10 Krey Boulevard, Rensselaer, NY 12144
Ph: 518.356.6000 | Fax: 518.356.8899
April 7, 2020
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., Compliance Filing and
Request for Commission Action No Later Than June 8, 2020; Docket No. ER16-1404-___
Dear Ms. Bose:
In accordance with Ordering Paragraph “B” of the Commission’s February 20, 2020
Order (“February 20 Order”),1 and its March 25 Notice of Extension of Time the New York
Independent System Operator, Inc. (“NYISO”) respectfully submits this compliance filing. The
NYISO’s proposed compliance tariff revisions address the proposed “Renewable Exemption”
under the “buyer-side” capacity market power mitigation measures (the “BSM Rules”) in
Attachment H to the NYISO’s Market Administration and Control Area Services Tariff
(“Services Tariff”). Specifically, the NYISO is proposing a new methodology for calculating the
limit on the amount of Unforced Capacity available for a Renewable Exemption (the
“Renewable Exemption Limit”) for each Mitigated Capacity Zone2 within each Class Year
Study, Additional SDU Study and Expedited Deliverability Study. The NYISO is also proposing
to modify the procedures that govern the revocation of previously awarded Renewable
Exemptions.3 As discussed below these revisions implement the directives of the February 20
Order, are just, reasonable, and not unduly discriminatory, and are consistent with other
applicable Commission precedent.
The proposed revisions included in this compliance filing are expressly required by the
February 20 Order, are necessary to implement or clarify the NYISO’s existing tariff language to accommodate the Commission’s directives, or are non-substantive organizational or clarifying adjustments. The Commission has previously allowed the NYISO to include revisions in
compliance filings that were not explicitly directed by an order but were necessary to
1 New York Independent System Operator, Inc., 170 FERC ¶61,121 (2020).
2 Capitalized terms that are not otherwise defined herein shall have the meaning specified in the Services Tariff.
3 The February 20 Order also directed the NYISO to make compliance revisions to the proposed Self-Supply Exemption (“SSE”) under the BSM Rules. On March 17, 2020, the Commission issued a Notice of Extension of Time authorizing the NYISO to defer submitting its SSE-related revisions until September 21, 2020. Consequently, this compliance filing does not address the SSE.
Website: www.nyiso.com | LinkedIn: NYISO | Twitter: @NewYorkISO
Honorable Kimberly D. Bose April 7, 2020
Page 2
accommodate or implement required compliance revisions.4 As discussed below, the NYISO is proposing a number of such necessary additional revisions, principally to address ministerial and clarifying changes to the language in pertinent sections of the Services Tariff that occurred in the four years since the Renewable Exemption was first proposed.
The NYISO reviewed its compliance proposal for the revised Renewable Exemption
Limit at multiple stakeholder meetings and has made various changes in response to stakeholder input. It also consulted closely with the independent Market Monitoring Unit (“MMU”)
throughout the development of the proposal. The MMU supports the methodology for
calculating the Renewable Exemption proposed in this compliance filing.
The NYISO respectfully requests that the Commission issue an order accepting this filing
within sixty-two days, i.e., by June 8, 2020, without imposing any conditions or instituting any
further proceedings. The NYISO further requests that the Commission make its proposed
compliance revisions effective one day after that date, i.e., on June 9, 2020. It is very important
that the Commission act by early June. The NYISO is working diligently to complete the Class
Year 2019 process on schedule. Completing the Class Year Study in a timely manner is a major
priority for the NYISO and many stakeholders. The NYISO has implemented many
improvements to its interconnection process, including the Class Year Study, in order to
streamline the process and manage the unprecedented increase in the number of proposed
projects in the NYISO interconnection queue. Commission action on this filing by early June
will allow the NYISO to make determinations under the BSM Rules, including eligibility for
exemptions, for Class Year 2019 projects without disrupting the current schedule or creating
significant uncertainty. Further, it is also important to complete Class Year 2019 in a timely
manner to facilitate developers’ decisions about whether to enter an upcoming Expedited
Deliverability Study and to allow the next Class Year Study to begin.
In order to complete Class Year 2019 on time, the Renewable Exemption rules must be in
place well in advance of the point in the Class Year process when the NYISO is required by
tariff to make Offer Floor and exemption determinations under the BSM Rules (“BSM
Determinations”).5 The Commission ruled in 20156 that it would be unjust and unreasonable for
the NYISO to mitigate Renewable Resources with characteristics that warranted an exemption.
The NYISO’s currently believes that it will be required to make BSM Determinations in Class
Year 2019 for renewable projects with such characteristics. It will require some time for the
4 See, e.g., 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).
5 See Motion Requesting Commission Action on Compliance Filing, Notice of Implementation Plans, and Conditional Request for Tariff Waivers of the New York Independent System Operator, Inc., Docket No. ER16-1404-000 (July 19, 2019) (describing connections between the BSM Rules and Class Year rules that dictate the timing of BSM Determinations).
6 New York State Public Service Commission, et al. v. New York Independent System Operator, Inc., 153 FERC ¶ 61,022 (2015) (the “October 2015 Order”).
Honorable Kimberly D. Bose April 7, 2020
Page 3
NYISO to implement the Renewable Exemption rules, including the determination of
“Renewable Exemption Limits” as proposed herein, after this compliance filing is accepted by the Commission. Thus, a delay in acting on this filing would likely cause a delay in the
completion of Class Year 2019.
I.COMMUNICATIONS
Communications regarding this proceeding should be sent to:
Robert E. Fernandez, Executive Vice President &Ted J. Murphy
General CounselHunton Andrews Kurth, LLP
Karen Georgenson Gach, Deputy General Counsel2200 Pennsylvania Avenue, NW
Raymond Stalter, Director, Regulatory AffairsWashington, DC 20037
*David Allen, Senior AttorneyTel: (202) 955-1500
10 Krey BoulevardFax: (202) 778-2201
Rensselaer, NY 12144tmurphy@huntonak.com
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
kgach@nyiso.com
rstalter@nyiso.com
dallen@nyiso.com
*Designated to receive service.
II.LIST OF DOCUMENTS SUBMITTED
The NYISO submits the following documents with this transmittal letter:
1. A blacklined version of the NYISO Services Tariff compliance revisions proposed in
this filing (“Attachment I”);
2. A clean version of the NYISO Services Tariff compliance revisions proposed in this
filing (“Attachment II”); and
3. The Affidavit of Shaun Johnson (“Attachment III”).
III.BACKGROUND
The October 2015 Order directed the NYISO to establish the Renewable Exemption and
Self Supply Exemption (“SSE”).7 The NYISO submitted the required compliance filing in April
7 See New York State Public Service Commission, et al. v. New York Independent System Operator, Inc., 153 FERC ¶ 61,022 (2015) (the “October 2015 Order”).
Honorable Kimberly D. Bose April 7, 2020
Page 4
2016 (the “April 2016 Filing”).8 During the years that this filing was pending at the Commission certain NYISO filings proposed limited changes to the pending Renewable Exemption language. To the extent necessary, these filings are addressed in Section V.E below.
In July 2019, the NYISO filed a motion asking the Commission to act on the April 2016
Filing.9 The NYISO explained that the Commission’s delay had not resulted in any material
consequences as of July 2019, because no resources eligible to obtain a Renewable Exemption
had yet sought to enter the NYISO-administered markets. However, the NYISO anticipated that
multiple resources would seek Renewable Exemptions in Class Year 2019, which began in
August 2019. The NYISO therefore urged Commission action and explained that it would
implement the Renewable Exemption as-filed if the Commission did not issue an order before
the tariff deadline for making BSM Determinations during Class Year 2019.
