth in the ISO
Procedures. Merchant Transmission Facilities but shall not include
Attachment Facilities, Network Upgrade Facilities, System Upgrade
Facilities or System Deliverability Upgrades. Merchant Transmission
Facilities shall not be those transmission facilities developed by an entity
that is not a Transmission Owner signatory to the ISO-Related
Agreements. Merchant Transmission Facilities shall not include upgrades
110 Proposed revisions to OATT Sections 4.5.4.2.2 and 4.5.5.
111 December Order at P 76. This change is necessary and complements the NYISO’s
determination that the best way to address the Commission’s concern regarding the interconnection rules as applied to incumbent Transmission Owners versus non-incumbent Transmission Developers is through creation of the new Transmission Interconnection Procedures. See supra at Part IV(C).
Honorable Kimberly D. Bose March 22, 2016
Page 27
or additions to the New York State Transmission System made by a
Transmission Owner signatory to the ISO-Related Agreements.112
• Revisions to require an Interconnection Request for a Merchant Transmission Facility
initially evaluated pursuant to Attachment P that elects to transition to the Standard Large Facility Interconnection Procedures in order to request CRIS and UDRs, but eliminating the requirement to submit a $10,000 application fee where such project has already
submitted a Transmission Interconnection Application and $10,000 application fee
pursuant to Attachment P;113
• Revisions to require that a controllable transmission project evaluated in the new
Transmission Interconnection Procedures that wishes to enter a Class Year Study to
request CRIS and UDRs must have an Operating Committee-approved System Impact
Study (performed under Attachment P of the OATT) or an Interconnection System
Reliability Impact Study (performed under Attachment X of the OATT) and must also
have satisfied one of the regulatory milestones described in Sections 25.6.2.3.1.1 through
25.6.2.3.1.3 of Attachment S;114
• Revision to the base case inclusion rules set forth in Attachment S to: (1) clarify that the
applicable Load and Capacity Data Report is the most recent report; and (2) add the criteria by which to determine if a transmission project evaluated under OATT 3.7 or OATT Attachment P should be included in the existing system representation for the Class Year Study base case;115
• Revision to the Security provisions of Attachment S to address the potential scenario that
a Transmission Project or its required Network Upgrade Facilities increase the actual cost of a Class Year Developer’s share of System Upgrade Facilities or System Deliverability Upgrades to an amount greater than the agreed-to and secured amount;116
• Revision to the definition of Affected Transmission Owner to recognize entities that own,
lease or otherwise possess and interest in a portion of the New York State Transmission
System where Network Upgrade Facilities are installed pursuant to Attachment P;117
112 Proposed revisions to OATT Section 30.1.
113 Proposed revisions to OATT Section 30.3.1.
114 Proposed revisions to OATT Section 25.5.5.1.
115 Id.
116 Proposed revisions to OATT Section 25.8.6.3 (applying the same rule that applies to that scenario if triggered by other interconnection projects having expanded, accelerated or otherwise modified or terminated).
117 Proposed revisions to OATT Sections 25.1, 30.1, 30.14 - Appx. 6, and 32.5 - Appx. 1.
Honorable Kimberly D. Bose March 22, 2016
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• Clarifying revision to the definition of Queue Position to include not only Interconnection
Requests, but also Study Requests and Transmission Interconnection Applications;118
• Clarifying revisions to replace references to the “ATRA” to the Class Year Study;119
• Clarifying revision regarding the timing when the ISO provides to a Developer a non-
binding good faith estimate of the study cost and schedule (clarifying that it is upon
tendering the Interconnection System Reliability Impact Study Agreement);120
• Ministerial edit to: (1) delete the extra period at the end of a sentence;121 (2) delete stray
underlining;122 (3) add “or ‘OATT’” to the following parenthetical (“NYISO OATT” or
“OATT”);123 and (4) add an omitted word from the following clause in the definition of
Connecting Transmission Owner: “…and (iii) is a Party to the Standard Large Generator
Interconnection Agreement” to address the directive in paragraph 52 of the December
Order.124
K. Alignment of Interconnection and Planning Requirements
The NYISO proposes to make revisions to Attachment Y of the OATT to align the new
Transmission Interconnection Procedures with the separate but related planning requirements.
These revisions provide the means by which a proposed transmission project will progress
through and timely satisfy its interconnection requirements in parallel with its progress through
the NYISO’s transmission planning processes. The proposed revisions also enable the NYISO to take into account in its selection process the detailed project information that is developed in the interconnection process. The proposed requirements further provide for the scenario in which a developer performs certain studies under the existing interconnection or transmission expansion requirements in the manner described in Part IV.D(2) above as part of the transition rules to the
new Transmission Interconnection Procedures.
Specifically, the NYISO proposes the following revisions in Attachment Y to align the interconnection and transmission planning processes:
• A Developer proposing a transmission solution to a Reliability Need or a Public Policy
Transmission Need in response to a NYISO solicitation for solutions will need to
demonstrate simultaneous with the submission of its project information that it has
118 Proposed revisions to OATT Sections 30.1, 30.14 - Appx. 6, and 32.5 - Appx. 1. 119 Proposed revisions to OATT Section 25.6.2.3.1.
120 Proposed revisions to OATT Section 30.7.1.
121 Proposed revisions to OATT Section 30.3.2.4.
122 Proposed revisions to OATT Sections 30.7.1 and 30.7.3. 123 Proposed revisions to OATT Section 30.1.
124 Proposed revisions to OATT Sections 25.1, 30.1, and 30.14 - Appx. 6.
Honorable Kimberly D. Bose March 22, 2016
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submitted a valid Transmission Interconnection Application or Interconnection Request,
as applicable.125 This requirement does not apply to any transmission solutions proposed
in response to the needs identified in the 2014-2015 planning cycle for which the NYISO
has already solicited solutions, including the Western New York Public Policy
Transmission Need and the AC Transmission Public Policy Transmission Need.126
• A Developer proposing a project in the NYISO’s reliability, economic, or public policy
planning processes must notify the NYISO upon the completion of any interconnection or transmission expansion study and, at the NYISO’s request, submit to the NYISO any study reports and related materials prepared in connection with the study.127
• In the Public Policy Transmission Planning Process, the NYPSC will review viable and
sufficient solutions to a Public Policy Transmission Need to identify whether the NYISO
should proceed to select a transmission solution to the need.128 The Developer must elect
for its project to proceed to be evaluated for purposes of selection.129 The NYISO
proposes to revise this requirement to require the Developer to demonstrate with its
election to proceed that it has an executed System Impact Study Agreement or System
Reliability Impact Study, as applicable, for its project.130 The NYISO also proposes to
revise the timing for the Developer to make its election to proceed, so that the Developer
need not make its election until 15 calendar days after the NYPSC issues an order
directing the NYISO to proceed to evaluate transmission solutions for purposes of
selection.131 This timing change will provide Developers with additional time to enter
into a System Impact Study Agreement or System Reliability Impact Study, as
applicable.
125 Proposed revisions to OATT Sections 31.2.5.1, 31.4.4.31.
126 The NYISO is currently administering its Public Policy Transmission Planning Process in
connection with two separate Public Policy Transmission Needs identified by the New York State Public
Service Commission. See NYPSC Case 12-T-0502, et al., Proceeding on Motion of the Commission to
Examine Alternating Current Transmission Upgrades, et al., Order Finding Transmission Needs Driven
by Public Policy Requirements (December 17, 2015) (adopting the need for new 345 kV transmission
facilities to provide additional transmission capacity to move power from upstate to downstate New York
as a Public Policy Transmission Need); see also NYPSC Case No. 14-E-0454, In the Matter of New York
Independent System Operator, Inc.’s Proposed Public Policy Transmission Needs for Consideration,
Order Addressing Public Policy Requirements for Transmission Planning Process (July 20, 2015)
(adopting the relief of transmission congestion in Western New York as a Public Policy Transmission
Need).
127 Proposed revisions to OATT Sections 31.2.4.4.2, 31.2.4.6, 31.2.4.8.2, 31.3.2.4.2, 31.4.5.1.5,
31.4.5.2.5. The NYISO also put in lowercase the term “interconnection agreement” in the project information requirements as it is not a defined term.
128 OATT Section 31.4.6.7.
129 OATT Section 31.4.6.6.
130 Proposed revisions to OATT Section 31.4.6.6.
131 Proposed revisions to OATT Section 31.4.6.6.
Honorable Kimberly D. Bose March 22, 2016
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• In the reliability planning process, the NYISO solicits more detailed project information
for those projects it has determined are viable and sufficient to address the Reliability
Need. The NYISO proposes to require the Developer to demonstrate when it submits this additional project information that it has an executed System Impact Study Agreement or System Reliability Impact Study, as applicable, for its project.132
• In addition, as part of the NYISO’s evaluation for purposes of selection of proposed
transmission solutions to a Reliability Need, the NYISO performs an evaluation of the system impacts of the proposed solution. This analysis may overlap with analysis in the project’s System Impact Study (or a System Reliability Impact Study, as applicable). For this reason, the NYISO proposes to revise this requirement to indicate that as part of this evaluation, it “shall give due consideration to the results of any completed System Impact Study” or System Reliability Impact Study, as applicable.133
• In the economic planning process (“CARIS”), Load Serving Entities that would benefit
from a transmission project must vote whether to implement the project. In order to
assist the Load Serving Entities in their decision, the NYISO proposes to require that a
Developer complete a System Impact Study or a System Reliability Impact Study, as
applicable, prior to this vote.134 This will provide project beneficiaries more specific
information on project costs to be incurred in the interconnection process - information
that may not otherwise be publicly available to project beneficiaries. Such costs can be
considered by project beneficiaries in determining the cost effectiveness of proposed
projects.
