UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

)

New York Independent System Operator, Inc. )Docket No. ER16-120-00_

)

REQUEST FOR REHEARING AND CLARIFICATION OF

THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.

Pursuant to Section 313(a) of the Federal Power Act1 and Rules 713 and 2007 of the

Commission’s Rules of Practice and Procedure,2 the New York Independent System Operator,
Inc. (“NYISO”) requests rehearing of the Commission’s April 21, 2016, Order on Compliance
and Rehearing in the above-captioned proceeding (“April 2016 Order”).3 The April 2016 Order
conditionally accepted portions of the NYISO’s October 19, 2015 compliance filing
(“Compliance Filing”), rejected others, and directed the NYISO to submit a further compliance
filing.

As discussed below, the NYISO respectfully requests rehearing of the April 2016 Order’s
determinations that: (i) the NYISO must require all RMR Generators4 to offer into capacity
auctions as price-takers (in the alternative, the NYISO requests clarification on this issue); and
(ii) require the NYISO to implement an additional claw-back refund mechanism. In addition, the
NYISO seeks clarification to confirm the reasonableness of its plan for addressing any Generator
Deactivation Notices that it may receive prior to its submission of a further compliance filing.

1 16 U.S.C. § 8251(a).

2 18 C.F.R. § 385.713.

3 New York Independent System Operator, Inc., Order on Compliance and Rehearing, 155 FERC ¶ 61,076 (2016) (“April 2016 Order”).

4 Capitalized terms that are not otherwise defined herein have the meaning specified in the

NYISO’s Market Administration and Control Area Services Tariff and Open Access Transmission Tariff or in the Compliance Filing.

Robert E. Fernandez, General Counsel
*Raymond Stalter, Director of Regulatory Affairs *Alex M. Schnell, Assistant General Counsel/

Registered Corporate Counsel

New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, N.Y. 12144 Tel: (518) 356-6000

Fax: (518) 356-4702 rfernandez@nyiso.com rstalter@nyiso.com

aschnell@nyiso.com

* -- Persons designated for service.

*Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, D.C. 20037
Tel: (202) 955-1500

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

*Michael J. Messonnier5
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

II. SPECIFICATION OF ERRORS/STATEMENT OF ISSUES

In accordance with Rule 713(c),6 the NYISO submits the following specifications of error and statement of the issues on which it seeks rehearing of the April 2016 Order:

 The April 2016 Order’s directive that all RMR Generators offers as “price-takers” does
not constitute reasoned decision-making7 for instances in which an RMR Agreement
addresses a resource adequacy need because it would mute price signals, would not be
more efficient, and could compound the Commission’s concerns about ratepayers
“paying twice.”

5 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, D.C.

6 18 C.F.R. § 385.713(c).

7 See, e.g., Motor Vehicle Mfr. Ass 'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 at 43 (1983);
National Fuel Gas Supply Corp. v. FERC, 468 F.3d 831 at 839 (D.C. Cir. 2006); NorAM Gas
Transmission Co. v. FERC, 148 F.3d 1158, 1165 (D.C. Cir. 1998); citing K N Energy, Inc. v. FERC,
968 F.2d 1295, 1303 (D.C. Cir. 1992); West Deptford Energy, LLC v. FERC, 766 F.3d 10, 12 (D.C. Cir.
2014).

 The April 2016 Order’s directive that the NYISO adopt additional “claw-back” anti-

toggling provisions does not constitute reasoned decision-making8 because such

provisions are unnecessary given protections that already exist in the NYISO’s RMR

rules and because the Commission’s claw-back formula can be overly punitive and could be inconsistent with the voluntary character of the NYISO’s RMR arrangements.