The NYISO has in fact received requests for a Renewable Exemption from Examined Facilities participating in Class Year 2019. The NYISO also began its first Expedited
Deliverability Study (“EDS”) on March 20, 2020 (“March 20 EDS”).10 There are no Examined Facilities participating in the March 20 EDS; and as such implementation of the Renewable Exemption, and the NYISO’s proposed Renewable Exemption Limit methodology, will first impact Examined Facilities in Class Year 2019.
The February 20 Order conditionally accepted the April 2016 filing but required the
NYISO to make substantive changes to both the proposed Renewable Exemption and SSE. With
respect to the Renewable Exemption, the Commission conditionally accepted the NYISO’s
proposed eligibility criteria and process. The Commission found that the NYISO’s proposal was
consistent with earlier directives because it limited eligibility for the exemption to “Exempt
Renewable Technology” which is initially defined (per the NYISO’s proposed definition in
Section 23.2) as purely intermittent renewable resources with low capacity factors and high
development costs. The Commission also accepted as just and reasonable the NYISO’s proposal
to subject Renewable Exemption Applicants that are not solely powered by Exempt Renewable
Technology to an applicant-specific review, based upon criteria set forth in the Services Tariff.
On the other hand, the Commission rejected the NYISO’s proposed annual 1,000 MW
Renewable Exemption cap (measured in ICAP) and directed the NYISO to submit a revised cap
that would be: “(1) narrowly tailored to the mitigated capacity zones, and not based on the entire
8 New York State Public Service Commission, et al. v. New York Independent System Operator, Inc., Compliance Filing and Request for Commission Action Within Sixty Days, Docket No. ER16-1404-
000 (April 13, 2016).
9 See n. 5 above.
10 Expedited Deliverability Studies are a new study type that was added to the NYISO’s
interconnection process as part of a comprehensive redesign of its Class Year processes that was proposed
in 2019 and accepted by the Commissioner in early 2020. See New York Independent System Operator,
Inc., Interconnection Process Improvements, Docket No. ER20-638-000 (Dec 19, 2019) (the “Class Year
Redesign Filing”) and Letter Order, Docket No. ER20-638-000 (Jan. 31, 2020) (accepting the Class Year
Redesign Filing).
Honorable Kimberly D. Bose April 7, 2020
Page 5
NYCA; and (2) based on UCAP rather than ICAP.”11 The February 20 Order emphasized that
the MW cap would limit “the risk that the renewable resources exemption will significantly
impact market prices and it is such limitation that makes this tariff revision just and
reasonable.”12 It further directed the NYISO to “be mindful of the relationship between: (1) the
size of the MW cap; and (2) the limit the MW cap imposes on the renewable resource
exemption’s impact to market prices.”13 Finally, the Commission conditionally accepted
NYISO’s proposed exemption revocation provisions, but directed the NYISO to create additional
procedural protections for an entity facing a possible revocation.14 All other aspects of the
proposed Renewable Exemption that were not discussed by the February 20 Order were
accepted.15
IV.JUSTIFICATION FOR THE PROPOSED RENEWABLE EXEMPTION LIMIT
CALCULATION
A.Overview
The February 20 Order reiterated the October 2015 Order’s holding that “a capped
amount of purely intermittent renewable resources has limited or no incentive and ability to
exercise buyer-side market power to artificially suppress ICAP market prices.16 The
Commission emphasized that the “cap” must “limit” the “risk that the renewable resources
exemption will significantly impact market prices and it is such limitation that makes this tariff
revision just and reasonable.”17 The Commission did not require the NYISO to eliminate all risk
that a Renewable Exemption would have any impact on prices. The Commission also gave the
NYISO substantial discretion to design a suitable limit. It did not require the NYISO to adopt
any specific methodology but indicated that the NYISO was not prohibited from using “some
combination of load growth and retirements to set the limit” if appropriate.18 As explained
below, the NYISO’s compliance proposal accounts for both load growth and retirements.
In compliance with Paragraph 48 of the February 20 Order the NYISO is proposing to
establish a formula to calculate “Renewable Exemption Limits” for each Mitigated Capacity
Zone. As required by the February 20 Order, the formula would be based on UCAP, not ICAP
values. The advantage of using a formula instead of attempting to define a single static cap is
that it would allow for a dynamic limit that is a function of the market conditions occurring in
each Mitigated Capacity Zone at the time that a Renewable Exemption Limit is applied.
11 February 20 Order at PP 18, 48.
12 Id.
13 Id.
14 February 20 Order at P 18.
15 Id.
16 February 20 Order at P 28 citing October 2015 Order at P 47.
17 Id. at 48.
18 February 20 Order at P 51.
Honorable Kimberly D. Bose April 7, 2020
Page 6
The NYISO’s proposed formulaic approach is informed by the Commission’s guidance. It is “narrowly tailored” to the Mitigated Capacity Zones because it accounts for each of the factors relevant to determining the capacity price impacts of renewable resource entry, such as retirements and load changes, as those factors vary over time. It will also ensure that the
Renewable Exemption will not “significantly impact” capacity market prices.
In short, the NYISO’s proposed approach will allow intermittent renewable resources that
lack the incentive and ability to suppress capacity market prices to qualify for the Renewable
Exemption up until the point, based on evolving market and system conditions, that their entry
would significantly impact capacity prices. This dynamic approach complies with the February
20 Order, is just and reasonable, is not unduly discriminatory, and will better balance the risks of over- and under-mitigation19 than a static cap. The Renewable Exemption Limits calculated under the NYISO’s proposed method will vary over time as the inputs change, but the formula is designed to produce a value that avoids significant price impacts.20
B. The Renewable Exemption Limit Formula and its Components
Under the NYISO’s proposed formula, the Renewable Exemption Limit for each
Mitigated Capacity Zone would be equal to the greater of: (a) the UCAP MW associated with the
NYISO’s calculation of the Minimum Renewable Exemption Limit that would reduce the market
price forecast for the Mitigated Capacity Zone by no more than $0.50/kW-month; or (b) the sum
of (i) the UCAP MW associated with the “Change in Forecasted Peak Load” calculated by the
NYISO in accordance with proposed new Section 23.4.5.7.13.5.2, (ii) the UCAP MW value
identified by the NYISO associated with the “Incremental Regulatory Retirements” in
accordance with new Section 23.4.5.7.13.5.3, (iii) the “Unforced Capacity Reserve Margin”
(“URM”) Impact of the Qualified Renewable Exemption Applicants in the Class Year Study,
Additional SDU Study, or Expedited Deliverability Study calculated by the NYISO in
accordance with Section 23.4.5.7.13.5.4, and (iv) the UCAP MW in the “Renewable Exemption
19 See, e.g., New York State Public Service Commission, et al. v. New York Independent System
Operator, Inc., 154 FERC ¶ 61,088 at P 31(reiterating the importance of balancing “the need to mitigate
the exercise of buyer-side market power to ensure just and reasonable ICAP market prices with the risk of
over-mitigating new entrants.”); Consolidated Edison Co. of New York, Inc. v. New York Independent
System Operator, Inc., 150 FERC ¶ 61,139 at P 4 (2015); New York Independent System Operator, Inc.,
143 FERC ¶ 61,217 at P 77 (2013) (noting that buyer-side market power mitigation rules must
“appropriately balance the need for mitigation of buyer-side market power against the risk of over-
mitigation.”)