• The NYISO also proposes to revise the selection requirements in its public policy and
reliability processes to clarify that it will give due consideration to the status and results of any completed interconnection or transmission expansion studies in evaluating the proposed project for purposes of selection.135
• The NYISO also inserted the term “Network Upgrade Facilities” as defined in
Attachment P in the description of facilities that must be accounted for in Developer’s worksheets as part of the capital cost estimate selection metric.136
• The NYISO clarified that it may publicly disclose information regarding proposed
transmission projects in its competitive planning processes that it is required to disclose under its interconnection or transmission expansion processes.137
132 Proposed revisions to OATT Section 31.2.6.1.
133 Proposed revisions to OATT Section 31.2.6.3.
134 Proposed revisions to OATT Section 31.5.4.6.1.
135 Proposed revisions to OATT Sections 31.2.6.5, 31.4.8.
136 Proposed revisions to OATT Sections 31.2.6.5.1.1, 31.4.8.1.1.
137 Proposed revisions to OATT Sections 31.2.12.1, 31.4.15.1.
Honorable Kimberly D. Bose March 22, 2016
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• Finally, the NYISO made conforming revisions in Attachment Y to cross-references to
the interconnection procedures.138
V. RELIABILITY DEVELOPMENT AGREEMENT
The NYISO submitted in its May 2015 Filing a pro forma Development Agreement for
its reliability planning process located in Appendix C of Section 31.7 of Attachment Y of the
OATT (“Reliability Development Agreement”), along with related tariff revisions in Section
31.2 of Attachment Y of the OATT. The purpose of the agreement is to provide the NYISO with
a mechanism for ensuring that a transmission project selected in the NYISO’s reliability
planning process to address a Reliability Need will be constructed and in-service in time to
satisfy the need.
The December Order largely accepted the Reliability Development Agreement and
related tariff revisions, but directed the NYISO to make certain revisions.139 The NYISO
submits with this filing a revised Reliability Development Agreement, along with revisions to the
related tariff requirements, to address the Commission’s directives in the manner described
below.140
A. Party Responsible for Executing a Development Agreement
The NYISO’s reliability planning process identifies solutions to timely address
Reliability Needs. It is intended to yield market-based solutions to Reliability Needs, with
regulated solutions serving as a backup to maintain system reliability. In the absence of
sufficient market-based solutions, the NYISO will turn to a regulated solution if necessary. The
Responsible Transmission Owner identified by the NYISO is required to propose a regulated
backstop solution to provide a means of addressing the Reliability Need.141 Other Developers,
including other Transmission Owners, may also propose their own alternative regulated
solutions.142
The NYISO will evaluate all of the proposed transmission solutions that is has
determined are viable and sufficient to address the Reliability Need for purposes of selecting the
more efficient or cost-effective transmission project that is eligible for cost allocation under its
tariffs.143 The NYISO may trigger a regulated solution to proceed if necessary to timely satisfy a
Reliability Need, which may be the regulated backstop solution or an alternative regulated
solution. If the selected project is an alternative regulated transmission solution, the NYISO may
138 Proposed revisions to OATT Sections 31.3.1.2.3, 31.5.1.3.
139 December Order at PP 45-48, 51-52, 57, 67-76, 79, 90-91, 94, 98, 103-105, 111, 116-120.
140 As the NYISO uses the term “Development Agreement” as a capitalized term in Attachment Y, it proposes to define that term in the definitions provision of Section 31.1.1 or Attachment Y.
141 OATT Attachment Y Section 31.2.4.3.
142 OATT Attachment Y Section 31.2.4.7.
143 OATT Attachment Y Section 31.2.6.5.
Honorable Kimberly D. Bose March 22, 2016
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also elect to trigger the Responsible Transmission Owner’s regulated backstop solution as a
backup solution to proceed in parallel as a means for maintaining system reliability in case the
selected alternative transmission solution cannot or does not proceed to completion.144 In that
case, the NYISO will continue to expect that the selected alternative transmission project will
proceed to be developed and completed in time to address the Reliability Need and will halt the
triggered regulated backstop solution if it determines the backstop is no longer required.145
Section 31.2.8.1.6 of Attachment Y currently provides that the Developer of a selected
alternative regulated transmission solution must execute a Reliability Development Agreement to
proceed with its project. The December Order directed the NYISO to require that the
Responsible Transmission Owner also execute the Reliability Development Agreement when its
regulated backstop transmission solution is selected as the more efficient or cost-effective
transmission solution to a Reliability Need or is triggered to proceed in parallel with a selected
alternative regulated transmission solution.146 The NYISO has requested rehearing on the
directive that a Responsible Transmission Owner be required to execute a Reliability
Development Agreement in instances in which the transmission project was not selected, but is
simply proceeding in parallel as a backup.147 Until such time as the Commission acts on the
NYISO’s request for rehearing, the NYISO is proposing revisions to the Reliability
Development Agreement and Section 31.2 of Attachment Y that are consistent with the
directives of the December Order.
The NYISO, therefore, proposes to revise Section 31.2.8.1.6 of Attachment Y to require
that any Developer - whether the Responsible Transmission Owner, Other Developer, or
Transmission Owner - execute a Reliability Development Agreement under the following
circumstances: (i) the NYISO has selected its project as the more efficient or cost-effective
transmission solution to a Reliability Need, (ii) the NYISO has triggered its regulated backstop
transmission solution to proceed, or (iii) the Responsible Transmission Owner agrees to step-in
to complete a selected alternative transmission project. The NYISO proposes related revisions to
the Recitals of the Reliability Development Agreement that capture in placeholders these three
scenarios for entering into agreement. The NYISO will apply the appropriate placeholder based
on the circumstances in which the NYISO and Developer enter into the agreement.
144 OATT Attachment Y Sections 31.2.8.1.3, 31.2.8.1.4; see also Agreement Between the New
York Independent System Operator, Inc., and the New York Transmission Owners on the Comprehensive Planning Process for Reliability Needs, available at:
<http://www.nyiso.com/public/webdocs/markets_operations/documents/Legal_and_Regulatory/Agreeme
nts/NYISO/Comprehensive_Planning_Process_for_Reliability_Needs_Agreement.pdf.>
145 OATT Attachment Y Section 31.2.8.2.1.
146 December Order at PP 45-48.
147 New York Independent System Operator, Inc., Request for Rehearing and Clarification of New
York Independent System Operator, Inc., Docket No. ER13-102-007 (January 27, 2016) at pp 12-16. As
indicated in its rehearing request, requiring the Responsible Transmission Owner to execute the
Reliability Development Agreement under these circumstances is unnecessary, inconsistent with the
requirements of other ISO/RTOs, and will create undue administrative burdens on the NYISO.
Honorable Kimberly D. Bose March 22, 2016
Page 33
The NYISO also proposes to revise Section 31.2.8.1.6 to clarify the timing for tendering a draft Reliability Development Agreement to a Developer based on the three different
circumstances for entering into the agreement. Specifically, the NYISO proposes to tender the
draft Reliability Development Agreement to the Developer as soon as practicable considering the project’s Trigger Date following, as applicable, the NYISO’s selection of the project, the
NYISO’s triggering of the regulated backstop transmission solution, or the Responsible
Transmission Owner’s agreement to step-in to complete a project. The NYISO also proposes to clarify in Section 31.2.8.1.6 that, if negotiations over the Development Agreement are at an
impasse, the NYISO may also initiate on its own behalf the filing of an unexecuted Reliability
Development Agreement at the Commission.
Finally, certain provisions in the Reliability Development Agreement reference the
NYISO’s selection of the transmission project as the more efficient or cost-effective transmission
solution to the Reliability Need. The NYISO proposes to revise these provisions to
accommodate the scenarios in which a project that has not been selected by the NYISO is subject
to the agreement.148 Specifically, the NYISO proposes to modify the definitions of the terms
“Project Description,” “Significant Modification,” and “Transmission Project,” and the
requirements in Articles 3.4 and 3.8 of the Agreement, so that these provisions are applicable in
instances in which the transmission project at issue was not selected by the NYISO.
B. Addressing a Developer’s Inability to Timely Complete Regulated Project
The NYISO initially drafted the Reliability Development Agreement and related tariff
revisions with the understanding that they would apply only to the Developer of a selected
alternative regulated transmission solution. In such case, the NYISO would have the option of
turning to the Responsible Transmission Owner to satisfy the Reliability Need if the Developer
of the selected alternative solution did not or could not timely complete its project. For this
reason, the Reliability Development Agreement and Section 31.2.10 of Attachment Y permitted
the NYISO, following termination of the agreement, to: (i) direct the Responsible Transmission
Owner to proceed with its regulated backstop solution, (ii) request the Responsible Transmission
Owner to step-in to complete the failing project, or (iii) commence a Gap Solution process.