III.BACKGROUND

On February 19, 2015, the Commission directed the NYISO to make a compliance filing
to establish RMR tariff provisions and a pro forma RMR agreement (“February 2015 Order”).9
The NYISO submitted its Compliance Filing on October 19, 2015. The April 2016 Order
conditionally accepted portions of the Compliance Filing. Those portions were made effective
on October 20, 2015. The April 2016 Order rejected other components of the NYISO’s
Compliance Filing proposal. The NYISO is separately making a further compliance filing to
implement these directives.10

This filing seeks rehearing of one of the April 2016 Order’s determinations, and

rehearing or in the alternative, clarification, of another. It also seeks clarification to confirm the reasonableness of the NYISO’s plan for processing any Generator Deactivation Notices that may be received prior to its submission of the further compliance filing, in light of the October 20, 2015 effective date of the tariff provisions that were accepted by the April 16 Order.

8 Id.

9 New York Indep. Sys. Operator, Inc., 150 FERC ¶ 61,116 (2015) (“Initial RMR Order”).

10 The NYISO has requested an additional ninety days to develop and submit its further

compliance filing. See Motion for Extension of Compliance Filing Deadline and Request for Expedited Commission Action of the New York Independent System Operator, Inc., Docket No. ER16-120-000
(May 19, 2016).

IV.REQUEST FOR REHEARING

A.The Commission Should Grant Rehearing of the April 2016 Order’s

Determination that RMR Generators Needed to Address a Resource

Adequacy Need Must Offer as Price-Takers into the Capacity Auctions, or, in the Alternative, Should Clarify that the NYISO May File a Revised Offer Price Rule that Provides Additional Ratepayer Protections

The Compliance Filing generally proposed to require RMR Generators to offer all of

their UCAP into the capacity auctions as “price-takers,” i.e., at $0.00/kW month. It also

proposed three exceptions to that general rule. The first two would have been if: (i) the NYISO’s
determination of the need to enter into an RMR Agreement was based on a resource adequacy
need; or (ii) the RMR Generator was not the least-cost solution to an identified Reliability Need.
In those two instances, the RMR UCAP Offer Floor Price would be equal to the RMR
Generator’s RMR Avoidable Costs net of likely projected annual energy and ancillary services
revenues, seasonally adjusted. In addition, the Compliance Filing proposed an exemption if an
RMR Generator was subject to Offer Floor mitigation11 prior to seeking to deactivate. In that
instance, its UCAP would have been offered into the auctions at the higher of its Offer Floor or
its RMR UCAP Offer Price.

The April 2016 Order rejected all of the NYISO’s proposals “to impose a capacity offer price on RMR generators higher than $0.00/kW-month ”12 It stated that it would be “more

efficient” for RMR Generators to offer as price-takers.13 It also expressed concern that the

NYISO’s proposal could result in ratepayers “paying twice.”14 That is, if the NYISO were to

impose “a higher than $0.00/kW-month offer price on an RMR generator and the generator does

11 Offer Floor mitigation is mitigation pursuant to the buyer-side capacity market mitigation measures set forth in Section 23.4.5.6.7, et seq.

12 April 2016 Order at P 82.

13 Id.

14 Id.

not clear in the ICAP spot market auction, another generator that otherwise would not have cleared will clear instead.”15 The Commission was concerned that ratepayers would “pay twice—once for the cost of the RMR agreement, and again for the generator that otherwise would not have cleared the market.”16

The April 2016 Order also pointed to the Commission’s February 2015 Order in Indep.
Power Producers of New York, Inc. v. New York Indep. Sys. Operator, Inc. (“IPPNY”),17 to
support the proposition that it would be unreasonable to subject any generator with an RMR-like
arrangement to mitigation measures that would prevent it from clearing in an auction.18 IPPNY
rejected a complaint that had called for the NYISO to adopt new capacity market power
mitigation measures to prevent what the complainants had asserted was the “uneconomic
retention” of existing generation. The Commission denied the complaint. The Commission also
indicated that it was efficient for units retained under “Reliability Support Services Agreements,”
a form of RMR agreement, to clear in the auction, and that any mitigation imposed on such units
which would prevent them from clearing would be unreasonable.19 The April 2016 Order
reiterated that it would be unreasonable to mitigate offers by RMR generators that “are needed to
fulfill a reliability need that market forces have not fulfilled.”20 It concluded that “[i]mposing a
minimum offer price” on such Generators “would allow for inefficient outcomes and is thus
unreasonable.”21

15 Id.

16 Id.

17 150 FERC ¶61,215 (2015).