20 In particular, it is expected that there will be significant generation retirements in New York
State during the period covered by Class Year 2019 because of the New York State Department of
Environmental Conservation’s “Peaker Rule.” See Ozone Season Oxides of Nitrogen (NOx) Emission
Limits for Simple Cycle and Regenerative Combustion Turbines, 6 NYCRR Subpart 227-3 (effective
January 16, 2020). https://www.dec.ny.gov/regulations/116131.html. Thus, the Renewable Exemption
Limit for Class Year 2019 may be materially higher than in subsequent Class Years, but this difference
will be entirely justified by market and system conditions existing in Class Year 2019.
Honorable Kimberly D. Bose April 7, 2020
Page 7
Bank” for each Mitigated Capacity Zone calculated by the ISO in accordance with the proposed new version of Section 23.4.5.7.13.5.5.
Consistent with the February 20 Order, this approach ensures that a Renewable
Exemption Limit is narrowly tailored to its corresponding Mitigated Capacity Zone, as opposed to a NYCA-wide value. The formula also adheres to the February 20 Order by providing a
Renewable Exemption Limit that will not substantially reduce market prices. The factors
proposed that could result in an exemption larger than the amount corresponding to the
Minimum Renewable Exemption Limit are each factors that would offset the price effects of the renewable resources that are entering. Each of these factors would tend to increase capacity prices and granting renewable entry exemptions that would tend to offset these increases, but not cause market prices to fall is consistent with the Commission’s guidance.
Parameters (b)(i), (ii), and (iii) form the core of the proposed limit because they are tied
to factors that would increase capacity market prices and thus should be accounted for in the
Renewable Exemption Limit formula. The Minimum Renewable Exemption Limit value will be calculated during each Class Year to reflect the UCAP MW that would be forecasted to cause a $0.50/kW-month impact on ICAP prices. This value would then set an initial minimum amount of UCAP MW available for Renewable Exemptions within the Class Year Study, which may
then be adjusted for any Additional SDU and Expedited Deliverability Studies that come to
completion prior to the start of the subsequent Class Year Study. This minimum value or floor
would be compared to the UCAP MW value arrived at by summing the items listed within (b)
above, for each BSM Determination conducted in each Class Year Study, Additional SDU Study and Expedited Deliverability Study. To the extent the sum of the items under (b) equals or
exceeds the applicable Minimum Renewable Exemption Limit value, that UCAP MW value
would be the Renewable Exemption Limit for that study.21
The $0.50/kW-month market price forecast threshold is the same value used in physical
withholding thresholds under the NYISO’s supplier-side capacity market power mitigation
measures22 to ensure that they are not overly aggressive in inhibiting conduct that would have a
de minimis impact on market outcomes. Having a minimum threshold is appropriate considering
that buyer-side mitigation evaluations are typically performed years before a resource actually
enters the market, and are based on a forecast of market conditions. This forecast will naturally
tend to under-estimate the actual amount of retirements that will occur since owners of retiring
resources are not required to notify the NYISO of their plans more than 12 months in advance.
This threshold, which is approximately four percent of the levelized net cost of new entry for the
current demand curve unit for New York City, has been used to avoid excessive mitigation of
conduct that would have a de minimis impact on market outcomes. Thus, this threshold strikes a
reasonable balance between preventing price suppression and excessive mitigation that
21 See Attachment III at P 24.
22 See Services Tariff Section 23.4.5.6.3. The Commission has previously declined to act in
response to claims that the absence of comparable thresholds in the BSM Rules makes them unjust and unreasonable. See, e.g., Energy Storage Complaint in EL19-86 at 26. But this does not bar the NYISO from proposing to incorporate the threshold into the Renewable Exemption Limit.
Honorable Kimberly D. Bose April 7, 2020
Page 8
unnecessarily limits legitimate public policy objectives. The use of such a price impact threshold is also consistent with Commission precedent involving the renewable exemption from
mitigation that was implemented in ISO New England, Inc.23
The “Change in Forecasted Peak load” component of the formula would capture both
positive and negative Load growth circumstances over time within each Mitigated Capacity
Zone. It would allow Renewable Exemptions to be available over time for Qualified Renewable Exemption Applicants when Load growth is a persistent condition in the market without
suppressing price. At the same time, it would reduce the amount of Renewable Exemption
available when load is expected to contract, thereby avoiding price suppression.
The Renewable Exemption Limit formula would also account for “Incremental
Regulatory Retirements.” This value is intended to reflect incremental retirements attributable to
“direct” regulatory action that has taken place since the prior study period. The core issue or
concern associated with State policies that result in sizable new entry of renewable energy
resources is that they result in an out-of-market supply increase that can depress capacity prices.
The BSM Rules seek to protect the market from the full effects of this artificial supply-demand
disequilibrium. However, when out-of-market actions are taken that reduce supply, these actions
offset the effects of the renewable resource policies that increase supply. Recognizing that out-
of-market retirements offset the effects of out-of-market investment is the principle underlying
the Competitive Auctions with Sponsored Resource (“CASPR”) rules accepted by the
Commission and implemented in ISO New England, Inc.24 This same principle applies to the
component of the NYISO’s proposed Renewable Exemption Limit formula that would allow
Incremental Regulatory Retirements to generate additional renewable resource exemptions.
Ultimately, it is the net effect of State policy on supply in the capacity market that matters,
including both those policies that increase supply and those that reduce supply. Therefore,
recognizing this principle in the proposed renewable entry exemption rules is reasonable and
appropriate.
For these rules to be consistent with this principle, however, it is very important that only
retirements that are substantially caused by changes in regulatory policies or regulations be
included. “Incremental Regulatory Retirements” would not encompass market exit that is a
result of changes in market conditions or fluctuations that render a resource uneconomic. Rather,
Incremental Regulatory Retirements comprise only those retirements where a public policy
decision or action external to the market contributes materially to the retirement. Decisions to
23 See NextEra Energy Resources, LLC v. FERC, 898 F.3d 14, 21 (D.C. Cir. 2018) (“the
Commission reasonably balanced the potential for limited price suppression against competing interests in concluding that the renewable exemption to the minimum offer price rule is consistent with the purpose of the forward capacity market.”). See also ISO New England Inc., 147 FERC ¶ 61,173 (2014) (accepting ISO-NE renewable exemption), reh'g denied, 150 FERC ¶ 61,065 (2015); ISO-New England Inc., 155 FERC ¶ 61,023 (2016) (order on remand and clarifying renewable exemption by reaffirming that a
renewable exemption was not per se unjust and unreasonable even if it had the potential to cause some level of artificial price suppression), reh'g denied, 158 FERC ¶ 61,138 (2017).
24 See ISO New England, Inc., 162 FERC ¶ 61,205 (2018).
Honorable Kimberly D. Bose April 7, 2020
Page 9
continue, or cease, operating have typically been driven by the direct impact of market
conditions upon the economics of a particular facility. Thus, a Generator that is uneconomic and unable to recover its costs sufficiently via the markets, irrespective of external policy actions, is expected to exit and thus would not be included as an Incremental Regulatory Retirement. The proposed mechanism is intended to only capture market exit that is the result of a new regulatory action, for which the anticipated cost of compliance or other financial impact (e.g., elimination of a local property tax exemption) is a significant factor in the Generator’s exit.
Although the proposed tariff language defining “Incremental Regulatory Requirements”
is clear, the NYISO recognizes that it must weigh the significance of policy and non-policy
factors in retirement decisions, and that this determination may significantly increase or decrease
the Renewable Entry Limit. As an additional safeguard to ensure that the Incremental
Regulatory Requirements rule is not construed too broadly, the NYISO would be required to
consult with the independent MMU when determining what qualifies as an Incremental
Regulatory Retirement.
