10 Krey Boulevard, Rensselaer, NY 12144
Ph: 518.356.6000 | Fax: 518.356.8899
January 23, 2020
By Electronic Delivery
Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE
Washington, DC 20426
Re: Filing of an Executed Development Agreement Among the New York
Independent System Operator, Inc., Niagara Mohawk Power Corporation d/b/a National Grid, and New York Transco, LLC; Request for Waiver of the 60-Day Notice Period; Docket No. ER20-____-000
Dear Ms. Bose:
Pursuant to Section 205 of the Federal Power Act1 and Section 35.13 of the
Commission’s regulations,2 the New York Independent System Operator, Inc. (“NYISO”)
hereby tenders for filing an executed Public Policy Transmission Planning Process Development
Agreement entered into by the NYISO, Niagara Mohawk Power Corporation d/b/a National
Grid (“National Grid”) and New York Transco, LLC (“Transco”) (hereinafter the “Development
Agreement”).3 As detailed below, the Development Agreement addresses the development of a
Public Policy Transmission Project that was jointly submitted by National Grid and Transco, and
selected by the NYISO as the more efficient or cost-effective transmission solution, to satisfy a
Public Policy Transmission Need identified as part of the NYISO’s Public Policy Transmission
Planning Process (“Public Policy Process”). The Development Agreement is labeled as Service
Agreement No. 2510 under the NYISO’s Open Access Transmission Tariff (“OATT”).
The NYISO respectfully requests that the Commission accept the Development
Agreement for filing. With the limited exception described in Part I.B of this letter, the
Development Agreement conforms to the NYISO’s pro forma Public Policy Transmission
Planning Process Development Agreement (“Pro Forma Development Agreement”) that is
contained in Attachment Y to the OATT.4 Further, as described in Part II of this letter, the
NYISO respectfully requests a waiver of the Commission’s prior notice requirements5 to make
the Development Agreement effective as of January 10, 2020, which is the date of its full
execution.
1 16 U.S.C. § 824d (2012).
2 18 C.F.R. § 35.13 (2019).
3 Capitalized terms that are not otherwise defined in this filing letter shall have the meaning specified in Attachment Y of the OATT, and if not defined therein, in the NYISO OATT and NYISO Market Administration and Control Area Services Tariff.
4 See OATT § 31.7 Appendix D.
5 See Prior Notice and Filing Requirements Under Part II of the Federal Power Act, 64 FERC ¶ 61,139, clarified, 65 FERC ¶ 61,081 (1993).
Website: www.nyiso.com | LinkedIn: NYISO | Twitter: @NewYorkISO
Honorable Kimberly D. Bose January 23, 2020
Page 2
I.Discussion
A. Background
On August 1, 2014, the NYISO commenced its first Public Policy Process planning
cycle. The NYISO solicited and submitted to the New York Public Service Commission
(“NYPSC”) potential transmission needs. On December 17, 2015, the NYPSC issued an order
finding that there is a transmission need driven by Public Policy Requirements to increase the
Central East interface in New York (“Segment A”) by at least 350 MW and the UPNY/SENY
interface in New York (“Segment B”) by at least 900 MW to provide additional transmission
capacity to move power from upstate to downstate New York (collectively the “AC
Transmission Needs”).6 The NYISO issued a solicitation for solutions to the AC Transmission
Needs in its Public Policy Process, requirements for which are set forth in Attachment Y to the
OATT.
National Grid and Transco jointly submitted the New York Energy Solution Project
(“Project”) as a solution to address Segment B of the AC Transmission Needs. The Project will
mainly be located in the Hudson Valley in New York. The Project will consist of a new 345
kV/115 kV double-circuit transmission line from a new Knickerbocker switching station to the
existing Pleasant Valley substation, as well as rebuilding the existing 115 kV transmission lines
within the same corridor. In addition, the NYPSC identified certain other work that all solutions
to Segment B of the AC Transmission Needs were required to include—e.g., terminal upgrades
at the New York State Electric & Gas Corporation (“NYSEG”) Rock Tavern substation and
construction of a double-circuit 138 kV line in place of the Orange and Rockland Utilities, Inc.