18 April 2016 Order at P 83.

19 April 2016 Order at P 83, citing IPPNY at P 66.

20 April 2016 Order at P 83.

21 Id.

The NYISO agrees that there are circumstances in which RMR Generators should offer
as price-takers. But the NYISO respectfully seeks rehearing of the April 2016 Order’s
determination with respect to RMR Agreements that address a resource adequacy need 22
because: (i) it is concerned that doing so would mute the corresponding price signal and, as a
result, inhibit the potential for market response; (ii) it would not be more efficient for RMR
Generators to offer as price-takers in these limited circumstances; and (iii) it appears that the
Commission’s concern for the possibility that subjecting such RMR Agreements to potential
Offer Price mitigation could result in ratepayers “paying twice” did not fully consider all of the
consequences for ratepayers of $0.00 offers. The Compliance Filing’s proposal to base the RMR
Offer Price for such RMR Generators on identified costs, and to allow them to fail to clear in the
auction, is reasonable because it permits the market to produce efficient price signals.
Prescribing a $0.00 Offer Price for RMR Agreements to address resource adequacy needs would
interfere with those signals and distort decisions to invest in new or existing generation. This
requirement would be problematic because the NYISO depends on those same market forces,
acting through the capacity market, as its primary means of procuring and retaining sufficient
capacity to meet its resource adequacy requirements. As a result, under the April 2016 Order the
NYISO may be required to seek a permanent solution to the reliability need without the use of its
primary tool.

In general, the NYISO agrees that when an RMR Agreement is not for a resource

adequacy need it is appropriate and efficient for the RMR Generator to participate in the capacity
market as a price-taker. In these circumstances, the RMR Generator is receiving non-market

22 The NYISO is not seeking rehearing with respect to the other two exceptions to the price-taker
rule that it proposed in the Compliance Filing because requiring price-taker offers in those instances is not
as problematic as requiring such offers from resources that are needed to address resource adequacy.

compensation for a reliability service. As such, the RMR Generator’s costs for providing

capacity in addition to that service are de-minimus. In addition, sending a price signal through the capacity market is not likely to assist in resolving such a need because a resource responding to that price signal would not help to resolve it, except by coincidence.

However, when an RMR Agreement addresses a resource adequacy need, requiring the
RMR Generator to offer at a de-minimus amount, and thereby inhibiting the potential for the
market to respond would not be more efficient. Indeed, the April 2016 Order’s “price-taker”
directive is at odds with the Commission’s mandate that RMR Agreements be “limited, last-
resort measures,” because inhibiting the potential market response would likely extend the length
of such RMR Agreements. It could even perpetuate RMR Agreements if the absence of the
correct price signals prevents market-based solutions from entering entirely or causes other
generators to exit the market. Furthermore, given the “lumpy” nature of the capacity market due
to exits and entry, it is not difficult to envision a scenario where an RMR Agreement retains a
sufficiently large generator such that the price impact of its participation in the capacity market
as a price-taker suppresses capacity prices to a level insufficient to support new entry.
These circumstances are especially problematic for RMR Agreements needed to address resource adequacy needs where non-generation solutions addressing the need may be limited in number or unavailable. In the scenario where there are no viable and sufficient solutions
identified to resolve the resource adequacy need, and the lack of an appropriate price signal has
impeded the market’s ability to respond, the options available to the NYISO as a permanent
solution would be limited. As a result, the NYISO might be forced to choose between an
unnecessarily long duration RMR Agreement, or the construction of a regulated backstop
generator as a replacement. It is clear that neither of these options would be an economically

efficient outcome and that both would cause significant and long-term disruptions in the markets. As a result, requiring that an RMR Generator must be a price-taker even if the RMR Agreement is to fulfill a resource adequacy need disregards that customers would pay for a longer duration, and perhaps pay more money in the aggregate, than if the rules were designed to allow the
market to resolve such a need.