The URM Impact value is intended to capture the change in Unforced Capacity Reserve Margin in a Mitigated Capacity Zone that reflects how URM market requirements are expected to increase in response to renewable resource entry. The NYISO will perform an analysis to
determine the expected increased impact to URM market requirements as result of the entry of the renewable projects in the Class Year Study, Additional SDU Study, and Expedited
Deliverability Study. The consideration of increased URM impacts recognizes that URM market requirements are expected to increase in response to renewable resource entry and, when
implemented as proposed, will not lead to price suppression.
For example, the New York State Reliability Council (“NYSRC”) recently performed an
analysis of the expected change to Installed Reserve Margin (“IRM”) and URM requirements
using a New York Control Area resource mix containing additional quantities of on-shore wind,
off-shore wind, and solar PV renewable resources. The additional renewable resources that
connected into the New York City Zone were 2,000 MW of off-shore wind. The UCAP rating of
the additional off-shore wind resources was approximately 590 MW under the NYISO’s current
market rules. The results of the NYSRC’s analysis show that the New York City Zone UCAP
requirement (i.e., URM as defined in this filing) increased by approximately 350 MW. Thus, the
effect on the New York City Zone capacity price due to the off-shore wind would be the UCAP
supply added (+590 MW) less the increase in URM demand requirements (-350 MW), for a net
increase in supply (relative to requirements) of +240 MW. The NYISO’s proposed URM Impact
value captures exactly this phenomenon.25
25 The New York State Reliability Council has conducted a study finding that renewable
resources increase the URM. The draft whitepaper entitled, The Impacts of High Intermittent Renewable
Resources On the Installed Reserve Margin for New York (March 31, 2020), can be found at:
http://nysrc.org/PDF/MeetingMaterial/ECMeetingMaterial/EC%20Agenda%20252/4.2a%20HR%20Whit
e%20Paper%20-%20Clean%20Final%20Draft-Attachment%204.2a.pdf.
Honorable Kimberly D. Bose April 7, 2020
Page 10
The “Renewable Exemption Banks” are the mechanism through which the UCAP MWs
which were made available with the calculation of the Renewable Exemption Limit, but were not
used, for Renewable Exemptions in a Class Year Study, Additional SDU Study or Expedited
Deliverability are “carried over” into subsequent studies. The purpose of the banks is to ensure
that any UCAP MWs derived from load growth or Incremental Regulatory Retirements or from
the URM impact remain available to Qualified Renewable Exemption Applicants in future BSM
Determinations. These measures in aggregate are intended to keep supply and demand in the
ICAP market in balance.
The addition of a bank helps to maintain this balance over the long term by accounting
for factors directly contributing to renewable entry (i.e., URM) or to policy-driven exits (i.e.,
Incremental Regulatory Retirements). As exit and entry in the markets is lumpy over time the
banks will help to ensure continuity across study periods. Since many of the terms in the
formula for the Renewable Exemption Limit are also used in the “Part A” (23.4.5.7.2.(a))
exemption test and in an effort to avoid future price suppression by double counting the same
criteria to different exemptions, the UCAP equivalent MWs found exempt under the “Part A”
test will be deducted from the bank. This deduction may mean that the bank could have a
negative value. Additionally, the bank will be trued-up for previous forecasts which did not
materialize. Previously forecasted Incremental Regulatory Retirements that do not actually exit
will be deducted from the bank (this can also result in a negative bank) and conversely MWs
associated with exemptions previously granted under the Renewable Exemption or “Part A” that
do not meet the inclusion rules of the BSM forecast per 23.4.5.7.15 will be added back to the
bank.
The attached Affidavit of Shaun Johnson supports the NYISO’s proposed compliance
approach. It also includes illustrative examples of how Renewable Exemption Bank calculations would interact with each other and how the Minimum Renewable Exemption Limit would
operate over time.26
V.DESCRIPTION OF PROPOSED COMPLIANCE TARIFF REVISIONS
A.Proposed New Definitions
Section 23.2 of the Services Tariff includes the definitions that are used in the BSM
Rules and other capacity market-related mitigation provisions. The NYISO is proposing multiple new defined terms that are applicable to the Renewable Exemption rules in Section 23.4.5.7.13. They include adding “Renewable Exemption Applicant” and “Qualified Renewable Exemption Applicant,” which were previously terms used within Section 23.45.7.13, to the definitions list in Section 23.2. The NYISO is also defining several terms that are integral to its proposed
Renewable Exemption Limit calculation.
26 As is permitted by the Commission’s April 2, Order Granting Blanket Waiver of In-Person Meeting and Document Notarization Requirements, 171 FERC ¶ 61,004 (2020), Mr. Johnson’s affidavit is signed but not notarized.
Honorable Kimberly D. Bose April 7, 2020
Page 11
The NYISO would add language to Section 23.2 specifying that “Incremental Regulatory Retirements” would be identified by the NYISO in accordance with Section 23.4.5.7.13.5.2 in the Class Year 2019 and in subsequent Class Year Studies, Additional SDU Studies, and
Expedited Deliverability Studies that start after July 1, 2020 and will be used in the NYISO’s calculation of the Renewable Exemption Limit.
“Minimum Renewable Exemption Limit” would be defined as the UCAP value
calculated by the NYISO in the Class Year 2019 and subsequent Class Year Studies in
accordance with Section 23.4.5.7.13.5.1 to be used in the NYISO’s calculation of the Renewable Exemption Limit.
The April 2016 Filing included references to “Renewable Exemption Applicants”
throughout proposed Section 23.4.5.7.13. That term was defined within Section 23.4.5.7.13 as an Examined Facility or NCZ Examined Project that sought a Renewable Exemption. For ease of reference, the NYISO is now proposing to add this term to Section 23.2.
Similarly, as discussed further below in Section V.E, the NYISO proposed modifications
to the April 2016 Filing in an October 2017 filing proposing various improvements to the
NYISO’s interconnection process. The October 2017 Filing modified the (then still-pending)
Renewable Exemption proposal to add references to “Qualified Renewable Exemption
Applicants,” i.e., applicants that are found to satisfy the criteria for seeking a Renewable
Exemption.27 The purpose of adding this term was to clarify the applicability of various tariff
provisions to different types of applicants. The “Qualified Renewable Exemption Applicant”
revisions were accepted by the Commission in 2017.28 This change was not incorporated into
the effective tariff language at that time but was considered as part of the previously proposed
tariff language that would not be superseded by the Class Year Redesign Filing.29 The NYISO
is now proposing to make “Qualified Renewable Exemption Applicant” a defined term in
Section 23.2. As noted below, it is also proposing to restore references to “Qualified Renewable
Exemption” throughout Section 23.4.5.7.13 when it is appropriate to distinguish them from
Renewable Exemption Applicants.
The NYISO also proposes to add a definition of “Renewable Exemption Bank” to
Section 23.2. A “Renewable Exemption Bank” would be defined as the amount of UCAP MW
calculated separately for each Mitigated Capacity Zone by the NYISO to remain available as
described in Section 23.4.5.7.13.5.5 from the most recently completed Class Year Study,
Additional SDU Study or Expedited Deliverability Study after deducting the UCAP equivalent
27 See New York Independent System Operator, Inc., Interconnection Process Improvements, Docket No. ER18-80-000 (Oct. 16, 2017) (the “October 2017 Filing”).
28 See Letter Order, Docket No. ER18-80-000 (Dec. 7, 2017) (accepting the “comprehensive
queue improvements” that were proposed in the October 2017 Filing, including Class Year “bifurcation” provisions and conforming adjustments to the BSM Rules (such as the addition of “Qualified Renewable Exemption Applicant” references).