(“O&R”) double-circuit 69 kV line from the Shoemaker substation to the Sugarloaf substation on
existing rights of way.7 Additional details regarding the Project can be found in Appendix C of
the Development Agreement.
On April 8, 2019, the NYISO’s Board of Directors selected the Project as the more
efficient or cost-effective solution to Segment B of the AC Transmission Needs. As National
Grid and Transco jointly proposed the Project as a part of the Public Policy Process, they are
jointly considered the Developer of the selected project and are both subject to the requirements
under Attachment Y to the OATT. Specifically, a Developer of a selected project is required,
pursuant to Section 31.4.12.2 of the OATT, to execute a development agreement or to request
the NYISO to file an unexecuted development agreement within the specified time.
Accordingly, the NYISO, Transco, and National Grid fully executed the Development Agreement for the Project on January 10, 2020.
6 NYPSC Case No. 12-T-0502, et al., Order Finding Transmission Needs Driven by Public Policy
Requirements, at PP 68 & Appendix A (December 17, 2015) (“NYPSC 2015 Order”); see also NYPSC Case No. 12-T-0502, et al., Order Addressing Public Policy Transmission Need for AC Transmission Upgrades (January 24, 2017) (confirming the AC Transmission Needs).
7 See NYPSC 2015 Order, at pp 61-62 & Appendix A. Subsequent to the NYISO Board of Directors
selecting the Project, the Developer reached an agreement with O&R whereby the Developer will develop and
complete the line from Shoemaker to Sugarloaf. This is reflected in Appendices B and C of the Development
Agreement.
Honorable Kimberly D. Bose January 23, 2020
Page 3
B. The Development Agreement Closely Conforms to the Pro Forma
Development Agreement Contained in Attachment Y of the OATT
The Development Agreement largely conforms to the language in the Pro Forma
Development Agreement contained in Attachment Y of the NYISO OATT with the limited
exceptions described below. The NYISO submits that the changes from the Pro Forma
Development Agreement specified below are just and reasonable because unique factors exist to
justify a non-conforming agreement.8 Therefore, the NYISO respectfully requests that the
Commission accept the Development Agreement with the limited non-conforming changes.
Subsequent to the NYISO Board of Director’s selection of the Project, National Grid and
Transco confirmed that National Grid intends to transfer its interests in the Project to Transco
and that Transco will continue the development of the Project as the sole developer.9 However,
Attachment Y does not contain a mechanism that permits the Developer of selected project to
modify the project or assign its rights and obligations prior to execution of the Pro Forma
Development Agreement (or filing of an unexecuted agreement, if applicable). Once the Pro
Forma Development Agreement is executed by the selected Developer, the agreement has
specific provisions addressing changes to the project and/or the Developer, such as assignment to
another entity to develop the project.10 These assignment provisions establish that a selected
project can only be transferred to another entity after satisfying certain requirements, including a
NYISO determination that the assignee satisfies the NYISO’s developer qualification
requirements and has the technical competence, financial ability, and material, equipment, and
plans to comply with the Pro Forma Development Agreement, and to construct and place the
selected project in service by the Required In-Service Date consistent with the assignor’s cost
estimates.11
Based on the foregoing, the parties agreed to allow National Grid to fulfill its obligations
under Section 31.4.12.2 of the OATT as the Developer of a selected project by executing the
Development Agreement for the limited purpose of assigning its rights, duties, and obligations to
Transco in order for Transco to continue with the development of the Project as the sole
developer. To address the limited purpose of National Grid executing the Development
Agreement, the parties detailed National Grid’s role in the prefatory paragraph. In addition, the
parties made limited revisions to the “Recitals” and the definition of “Party or Parties” in Article
1 (Definitions) to account for more than one party as the Developer.
