April 6, 2018
By Electronic Delivery
Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE
Washington, DC 20426
Re: New York Independent System Operator, Inc., ER18-____-000;
Proposed Revisions to the Requirement to Perform Certain
Informational Calculations related to Net Congestion Rent
Settlements
Dear Secretary Bose:
In accordance with Section 205 of the Federal Power Act1 and Part 35 of the regulations of the Federal Energy Regulatory Commission (“Commission”), the New York Independent System Operator, Inc. (“NYISO”) submits proposed revisions to Attachment N of the Open
Access Transmission Tariff (“OATT”) to modify the current requirement to annually perform certain informational calculations related to Day-Ahead Market (“DAM”) Net Congestion Rent settlements.2 The NYISO proposes that, going forward, such informational calculations be
performed only at the request of a Transmission Owner subject to Net Congestion Rent
settlements pursuant to Attachment N of the OATT.3
The NYISO Management Committee approved the proposed revisions, without
opposition, on February 28, 2018. The NYISO respectfully requests that the proposed revisions
become effective on June 6, 2018 (i.e., the day following the end of the statutory 60-day notice
period).
1 16 U.S.C. § 824d.
2 Capitalized terms not otherwise defined herein shall have the meaning specified in the OATT.
3 Presently, the New York Transmission Owners (“NYTOs”) are the only Transmission Owners
that are subject to these settlement procedures. The NYTOs consist of: (i) Central Hudson Gas & Electric Corporation; (ii) Consolidated Edison Company of New York, Inc.; (iii) Long Island Power Authority
(iv) New York Power Authority; (v) New York State Electric & Gas Corporation; (vi) Niagara Mohawk
Power Corporation d/b/a National Grid; (vii) Orange and Rockland Utilities, Inc.; and (viii) Rochester
Gas and Electric Corporation.
Honorable Kimberly D. Bose April 6, 2018
Page 2
I.Documents Submitted
The NYISO respectfully submits the following documents with this filing letter:
1.A clean version of the proposed revisions to the OATT (“Attachment I”); and
2.A blacklined version of the proposed revisions to the OATT (“Attachment II”).
II.Background
Section 20.2 of Attachment N of the OATT provides the methodology for allocating Net Congestion Rent to the applicable Transmission Owners.4 These procedures seek to allocate the DAM Congestion Rent impact of transmission facility outages and returns-to-service to the
responsible Transmission Owners on a cost causation basis. The NYISO generally accomplishes this direct allocation to responsible Transmission Owners by determining the contributing impact that transmission facility outages and returns-to-service not accounted for in NYISO-
administered Transmission Congestion Contract (“TCC”) auctions have on the binding
constraints for each hour of the DAM.
A de minimis threshold is utilized to exclude certain low dollar value binding constraints from such calculations.5 The de minimis threshold is intended to recognize that, in certain cases, the resources required to perform the detailed calculations necessary for the direct allocation of impacts exceed the benefits of absolute precision in allocating costs for all binding constraints regardless of their dollar value. The DAM Congestion Rent impacts of binding constraints
excluded by the de minimis threshold are allocated on a pro rata basis among all the applicable Transmission Owners in proportion to the benefit that each Transmission Owner received from the sale of TCCs that are valid in the relevant month.
To assess the performance and appropriateness of the de minimis threshold value, Section
20.2.4.6.2 of Attachment N of the OATT requires the NYISO to perform certain informational calculations once per year. These informational calculations are intended to provide the affected Transmission Owners with data showing how Congestion Rent shortfalls and surpluses related to transmission facility outages and returns-to-service for a particular month would have been
allocated in the absence of any de minimis threshold.
4 See Docket No. ER06-769-000, New York Independent System Operator, Inc., Tariff Revisions Concerning a Revised Methodology to Allocate Among Transmission Owners Congestion Rent Shortfalls and Surpluses and TCC Auction Revenue Shortfalls and Surpluses (March 17, 2006); and Docket No. ER06-769-000, supra, Letter Order (April 14, 2006).
5 The current threshold applies to binding constraints that have a dollar value less than $5,000, provided that the sum of all constraints below this threshold value in not greater than $250,000 or 5% of the total aggregate dollar value of all binding constraints for the relevant month.
Honorable Kimberly D. Bose April 6, 2018
Page 3
III.Description of the Proposed Tariff Revisions
The NYISO has performed the informational calculations required by Section 20.2.4.6.2
of Attachment N of the OATT for all years since the requirement became effective in 2006.
After review of this information, the affected Transmission Owners have concluded every year
that the current de minimis threshold value is appropriate and producing satisfactory outcomes.
The performance of these informational calculations requires the commitment of material resources by the NYISO, as well as material time and resource commitments by both the NYISO and the Transmission Owners in reviewing their results. In light of the consistent determinations for more than a decade that the current de minimis threshold value remains appropriate and is producing outcomes consistent with expectations, the NYISO proposes to modify the
requirements for performing the informational calculations.
The NYISO proposes to modify Section 20.2.4.6.2 of Attachment N to no longer
mandate that these informational calculations be performed annually regardless of whether any
potential concerns exist with respect to the operation of the de minimis threshold. Instead, the
NYISO will only be required to perform these calculations upon the request of any affected
Transmission Owner. Consistent with the current requirements, the NYISO will, if requested by
an affected Transmission Owner, perform such calculations once per twelve-month period.6
The proposed revisions retain the right of the affected Transmission Owners to require
the NYISO to perform these informational calculations. However, absent a request to perform
such calculations by an affected Transmission Owner, the NYISO would not be required to
undertake this analysis. The proposed revisions appropriately balance the protections intended
by this provision with the commitment of time and resources necessary to perform and review
the required informational calculations. Notably, the affected Transmission Owners will
continue to receive data related to the application and operation of the de minimis threshold as
part of the detailed information provided by the NYISO in connection with the monthly
settlement of Net Congestion Rent.
IV.Effective Date
The NYISO respectfully requests that the proposed tariff revisions become effective on June 6, 2018 (i.e., the day following the end of the statutory 60-day notice period).
V.Stakeholder Process
The proposed revisions were approved by the Management Committee, without
opposition, on February 28, 2018. The NYISO Board of Directors approved the proposed revisions on March 20, 2018.
6 The NYISO also proposes to clarify that the month utilized to perform any required
informational calculations will be selected from among the most recent twelve months for which the NYISO has issued final settlements.
Honorable Kimberly D. Bose April 6, 2018
Page 4
VI.Communications and Correspondence
Please direct all communications and service in this proceeding to:
Robert E. Fernandez, General Counsel
Raymond Stalter, Director, Regulatory Affairs
*Garrett E. Bissell, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, New York 12144
Telephone: 518-356-6107
Email: gbissell@nyiso.com
*Person designated for receipt of service.
VII.Service
The NYISO will send an electronic link to this filing to the official representative of each
of its customers, each participant on its stakeholder committees, the New York State Public
Service Commission, and the New Jersey Board of Public Utilities. The NYISO will also post
the complete filing on its website at www.nyiso.com.
VIII.Conclusion
The NYISO respectfully requests that the Commission accept the proposed revisions to the OATT attached hereto with an effective date of June 6, 2018.
Respectfully submitted,
/s/ Garrett E. Bissell
Garrett E. Bissell
Senior Attorney
New York Independent System Operator, Inc.
cc:Anna Cochrane
James Danly
Jette Gebhart
Kurt Longo
David Morenoff
Daniel Nowak
Larry Parkinson
J. Arnold Quinn
Douglas Roe
Kathleen Schnorf Gary Will