August 9, 2018
By Electronic Delivery
Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE
Washington, DC 20426
Re: Response to Deficiency Letter With Supporting Affidavits and Exhibits, Request for a
Revised Effective Date and Resubmission of Proposed Tariff Amendments in Docket No. ER18-1743-000
Dear Secretary Bose:
The New York Independent System Operator, Inc. (“NYISO”) submits this response to the
Federal Energy Regulatory Commission’s (the “Commission’s”) deficiency letter issued in the above-
referenced docket on July 10, 2018 (“Deficiency Letter”). The Deficiency Letter directs the NYISO to
respond to several questions regarding the proposed changes to Section 5.11 of the NYISO Market
Administration and Control Area Services Tariff (“Services Tariff”) that were submitted on June 5,
2018 (“Alternative LCR Filing”). The Deficiency Letter also requires the NYISO to describe how it
determines the Locational Minimum Installed Capacity Requirement (“LCR”) 1 for each Locality in
the New York Control Area (“Alternative LCR Methodology”) as well as to provide studies, exhibits
and other documents that detail the factors that led the NYISO to propose the Alternative LCR
Methodology.
The NYISO submits its responses to the Deficiency Letter’s questions in Attachment I to this
filing letter. The NYISO also provides the requested supporting documentation with an affidavit of
Wesley Hall with exhibit as Attachment II. In Attachments III and IV, in response to the
Commission’s request for the studies, exhibits, or other documents that detail the factors that led to the
proposed Alternative LCR Methodology, the NYISO provides the documents presented to NYISO
stakeholders during the multi-year effort to develop the proposal. A table listing these exhibits from 1-
39 in chronological order is being provided as Attachment V to this filing letter.
The NYISO respectfully submits that its responses, as supplemented by the Attachments,
reaffirms that the proposed Alternative LCR Methodology is a clear improvement over the existing
method and that it is just, reasonable, and not unduly discriminatory. In particular, the responses
1 Capitalized terms not otherwise defined herein shall have the meaning specified in Section 1 of the NYISO Open Access Transmission Tariff and Section 2 of the Services Tariff.
Honorable Kimberly D. Bose August 9, 2018
Page 2
clearly establish that, notwithstanding assertions made by certain parties in this proceeding, the
Alternative LCR Methodology will satisfy the 0.1 days per year loss of load expectation reliability criterion2 and makes reasonable use of Transmission Security Limits.3 Similarly, the responses
confirm that the Alternative LCR Methodology will be more transparent, predictable, and robust than currently effective procedures.4 The NYISO’s proposed revisions include a level of detail that is
consistent with the Commission’s “rule of reason” and decades of practice in New York.5 Finally, the NYISO’s responses make clear that incorporating economic optimization into the LCR calculation process should reasonably be expected to yield substantial statewide capacity cost savings that greatly outweigh potential increases in any individual Locality.6
The NYISO understands that this response to the Deficiency Letter constitutes an amendment
to the Alternative LCR Filing and that a new filing date will be established pursuant to Duke Power
Co., 57 FERC ¶ 61,215 (1991). Accordingly, the NYISO respectfully resubmits in Attachments VI
and VII, clean and redline versions, respectively, of the proposed tariff amendments to Sections 2.12
and 5.11 of the Services Tariff that it originally submitted on June 5, 2018 in this proceeding, with the
same text but with an amended effective date of October 9, 2018. The previously proposed effective
date of August 5, 2018 has passed. The NYISO calculates LCRs in January each year. Accordingly,
the NYISO respectfully requests that its proposed tariff revisions become effective on October 9, 2018, i.e., the day following the end of the statutory 60-day notice period.
The NYISO’s requested effective date would also allow it to implement the Alternative LCR Methodology far enough in advance to permit the timely initiation and orderly administration of the
2019 Installed Capacity Market. It would also provide notice and certainty for the market participants. By contrast, if the effectiveness of the NYISO’s proposed tariff revisions were delayed beyond
October 9, 2018, or if the Commission were to require modifications to the proposal, it would
jeopardize the NYISO’s ability to complete the LCR determination process for the 2019-2020
Capability Year. In order to meet the auction starting dates that are specified in the Services Tariff, the NYISO must first determine and report on the LCR determinations in January. These LCRs are
immediately used as inputs into many other parameters that must be established in order to conduct
such auctions. For example, the import right limits setting process and the import rights deliverability assessment process begin in January once the LCRs are established.
The NYISO’s responses to the questions in the Deficiency Letter are endorsed by a confirming
affidavit of NYISO Senior Vice President Rana Mukerji, provided in Attachment VIII to this filing.
2 See, e.g., Attachment I at [9] (Response to Question I(2)).
3 See, e.g., Attachment I at [10] and at [25-28] (Response to Questions I(3) and 4).
4 See, e.g., Attachment I at [10-15] (Response to Question 2).
5 See, e.g., Attachment I at [15-17] (Response to Question 2).
6 See, e.g., Attachment I at [18-21] (Response to Question 2b).
Honorable Kimberly D. Bose August 9, 2018
Page 3
This filing will be posted on the NYISO’s website at www.nyiso.com. In addition, the NYISO
will e-mail an electronic link to this filing to the official representative of each party to this proceeding, to each of its customers, to each participant on its stakeholder committees, to the New York Public Service Commission, and to the New Jersey Board of Public Utilities. Please feel free to contact me if your office has any additional questions.
Respectfully submitted,
/s/ David Allen
Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Telephone: 518-356-7656
Email: dallen@nyiso.com
cc:Nicole Buell
Anna Cochrane
James Danly
Jignasa Gadani
Jette Gebhart
Kurt Longo
John Miller
David Morenoff
Daniel Nowak
Larry Parkinson
Douglas Roe
Kathleen Schnorf Gary Will