The Development Agreement also includes a new Article 10.2 that details the process and
requirements, including timeframes, by which National Grid is required to assign its rights and
obligations to Transco. The existing Pro Forma Development Agreement does not explicitly
8 See PJM Interconnection, L.L.C., 154 FERC ¶ 61,054 (2016); Southwest Power Pool, Inc., 132 FERC ¶ 61,159, at P 7 (2010); PJM Interconnection, LLC, 111 FERC ¶ 61,163 (2005).
9 The Developer contemplated in its submission in the Public Policy Transmission Planning Process the possibility of National Grid transferring the Project to Transco.
10 See, e.g., Pro Forma Development Agreement, Art. 10 (general assignment requirements); Pro Forma Development Agreement, Art. 3.5 (modifications to the project).
11 See Pro Forma Development Agreement, Art. 10.
Honorable Kimberly D. Bose January 23, 2020
Page 4
address the circumstances in which one entity participating as part of a multi-party Developer
seeks to assign its rights and obligations to the remaining Developer entity. Specifically, within
30 days after the effective date of the Development Agreement, National Grid is required to
submit a notice of assignment and request for the NYISO to consent to the assignment of its
rights, duties, and obligations to Transco. In addition, National Grid must satisfy the general
assignment requirements currently set forth in Article 10 (now Article 10.1) of the Pro Forma
Development Agreement. If the assignment meets the requirements of Article 10.1 and the
NYISO consents, the parties will amend the Development Agreement to replace it with a two-
party agreement between NYISO and Transco in a subsequent filing with the Commission.
Conversely, if National Grid does not satisfy these requirements within a reasonable time period,
the parties have agreed that they will amend the Development Agreement to provide that
National Grid will be a Developer with all of the related rights, duties, and obligations for
purposes of the entire agreement, and will be jointly and severally liable with Transco under the
amended agreement.
II. Proposed Effective Date and Request for Wavier of the 60-Day Notice Period
The NYISO requests an effective date of January 10, 2020 for the Development
Agreement, which is the date of its full execution. The NYISO respectfully requests that the Commission waive its prior notice requirement to permit the requested effective date. The Commission has permitted similar agreements (e.g., interconnection agreements) to become effective upon the date of execution.12
III. Communications and Correspondence
All communications and service in this proceeding should be directed to:
Robert E. Fernandez, Executive Vice President & General Counsel Karen Georgenson Gach, Deputy General Counsel
Raymond Stalter, Director, Regulatory Affairs
*Carl F. Patka, Assistant General Counsel
*Brian R. Hodgdon, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702
cpatka@nyiso.com
bhodgdon@nyiso.com
*Designated to receive service.
12 See, e.g., PJM Interconnection, L.L.C., 154 FERC ¶ 61,054 at P 26; see also, e.g., New York Independent System Operator, Inc. and New York State Electric & Gas Corporation, Docket No. ER11-2953-000 (April 7, 2011) (accepting interconnection agreement effective as of date of execution).
Honorable Kimberly D. Bose January 23, 2020
Page 5
IV. Documents Submitted
The NYISO submits the following documents with this filing letter:
• A clean version of the Development Agreement (Attachment I);
• A blacklined version of the Development Agreement showing the changes from
the Pro Forma Development Agreement (Attachment II); and
• The signature pages for the Development Agreement (Attachment III).
V.Service
The NYISO will send an electronic link to this filing to the official representative of 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. In addition, a complete
copy of the documents included with this filing will be posted on the NYISO’s website at
www.nyiso.com.
VI. Conclusion
Wherefore, the NYISO respectfully requests that the Commission accept the Development Agreement for filing with an effective date of January 10, 2020.
Respectfully submitted,
/s/ Brian R. Hodgdon
Brian R. Hodgdon
Counsel for the
New York Independent System Operator, Inc.
cc:Anna CochraneDavid Morenoff
James DanlyDaniel Nowak
Jignasa GadaniLarry Parkinson
Jette GebhartDouglas Roe
Kurt LongoFrank Swigonski
John C. MillerGary Will