In the event the Responsible Transmission Owner cannot timely complete its project,
there is no additional backup project to addressing reliability. For this reason, the NYISO
proposes to revise Article 8.1 of the Reliability Development Agreement and Sections 31.2.10.1
and 31.2.10.1.3 of Attachment Y to provide the NYISO with additional options and flexibility
for maintaining system reliability when a Developer - whether an incumbent Transmission
Owner or a non-incumbent Developer - does not or cannot timely complete its project.149 As set
148 For example, one scenario would be a regulated backstop transmission solution that is not selected by the NYISO, but is triggered to proceed in parallel with a selected project.
149 The NYISO previously addressed in Section 31.2.10.2 the action it could take if a Responsible
Transmission Owner’s regulated backstop solution is not timely progressing. As the Responsible
Transmission Owner of a regulated backstop transmission solution will now execute a Reliability
Development Agreement, Section 31.2.10.1 now addresses how the NYISO will address any project
under a Reliability Development Agreement that does not or cannot be timely completed. Section
Honorable Kimberly D. Bose March 22, 2016
Page 34
forth in Section 31.2.10.1.3, the NYISO can take one or more of the following actions to address the Reliability Need in such cases: (i) address the Reliability Need in the following biennial
reliability planning process, (ii) direct the Developer to proceed to complete its project beyond the Required Project In-Service Date, (iii) direct the Responsible Transmission Owner to proceed with its regulated backstop solution, (iv) request the Responsible Transmission Owner to step-in to complete the selected project,150 (v) commence the Gap Solution process, (vi) adopted new NYISO or Transmission Owner operating procedures, and/or (vii) take any other action the
NYISO reasonably considers appropriate to address the Reliability Need.
The revised language enables the NYISO to take action prior to terminating the
Reliability Development Agreement, so that it is not automatically required to terminate an
agreement when doing so may be more costly or harmful to system reliability in New York.151 For example, if a project is near completion but will not meet the Required Project In-Service Date, the NYISO could determine that the project should proceed to be completed beyond that date if any short-term reliability concerns caused by the delay can be addressed through a Gap Solution or changes to operating procedures. These proposed revisions provide the NYISO and Developer with additional options to address project delays, but do not prevent the NYISO from terminating the Reliability Development Agreement if there are grounds for doing so, and the NYISO concludes that termination is the best option.
Pursuant to its tariff, the NYISO may enter into a Reliability Development Agreement
with a Developer after the NYISO selects a project as more efficient or cost effective, but prior
to its determination in Section 31.2.8.1.1 of Attachment Y that the project should be triggered
because there are not sufficient market-based solutions to address a Reliability Need. The
NYISO proposes to clarify in the first paragraph of Article 8.1 of the agreement that it may
terminate the agreement if it determines there are sufficient market-based solutions and the
project should not be triggered. In addition, the NYISO proposes to revise the cross-references
in the first paragraph of Article 8.1 describing the halting provisions to also reference the
provisions applicable to the halting of a Responsible Transmission Owner’s regulated backstop
solution.
Finally, the NYISO proposes to make revisions to the requirements in Article 8.1 of the
Reliability Development Agreement and Section 31.2.10.1.2 of Attachment Y concerning cost
recovery in the event the Reliability Development Agreement is terminated. As directed in
31.2.10.2 continues to apply to non-transmission or partial transmission regulated backstop solutions that are not subject to a Reliability Development Agreement.
150 The NYISO clarifies in Article 8.3 of the Reliability Development Agreement that the project
transfer provisions only apply when the Transmission Project under the agreement is a selected alternative regulated transmission project. If the Responsible Transmission Owner’s regulated backstop solution is
the project subject to the agreement, there is no further Responsible Transmission Owner that can step-in
to complete the project.
151 The NYISO also proposes to indicate in Article 8.1 of the Reliability Development Agreement that it may disclose information regarding the transmission project as required to implement the action it may take under Section 31.2.10.1.3.
Honorable Kimberly D. Bose March 22, 2016
Page 35
Paragraph 119 of the December Order, the NYISO proposes to revise Section 31.2.10.1.2 to
indicate that the NYISO may revoke its selection of a project and the eligibility of the Developer to recover its costs “pursuant to the ISO’s regional cost allocation mechanism.” Further, as
directed in Paragraph 94 of the December Order, the NYISO proposes to replace the language in Article 8.1 stating “the Developer must seek any cost recovery from FERC” with language
stating “cost recovery may be permitted as determined by FERC.”
Given that the Responsible Transmission Owner will now execute the Reliability
Development Agreement, the NYISO also proposes to include in Section 31.2.10.1.2 references
to the tariff provisions pursuant to which a Responsible Transmission Owner may recover costs
if its project is not triggered or is halted. Moreover, the Responsible Transmission Owner’s
obligation to submit a regulated backstop solution is subject to its ability to recover its project
proposal, development, construction, operation and maintenance costs under the NYISO/TO
Reliability Agreement.152 The Commission upheld this cost recovery eligibility in its April 18,
2013 and July 17, 2014, orders in this proceeding.153 The NYISO, therefore, proposes to
expressly provide in Section 31.2.10.1.2 and Article 8.1 that the Responsible Transmission
Owner may recover costs to the extent permitted under the ISO/TO Reliability Agreement.154
The NYISO also proposes to include a new Article 15.3 in the Reliability Development
Agreement that makes clear that the Developer: “may recover the costs of the Transmission
Project in accordance with the cost recovery requirements in the ISO Tariffs and, if the
Developer is the Responsible Transmission Owner, the ISO Tariffs and the NYISO/TO
Reliability Agreement.”
C.Force Majeure Requirements
The Reliability Development Agreement provides that the NYISO has the option to
terminate the agreement if the Transmission Project cannot be completed by the Required Project
In-Service Date for any reason. The NYISO requires this authority to ensure that it can timely
act to address a Reliability Need if the Developer of a project selected to maintain system
reliability is not timely progressing, or cannot progress, to complete its project. In the May 2015
Filing, the NYISO indicated that the occurrence of a Force Majeure event would not excuse the
performance of any obligations under the agreement. The December Order directed the NYISO
to take Force Majeure into account in a manner similar to PJM’s Designated Entity Agreement,
which excuses non-performance due to a Force Majeure event, but ultimately permits PJM to
152 See Agreement Between the New York Independent System Operator, Inc., and the New York Transmission Owners on the Comprehensive Planning Process for Reliability Needs, available at:
http://www.nyiso.com/public/webdocs/markets_operations/documents/Legal_and_Regulatory/Agreement
s/NYISO/Comprehensive_Planning_Process_for_Reliability_Needs_Agreement.pdf.
153 See New York Independent System Operator, Inc., Order on Rehearing and Compliance, 148 FERC ¶ 61,044 at P 282 (2014); New York Independent System Operator, Inc., Order on Compliance Filing, 143 FERC ¶ 61,059 at P 326 (2013).
154 The NYISO proposes to insert “ISO/TO Reliability Agreement” as a new defined term in the Reliability Agreement and in the definition provisions in Section 31.1.1 of Attachment Y.
Honorable Kimberly D. Bose March 22, 2016
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terminate any agreement if the project cannot be timely completed.155 The NYISO proposes to revise Articles 7.1, 8.1, and 15.5 of the Reliability Development Agreement to provide that a
party shall not be responsible for non-performance or be considered in Breach or Default under the agreement if the party’s failure to perform is due to the occurrence of Force Majeure and the Force Majeure will not delay the Developer’s ability to complete the transmission project by the Required Project In-Service Date.
A party that is unable to carry out its obligations as a result of a Force Majeure event
must notify the other party of the Force Majeure event and indicate whether it will result in a
delay in meeting one or more Critical Path Milestones or to completing the project by the
Required Project In-Service Date. If the Force Majeure event will impact the Developer’s ability to meet Critical Path Milestone(s), the Developer must request with its notice a change to the
impacted milestones in accordance with the requirements in Article 3.3.4 and must satisfy those requirements for modifying the milestones. As described in Article 3.3.4, the NYISO will not unreasonably withhold, condition, or delay its consent to change a Critical Path Milestone if the change will not delay the project’s in-service date beyond the Required Project In-Service Date. The party will be excused from whatever performance is affected only for the duration of the
Force Majeure event and while the party exercises reasonable efforts to address the situation. As with PJM, the NYISO retains the option to terminate the agreement if the Developer will not be able to complete the project by the Required Project In-Service Date.
The December Order also directed the NYISO to revise the definition of Force Majeure in the Reliability Development Agreement to more closely match the definition of Force Majeure in the NYISO’s Standard Large Generator Interconnection Agreement (“LGIA”).156 The
NYISO, therefore, proposes to replace the current definition of Force Majeure in the Reliability Development Agreement with the definition from the LGIA.
