UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

)

TC Ravenswood, LLC)Docket No. ER11-4200-000

)

MOTION OF NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.

IN OPPOSITION TO AMENDMENT AND, IN THE ALTERNATIVE, ANSWER;

AND MOTION SEEKING WAIVER OF TARIFF REQUIREMENTS REGARDING BLACK
START SERVICE

Pursuant to Rules 212, 215(b) and 216(b)1 of the Commission’s Rules of Practice and

Procedure,2 the New York Independent System Operator, Inc. (“NYISO”) respectfully requests that the
Commission: (i) find that good cause exists to reject the proposed amendments submitted by TC
Ravenswood, LLC (“TC Ravenswood”) on August 26, 2011 (“August 26 Motion”) in the above-
captioned proceeding,3 (ii) grant TC Ravenswood’s initial requests for limited waivers of the black
start and system restoration provisions in Rate Schedule 5 of the NYISO Market Administration and
Control Area Services Tariff (“Services Tariff”) as set forth in its August 2, 2011 submission (“August

2 Motion”),4 (iii) grant an additional limited waiver of the NYISO’s black start and system restoration
provisions as described below, and (iv) initiate a process supervised by the Commission to address the

1 As indicated in this submission, the NYISO believes that TC Ravenswood’s proposed withdrawals of its waiver
request and request for the appointment of a settlement judge in this proceeding should be rejected pursuant to Rule
216(b). TC Ravenswood classifies its August 26 Motion as an amendment to its August 2 Motion that should be
addressed under the amendment requirements in Rule 215. However, TC Ravenswood’s motion is tantamount to a
withdrawal as it is seeking to withdraw the core requests in its August 2 Motion. As indicated in Section III.D of
this submission, if the Commission were to accept TC Ravenswood’s proposed changes to its August 2 Motion, its
one remaining waiver request would be meaningless. The Commission should, therefore, treat TC Ravenswood’s
August 26 Motion as a withdrawal under Rule 216, which shall be subject to disallowance by the Commission for
good cause pursuant to Rule 216(b). If, however, the Commission does determine that Rule 215 is appropriate in
this instance, the NYISO’s response should be treated as an answer, which the NYISO is entitled to make pursuant
to Rule 215(b).

2 18 C.F.R. §§ 385.212, 385.215(c), and 385.216(b) (2011).

3 See Amendment to Motion of TC Ravenswood, LLC, TC Ravenswood, LLC, Docket No. ER11-4200-000 (August 26, 2011) (“August 26 Motion”).

4 See Motion of TC Ravenswood, LLC for Waiver of New York Independent System Operator, Inc.’s Tariff Provisions Regarding Black Start and System Restoration Procedures; Request for Expedited Treatment, TC Ravenswood, LLC, Docket No. ER11-4200-000 (August 2, 2011) (“August 2 Motion”).

concerns of the NYISO, Con Edison, and TC Ravenswood, along with the concerns of other generators that participate in the statewide program administered by the NYISO for restoring electric service in New York following an unplanned outage (“New York Restoration Program”).

This proceeding concerns TC Ravenswood’s request in its August 2 Motion, with the

concurrence of the NYISO and the Consolidated Edison Company of New York, Inc. (“Con Edison”), that the Commission grant on an expedited basis certain limited waivers of the Services Tariff to
temporarily extend from September 30, 2011, until April 30, 2012, the participation of its steam
turbine units 10, 20, and 30 (“Ravenswood Units”) in the Con Edison portion of the New York
Restoration Program.5

Due to their size and location, the Ravenswood Units play a unique and important role in the
Con Edison portion of the New York Restoration Program. TC Ravenswood notified the NYISO and
Con Edison in September 2010 of its intent to withdraw the Ravenswood Units from the program at
the conclusion of their commitment period on September 30, 2011, due, in large part, to its concerns
regarding the impact of required annual black start capability tests on the aging Ravenswood Units.
TC Ravenswood, the NYISO, and Con Edison agreed upon a temporary extension as a mechanism for
providing additional time to complete the development and implementation of enhancements to the
New York Restoration Program that, among other things, are intended to address TC Ravenswood’s
operational concerns and the NYISO and Con Edison’s reliability concerns with the aim of retaining
the Ravenswood Units and other resources in the New York Restoration Program.