29 See n. 10 above.
Honorable Kimberly D. Bose April 7, 2020
Page 12
MW of awarded Renewable Exemption in that most recent study from the Renewable Exemption
Limit.
“Renewable Exemption Limit” would be defined in Section 23.2 as “the maximum
amount of UCAP MW calculated by the ISO in accordance with Section 23.4.5.7.13.5.5 in Class
Year 2019 and any subsequent Class Year Studies, Additional SDU Studies, and Expedited
Deliverability Studies that start after July 1, 2020 that is available for Qualified Renewable
Exemption Applicants to receive Renewable Exemptions pursuant to section 23.4.5.7.13.”
Finally, the NYISO is proposing to add a new definition of “Unforced Capacity
Reliability Margin” (“URM”). The URM would be defined as, “the megawatt value calculated
by the ISO when converting the (a) the IRM for the NYCA or (b) the Locational Minimum
Installed Capacity Requirement (“LCR”) for a given Locality within the NYCA into UCAP
terms using ICAP to UCAP conversion factors consistent with the corresponding resource
adequacy study.” The impacts of the URM caused by Qualified Renewable Exemption
Applicants is captured in the formula for the Renewable Exemption Limit which is proposed in
Section 23.4.5.7.13.5.
B. Proposed Compliance Revisions to Renewable Exemption Eligibility Criteria
The NYISO is proposing several non-substantive updates to the Renewable Exemption eligibility criteria set forth in Section 23.4.5.7.13.1 of the Services Tariff.
First, the NYISO would establish that the Renewable Exemption would first apply “for
Class Year 2019, subsequent Class Year Studies, Additional SDU Studies and Expedited
Deliverability Studies that start after July 1, 2020 . . . ,” instead of for Class Year 2015 as was
originally envisioned by the April 2016 Filing. The new language addressing Additional SDU
Studies and Expedited Deliverability Studies is necessary because those types of studies were
introduced by the Class Year Redesign Filing. The April 2016 Filing’s version of the Renewable
Exemption proposal only referenced Class Year Studies because they were the only types of
studies that existed at the time. Second, the NYISO would delete proposed language in Section
23.4.5.7.13.1 governing the application and allocation of the previously proposed 1,000 MW cap
on Renewable Exemption awards. The deletion would reflect the fact that the 1,000 MW cap
proposal was rejected by the Commission. Moreover, the NYISO is now proposing to address
“exemption allocation” issues that would arise when the UCAP MW of Qualified Renewable
Exemption Applicants exceeds the applicable Renewable Exemption Limit using the proposed
new rules provided in new Sections 23.4.5.7.13.5 and 23.4.5.7.13.6 (discussed below).
Finally, the NYISO is proposing to replace certain references to “Renewable Exemption
Applicants” in Section 23.4.5.7.13.1 with references to “Qualified Renewable Exemption
Applicants” and to make other clarifying changes that were either first introduced by the NYISO
in the October 2017 Filing but that were removed by the Class Year Redesign Filing or that are
necessitated by the Class Year Redesign Filing (e.g., adding rules to address Additional SDU
Studies).
Honorable Kimberly D. Bose April 7, 2020
Page 13
C.Proposed Compliance Revisions Governing the Calculation of “Renewable
Exemption Limits”
Proposed new Section 23.4.5.7.13.5 would govern the calculation of Renewable
Exemption Limits for each Mitigated Capacity Zone for each Class Year Study, Additional SDU
Study and Expedited Deliverability Study. As was noted above, the Renewable Exemption
Limit for each Mitigated Capacity Zone would be the greater of: (a) the Minimum Renewable
Exemption Limit; or (b) the sum of (1) forecasted changes in Load growth; (2) forecasted
retirements that are driven by legislative and regulatory requirements and policy (i.e.,
“Incremental Regulatory Retirements”), (3) changes to the URMs that reflect the changes to the
minimum requirements for each Mitigated Capacity Zone that are indicated by modeling a
“BSM base case” and a “BSM case” including the megawatts of Qualified Renewable
Exemption Applicants seeking a Renewable Exemption, using the same software and methods
used to determine resource adequacy requirements (e.g., NYCA IRM, Locality LCRs) for the
ICAP market (“URM Impact”), and (4) the rolling bank of unused UCAP MW from previous
BSM Determinations,30 whichever is greater.
Proposed Section 23.4.5.7.13.5 explains that Renewable Exemption Limits would first be calculated for the Class Year 2019 Study that is expected to be completed at the end of this
summer. There are no Examined Facilities in the March 20, 2020 Expedited Deliverability
Study and the next Expedited Deliverability Study is not expected to start until late this summer. As a result the NYISO would first expect to implement the Renewable Exemption during Class Year 2019. The NYISO would employ the same methodology to calculate Renewable
Exemption Limits for all subsequent Class Year Studies, Additional SDU Studies, and Expedited Deliverability Studies commencing after July 1, 2020.
Section 23.4.5.7.13.5 establishes that each Renewable Exemption Limit “will identify the
maximum amount of Renewable Exemption MW that can be granted in each Mitigated Capacity
Zone to Qualified Renewable Exemption Applicants that accept their exemption
determinations.” It states that a Renewable Exemption Limit will be calculated for each
Mitigated Capacity Zone in UCAP MW as the greater of “(a) the UCAP MW associated with the
ISO’s calculation of the Minimum Renewable Exemption Limit as described in Section
23.4.5.7.13.5.1 that will lower the market price forecast for the Mitigated Capacity Zone by
$0.50/kW-month or (b) the sum of (i) the UCAP MW associated with the “Change in Forecasted Peak Load” calculated by the ISO in accordance with Section 23.4.5.7.13.5.2, (ii) the UCAP MW value identified by the ISO associated with the Incremental Regulatory Retirements
calculated by the ISO in accordance with Section 23.4.5.7.13.5.3, (iii) the URM Impact of the Qualified Renewable Exemption Applicants in the Class Year Study, Additional SDU Study, or Expedited Deliverability Study calculated by the ISO in accordance with Section 23.4.5.7.13.5.4, and (iv) the UCAP MW in the Renewable Exemption Bank for each Mitigated Capacity Zone calculated by the ISO in accordance with Section 23.4.5.7.13.5.5.
30 For purposes of initially applying the formula for Class Year 2019, the bank of UCAP MW will be set to zero for each Mitigated Capacity Zone. See proposed Services Tariff Sections
23.4.5.7.13.5.5.1 and 23.4.5.7.13.5.5.2.
Honorable Kimberly D. Bose April 7, 2020
Page 14
Section 23.4.5.7.13.5 would also establish that the NYISO will post on its website the
assumptions and calculation of the UCAP MW limit of Renewable Exemption available in each study with its “posting of the BSM Forecast inputs in accordance with Section 23.4.5.7.15” of the Services Tariff, subject to any applicable confidentiality restrictions.
Proposed new Section 23.4.5.7.13.5.1 would describe the calculation of the Minimum Renewable Exemption Limit for each Class Year Study beginning with Class Year 2019. As was noted above, the Minimum Renewable Exemption Limit would be equal to the equivalent UCAP MW that is forecasted to cause a price decrease to the Installed Capacity Spot Auction results of $0.50/kW-Month.
The Minimum Renewable Exemption Limit calculated in the preceding Class Year Study carries forward to subsequent Additional SDU Studies and Expedited Deliverability Studies that are completed prior to the start of the Initial Decision Period for the following Class Year Study. Between Class Year Studies, the Minimum Renewable Exemption Limit is reduced if Qualified Renewable Exemption Applicants are awarded a Renewable Exemption when the Minimum
Renewable Exemption Limit is in effect as the Renewable Exemption Limit for the Class Year
Study, Additional SDU Study, and/or Expedited Deliverability Study (i.e., when the Minimum
Renewable Exemption Limit results in the higher UCAP MW value when calculating the
Renewable Exemption Limit in the study).