D. Impact of Delays by Transmission Owners
The December Order directed the NYISO to revise the Breach and Termination
provisions of the Reliability Development Agreement “to excuse non-performance due to delays
of a Connecting Transmission Owner, or of an operator or owner of an Affected System.”157
The NYISO, therefore, proposes to revise Article 7.1 to provide that a Breach shall not occur as a
result of a delay caused by a Connecting Transmission Owner or an Affected System Operator.
The NYISO also proposes to revise the requirement in Article 8.1 that permits the NYISO to
terminate a project that cannot be completed by the Required Project In-Service Date “for any
reason” to exclude delays caused by a Connecting Transmission Owner or an Affected System
Operator.
155 December Order at P 90; see also PJM Interconnection, L.L.C., Open Access Transmission Tariff, Attachment KK (Form of Designated Entity Agreement), Articles 8.0 and 10.
156 December Order at P 51.
157 December Order at P 91.
Honorable Kimberly D. Bose March 22, 2016
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E.Liability and Indemnity
As directed by the December Order,158 the NYISO proposes to revise the liability
provisions in Article 9.1 of the Reliability Development Agreement to make them reciprocal.
The NYISO also replaces the language “in any way associated with this Agreement” with “under this Agreement” as directed by the Commission.159 Finally, the NYISO makes a conforming revision to the Remedies provision in Article 7.3, replacing the reference to the limitation of the “NYISO’s liability” under Article 9.1 with the “defaulting Party’s liability.”
The NYISO also proposes to revise the indemnity provision in Article 9.2 as directed by
the Commission.160 The NYISO proposes to make the provision reciprocal and to remove the
language “or associated with.” In addition, the NYISO’s proposed tariff revisions replace “gross
negligence” with “negligence,” exempting NYISO acts of ordinary negligence from
indemnification by the Developer. The NYISO has requested rehearing on the Commission’s
directive that it should not be indemnified under the Reliability Development Agreement for its
acts of ordinary negligence.161 As indicated in its rehearing request, this directive is inconsistent
with Commission precedent and other NYISO tariff requirements. Nevertheless, until such time
as the Commission acts on the NYISO’s request for rehearing, the NYISO is proposing revisions
to the Reliability Development Agreement that are consistent with the directive of the December
Order.162
F.Interconnection Requirements
As described in Part IV above, the NYISO is proposing new Transmission
Interconnection Procedures that will apply to all projects that have been proposed in the
NYISO’s CSPP, including the reliability planning process. The NYISO proposes the following revisions to the Reliability Development Agreement to align the agreement with the new
interconnection requirements:
• Revise Article 4.1 to establish that the Developer must satisfy the interconnection
requirements in Attachment P of the OATT. As a Developer may have already proposed its
project under the current interconnection or transmission expansion process, Article 4.1 also
references the Transmission Interconnection Procedure transition rules located in Section
22.3.3 of Attachment P.
158 December Order at PP 100-101.
159 December Order at PP 100-101.
160 December Order at PP 103-105.
161 New York Independent System Operator, Inc., Request for Rehearing and Clarification of New York Independent System Operator, Inc., Docket No. ER13-102-007 (January 27, 2016) at pp 5-12.
162 If rehearing is granted, the NYISO will file appropriate conforming tariff language in a further compliance filing.
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• Revise Article 4.1 further to establish that if another developer seeks to interconnect its
Transmission Project (as defined in Attachment P) to the Developer’s Transmission Project (as defined in the Reliability Development Agreement), the Developer will participate in the new Attachment P process as an Affected System Operator for purposes of evaluating the impact of the proposed interconnection.
• Revise Articles 4.2 and 5 to modify references to apply to the new interconnection
requirements in Attachment P of the OATT and revised Appendix C to use new defined terms for interconnection studies from Attachment P.
•Revise Article 3.4 to align with terminology on material modification in Attachment P of the
OATT.
• Insert two new defined terms “Connecting Transmission Owner” and “Affected System
Operator” to define for purposes of the agreement the Connecting Transmission Owner(s)
and Affected System Operator(s) that have been identified in accordance with new
Attachment P of the OATT as being impacted by the proposed transmission project.163 The
NYISO also proposes conforming changes to the definitions of “Applicable Reliability
Requirements,” “Governmental Authority,” and “Transmission Owner Technical Standards.”
• Remove references to the Distribution System in the agreement, consistent with the
application of the new Transmission Interconnection Procedures to only the New York State Transmission System.
• Revise the definition of In-Service Date to be consistent with the definition of that term in the
Transmission Interconnection Procedures in Attachment P of the OATT.
G. Additional FERC Directives/Miscellaneous
The NYISO proposes the following additional revisions to the Reliability Development Agreement and Attachment Y of the OATT to address and implement the directives of the
December Order:
• Paragraph 117 of the December Order required the NYISO to inform a Developer of the
Required Project In-Service Date earlier in the reliability planning process than the tendering
of the Reliability Development Agreement. The NYISO proposes to revise Sections 31.2.7,
31.2.7.3, and 31.2.8.1.6 of Attachment Y and Article 3.3.1 of the Reliability Development Agreement to provide that the NYISO will specify the Required Project In-Service Date in the Comprehensive Reliability Plan report or the updated Comprehensive Reliability Plan report, as applicable. The report is the means by which the NYISO publishes the results of its evaluation of proposed solutions and specifies the project selected as the more efficient or cost-effective solution to the Reliability Need.
163 The NYISO made a similar conforming revision in OATT Section 31.2.8.1.7.
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• As directed in Paragraph 74 of the December Order, the NYISO proposes to revise Section
31.2.8.1.6 and Article 3.3.1 of the Reliability Development Agreement to provide that any milestones that require action by a Connecting Transmission Owner or Affected System Operator to complete will be included as Advisory Milestones.
• As directed in Paragraph 57 of the December Order, the NYISO proposes to revise Article
3.3.3 of the Reliability Development Agreement to replace the requirement that the
Developer notify the NYISO thirty days prior to a Critical Path Milestone “whether it will
meet” the milestone, with “whether, to the best of its knowledge, it expects to meet the
milestone.”
• As directed in Paragraph 98 of the December Order, the NYISO proposes to revise Article
7.2 of the Reliability Development Agreement to provide that the NYISO will not
unreasonably withhold, condition, or delay its agreement to extend the cure period for a
Breach if it determines that a longer cure period will not threaten the Developer’s ability to complete its project by the Required Project In-Service Date.
• As directed in Paragraph 120, the NYISO proposes to clarify the language in Section
31.2.10.1.4(ii) that describe certain limitations on the transfer of a project due to restrictions
on a Developer’s ability to transfer its rights-of-way to another party. As revised, Section
31.2.10.1.4(ii) provides that the transfer is subject to “(ii) any requirements or restrictions on the transfer of Developer’s rights-of-way under federal or state law, regulationconveyance, or contract (including mortgage trust indentures or debt instruments) ” The revised
language describes legal limitations on the transfer of property rights that are contained in federal or state law and debt instruments affecting legal title of the transferor.
• The NYISO revised Article 8.3 of the Reliability Development Agreement to insert the
appropriate cross-reference to the related tariff requirements in Attachment Y.
• The NYISO revised Section 31.2.10.1.1 to clarify the timing pursuant to which it will
terminate the agreement and file a notice of termination with the Commission.
• The NYISO revised Article 5 of the Reliability Development Agreement to clarify that the
Developer may not have to certify to NERC as the “Transmission Operator” under all circumstances.
• Finally, in Paragraph 47 of the December Order, the Commission read the NYISO’s
monitoring requirements for regulated solutions in Section 31.2.13.2 to be limited to
monitoring projects before their Trigger Date. The first sentence of this section does not
contain such a limitation. However, to avoid confusion regarding the meaning of this
provision, the NYISO proposes to revise Section 31.2.13.2 to make explicit that the NYISO
will monitor such regulated solutions until they have been completed and are in-service or
have been halted.
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VI.PUBLIC POLICY DEVELOPMENT AGREEMENT
The NYISO previously informed the Commission that it was in the process of developing
a pro forma development agreement between the NYISO and the Developer of a transmission
project selected by the NYISO in the Public Policy Process (“Public Policy Development
Agreement”).164 The NYISO subsequently filed proposed revisions to Sections 31.4 and 31.7 of
the OATT that included a placeholder for a Public Policy Development Agreement as Appendix
D in Section 31.7 of Attachment Y of the OATT.165 The proposed revisions also established in
Section 31.4.12.2 of Attachment Y the process by which the NYISO would tender and the
NYISO and the Developer will negotiate and enter into the agreement.166 Finally, the NYISO
proposed to establish in a new Section 31.4.12.3 the consequences of the Developer of a selected
project not timely executing the Public Policy Development Agreement or the agreement being
terminated. The Commission’s order on these tariff changes remains pending in a separate
proceeding.
The December Order directed the NYISO to file a pro forma development agreement for its Public Policy Transmission Planning Process (“Public Policy Process”).167 Accordingly, the NYISO submits a proposed Public Policy Development Agreement to replace the placeholder in Appendix D of Section 31.7 of Attachment Y of the OATT, along with a few proposed revisions to the requirements in Section 31.4 of Attachment Y for entering into the agreement and the consequences of terminating the agreement that are generally consistent with modifications to the related provisions in the reliability planning process.