5 The Ravenswood Units participate in Con Edison’s local system restoration program. The New York Restoration
Program provides for: (i) the restoration of electric service to New York by means of the 345 kV transmission
backbone of New York that is energized by large hydropower units located in northern and western New York, and
(ii) the restoration of electric service to the Con Edison service territory in southeastern New York by gas turbine
and steam turbine units in accordance with Con Edison’s local system restoration program. See Services Tariff,
Rate Schedule 5 § Section 15.5.1; see also NYISO System Restoration Manual § 1.2 (July 2010).

Notwithstanding the progress that the parties have made to date in developing program

enhancements that would address each parties’ stated concerns, TC Ravenswood abruptly changed its position and submitted the August 26 Motion to the Commission stating that it would withdraw the
Ravenswood Units from the New York Restoration Program on September 30, 2011. TC Ravenswood took this action without first attempting to address its newly identified concerns with the NYISO.
Withdrawing the Ravenswood Units at this time could result in significant harm to the robustness of the New York Restoration Program.

In its August 26 Motion, TC Ravenswood requested that the Commission amend its August 2 Motion to withdraw its waiver requests that would extend its participation in the New York
Restoration Program and its request for the initiation of a settlement process to assist the parties in
resolving their concerns. As grounds for its abrupt change, TC Ravenswood cited concerns unrelated to TC Ravenswood’s capability to provide, and be adequately compensated for providing, black start and system restoration service. As detailed below, TC Ravenswood’s claims as to why it must
withdraw its requests at this late stage simply are not credible given TC Ravenswood’s previous
statements and actions in this proceeding. The NYISO continues to believe that the substantive
concerns of each of the parties regarding black start and system restoration service can and should be resolved by means of this proceeding. Absent an expeditious and definitive resolution of the
underlying operational and economic issues in this docket, New York City’s ability to recover in a
timely manner from a blackout could be threatened.

For this reason, the NYISO respectfully requests that the Commission: (i) find that good cause
exists to reject TC Ravenswood’s proposed amendments, (ii) grant the limited waivers of the black
start and system restoration provisions initially requested by TC Ravenswood, (iii) grant an additional
waiver of the black start and system restoration provisions to temporarily suspend the withdrawal of

Robert E. Fernandez, General Counsel
Raymond Stalter, Director of Regulatory Affairs
* Carl F. Patka, Assistant General Counsel
New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
rstalter@nyiso.com

cpatka@nyiso.com

* -- Persons designated for service.

II.BACKGROUND

*Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, D.C. 20037
Tel: (202) 955-1500

Fax: (202) 778-2201
tmurphy@hunton.com

*Kevin W. Jones6

Hunton & Williams LLP 951 East Byrd Street

Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 344-7999
kjones@hunton.com

A.NYISO Tariff Requirements for Generators Participating in New York Restoration

Program

The NYISO tariffs establish the requirements for a generator located in New York City to

participate in the Con Edison portion of the New York Restoration Program.7 Section 15.5.3.1 of Rate
Schedule 5 of the Services Tariff states that a generator commits to participate in the Con Edison
portion of the New York Restoration Program for a three-year commitment period. A participating

6 The NYISO respectfully requests waiver of 18 C.F.R. § 385.203(b)(3) (2011) to permit service on counsel for the NYISO in both Washington, D.C. and Richmond, VA.

generator may withdraw from the program by providing one year’s advance notice at the end of the second year of its three-year commitment period. If the generator does not provide this notice, it
commits to participate in the program for a subsequent three-year commitment period. A participating generator is paid a set annual amount for its participation based upon the voltage level at which it is interconnection - $350,000 for 345 kV and $300,000 for 138 kV.

