January 15, 2021
VIA E-TARIFF
Kimberly D. Bose Secretary
Federal Energy Regulatory Commission 888 First Street, NE
Washington, DC 20426
Re: Incorporation of NextEra Energy Transmission New York, Inc., Formula Rate into
the New York Independent System Operator, Inc. Open Access Transmission
Tariff, Docket No. ER21-___-000
Dear Ms. Bose:
Pursuant to Section 205 of the Federal Power Act1 and Part 35 of the Federal
Energy Regulatory Commission’s (“Commission” or “FERC”) regulations,2 the New York
Independent System Operator, Inc. (“NYISO”), as administrator of the NYISO Open
Access Transmission Tariff (“OATT” or “Tariff”), hereby submits via eTariff on behalf of
NextEra Energy Transmission New York, Inc. (“NEET New York”) revisions to the
NYISO Open Access Transmission Tariff (“OATT”) to (i) incorporate the formula rate
template and implementation protocols previously approved by the Commission for NEET
New York as NYISO OATT Section 6.10.9, Attachment 3 to Rate Schedule 10; and (ii)
incorporate the previously approved cost allocation for NEET New York’s Empire State
Line Project (“ESL Project”) into NYISO OATT Section 31.8.4, Appendix E to
Attachment Y. NEET New York requests an effective date of March 17, 2021, (i.e., the
day following the end of the statutory 60-day notice period), for the enclosed revisions.3
I.List of Documents Submitted
NEET New York submits the following documents with this filing letter:
1 16 U.S.C. § 824d (2012).
2 18 CFR Part 35 (2018).
3 The NYISO submits this filing on behalf of NEET New York solely in its role as administrator of the
OATT. The burden of demonstrating that the proposed tariff amendments are just and reasonable rests with
NEET New York, the sponsoring party. The NYISO takes no position on any substantive aspect of this
filing at this time. Capitalized terms not otherwise defined herein shall have the meaning specified in the
OATT.
Kimberly D. Bose
January 15, 2021
Page 2
1.A clean version of the proposed revisions to the OATT (Attachment I);
2.A blacklined version of the proposed revisions to the OATT (Attachment
II); and
3.A native (Microsoft Excel) version of the NEET New York formula rate
(Attachment III).
II.Copies of Correspondence
Communications regarding this pleading should be addressed to:
For NEET New York:
Joseph W. Lowell
Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004
(202) 739-5384
jlowell@morganlewis.com
III.Background
Justin P. Moeller
Senior FERC Counsel
NextEra Energy, Inc.
801 Pennsylvania Ave., NW, #220 Washington, DC 20004
(202) 349-3346
justin.moeller@fpl.com
NEET New York is a wholly-owned direct subsidiary of NextEra Energy
Transmission, LLC (“NEET”), and is incorporated under the Transportation Corporation
Laws of New York. NEET New York was formed to develop, construct, finance, own,
operate, and maintain high-voltage electric transmission facilities in the NYISO region as a
portfolio.
On September 30, 2016, in Docket No. ER16-2719-000, NEET New York
submitted for filing with the Commission a proposed formula rate template and associated
implementation protocols. NEET New York also requested Commission approval of
several rate incentive treatments incorporated in the formula rate template: (i) a base return
on equity (“ROE”) of 10.5 percent and a 50 basis point ROE Adder for Regional
Transmission Organization/Independent System Operator participation (RTO/ISO
Participation Adder); (ii) a regulatory asset account for NEET New York’s prudently
incurred pre-commercial and formation costs for later recovery, with carrying charges; and
(iii) a hypothetical capital structure of 60 percent equity and 40 percent debt, to remain in
effect until the first transmission project is placed in service. At the time, NEET New
York explained that the formula rate template would be a NEET New York tariff and that
it was not yet incorporated into the NYISO OATT. By delegated letter order issued in
Docket No. ER16-2719-000 on February 16, 2017, NEET New York’s filing was accepted
Kimberly D. Bose
January 15, 2021
Page 3
and suspended for a nominal period, to be effective November 30, 2016, as requested, subject to refund and further Commission order.4
On November 3, 2017, the Commission issued a further order accepting and
suspending NEET New York’s September 30 Filing for a nominal period to be effective
November 30, 2016, subject to condition, and setting the base ROE of the Formula Rate
for hearing and settlement judge procedures.5 The November 2017 Order also granted
NEET New York: (1) recovery of all pre-commercial and formation costs that are not
capitalized through the establishment of a regulatory asset account, with carrying charges
accruing beginning on November 30, 2016; (2) the use of a hypothetical capital structure
of 60 percent equity and 40 percent debt prior to its first transmission project going into
service; and (3) a 50 basis point ROE adder for NEET New York’s participation in
NYISO.