Granting rehearing would be consistent with the Commission’s holding in IPPNY

because it would promote efficient market price signals and avoid “inefficient outcomes.” The
Compliance Filing’s proposal to require RMR Generators to offer at an RMR Offer Price if their RMR Agreement is based on a resource adequacy need is consistent with efficient price
formation. It addresses the specific case in which requiring price-taker offers would permit an
RMR Agreement to cause an artificially low clearing price. This specific case was not discussed in IPPNY. Thus, nothing in IPPNY prevents the Commission from accepting the Compliance
Filing’s Offer Price proposal to address the limited circumstance of an RMR Agreement that
addresses a resource adequacy need.

Accordingly, the Commission should rule on rehearing that an RMR Generator that is

selected to address a resource adequacy need should not be required to offer its UCAP as a price-
taker. As the Compliance Filing explained,23 requiring such Generators to offer at the level of
their RMR Avoidable Costs would send a price signal for efficient investment in both new and
existing capacity resources and could reduce the need for, and duration of, RMR Agreements.

The Commission’s concern that subjecting RMR Generators that address a resource

adequacy need to an Offer Price requirement could result in ratepayers “paying twice” does not
appear to have considered the ratepayer consequences of the Commission’s mandated $0.00

23 See Compliance Filing at 47-48.

Offer Price. The April 2016 Order illustrates the Commission’s concern by posing the following hypothetical: “If NYISO imposes a higher than $0.00/kW-month offer price on an RMR
generator and the generator does not clear in the ICAP spot market auction, another generator
that otherwise would not have cleared will clear instead. In this instance, ratepayers will pay
twice—once for the cost of the RMR agreement, and again for the generator that otherwise
would not have cleared the market.”24 The Commission’s exclusive focus on this unlikely
scenario is unreasonable because it ignores the consequences of the Commission’s directive in
spite of to the Commission’s intent.

Specifically, the Commission’s scenario implicitly relies on an assumption that there is
another generator participating in the capacity market at cost based offers, i.e., not bidding as a
price-taker, that this other generator’s offers are lower than the RMR Generator’s going-forward
cost-based Offer Price, and that the hypothetical generator would not clear in the market if the
RMR Generator participates as a price-taker. However, assuming the other generator is
behaving in a rational and competitive manner, its going-forward costs would have to be lower
than the RMR Generator’s. In addition, because the other generator would not clear its offers
when the RMR Generator’s offers clear, it likely would have mothballed, or have noticed its
intent to mothball or retire, at the time of the RMR Generator’s retirement notice.25 This means
that in a resource adequacy scenario it would have been eligible for an RMR Agreement and the
NYISO, in all likelihood, would have selected it for RMR service instead of the RMR Generator.

24 April 2016 Order at P 82

25 In the NYISO’s experience, generators do not continue to offer their going-forward costs into
the NYISO’s capacity market if they do not clear. Instead, they either take steps to mothball or retire, or
continue to operate but offer at a de-minimus amount in order to secure what payments they can.

Although there are limited circumstances in which a scenario similar to the

Commission’s example could occur,26 it is unlikely to occur, especially given the rules proposed in the Compliance Filing. However, it is true that if an RMR Generator’s Offer Price is set at its going forward costs and it does not clear, consumers will pay a higher price for the capacity that is procured in the auction. To address the potential for this event, it is the NYISO’s expectation that the rules could be designed to protect ratepayers from having to “pay twice,” or from having to pay more than they otherwise would have, while retaining the ability of the markets to aid in the resolution of a resource adequacy need.