Proposed new Section 23.4.5.13.5.2 specifies how the “Change in Forecasted Peak Load” used in the Renewable Exemption Limit formula is to be calculated. For the Class Year 2019 this value would be equal to the:
UCAP MW change associated with the difference between the 2020 peak Load
forecast published in the ISO’s 2020 Load and Capacity Report and the forecasted peak Load for the last year of the applicable Mitigation Study Period used to
evaluate Examined Facilities in Class Year 2019 pursuant to Section 23.4.5.7.2(b) of this Services Tariff that is identified from the ISO’s most recently published
Load and Capacity Report.
And for this calculation in subsequent studies the tariff would require:
The change in forecasted peak load used in the Renewable Exemption Limit for
all subsequent studies shall be the calculated as the difference between the
forecasted peak Load for last year of the applicable Mitigation Study Period used
to evaluate Examined Facilities pursuant to Section 23.4.5.7.2(b) of this Services
Tariff in the immediately preceding Class Year Study, Additional SDU Study, or
Expedited Deliverability Study and the forecasted peak Load that applies to the
last year of the Mitigation Study Period used to evaluate Examined Facilities
pursuant to Section 23.4.5.7.2(b) of this Services Tariff in the ongoing study that
is identified from the ISO’s most recently published Load and Capacity Report.”
Honorable Kimberly D. Bose April 7, 2020
Page 15
Proposed Section 23.4,5.13.5.3 addresses the use of “Incremental Regulatory
Retirements” in Renewable Exemption Limit calculations. The “UCAP MW of Incremental Regulatory Retirements” would be determined pursuant to the following process:
[S]hall include the incrementally new MW of Retirements forecasted in
accordance with Sections 23.4.5.7.15.6 and 23.4.5.7.15.7 of the Services Tariff
that have retired, or are planning to permanently cease operation, in order to
comply with or in response to new or amended regulations or statutes, or other
regulatory or related action, including but not limited to those that impact (i)
Generator emissions, (ii) inability to renew or modify the necessary operating
permits, (iii) availability of fuel supply, (iv) assessment of property taxes, and (v)
compensation or other incentive outside of the ISO markets received by a
Generator that is contingent upon its permanently ceasing operation. In order for
the ISO to identify UCAP MW of Incremental Regulatory Retirements such
regulatory action must be a significant factor in the retirement of the Generator
(i.e., a factor that contributes materially to the retirement).
As a further safeguard to ensure that these determinations are well-founded, the NYISO’s
proposal requires that it consult with the independent MMU when determining what qualifies as
an Incremental Regulatory Retirement. It would also prescribe the MMU’s reporting and posting
obligations which provide for greater transparency to stakeholders. These provisions are
consistent with other provisions under the BSM Rules31 that require the NYISO to consider
MMU input and authorize the MMU to report on any concerns that it may have with the
NYISO’s conclusions. But they provide an additional level of protection by specifying that the
Commission will review and address the NYISO’s determinations if the MMU does not endorse
them. Specifically:
When identifying such UCAP MW of Incremental Regulatory Retirements the
ISO shall consult with the Market Monitoring Unit when evaluating whether
newly enacted or amended regulatory action plays a significant role in the
retirement of the Generator. Prior to the ISO making a determination to include
or exclude a Generator retirement in this component of the Renewable Exemption
Limit calculation, the Market Monitoring Unit shall provide the ISO a written
opinion and recommendation. The Market Monitoring Unit shall also include its
assessment in its report issued pursuant to Section 23.4.5.7.6.8 of Attachment H
to this Services Tariff and as further specified in Section 30.4.6.2.13 of
Attachment O to this Services Tariff. In the event that the ISO view on whether
to include a Generator retirement in its calculation of the UCAP MW of
Incremental Regulatory Retirements is contrary to the recommendation of the
Market Monitoring Unit, the ISO will submit the question to FERC for resolution.
The ISO’s filing with FERC will describe the ISO’s opinion and recommendation
and include the Market Monitoring Unit’s written opinion and recommendation.
The ISO will request FERC to act on this filing within 60 days and will begin the
31 See Services Tariff Sections 23.4.5.7.6.8, 23.4.5.7.9.4.2, and 23.4.5.7.10.
Honorable Kimberly D. Bose April 7, 2020
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Initial Decision Period of the Class Year Study, Additional SDU Study, or submit
the Class Year Study or Additional SDU Study to the Operating Committee for
approval, until FERC acts on the ISO’s filing. Once FERC acts on the ISO’s
filing, the ISO will calculate the Renewable Exemption Limit using the UCAP
MW of Incremental Regulatory Retirements consistent with the FERC decision.
Proposed new Section 23.4.5.7.13.5.4 governs the NYISO’s calculation of URM Impact
values used in the Renewable Exemption Limit formula. The URM Impact of the “CRIS MW
requested by the Qualified Renewable Exemption Applicants shall be computed for each Class
Year Study, Additional SDU Study, and Expedited Deliverability Study.” A URM Impact “shall
be calculated separately for each Mitigated Capacity Zone. If there are no Qualified Renewable
Exemption Applicants participating in the study the URM Impact of Qualified Renewable
Exemption Applicants shall be zero, otherwise the ISO shall calculate the incremental URM associated with Qualified Renewable Exemption Applicants in the study.”
In implementing the calculation of this term within the proposed Renewable Exemption
Limit formula the NYISO shall calculate the URM Impact of the Qualified Renewable
Exemption Applicants separately for each Mitigated Capacity Zone and technology type. When
there are no Qualified Renewable Exemption Applicants participating in the study the URM
Impact of Qualified Renewable Exemption Applicants shall be zero, otherwise the NYISO shall
calculate the URM impacts using the inputs and methods used to determine the most recently
approved Installed Capacity requirements for the Localities (i.e., NYISO Locational Minimum
Installed Capacity Requirements Study), to the extent practicable. Each Mitigated Capacity
Zone’s URM impact will reflect the sum of the changes in URM caused by each Qualified
Renewable Exemption Applicant in the study, prorated for any Qualified Renewable Exemption
Applicants that drop out of the study.
Section 23.4.5.7.13.5.5 describes the “Renewable Exemption Banks.” Under the NYISO’s proposed language:
The amount of UCAP MW in the Renewable Exemption Bank shall be calculated
separately for each Mitigated Capacity Zone as a running total of UCAP MW
determined to be available in the calculation of a Renewable Exemption Limit as
described above for the most recently completed Class Year Study that was not
awarded to a Qualified Renewable Exemption Applicant as part of that Class Year
Study or in subsequent Additional SDU Studies and Expedited Deliverability
Studies that are completed prior to the start of the Initial Decision Period of the
next Class Year Study. The UCAP equivalent MW of CRIS MW that receive
exemptions pursuant to Section 23.4.5.7.2.(a) and that are shall be deducted from
the Renewable Exemption Bank. Renewable Exemptions awarded in a Mitigated
Capacity Zone during a Class Year Study, Additional SDU Study or Expedited
Deliverability Study pursuant to the Minimum Renewable Exemption Limit for
that Mitigated Capacity Zone shall not be subtracted from the Renewable
Exemption Bank for that Mitigated Capacity Zone. The Bank will further be
modified for each Study such that 1) any UCAP MWs from Incremental
Honorable Kimberly D. Bose April 7, 2020
Page 17
Regulatory Retirement previously forecast pursuant with 23.4.5.7.13.5.3 which
did not remove capacity consistent with the forecast or did not retire would be
deducted from the Bank and 2) any UCAP MWs previously found exempt under
23.4.5.7.13.4.2 or Section 23.4.5.7.2.(a) which do not meet the criteria per
23.4.5.7.15 to be included into the NYISO forecast shall be added back to the
Bank.