Separately, on October 20, 2017, in Docket No. ER18-125-000, NEET New York
requested approval of certain incentive rate treatments for its investment in the ESL
Project, a Public Policy Transmission Project pursuant to Attachment Y of the OATT. The
NYISO selected NEET New York’s ESL Project on October 17, 2017 in response to the
Western New York Public Policy Transmission Need identified by the New York State
Public Service Commission on July 20, 2015 in Case No. 14-E-0454. In its filing to the
Commission, NEET New York requested that the Commission grant authorization of the
following incentives: (i) recovery of 100% of prudently incurred costs in the event the
ESL Project must be abandoned for reasons outside of NEET New York’s reasonable
control (“Abandoned Plant Incentive”); (ii) inclusion of 100% Construction Work In
Progress (“CWIP”) in rate base; (iii) an incentive return on equity adder of 50 basis points
(“ROE Incentive Adder”); and (iv) an incentive return on equity adder of 50 basis points
for independent transmission ownership (“Transco Adder”). The Commission granted the
requests for the ROE Incentive Adder and the Transco Adder, subject to the resulting ROE
being within the zone of reasonableness for NEET NY in Docket No. ER16-2719-000, et
al., and the Commission also granted the Abandoned Plant Incentive and CWIP incentive.6
On May 25, 2018, NEET New York filed an offer of settlement (“Settlement
Agreement”) in Docket No. ER16-2719-000. The Settlement Agreement resolved all of
the issues set for hearing and settlement procedures in Docket No. ER16-2719-000,
including a base ROE, as well as NEET NY’s incentive rate treatments for the ESL Project
and certain issues associated with NEET NY’s potential development of a separate set of
transmission projects in New York, the “AC Transmission Projects.”7 Relevant here, the
4 NextEra Energy Transmission New York, Inc., 158 FERC ¶ 62,109 (2017).
5 NextEra Energy Transmission New York, Inc., 161 FERC ¶ 61,138 (2017) (“November 2017 Order”).
6 NextEra Energy Transmission New York, Inc., 162 FERC ¶ 61,196 (2018).
7 While NEET New York ultimately was not selected as a developer of the AC Transmission Projects, the
Settlement Agreement provides for the recovery of “Project Development Costs” incurred by NEET New
York related to its participation in the Public Policy Transmission Planning Process for the AC Transmission
Kimberly D. Bose
January 15, 2021
Page 4
Settlement Agreement also included a cost allocation for recovery of the costs of the ESL
Project. The Settlement Agreement was approved by the Commission on August 17,
2018.8
IV. Description of the Proposed Tariff Revisions
The enclosed revisions to the OATT are submitted consistent with the Settlement Agreement reached in Docket No. ER16-2719-000. In particular, article 4(a) of the
Settlement Agreement provides:
As necessary, NEET NY will make appropriate filings (“Implementation Filings”)
to FERC to implement the foregoing terms of this settlement agreement, including
filings to (i) propose revisions to the NEET NY formula rate and rate incentive
treatment to reflect the foregoing rate treatments with respect to the Empire State
Line Project; (ii) to the extent NEET NY is selected as the developer of the AC
Transmission Project, propose revisions to the NEET NY formula rate to reflect the
rate incentive treatment and terms applicable for the AC Transmission Project as
discussed herein; and (iii) incorporate the NEET NY formula rate into the NYISO
Tariff.9
The tariff revisions submitted herewith include limited modifications to Rate
Schedule 10 and Attachment Y of the OATT. Rate Schedule 10 establishes the Regulated
Transmission Facilities Charge (“RTFC”) for the recovery of costs associated with a
regulated transmission project that is eligible for cost recovery in accordance with the
NYISO Comprehensive System Planning Process (“CSPP”). The ESL Project is a Public
Policy Transmission Project that is being developed as a regulated transmission project
through the CSPP. Section 6.10.4.2 of Rate Schedule 10 requires a filing with the
Commission for approval of the revenue requirement for a project to be recovered through
a RTFC. To that end, and in light of the Commission’s prior approval of the formula rate
for NEET New York, NEET New York proposes a new Attachment 3 to Rate Schedule 10
to be used in the calculation of the RTFC associated with the ESL Project.