Thus, if the Commission continues to believe that the Compliance Filing’s original

proposal with respect to RMR Generators retained to address a resource adequacy need creates
too great a risk of ratepayers having to “pay twice,” or having to pay a higher price for capacity
than they would otherwise, the NYISO seeks clarification. The intent of the April 2016 Order
appears to have been to protect ratepayers from overpaying while avoiding “inefficient
outcomes.” In order to better accomplish that intent the Commission should clarify that the
NYISO may propose revised offer floor rules in its further compliance filing that would provide
additional ratepayer protections while avoiding the price formation problems that are associated
with requiring price-taker offers from an RMR Generator that addresses a resource adequacy
need.

26 Examples of this scenario are if the cheaper generator does not accept an RMR Agreement, or if it is not large enough to resolve the need and there are no other eligible generators with which it can be combined to form a viable and sufficient solution. Also, if the generator is too small to resolve the
resource adequacy need, then it must necessarily be smaller than the RMR Generator and, as a result, ratepayers would be paying somewhat less than twice.

B.The Commission Should Grant Rehearing of the April 2016 Order’s

Determinations Related to Toggling

Paragraphs 122-125 of the April 2016 Order rejected, in part, the Compliance Filing’s
proposed rules to disincentivize toggling between cost-based and market-based compensation.
The Commission was concerned that the NYISO’s proposed claw-back provision did not
adequately prevent a Generator from noticing an intent to deactivate in order to temporarily
obtain cost-based compensation that exceeds the Generator’s expected market compensation.
For the reasons explained below, protections that are already included in the NYISO’s RMR rules render the additional claw-back measure the Commission instructed the NYISO to include in its tariffs unnecessary. However, if the Commission concludes an additional claw-
back refund is necessary to prevent misuse of the RMR process, the claw-back formula the
Commission instructed the NYISO to implement can be overly punitive and its application is
inconsistent with the NYISO’s decision to implement RMR on a voluntary basis in New York.
The NYISO is concerned that the more stringent claw-back formula that it was instructed to
implement by P 126 of the Order could discourage Generators that are in a Mothball Outage or
an ICAP Ineligible Forced Outage (“IIFO”), or that have noticed their intent to enter a Mothball
Outage, that are not exercising market power, and that reasonably expect to return to the NYISO-
administered markets, from voluntarily providing RMR service when the NYISO asks them to
do so.

1.The NYISO’s Proposed Tariff Rules Already Include Measures to

Prevent Misuse of the RMR Process

Paragraph 123 of the Order describes a hypothetical situation in which the owner of a
Generator whose “market revenues equal or exceed its going-forward costs” expects or knows
that its Generator will be needed for reliability, and submits a Generator Deactivation Notice

with the intent of obtaining compensation that exceeds the Generator’s expected market

compensation. The NYISO’s rules already address the Commission’s concern. Under the

NYISO’s proposed RMR rules, when a Generator Deactivation Notice is submitted the NYISO
calculates an Availability and Performance Rate (“APR”) that is based on the deactivating
Generator’s going forward costs.27 The Compliance Filing described the components and
calculation of the APR in detail28 and the April 2016 Order accepted the proposed APR
calculation.29 A Generator that expects to receive market revenues that equal or exceed its APR,
but that wants to use the RMR process to obtain greater revenues, would not be expected to
accept the APR.30 Instead, the owner of such a Generator would be expected to file a proposed
Owner Developed Rate with the Commission for its consideration under Section 205 of the
Federal Power Act.

The independent Market Monitoring Unit, Potomac Economics, (“MMU”) is responsible
for participating in Owner Developed Rate proceedings before the Commission to ensure that the
resulting rate is just and reasonable.31 The MMU also participates in the NYISO’s calculation of
RMR Avoidable Costs for each Generator and has access to all of the Generator cost information

27 A Generator that is subject to an APR can earn Availability and Performance incentives that exceed its going-forward costs if it meets or exceeds operational targets that are specified in its RMR Agreement. Availability and Performance incentives are substitutes for market incentives. If the
Availability and Performance incentives are subject to claw-back, then an RMR Generator may not have any financial incentive to reliably perform while it is receiving RMR compensation.