The proposed Public Policy Development Agreement is substantially similar to the Reliability Development Agreement, as that agreement has been modified in this filing
consistent with the directives of the December Order. The differences between the pro forma agreements reflect the different purposes and procedures of the reliability planning process and the Public Policy Process. These differences are illustrated in a blackline version of the two agreements included in Attachment V to this letter and include the following:
164 See New York Independent System Operator, Inc., Proposed Tariff Revisions Regarding Public Policy Transmission Planning Process, Docket No. ER15-2059-000 at p 5 (June 29, 2015).
165 The NYISO’s proposed revisions to its Public Policy Process are built upon the tariff revisions
that the NYISO filed on February 18, 2016 to clarify and enhance the Public Policy Process. See New
York Independent System Operator, Inc., Proposed Tariff Revisions Regarding Public Policy
Transmission Planning Process, Docket No. ER16-966-000 (February 18, 2016) (“February 2016
Filing”).
166 This process is consistent with the requirements for negotiating and entering into a Reliability Development Agreement in Section 31.2.8.1.6 of Attachment Y and a Large Generator Interconnection Agreement in Section 30.11 of Attachment X of the OATT.
167 December Order at P 19.
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A. Public Policy Process Scope and Terminology
The Public Policy Development Agreement will apply to the Developer of a Public
Policy Transmission Project that is selected by the NYISO as the more efficient or cost-effective
transmission solution to a Public Policy Transmission Need. Unlike in the reliability planning
process, there are no backstop solutions or other projects that the NYISO could trigger in parallel
with a selected Public Policy Transmission Project. The Public Policy Development Agreement
replaces the reliability planning process related terminology with the terminology set forth in
Sections 31.1 and 31.4 of Attachment Y that is specific to the Public Policy Process, such as
Public Policy Transmission Planning Process, Public Policy Transmission Planning Process
Manual, Public Policy Transmission Need, and Public Policy Transmission Project.
B. Required Project In-Service Date Requirements
The NYISO proposes to revise Section 31.4.11 of Attachment Y, consistent with the
revisions to the reliability planning process directed by the December Order, to provide that the
NYISO will provide the Required Project In-Service Date for the selected Public Policy
Transmission Project in the Public Policy Transmission Planning Report. Unlike with a
Reliability Need, there may not be a specific date by which a project is required to satisfy a
Public Policy Transmission Need. When it identifies a Public Policy Transmission Need, the
NYPSC may, but need not, identify a date by which the need must be satisfied.168 For this
reason, the NYISO proposes to define the Required Project In-Service Date for the Public Policy
Process in Section 31.4.11 of Attachment Y and in the Public Policy Development Agreement
as: (i) the date by which the Public Policy Transmission Need must be satisfied as prescribed by
the NYPSC in its order identifying the need or in a subsequent order, or (ii) if the NYPSC has
not prescribed a date, the date proposed by the Developer and reviewed and accepted by the
NYISO. This date may be either the In-Service Date specified by the Developer in the project
information it submitted under Attachment Y of the OATT for use by the NYISO in its selection
of the Transmission Project, or such other date accepted by the NYISO as reasonable in light of
the Public Policy Transmission Need.
Given that a Public Policy Transmission Need may not raise the same reliability concerns
as a Reliability Need identified in the reliability planning process, the NYISO proposes to
provide additional flexibility in the Public Policy Development Agreement that will enable the
parties to amend the Required Project In-Service Date under certain circumstances as set forth in
an Article 3.4 of the agreement that is not provided for in the Reliability Development
Agreement.
Pursuant to Article 3.4, the NYISO must consent to any change to the Required Project
In-Service Date. To request a change, the Developer must inform the NYISO of its proposed
168 See OATT Section 31.4.2.1, as further clarified in the February 2016 Filing (“The NYPSC’s statement may also provide: (i) additional criteria for the evaluation of transmission solutions and nontransmission projects, (ii) the required timeframe, if any, for completion of the proposed solution, and (iii) the type of analyses that it will request from the ISO.”).
Honorable Kimberly D. Bose March 22, 2016
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change and the reasons for the change, must submit a revised Development Schedule that
provides for the project to be in-service by the modified Required Project In-Service Date, and
demonstrate that the Developer has made reasonable progress against its project milestones and is capable of completing the project in accordance with the modified schedule. The agreement
states that the NYISO will not unreasonably withhold, condition, or delay its consent to change the date if the Developer demonstrates to the NYISO’s satisfaction that the modified date is
reasonable in light of the Public Policy Transmission Need, the Developer has made reasonable progress against its project milestones, and the modified date will not result in a significant
adverse impact to the reliability of the New York State Transmission System. If the Required
Project In-Service Date is the date prescribed by the NYPSC in its order identifying the Public
Policy Transmission Need or in a subsequent order, the Developer must also demonstrate that the NYPSC has issued an order modifying its prescribed date.
C. Other Differences in the Public Policy Development Agreement
The NYISO has included in Article 3.5 of the Public Policy Development Agreement that the NYISO will, before consenting to a modification to a Transmission Project, review whether
the modification will result in a significant adverse impact to the reliability of the New York
State Transmission System.169 This could occur, for example, when the proposed solution to a
Public Policy Transmission Need has impacts on system reliability, or where the NYISO has
included the project in the base case illustrating a reliable system pursuant to which it makes
future planning determinations.
In addition, the NYISO has not included in the Public Policy Development Agreement
references to the ISO/TO Reliability Agreement as that agreement concerns projects that must be proposed to address a Reliability Need and is not applicable to the Public Policy Process.
Finally, the NYISO has not included in the Public Policy Development Agreement
references to the NYISO’s ability to terminate an agreement based on the triggering and halting provisions that are specific to the reliability planning process.
D. Addressing Developer’s Inability to Complete Project
The NYISO proposes to revise Section 31.4.12.3 of Attachment Y, along with Articles
8.1 and 8.3 of the Public Policy Development Agreement, to be generally consistent with the
related requirements in the reliability planning process in Section 31.2.10 to address the actions
the NYISO can take when a Developer does not or cannot timely complete a Transmission
Project.170 As revised, the NYISO can take one or more of the following actions when a
169 In the Reliability Development Agreement, the NYISO evaluates the impact of a proposed project modification on reliability when it determines that the modification “does not impair the
Transmission Project’s ability to satisfy the identified Reliability Need.” See Reliability Development Agreement Article 3.4.
170 The NYISO revised Section 31.2.10.1.1 to clarify the timing pursuant to which it will terminate the agreement and file a notice of termination with the Commission.
Honorable Kimberly D. Bose March 22, 2016
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Developer does not enter into a Public Policy Development Agreement or the NYISO determines
that the agreement may be terminated or terminates the agreement: (i) address the need in a
subsequent planning cycle; (ii) direct the Developer to continue development of project beyond
the Required Project In-Service Date; (iii) solicit bids from qualified Developers to complete
selected project; (iv) submit a report to the NYPSC and/or Commission for determination of
whether action is appropriate under state or federal law; or (v) take such other action as the
NYISO reasonably considers is appropriate to address the Public Policy Transmission Need.171
The NYISO proposes a competitive bidding process from qualified Developers to step-in
to complete a selected Public Policy Transmission Project. The NYISO’s proposal reflects
feedback in its stakeholder process that if the NYISO requests that another party step-in to
complete a selected Public Policy Transmission Project, the NYISO should not simply default to
an existing Transmission Owner if there are other qualified Developers available to complete the
project. Given that the project is already underway, there is no need to start a new project
solicitation process, but instead only a process to select a qualified Developer to complete that
project. Thus, the NYISO proposes to use a modified version of its Public Policy Process
selection process as described in new Section 31.4.12.3.1.4 of Attachment Y.172
Specifically, the NYISO will solicit bids from all Developers that are qualified at the time of the NYISO’s solicitation. The solicitation will indicate which components of the existing
project information requirements must be submitted with the Developer’s submission and which subset of the existing selection metrics will be used by the NYISO to make its selection. The
specific project information and selection metrics drawn from the existing tariff requirements
will depend on the particular circumstances of the project and what work is required at that stage to complete the project on time.173 The NYISO will make its selection using the existing
processes described in Sections 31.4.8 and 31.4.11 of the OATT, including issuing an updated
Public Policy Transmission Planning Report.
Developers will be responsible for the NYISO’s actual costs in conducting its evaluation
in the same manner as in the normal Public Policy Process. The newly selected Developer will
be required to enter into a Public Policy Development Agreement. The newly selected
Developer and the initial Developer are required to work cooperatively to implement the
171 Proposed OATT Sections 31.4.12.3.1.1, 31.4.12.3.1.3.
172 In its reliability planning process, the NYISO can request that the Responsible Transmission Owner step-in to complete a selected project. For the Public Policy Process, there is no Responsible Transmission Owner, and the NYISO is proposing a process that allows all qualified Developers to
propose bids to complete a selected project. The Commission has accepted this type of distinction
between addressing failing reliability and public projects for the California Independent System Operator (“CAISO”). See CAISO Tariff at Section 24.6.4.