Proposed new Sections 23.4.5.7.13.5.5.1 and 23.4.5.7.13.5.5.2 contain additional rules
specific to how the Renewable Exemption Banks for the New York City Locality and the G-J
Locality interact. These are the two Mitigated Capacity Zones that currently exist in New York.
These additional rules are required because the New York City Locality is located wholly within
the G-J Locality.
Section 23.4.5.7.13.5.5.1 establishes that:
The Renewable Exemption Bank for New York City Locality used in the
calculation of the Renewable Exemption Limit for New York City Locality in
accordance with Section 23.4.5.7.13.5 will be a rolling calculation of UCAP MW calculated using the sum of (i) the UCAP MW associated with the Change in Forecasted Peak Load calculated by the ISO in accordance with Section
23.4.5.7.13.5.2, (ii) the UCAP MW value of the Incremental Regulatory
Retirements calculated by the ISO in accordance with Section 23.4.5.7.13.5.3, (iii) the URM Impact of the Qualified Renewable Exemption Applicants
calculated by the ISO in accordance with Section 23.4.5.7.13.5.4, and (iv) the UCAP MW in the Renewable Exemption Bank for New York City Locality that carried forward from the immediately prior Class Year Study, Additional SDU Study, or Expedited Deliverability Study, less (v) the UCAP equivalent MW
associated with the exempted CRIS MW received by Qualified Renewable
Exemption Applicants pursuant to this Section 23.4.5.7.13 of the Services Tariff in the current study in the New York City Locality.
Section 23.4.5.7.13.5.5.2 states that the Renewable Exemption Bank for the G-J Locality
will likewise be a rolling calculation computed in the same manner, and using the same factors
(and data relevant to the G-J Locality), as the calculation for the New York City bank except that
the value subtracted from the sum of items (i) through (iv) is different. For the G-J Locality, the
NYISO will subtract the sum of (a) the UCAP equivalent MW associated with the exempted
CRIS MW received by Qualified Renewable Exemption Applicants pursuant to this Section
23.4.5.7.13 of the Services Tariff in the current study in both the New York City and the G-J
Localities and (b) any positive UCAP MW remaining in the Renewable Exemption Bank for the New York City Locality. That is, the amount of MWs in the G-J Locality Bank will be offset, by the MW in the New York City bank; this can result in a negative value for the G-J Locality
Bank. The purpose of this requirement is to avoid double counting “carryover” capacity from one study to the next. As the New York City Locality (“Load Zone J”) is wholly nested within the G-J Locality not only the Renewable exemptions awarded, but the remaining New York City Locality bank must be deducted from the G-J Locality calculation.
Honorable Kimberly D. Bose April 7, 2020
Page 18
Both Sections 23.4.5.7.13.5.5.1 and 23.4.5.7.13.5.5.2 provide that the New York City
Locality and G-J Locality Renewable Exemption Banks will be set at zero when calculating the
initial Renewable Exemption Limits applicable for Class Year 2019. This is appropriate because
Class Year 2019 will be the first time that the NYISO implements the Renewable Exemption,
and the Renewable Exemption Limit. Thus, there will be no “carryover” MW from prior studies.
Finally, proposed Section 23.4.5.7.13.6 would describe how the NYISO would determine
actual Renewable Exemption awards in light of the Renewable Exemption limits. This provision
would replace outdated “exemption allocation” rules included in the April 2016 Filing and
subsequently addressed by certain other filings. The NYISO’s new compliance proposal is that
it would convert the CRIS MW requested for each Qualified Renewable Exemption Applicant in
a Class Year Study, Additional SDU Study or Expedited Deliverability Study to a UCAP MW
equivalent value in accordance with applicable UCAP Deration Factor (“UCDF”) and in
accordance with ISO Procedures. The UCDF shall be based on specific type of Exempt
Renewable Technology being proposed by the Qualified Renewable Exemption Applicant. The
NYISO would award Renewable Exemptions to Qualified Renewable Exemption Applicant in
each Mitigated Capacity up to, but not to exceed, the UCAP MW value calculated in the
applicable Class Year Study, Additional SDU Study or Expedited Deliverability Study to be the
Renewable Exemption Megawatt Limit for the Mitigated Capacity Zone as provided in proposed
Section 23.4.5.7.13.5. If the UCAP MW equivalent value of the total requested CRIS MW
received from Qualified Renewable Exemption Applicants in a given study exceeds the
applicable UCAP MW Renewable Exemption Megawatt Limit calculated by the NYISO then the
NYISO would award Renewable Exemptions on a pro rata basis using the UCAP MW
equivalent value it calculated for the requested CRIS MW of each Qualified Renewable
Exemption Applicant that remains in the relevant study.
D.Proposed Compliance Revisions to Renewable Exemption Revocation
Provisions
In compliance with the October 2015 Order, the April 2016 Filing included provisions
governing the potential revocation of a Renewable Exemption. These provisions were modeled
closely on the previously accepted revocation language applicable to Competitive Entry
Exemptions.
The February 20 Order conditionally accepted the revocation provisions.32 It directed the NYISO to further revise the Services Tariff “to provide an opportunity for an exemption holder to explain to NYISO why revocation may be inappropriate” before the NYISO revokes a
Renewable Exemption.
In accordance with this new requirement, the NYISO has proposed additional compliance
language for inclusion in Section 23.4.5.7.13.3.1 and 23.4.5.7.13.3.3. The new language builds
on the NYISO’s previous compliance proposal, which already contemplated that exemption
32 See February 20 Order at P 141.
Honorable Kimberly D. Bose April 7, 2020
Page 19
holders would be afforded an opportunity to explain why an exemption should not be revoked. The proposed new tariff language would add further procedural details.
Specifically, Section 23.4.5.7.13.3.1 applies to scenarios in which an exemption holder
gives the NYISO timely notice that changed circumstances could mean that it is no longer
eligible for a Renewable Exemption. The proposed new compliance language would require the NYISO to respond by providing written notice of its intent to revoke an exemption and set forth its reasons within ten business days of receiving notice from an exemption holder. The NYISO would also be required to provide the exemption holder with twenty business days to schedule a meeting with the NYISO in order to make a final attempt to demonstrate why the exemption
should not be revoked. The NYISO would be obliged to determine within ten business days of
the meeting whether the revocation of the Renewable Exemption should be finalized and to post a revocation determination on its website.
Similarly, Section 23.4.5.7.13.3.3 applies to scenarios in which an exemption holder has
not given the NYISO timely notice of, but the NYISO has identified, a development that could
invalidate a Renewable Exemption. Previously accepted language required the NYISO to give
an exemption holder notice of a potential revocation in this scenario. Proposed new compliance
language would clarify that the NYISO’s notice must be in writing and must provide the
exemption holder with an opportunity to submit documentation to the NYISO and meet with the
NYISO to attempt to rebut the NYISO’s findings within thirty days. In addition, the NYISO
would be obliged to determine within ten business days of the meeting whether the revocation of
the Renewable Exemption should be finalized and post a revocation determination on its website.
E. Additional Necessary Compliance Tariff Revisions
As noted above, the Commission has previously authorized the NYISO to include
additional revisions in compliance filings that were not expressly required by the Commission but that are necessary to implement or accommodate such revisions.33 A number of such revisions are included in this filing.