28 See Compliance Filing at 32-38.

29 April 2016 Order at PP 98-99.

30 If the owner accepted the APR, the Generator would be forgoing any potential upside from

market revenue above the APR. Any market revenues the Generator earned from its participation in the NYISO’s markets that exceeded the APR would accrue to the benefit of RMR Loads. See pages 69-70 of the NYISO’s October 19, 2015 filing letter and Section 6.14.3.2 of OATT Rate Schedule 14 that the
NYISO submitted with its October 19, 2015 compliance filing.

31 Paragraph 15 of the Commission’s April 2016 Order accepted the NYISO’s proposed revisions to Section 30.4.6.11 of its Services Tariff that assign this duty to the MMU.

that the NYISO receives.32 Because an Owner Developed Rate is subject to Commission review
in a public Section 205 rate proceeding in which the NYISO’s MMU will participate, the
Commission will decide whether it would be just and reasonable to accept an Owner Developed
Rate for a Generator that is already recovering (and that is expected to continue to recover)
revenues in excess of its going-forward costs in the NYISO’s markets.
In addition, as the NYISO explained on page 44 of its Compliance Filing, it proposed Tariff revisions to exclude Generators that are operating pursuant to an RMR Agreement from its Reliability Needs Assessment (“RNA”) base case. When the NYISO removes an RMR
Generator from its RNA base case it plans the system to operate reliably without the RMR
Generator’s participation. This proposed Tariff change should prevent Generators that submitted
Generator Deactivation Notices and that received RMR Agreements from being able to
repeatedly obtain RMR compensation. The NYISO expects to re-present this proposed Tariff
change in its further compliance filing.33

2. The More Stringent Refund Requirement Can Be Overly Punitive

Paragraph 123 of the April 2016 Order explains the Commission’s concern that the anti-
toggling measures the NYISO proposed do not address Generators that attempt to exercise
market power by noticing the intention to deactivate, even though the Generator is recovering its
going-forward costs in the NYISO’s markets (and should reasonably expect to continue
recovering its costs). Paragraph 126 of the April 2016 Order instructs the NYISO to implement

32 See OATT Sections 31.2.11.8.1 and 31.2.11.8.3 that the NYISO submitted with its October 19, 2015 compliance filing.

33 Paragraph 15 of the April 2016 Order states that “aspects” of the Compliance Filing that were not discussed by order “are accepted.” It is not entirely clear whether the tariff provisions referenced above are encompassed by Paragraph 15. Accordingly, the NYISO intends to re-submit them in case the Commission concludes that Paragraph 15 did not apply to them.

a more stringent claw-back refund requirement that will reduce the Generator’s compensation back down to what it would have received in the NYISO’s markets.

The NYISO is concerned about applying the Commission’s more stringent claw-back
refund to Generators that (x) are not presently able to recover their going-forward costs in the
NYISO’s markets, but that (y) reasonably anticipate returning to the NYISO markets at a later
date, when conditions improve. The NYISO has proposed to implement a voluntary RMR
regime. If available compensation is insufficient, a Generator can decline the NYISO’s request
to provide RMR service. The NYISO is concerned that the Commission’s more stringent refund
mechanism could discourage or prevent a Generator that is subject to conditions (x) and (y) from
agreeing to provide RMR service because, after the refund has been applied, the Generator will
have provided RMR service at a rate that is less than the Generator’s going-forward costs.34
If, after considering the NYISO’s arguments in Section IV.B.1 above, the Commission determines that more stringent claw-back rules are necessary to prevent potential abuse of the RMR process, the NYISO requests that the Commission allow it to work with its stakeholders to revise the claw-back formula in P 126 of the April 2016 Order to (a) permit Generators that
voluntarily agree to provide RMR service in New York to recover their going-forward cost of
providing RMR service, and (b) permit Generators that accepted an APR to retain the
Availability and Performance incentives that they earn by performing well during the term of
their RMR Agreement. The NYISO proposes to work with its stakeholders to develop an
alternative set of anti-toggling rules that address the Commission’s concerns, and that are
consistent with the voluntary RMR regimen the NYISO seeks to implement in New York.