173 If the NYISO elects to request bids from qualified Developers, the NYISO will not be
requesting that Developers propose new projects and will not be reevaluating its previous selection of the Public Policy Transmission Project in this process. Rather, the NYISO will only request that interested Developers submit the project information required by the NYISO to select a Developer to complete the previously selected project.
Honorable Kimberly D. Bose March 22, 2016
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transition, including negotiating in good faith with each other to transfer the project. The project
transfer requirements and limitations are consistent with the related requirements in Section
31.2.10.1.4 of Attachment Y for the transfer of transmission projects in the reliability planning
process.
E. Other Revisions to Section 31.4 of Attachment Y
The NYISO also proposes the following revisions to Section 31.4 of the OATT to
conform the tariff requirements for the Public Policy Development Agreement with the related requirements for the Reliability Development Agreement, as those requirements have been further modified to address the directives of the December Order:
• Revised 31.4.12.2 of Attachment Y to establish that the NYISO and the Developer of the
selected Public Policy Transmission Project will develop the milestones necessary to
construct the project by the required in-service date. Any milestones that require action
by a Connecting Transmission Owner or Affected System Operator will be included as
Advisory Milestones.
• Revised Section 31.4.12.2 to provide that either the NYISO or the Developer may
provide for the Public Policy Development Agreement to be filed unexecuted with the Commission.
• Revised Section 31.4.12.2 to set forth that the Connecting Transmission Owner(s) and
Affected System Operator(s) associated with selected Public Policy Transmission Project will act in good faith in timely performing their obligations that are required for the
Developer to satisfy its obligations under the Public Policy Development Agreement.
This is consistent with the similar requirement in the reliability planning process in
OATT Section 31.2.8.1.7.
• Revised Section 31.4.12.3.1.1 to clarify the timing pursuant to which the NYISO will
terminate the agreement and file a notice of termination with the Commission.
VII.OPERATING AGREEMENT
A.Background
The NYISO and the incumbent New York Transmission Owners executed the Agreement
Between New York Independent System Operator and Transmission Owners (“ISO/TO
Agreement”) in 1999.174 The ISO/TO Agreement was developed as part of the creation of a new
independent system operator for New York and the terms of the agreement were negotiated in
the context of those particular circumstances. The ISO/TO Agreement serves several functions,
which include accommodating the transfer of responsibilities of the predecessor New York
Power Pool to the NYISO as the independent system operator for the New York Control Area,
establishing the terms by which the NYISO operates and receives notifications regarding certain
174 See Cent. Hudson Gas & Elec. Corp., et al., 88 FERC ¶ 61,138 at p 5 (1999).
Honorable Kimberly D. Bose March 22, 2016
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transmission facilities owned by the New York Transmission Owners, and providing for the New York Transmission Owners to recover the costs of their transmission facilities.
Order No. 1000-A required the transmission providers in each transmission planning
region to have a clear enrollment process that defines how new transmission-owning entities
become part of the transmission planning region.175 In response to this directive, the NYISO
included the following enrollment requirements in Section 31.1.7 of Attachment Y of the OATT:
An owner of transmission in New York State may become a Transmission Owner by: (i) satisfying the definition of a Transmission Owner in Article 1 of the ISO Agreement and (ii) executing the ISO/TO Agreement or an agreement with the ISO under terms comparable to the ISO/TO Agreement and turning over
operational control of its transmission facilities to the ISO.176
The NYISO provided for the use of a comparable operating agreement for new entrants because the terms of the ISO/TO Agreement address issues beyond terms relevant to an
operating agreement. Specifically, the ISO/TO Agreement contains provisions that were
relevant at NYISO start-up and address issues unique to the incumbent Transmission Owners that are not applicable to the operation of new transmission facilities.
In its May 2015 compliance filing in this proceeding, the NYISO informed the
Commission that it planned to work with its stakeholders to develop a comparable operating
agreement.177 In the December Order, the Commission directed the NYISO to submit the
comparable operating agreement with its further compliance filing.178 The Commission required the NYISO to demonstrate that the agreement is not unduly discriminatory or preferential and that it is comparable to the ISO/TO Agreement.179 The NYISO, therefore, submits for the
Commission’s acceptance a comparable pro forma operating agreement (“Operating
Agreement”) as described below.
B. Scope of the Pro Forma Operating Agreement
The Operating Agreement is largely consistent with the existing ISO/TO Agreement.
There would have been some advantages to starting completely anew in drafting an operating
agreement tailored to the present circumstances, rather than starting with the ISO/TO Agreement
executed in 1999. However, the NYISO has retained in the Operating Agreement the basic
175 See Order No. 1000-A, 139 FERC ¶ 61,132 at P 275.
176 Emphasis added. The Commission accepted the enrollment requirement in its July 2014 order in the NYISO’s Order No. 1000 regional proceeding. See New York Independent System Operator, Inc., 148 FERC ¶ 61,044 at P 38 (2014).
177 See New York Independent System Operator, Inc. and New York Transmission Owners, Compliance Filing, Docket Nos. ER13-102-007 at pp 11-12 (May 18, 2015).
178 December Order at P 20.
179 December Order at P 20.
Honorable Kimberly D. Bose March 22, 2016
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structure and much of the current language of the ISO/TO Agreement to ensure that the agreements are comparable.
The NYISO did not carry over all of the terms of the ISO/TO Agreement in creating the
Operating Agreement. There are reasonable, not unduly discriminatory or preferential grounds
for certain differences between the Operating Agreement and the ISO/TO Agreement. These
differences include: (i) removal of requirements concerning the transition from the New York
Power Pool to the NYISO that are no longer relevant or are relevant only to then-existing
Transmission Owners, (ii) exclusion or revision of provisions pertaining to the status of a newly
formed independent system operator, (iii) revisions to accommodate transmission owners that
may not have the same operational capabilities or local service provider responsibilities as the
existing New York Transmission Owners, and (iv) revisions to make the agreement a two-party,
rather than multi-party agreement. The specific differences between the agreements are
described below. A blackline version showing the differences between the ISO/TO Agreement
and the Operating Agreement is included as Attachment VI to this letter.
C.Non-Incumbent Transmission Owners
In the Operating Agreement, the new transmission owner that will execute the agreement
is referred to as a “non-incumbent transmission owner” or “NTO.” As described in Article 1.01,
capitalized terms used in the Operating Agreement that are not otherwise defined in the
agreement are used as defined in the Independent System Operator Agreement (“ISO
Agreement”).180 Rather than incorporating the definition of “Transmission Owner” from the
ISO Agreement,181 the NYISO has revised Article 1.01 of the Operating Agreement to clarify
that the NTO will be able to fully participate as a Transmission Owner for purposes of the
NYISO’s Tariffs and the Operating Agreement on a comparable basis with the existing
Transmission Owners. Similarly, the NYISO has modified the enrollment requirements in
Section 31.1.7.2 pursuant to which an owner of transmission may become a Transmission Owner
in the New York Control Area. As revised, an owner of transmission in New York State used to
provide Transmission Service under the NYISO’s tariffs must execute the ISO/TO Agreement or
an Operating Agreement to become a Transmission Owner for purposes of the NYISO Tariffs.
The NYISO has removed the requirement that the new entity must satisfy the definition of
Transmission Owner in the ISO Agreement, so that non-incumbent Developers are not restricted
from becoming Transmission Owners for purposes of the Operating Agreement and the NYISO
Tariffs. The NYISO has also removed the requirement that the new owner of transmission must
have turned over operational control of its transmission facilities to the NYISO to become a
Transmission Owner. The reason for that deletion is that the NYISO requires notification from
owners of A-2 list transmission facilities, and that certain transmission owners may be required
to enter into an Operating Agreement for the NYISO’s performance of certain coordination and
180 The ISO Agreement is available at:
http://www.nyiso.com/public/webdocs/markets_operations/documents/Legal_and_Regulatory/Agreement
s/NYISO/iso_agreement.pdf.
181 The definition of “Transmission Owner” in the ISO Agreement states that the entity “must own,
individually or jointly, at least 100 circuit miles of 115 kV or above in New York State and has become a signatory to the ISO/TO Agreement.”
Honorable Kimberly D. Bose March 22, 2016
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control area responsibilities with respect to Local Area Transmission Facilities even though the transmission owner will retain operational control of those facilities.182 The process by which the NYISO will enter into an Operating Agreement with a new transmission owner is described in Part VII.I below.
In the course of developing the Operating Agreement and reviewing it with stakeholders, the NYISO has determined that it must perform a further, detailed review of its tariffs to
determine how best to address differences between the attributes of the existing Transmission
Owners that operate distribution networks and serve end-use customers as Load Serving Entities and those of new Transmission Owners that may not perform these functions. New
Transmission Owners will have fundamentally the same rights and responsibilities as existing
Transmission Owners concerning the provision of transmission service. However, the NYISO
tariffs also include provisions applicable to “Transmission Owners” that are inapplicable to new Transmission Owners to the extent that they do not perform all of the functions performed by
existing Transmission Owners, such as, for example, serving end-use customers within a
franchise service territory. The NYISO has separately filed a motion requesting a partial
extension of 180 days to conduct a careful and systematic review of the use of the term
“Transmission Owners” in its tariffs, to allow for meaningful review with stakeholders, and to
prepare a further compliance filing to address this matter.183
D.NTO Responsibilities
Article 2.0 of the Operating Agreement establishes the NTO’s responsibilities under the agreement. The requirements are substantially similar to the requirements in the ISO/TO
Agreement with the following differences.