A participating generator is responsible for conducting an annual black start capability test in accordance with test criteria set forth in Appendix I of Rate Schedule 5 of the Services Tariff. A
participating generator is also responsible for performing operator training and for conducting annual tests and certification of certain equipment and critical components related to its black start and system restoration capabilities. A generator may also recover additional verifiable costs associated with
performing operator training and conducting annual black start capability tests.

B. TC Ravenswood’s Notice of Its Intent to Withdraw the Ravenswood Units

On September 8, 2010, TC Ravenswood notified the NYISO and Con Edison of its intent to withdraw the Ravenswood Units from the New York Restoration Program at the end of the current three year commitment period on September 30, 2011.8 TC Ravenswood informed the NYISO that it was withdrawing its units principally due to concerns regarding the strain that the annual black start capability tests place on the aging Ravenswood Units.9

C. Ravenswood Units’ Important Role in the New York Restoration Program

Upon receipt of this notice, the NYISO and Con Edison reviewed the New York Restoration
Program and identified significant reliability concerns regarding the Con Edison portion of the New
York Restoration Program if the Ravenswood Units withdraw from the program on September 30,

8 TC Ravenswood owns both steam turbine and gas turbine units that participate in the New York Restoration

Program. In September 2010, TC Ravenswood did not notify the NYISO and Con Edison of any intent to withdraw the gas turbine units, as the testing concerns that TC Ravenswood had regarding its aging steam turbine units did not apply to its gas turbine units.

9 The Ravenswood Units were constructed in the 1960s.

2011. The Ravenswood Units play a unique and important role in the timely restoration of electric

service in the New York City in the event of an unplanned outage. The large size of the Ravenswood Units, which together are 1,827 MW,10 along with their strategic location, enables these units to pick up large increments of load, provide voltage support, and assist in stabilizing the local transmission system of the Con Edison service territory during system restoration.

A withdrawal of the Ravenswood Units would significantly diminish the black start and system
restoration capability in New York City. While the NYISO and Con Edison would still be capable of
restoring electric service to New York City in a manner that meets applicable reliability requirements,
the absence of the Ravenswood Units would delay the restoration process at significant cost and
inconvenience to New York City.11 Currently, there are no units located in the Con Edison service
territory that can replace the Ravenswood Units and provide comparable black start and system
restoration service.

D. Development of Enhancements to the New York Restoration Program

Given TC Ravenswood’s operational concerns and the NYISO and Con Edison’s

reliability concerns, the NYISO undertook extensive discussions beginning last December with
TC Ravenswood and Con Edison to review the existing requirements for participation in the
New York Restoration Program and to explore potential improvements to the program. The aim
of the discussions was to address TC Ravenswood’s stated operational concerns and explore
other potential improvements, including more flexible testing protocols, while ensuring a robust
New York Restoration Program. In addition, in response to TC Ravenswood’s concerns, in the
spring of 2011, the NYISO and Con Edison agreed to work to schedule the tests for the

10 Ravenswood Units 10 and 20 each have a nameplate capacity of 400 MW, and Ravenswood Unit 30 has a nameplate capacity of 1,027 MW.

11 The significance of the TC Ravenswood units to a black start and system restoration effort would depend upon the specific system conditions present at the time.

Ravenswood Units in coordination with the economic operation of the units. As a result of these discussions, the NYISO has planned to propose - as part of a larger package of potential
enhancements developed through discussions with all generators in the New York Restoration Program - changes to the black start capability testing requirements to address TC
Ravenswood’s stated concerns.

E.TC Ravenswood’s August 2 Motion

Notwithstanding extensive meetings, discussions, and correspondence over the last year among
the NYISO, Con Edison, and TC Ravenswood, the parties determined that they would not be able to
develop and implement the tariff revisions before the scheduled withdrawal of the Ravenswood Units
on September 30, 2011. Due to the significant role that the Ravenswood Units play in the timely
restoration of electric service to New York City and the progress that the parties have made to date in
developing program enhancements that would address each party’s stated concerns, TC Ravenswood,
the NYISO, and Con Edison discussed amongst themselves, and with input from Commission staff and
New York State Public Service Commission (“NYPSC”) staff, an appropriate mechanism for enabling
TC Ravenswood to extend its participation in the New York Restoration Program from September 30,
2011, until April 30, 2012, to provide the parties with additional time to develop and implement the
program enhancements.