34 The Commission’s enhanced refund formula could discourage or prevent a noticing Generator, or a Generator that is in a Mothball Outage or IIFO that would be a viable and sufficient solution if it returned to service, from agreeing to provide RMR service.

V.REQUEST FOR CLARIFICATION

The April 2016 Order accepted a number of the Compliance Filing’s proposed RMR

provisions effective on October 20, 2015. The Order also directed the NYISO to revise and re-
submit significant components of its Generator deactivation review process. This raises the
question of how the NYISO should proceed if it receives a Generator Deactivation Notice before
it submits a second compliance filing that contains the revised deactivation review process tariff
rules.

Under the circumstances, the NYISO believes that the most reasonable interim approach
would be for it to generally follow the timetable and procedures for evaluating Generator
deactivation notices that was proposed in its original Compliance Filing. That is, the NYISO
would require a deactivating Generators to submit all tariff-required information before
commencing its review,35 take up to 90 days to perform reliability assessments, take up to 120
days to review market power concerns, and require owners to have their Generator Deactivation
Notices submitted and determined to be complete at least 365 days before they want the relevant
Generator to enter a Mothball Outage or to be Retired.36 This approach is reasonable because the
NYISO can act within those timeframes, which is why it proposed them in the first place.
In the absence of tariff provisions specifying an alternate process the NYISO could
follow, and in light of the Commission’s instructions in its April 2016 Order, the NYISO seeks

35 The Commission accepted the NYISO’s data submission requirements in P 64 of the April 2016

Order.

36 In its December 2015 answer in this proceeding the NYISO indicated its support for ensuring Generators that submit Generator Deactivation Notices and that are required to continue operating beyond the 180th day of the notice period be given an opportunity to ensure recovery of their going-forward costs during the remainder of the notice period. The NYISO anticipates proposing rules to implement this
mechanism in its further compliance filing. The Commission will determine the date on which those
rules become effective, if it accepts them for filing.

clarification from the Commission to confirm that this is an appropriate interim approach subject to changes that may be proposed in its further compliance filing.

The NYISO commits to informing the Commission if it receives a Generator

Deactivation Notice and identifies a Reliability Need resulting from the noticed deactivation before it submits its proposed tariff revisions to comply with the April 2016 Order.

VI.CONCLUSION

WHEREFORE, for the foregoing reasons, the New York Independent System Operator, Inc., respectfully requests that the Commission grant rehearing and clarification of the April 2016 Order as specified above.

Respectfully submitted,

s/Ted J. Murphy

Ted J. Murphy

Counsel to the NYISO

May 23, 2016

cc:Michael Bardee

Anna Cochrane
Kurt Longo

Max Minzner
Daniel Nowak
Larry Parkinson

J. Arnold Quinn
Douglas Roe

Kathleen Schnorf
Jamie Simler

Gary Will

CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing document upon each person

designated on the official service list compiled by the Secretary in this proceeding in accordance with the requirements of Rule 2010 of the Rules of Practice and Procedure, 18 C.F.R. §385.2010.
Dated at Rensselaer, NY this 23rd day of May 2016.

/s/ Catherine Karimi

Catherine Karimi

Sr. Professional Assistant

Hunton & Williams LLP

2200 Pennsylvania Ave, NW
Washington, DC 20037
Tel: (202) 955-1500
Fax: (202) 778-2201

E-mail: ckarimi@hunton.com

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