For example, as was noted in various places in the preceding sections, the NYISO has
added references to Additional SDU Studies and Expedited Deliverability Studies throughout its proposed compliance tariff language. These revisions are necessary because the NYISO’s Class Year Redesign Filing created new types of studies that did not exist when the April 2016 Filing was developed. Similarly, the compliance revisions proposed herein include multiple references to “Qualified Renewable Exemption Applicants” for the reasons discussed above.
This filing also modifies the previously filed and accepted tariff language with respect to Qualified Renewable Exemption Applicants34 and seeks to provide additional clarity with
33 See n. 4 above.
34 See October 2017 Filing and See Letter Order, Docket No. ER18-80-000 (Dec. 7, 2017)
(accepting the “comprehensive queue improvements” that were proposed in the October 2017 Filing,
including Class Year “bifurcation” provisions and conforming adjustments to the BSM Rules (such as the addition of “Qualified Renewable Exemption Applicant” references).
Honorable Kimberly D. Bose April 7, 2020
Page 20
respect to the previously filed language with respect to both Renewable Exemption Applicants and Qualified Renewable Exemption Applicants by defining these terms in Section 23.2 and clarifying the usage of these terms throughout Section 23.4.5.7.13.
In addition, the NYISO is excluding from this filing the tariff language that was filed in
the October 2017 Filing and accepted by the Commission, but that was never effective tariff
language because it was superseded by the Class Year Redesign Filing35 prior to the
Commission’s order on the original Renewable Exemption proposal in the April 2016 Filing.
The excluded language largely pertains to descriptions of the bifurcation of the Class Year Study
that was proposed in the October 2017 Filing. For example, this language occurs in a
parenthetical that was originally proposed in the October 2017 Filing modifying Section
23.4.5.7.13.1 of the Services Tariff. The superseded language reads “…(a Class Year that is not Bifurcated, or Class Year X-1 and Class Year X-2 together, meaning “the same Class Year”)” and is shown as struck through in Attachment IX to the Class Year Redesign Filing. There is a large block of similarly superseded language found in Section 23.4.5.7.13.1(b) of the Services Tariff, which this filing is proposing to delete.
In Section 23.4.5.7.13.4.2, several tariff references were proposed to address the
bifurcation of the Class Year Study in the October 2017 filing that have also been mooted by the
Class Year Redesign Filing. For instance, the sentence “[f]or a Class Year that is not Bifurcated
the ISO shall make such qualification determination prior to the Initial Decision Period” and
other related language is no longer relevant tariff language. The NYISO is also eliminating the
first sentence in Section 23.4.5.7.13.4.4 of the Services Tariff that was originally proposed in the
October 2017 Filing. This sentence read “[c]oncurrent with the ISO’s posting on its website of
the BSM Forecast inputs, the ISO shall post both the total MW of Examined Facilities that were
determined to be Qualified Renewable Exemption Applicants and the total MW of Examined
Facilities for which Renewable Exemptions were requested.” This sentence has been made
redundant by the proposed revisions to the first sentence in Section 23.4.5.7.13.4.4, which reads
“[t]he ISO shall post on its website its determination of whether the Renewable Exemption
Applicant has been determined to be a Qualified Renewable Exemption Applicant and the
quantity of the CRIS MW and UCAP equivalent MW for which the Qualified Renewable
Exemption Applicant was determined to be exempt for any quantity of MW, and if exempt, the
quantity of MW exempt, or non-exempt, from an Offer Floor as soon as the determination is
final.” In addition to eliminating superseded and redundant provisions, the NYISO is also
proposing new language to Section 23.4.5.7.13.4.2 that is necessary to integrate the various
elements that impact the NYISO’s implementation of Renewable Exemptions (e.g., new study
types, “Qualified Renewable Exemption Applicants,” the proposed Renewable Exemption Limit
formula, and new exemption allocation provisions proposed in Section 23.4.5.7.13.6).
VI. STAKEHOLDER AND INDEPENDENT MARKET MONITORING UNIT INPUT
The NYISO worked expeditiously to submit this compliance filing by the deadline
dictated by the February 20 Order. In response to stakeholder requests that it take additional
time the NYISO obtained the extension that was granted on March 25. The NYISO’s proposed
35 See n. 10 above.
Honorable Kimberly D. Bose April 7, 2020
Page 21
methodology for calculating the annual Renewable Exemption was discussed at two meetings of
the Installed Capacity Working Group and were substantially revised in response to stakeholder
feedback. The NYISO also invited, and considered, written stakeholder comments on the
proposal.
In addition, the NYISO also engaged in extensive discussions with the MMU concerning
the compliance proposal. The NYISO’s understanding is that the MMU supports the
methodology for calculating the Renewable Exemption proposed in this compliance filing.
VII. REQUEST FOR COMMISSION ACTION WITHIN SIXTY-TWO DAYS
The NYISO respectfully asks that the Commission issue an order accepting this
compliance filing, without imposing condition or instituting any new proceedings, within sixtytwo days, i.e., by June 8, 2020. Action by that date should enable the NYISO to implement the Renewable Exemption in time for BSM Determinations made that will be made in Class Year 2019.36 The NYISO anticipates that these determinations will not be made until September
2020. It is critically important that the Renewable Exemption be in effect by that date. The
October 2015 Order held that it would be unjust and unreasonable “over-mitigation” to subject intermittent renewables to the BSM Rules up to an appropriate cap. The February 20 Order did not alter this holding. The NYISO is committed to completing the Class Year 2019 process on schedule. Delaying the implementation of the Renewable Exemption would seriously threaten the NYISO’s ability to meet this vitally important goal.
VIII PROPOSED EFFECTIVE DATE
The NYISO is requesting an amended effective date of June 9, 2020, i.e., one day after
the date that the NYISO has asked the Commission to act, for the compliance tariff revisions
proposed herein. The requested effective date will enable the NYISO to implement the
Renewable Exemption in Class Year 2019, as contemplated by the February 20 Order.37
IX.SERVICE
The NYISO will send an electronic link to 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 to the New
36 Paragraph 17 of the February 20 Order stated that if the NYISO anticipated “having to delay its issuance of the Class Year 2019 buyer-side market power mitigation determinations as a result of this
order, NYISO should also provide an updated schedule for its issuance of such determinations.” To be clear, the NYISO does not anticipate any need to delay Class Year 2019 BSM Determinations so long as the Commission acts by June 8, 2020.
37 See February 20 Order at PP 16-17 (making conditionally accepted Renewable Exemption
revisions effective for Class Year 2019 and instructing the NYISO to include in this compliance filing
“any tariff revisions necessary to make the [Renewable Exemption] effective for the Class Year 2019.”
Honorable Kimberly D. Bose April 7, 2020
Page 22
Jersey Board of Public Utilities. In addition, the complete filing will be posted on the NYISO’s
website at www.nyiso.com.
X.CONCLUSION
In conclusion, the NYISO respectfully asks that the Commission act within sixty-two days, i.e., by June 8, 2020 to accept this compliance filing without any conditions and without instituting any further proceedings. The NYISO requests that the proposed compliance tariff revisions be made effective the day after that date, i.e., on June 9, 2020.
Respectfully Submitted,
/s/ David Allen
David. Allen
Senior Attorney
New York Independent System Operator, Inc.
cc:Anna Cochrane
Jignasa Gadani
Jette Gebhart
Kurt Longo
John C. Miller
David Morenoff
Daniel Nowak
Larry Parkinson
Douglas Roe
Frank Swigonski
Eric Vandenberg
Gary Will