First, unlike the original Transmission Owners that executed the ISO/TO Agreement, it is uncertain whether future Transmission Owners will perform certain operational functions
described in Article 2.0, including maintaining and operating a control center. Consequently, the NYISO has also included a new Section 2.12 that specifically provides that the NTO may
arrange for a third party to perform its responsibilities, but remains ultimately responsible for
satisfying the requirements of the agreement. This third party could be the Transmission Owner with which the NTO’s facility will interconnect (the “Interconnecting Transmission Owner” or “ITO”) or another entity capable of performing the same operational functions for the NTO’s
facilities in coordination with the NYISO. Similarly, Section 2.10 of the Operating Agreement requires the NTO to determine, or arrange for its ITO to determine, the level of resources to be applied to restore facilities to service following a forced outage.
182 The NYISO has certain responsibilities concerning transmission facilities for which it does not have operational control, including “NTO Transmission Facilities Requiring ISO Notification” that will be listed in Appendix A-2 of the Operating Agreement, along with “Local Area Transmission System Facilities” that will be listed in Appendix A-3 of the Operating Agreement.
183 See New York Independent System Operator, Inc., Motion for Partial Extension of Time of the New York Independent System Operator, Inc., Docket No. ER13-102-007 (March 17, 2016).
Honorable Kimberly D. Bose March 22, 2016
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Second, the ISO/TO Agreement was developed prior to the advent of mandatory
reliability requirements pursuant to Section 215 of the Federal Power Act.184 The NYISO has indicated throughout Article 2.0 that the NTO must perform its operational requirements in
accordance with all applicable reliability requirements. In addition, the NYISO has included a new Section 2.09 that requires the NTO to register or enter into agreement with a NERC
registered entity for all required NERC functions applicable to the NTO. These functions may include, but are not limited to, “Transmission Owner,” “Transmission Planner,” and
“Transmission Operator” as those terms are defined by NERC. The NYISO has specified that it will register as the NERC Transmission Operator for all facilities under its Operational Control, referenced as the “A-1” list facilities in Operating Agreement.
Third, the existing Transmission Owners that executed the ISO/TO Agreement have
Transmission Districts - i.e., geographic areas in which they serve end-use customers. The
Operating Agreement reflects the fact that the NTOs may not be responsible for a Transmission
District or have obligations to maintain local reliability. The NYISO, for example, did not
include the language from Section 2.05 of the ISO/TO Agreement that concerns the role of the
existing Transmission Owners to operate as a backup control center for the NYISO and to
maintain the continued economic operation of the system, as an NTO without a Transmission
District is unlikely to play this role. Similarly, the NYISO revised the requirements in Section
2.06 to make clear that the NTO will need to coordinate with the Interconnection Transmission Owner regarding the commitment of additional resources required to ensure local reliability through the NYISO’s Supplemental Resource Evaluation process.
Additional differences proposed for Article 2.0 include:
• The facilities for which the NYISO will have operational control will be known as “NTO
Transmission Facilities Under ISO Operational Control” and included in Appendix 1 of the agreement. The facilities for which the NTO must provide notifications to the
NYISO will be known as “NTO Transmission Facilities Requiring ISO Notification” and included in Appendix 2 to the agreement. The NYISO will consolidate these lists of facilities with the related facilities listed under the ISO/TO Agreement, which are
maintained and regularly updated in the NYISO’s Operations Manual.
• The NYISO did not include the language from Section 2.02 of the ISO/TO Agreement
regarding development by the NYISO Operating Committee of certain emergency
operating requirements. These operating procedures have now been developed and are contained in the NYISO’s tariffs and manuals. Therefore, the resulting requirements are covered by the use of the term “ISO Procedures.”
• To the extent an NTO may have Local Area Transmission System Facilities, the NYISO
clarifies in Section 2.03 that it shall comply with requests to take action from the
Interconnecting Transmission Owners with which it is interconnected. Although it does
not operate Local Area Transmission Facilities, the NYISO will maintain a list of these
184 See 16 U.S.C. § 824o.
Honorable Kimberly D. Bose March 22, 2016
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facilities as they relate to other NYISO functions, such as system planning and
interconnection. That list will be located in Appendix A-3 of the Operating Agreement.
E.NYISO Responsibilities
Article 3.0 of the Operating Agreement establishes the NYISO’s responsibilities under the agreement. The requirements are substantially similar to the requirements in the ISO/TO Agreement with the following differences.
First, the NYISO has inserted a new Section 3.07 to describe the NYISO’s NERC
responsibilities for the same reasons described above in connection with the NTO’s obligations. Section 3.07 provides that the NYISO will register for certain NERC functions applicable to the NTO’s facilities if the facilities are NERC jurisdictional. The functions may include, but are not limited to, “Reliability Coordinator,” “Balancing Authority,” and “Planning Coordinator” as
defined by NERC. Following discussions with stakeholders, the NYISO has agreed that it will
register as the NERC Transmission Operator for all facilities under its Operational Control,
known as “A-1” list facilities.
Second, Section 3.07 of the ISO/TO Agreement establishes generic rules for the
NYISO’s evaluation of the impact of any proposed material modification to the NYS Power System. Since its formation, the NYISO has established requirements in its tariffs and
procedures to evaluate proposed modifications to the NYS Power System. The NYISO has amended the equivalent provision in Section 3.05 of the Operating Agreement to reflect the existence of these tariff requirements and procedures.185
Third, the NYISO clarified in Sections 3.03(b) of the Operating Agreement the NTO’s
ability to recover eligible costs under the NYISO Tariffs and rate schedules. Similarly, the
NYISO clarified in Section 3.08(a) of the Operating Agreement the NTO’s right to make a filing
with the Commission pursuant to Section 205 of the Federal Power Act to recover all of its
reasonably incurred costs, plus a reasonable return on investment, for the development,
construction, operation, and maintenance of its transmission facilities under the NYISO Tariffs
and rate schedules.
Fourth, the NYISO has not included in the Operating Agreement the following
requirements from the ISO/TO Agreement that are either no longer applicable or are specific to one of the incumbent Transmission Owners:
• Section 3.03 of the ISO/TO Agreement describes the requirements for amending the ISO
Agreement and the ISO Tariffs. This provision is not required in the Operating
Agreement as it does not impact the NTO’s or NYISO’s rights under the agreement or
provide the parties any additional rights to amend the ISO Agreement and ISO Tariffs.
Rather, the provision simply duplicates the requirements in Article 19 of the ISO
185 In addition, the NYISO will use the dispute resolution provisions in Article 11 of the Market Administration and Control Area Services Tariff to address any disputes concerning the impacts of
proposed modifications.
Honorable Kimberly D. Bose March 22, 2016
Page 50
Agreement applicable to all Market Participants pursuant to which the ISO Agreement and ISO Tariffs may be amended.
• Section 3.04 of the ISO/TO Agreement indicates that each Transmission Owner grants
the NYISO the responsibilities in Article 3 on condition that the NYISO meets certain
conditions. The NYISO has not adopted the following conditions from the ISO/TO
Agreement into the Operating Agreement because they have no application in a bilateral
agreement with a new Transmission Owner: (i) the cost recovery requirements in Section
304(b) that are specific to the New York Transmission Owners; (ii) the reference to
Existing Transmission Agreements in place at the commencement of NYISO operations
in Section 3.04(c); (iii) the protection against jeopardizing the status of the tax-exempt
bonds of Consolidated Edison, the Long Island Power Authority, and the New York
Power Authority in Section 3.04(d); and (iv) the restriction on wheeling to end users in
Section 3.04(h).
• Section 3.06 of the ISO/TO Agreement describes NYPA’s participation in the agreement as being premised on the recovery of its transmission revenue requirement under the NTAC mechanism and is not applicable to an NTO.
• Section 3.09 of the ISO/TO Agreement establishes the requirement for the NYISO’s
reimbursement to the Transmission Owners of the costs of the start-up of the NYISO, and the NYISO’s assumption of responsibilities from the New York Power Pool. These
actions have already been completed and are not applicable to an NTO.
•Section 3.12 of the ISO/TO Agreement establishes scheduling requirements specific to
the Long Island Power Authority.
F.Limitations of Liability and Indemnification Requirements
The NYISO proposes that the limitation of liability and indemnification provisions in
Article 5 of the Operating Agreement be reciprocal between the NYISO and the NTO.