The tariff revisions attached herewith propose to include a new Section 6.10.9.1,
which provides that Attachment 3 to Rate Schedule 10 establishes the RTFC for NEET
New York. Proposed Section 6.10.9.2 provides that the revenue requirement for NEET
New York shall be determined in accordance with the Formula Rate Template and
Formula Rate Protocols, which are included as Sections 6.10.9.2.1 and 6.10.9.2.2,
respectively. The NEET New York Formula Rate Template included in Section 6.10.9.2.1
Public Policy Transmission Needs identified by the New York State Public Service Commission on December 17, 2015 in Case No. 12-T-0502 prior to the NYISO’s selection of one or more competing developers’ projects to address the AC Transmission Public Policy Transmission Needs.
8 NextEra Energy Transmission New York, Inc., 164 FERC ¶ 61,117 (2018).
9 Settlement Agreement, Art. 4(a).
Kimberly D. Bose
January 15, 2021
Page 5
is the same template previously approved by the Commission, with several limited
corrections to references. In particular, NEET New York fixed several incorrect internal
references on lines 92, 93, and 94 of Appendix A of the template, and corrected a reference
in an introductory sentence above the table beginning on line 66 of Attachment 4 of the
template. The template also includes the corrections filed with NEET New York’s revised
compliance filing submitted on March 29, 2019, in Docket No. ER16-2719-007, which
was accepted by Commission letter order dated July 9, 2019.10 Lastly, Section 6.10.9.3
provides that NEET New York’s Project Development Costs associated with the AC
Transmission Project shall be allocated to Responsible LSEs consistent with the existing
cost allocation methodology provided in Section 31.8.2 of the Tariff for the AC
Transmission Public Policy Transmission Need, while NEET New York’s costs associated
with the ESL Project shall be allocated to Responsible LSEs consistent with the cost
allocation methodology for the Western New York Public Policy Transmission Need that
was included as section 3.5(b) of the Settlement Agreement approved by the Commission
and which, as discussed below, is now being incorporated into the NYISO Tariff at Section
31.8.4.
Attachment Y governs the CSPP, setting forth the NYISO process for reliability
planning, economic planning, Public Policy Requirements planning, cost allocation and
cost recovery, and the interregional planning process. Within Attachment Y, Sections
31.5.5.4.2 and 31.5.5.4.3 address the default load ratio based cost allocation methodology for Public Policy Transmission Projects, as well as the process for establishing an
alternative cost allocation methodology. As noted above, the Settlement Agreement
established a cost allocation methodology for the ESL Project to be used in lieu of the
default load ratio based cost allocation methodology. Therefore, a new Section 31.8.4 is included to set forth the ESL Project cost allocation methodology that was approved in section 3.5(b) of the Settlement Agreement. As discussed above, this new Section 31.8.4 is cross-referenced in Section 6.10.9.3 as the cost allocation for the portion of NEET New York’s revenue requirement related to the ESL Project.
V.Effective Date
NEET New York respectfully requests that the proposed tariff revisions become
effective on March 17, 2021, (i.e., the day following the end of the statutory 60-day notice
period).
VI.Service
The NYISO has informed NEET New York that it will send an electronic link to
this filing to the official representative of each of its customers, each participant on its
stakeholder committees, and the New York State Public Service Commission. The NYISO
10 NextEra Energy Transmission New York, Inc., Docket Nos. ER16-2719-004 et al., Letter Order (issued July 9, 2020).
Kimberly D. Bose
January 15, 2021
Page 6
has also informed NEET New York that it will post the complete filing on its website at
www.nyiso.com.
VII. Conclusion
For the reasons discussed herein, NEET New York respectfully requests that the Commission accept the proposed revisions to the OATT attached hereto with an effective date of March 17, 2021.
Respectfully submitted,
/s/ Justin P. Moeller
Justin P. Moeller
Senior FERC Counsel
NextEra Energy, Inc.
800 Pennsylvania Ave., NW, #220 Washington, DC 20004
(202) 349-3346
justin.moeller@fpl.com
Counsel to NextEra Energy Transmission New York,
Inc.