Specifically, Section 5.01 of the Operating Agreement provides that neither Party will liable to
the other Party or any other party, except to the extent a Party is found liable for gross negligence
or intentional misconduct and is then liable only for direct damages. In addition, Section 5.02 of
the Operating Agreement provides additional limitations of liability to both Parties. Finally,
Section 5.03 of the Operating Agreement provides that each Party will at all times indemnify,
save harmless, and defend the other Party with the following exceptions: (i) the NTO will not
have indemnification obligation with respect to a loss that results from the NYISO’s gross
negligence or intentional misconduct, and (ii) the NYISO will only have an indemnification
obligation if the NTO’s loss results from the NYISO’s gross negligence or intentional
misconduct.
These proposed provisions represent a reasonable allocation of risk between the NYISO and the NTO. Further, the reciprocal nature of these provisions is consistent with the December Order. As described in Part V.E above, the NYISO is revising the Reliability Development Agreement as directed in the December Order to make the limitation of liability and
Honorable Kimberly D. Bose March 22, 2016
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indemnification provisions reciprocal. Similarly, as described in Part IV.H, the Transmission Project Interconnection Agreement that the NYISO proposed to enter into with a transmission developer is based on the Large Generator Interconnection Agreement in Attachment X of the ISO OATT, which includes reciprocal indemnity requirements.186
G.Term and Termination Requirements
The NYISO proposes in Section 6.01 of the Operating Agreement that the term of the
agreement will commence upon the execution of the agreement and the later of: (i) the date on
which the Commission, the NYPSC, and any other regulatory agency with jurisdiction accepts
the Operating Agreement without condition or material modification, and grants approvals
needed to place the NTO’s facilities in service, or (ii) such later date specified by the
Commission.
The NYISO proposes several modifications to the termination provisions in Article 6 of
the Operating Agreement. As the agreement is only a two-party agreement, a party may
terminate, rather than withdraw from, the agreement. The NTO’s ability to terminate the
agreement is subject to its obtaining all regulatory approvals for such termination and having on
file with the Commission its own open access transmission tariff.187 The NYISO further
specifies in Section 6.03(c) that if an NTO terminates the agreement and withdraws from the
NYISO’s tariffs and agreements, the NTO shall remain responsible for the operation,
maintenance, and modification of its transmission facilities in accordance with its own open
access transmission tariff, all reliability rules, and all other requirements applicable to
transmission facilities in the New York Control Area. These requirements are important to
ensure that the withdrawal of an entity’s facilities from the NYISO’s operational control will not
endanger system reliability in New York. Finally, the NYISO did not adopt the provision in
Section 6.01 of the ISO/TO Agreement that permitted the Transmission Owners to unanimously
agree to terminate the NYISO and file a proposed alternative plan with the Commission and
NYPSC. That provision has no application in the present context. If an NTO were to terminate
its Operating Agreement and withdraw its facilities from NYISO operational control, the NYISO
would continue operations with respect to other Transmission Owners.
H. Other Differences Between ISO/TO Agreement and Operating Agreement
The NYISO also proposes the following requirements in the Operating Agreement that are different from the terms of the ISO/TO Agreement:
• Section 4.01 of the Operating Agreement has been made reciprocal to provide that either
the NYISO or the NTO may assign the agreement to another entity that agrees to be
bound by the terms of this agreement.
186 See NYISO Standard Large Generator Interconnection Agreement, Section 18.1. 187 Operating Agreement Sections 6.01 and 6.02.
Honorable Kimberly D. Bose March 22, 2016
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• Section 5.05 of the Operating Agreement provides, consistent with Section 5.05 of the
ISO/TO Agreement, that each Party must have insurance coverage “as is reasonably
necessary to meet its obligations under this Agreement.” The NYISO has not included further language from Section 5.05 of the ISO/TO Agreement because it is duplicative of the clear requirement that each party have sufficient insurance to meet its obligations
under the agreement.
• Section 6.05 of the Operating Agreement was expanded to more clearly describe the
treatment of confidential information and the parties’ obligations regarding the disclosure of such information in the event of judicial or regulatory proceedings.
• Section 6.09 of the Operating Agreement, concerning contract supremacy, provides that
in the event of a conflict between the agreement and the Independent System Operator
Agreement (“ISO Agreement”), the Operating Agreement terms will prevail. The
ISO/TO Agreement separately provides that its terms are also superior to the NYISO
Tariffs and the Agreement Between the New York Independent System Operator and the
New York State Reliability Council. It was necessary at the time of the NYISO’s
formation that the terms of the ISO/TO Agreement be superior to the other NYISO
Tariffs and agreements because, aside from its operations function, the agreement was the
key agreement for the transition from the New York Power Pool to the NYISO. The
Operating Agreement does not serve this function. The NYISO, however, has retained
the supremacy clause in relation to the ISO Agreement to resolve potential conflicting
terms between the Operating Agreement and the ISO Agreement.
•Section 6.10 has been revised to make the additional remedies provisions reciprocal
between the NYISO and the NTO.
• The NYISO did not adopt Section 6.15 of the ISO/TO Agreement into the Operating
Agreement as that provision concerns cost shifting resulting from an early NYISOrelated proceeding at the Commission that is not applicable to an NTO.
I. Requirements for Entering Into an Operating Agreement
The NYISO proposes to insert in new Section 31.1.7.3 of Attachment Y of the OATT
process requirements for entering into an Operating Agreement.188 Pursuant to these
requirements, a transmission owner that is not a party to the ISO/TO Agreement or an Operating
Agreement and will own transmission facilities in the New York Control Area over which
Transmission Service will be provided under the ISO tariffs will be required to enter into an
Operating Agreement prior to energizing its transmission facilities. If the transmission facilities
were selected in the NYISO’s regional planning process, the NYISO will tender the draft
Operating Agreement as soon as practicable following its selection of facilities. If the
transmission facilities were not selected in the NYISO’s regional planning process, the
transmission owner will request that the NYISO tender the draft Operating Agreement as soon as
188 The NYISO has made conforming changes to OATT Section 31.4.12.4.
Honorable Kimberly D. Bose March 22, 2016
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practicable after receiving its Article VII certification or other applicable siting permits or authorizations under New York State law.
The process described in Section 31.1.7.3 by which the NYISO and the transmission
owner will negotiate and file the agreement, including the filing requirements for non-
conforming or unexecuted agreements, are consistent with the requirements by which the
NYISO and a developer enters into the Reliability Development Agreement, Public Policy
Development Agreement, and Standard Large Generator Interconnection Agreement.189
VIII.EFFECTIVE DATE
The NYISO respectfully requests that the Commission accept the tariff revisions and
standard agreements proposed in this compliance filing with an April 1, 2016 effective date. The
NYISO is in the middle of administering its initial Public Policy Process for the 2014-15
planning cycle to evaluate solutions for two separate Public Policy Transmission Needs
identified by the NYPSC.190 In addition, the NYISO is in the first stage of its reliability planning
process for the 2016-17 planning cycle evaluating whether there are any Reliability Needs that
must be addressed in this cycle. The Commission’s acceptance of an April 1, 2016 effective date
will provide Market Participants and other interested entities with clarity regarding which
requirements are applicable and will be implemented by the NYISO in these ongoing planning
processes.
This clarity is particularly important with regards to which interconnection requirements
will be applicable to Developers that have submitted or are submitting solutions in response to
the Public Policy Transmission Needs identified in the Public Policy Process or in response to
any Reliability Need that may be determined in the reliability planning process later this year.
The NYISO intends to apply the new Transmission Interconnection Procedures, including the
related transition rules from the existing transmission expansion and interconnection
requirements, beginning on April 1, 2016. Market Participants and interested parties will not be prejudiced by the April 1, 2016 effective date, but could be harmed if the NYISO continues to apply requirements that the Commission has determined are unjust and unreasonable to certain competitive transmission Developers.
IX.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.
189 See OATT Sections 30.11, 31.2.8.1.6, 31.2.8.1.7, 31.4.12.2. 190 See Footnote No. 126.
Honorable Kimberly D. Bose March 22, 2016
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X.CONCLUSION
WHEREFORE, the New York Independent System Operator, Inc. respectfully requests
that the Commission accept this compliance filing without requiring any modifications and
determine that the NYISO has complied with the regional planning requirements of Order No.
1000.
Respectfully submitted,
NEW YORK INDEPENDENT SYSTEM OPERATOR, INC. By: /s/ Carl F. Patka
Robert E. Fernandez, General Counsel
Ray Stalter, Director of Regulatory Affairs
Karen G. Gach, Deputy General Counsel
Carl F. Patka, Assistant General Counsel
Sara B. Keegan, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Email: rfernandez@nyiso.com
Email: rstalter@nyiso.com
Email: kgach@nyiso.com
Email: cpatka@nyiso.com
Email: skeegan@nyiso.com
Ted J. Murphy
Hunton & Williams LLP
2200 Pennsylvania Ave, NW
Washington, DC 20037
Email: tmurphy@hunton.com
Michael J. Messonnier Jr.
Hunton & Williams LLP
951 East Byrd Street
Richmond, VA 23219
Email: mmessonnier@hunton.com
cc:Michael BardeeJ. Arnold Quinn
Anna CochraneDouglas Roe
Kurt LongoKathleen Schnorf
Max MinznerJamie Simler
Daniel NowakGary Will
Larry Parkinson