As a result of these discussions, TC Ravenswood filed a motion with FERC on August 2, 2011.
TC Ravenswood requested: (i) a waiver of the three-year commitment requirements in the NYISO
tariffs to temporarily extend the participation of the Ravenswood Units in the New York Restoration
Program, without requiring that it commit to a new commitment period prior to reviewing the impact
of the final program enhancements on the Ravenswood Units, (ii) the initiation of a settlement process
to enable the parties to resolve their concerns under the supervision of the Commission, and (iii) a

waiver of certain black start capability test requirements so that Ravenswood Unit 30, which

completed its most recent test outside the time limits specified in the NYISO tariffs, could remain
qualified to participate in the New York Restoration Program during the extended period.12
In its motion, TC Ravenswood expressly informed the Commission that its sole purpose in
providing notice to withdraw the Ravenswood Units from the New York Restoration Program was its concern regarding the potential harm that the annual black start capability tests could have on the aging Ravenswood Units. TC Ravenswood stated:

TC Ravenswood has provided notice to the NYISO and Con Edison, in accordance with the NYISO tariffs, that it is withdrawing its steam units from the Black Start Program on September 30, 2011, because of its operational concerns surrounding the current testing requirements.”13 (emphasis added).

Elsewhere, TC Ravenswood stated that:

Notwithstanding its notice to cease participation in the program, TC Ravenswood has
continued to discuss possible test revisions and is not seeking to cease providing Black
Start Service entirely, nor is it suggesting that its large steam units should not undergo
some form of testing regime. However, it believes that testing regimen must be one that
is based upon and is consistent with TC Ravenswood’s operational protocols and the

equipment design of its units....14

Moreover, TC Ravenswood expressly informed the Commission that it was not withdrawing the Ravenswood Units due to concerns regarding compensation for this service:

TC Ravenswood also wishes to make clear that its request for waivers is not related to
the compensation that it is paid for Black Start Service. TC Ravenswood is requesting
the waivers in order to be able to provide Black Start Service temporarily through April
30, 2012, while discussions continue with respect to revising test requirements and to

protect its valuable assets from damage.... 15 (emphasis added).

As the Ravenswood Units were scheduled to withdraw from the New York Restoration

Program on September 30, 2011, TC Ravenswood requested that the Commission act on an expedited

12 August 2 Motion at pp. 1 - 3.

13 Id. at 9.

14 Id. at 8.

15 Id. at 3.

basis to issue the requested waivers.16The NYISO supported, and Con Edison did not object to, TC

Ravenswood’s motion.17

F.TC Ravenswood’s August 26 Motion

Notwithstanding the progress that the parties have made to date in developing program

enhancements that would address each party’s stated concerns, TC Ravenswood abruptly reversed

course and submitted the August 26 Motion stating that it would withdraw the Ravenswood Units from
the New York Restoration Program on September 30, 2011. TC Ravenswood changed its position in
this proceeding without attempting to address any of its newly identified concerns with the NYISO.
Specifically, TC Ravenswood requested that the Commission permit it to amend the August 2 Motion to
withdraw its waiver requests that would extend its participation in the New York Restoration Program
and its request for the initiation of a settlement process to assist the parties in resolving their concerns.18
TC Ravenswood informed the Commission that it was requesting these amendments due to: (i) financial
concerns regarding its capability to provide black start service as a result of potential changes to the
capacity compensation that the Ravenswood Units receive, and (ii) concerns regarding Con Edison’s
initiation of a proceeding at the NYPSC seeking to require NYPSC consent before a generator can cease
providing black start service.19

III.ARGUMENT

A.Good Cause Exists to Reject TC Ravenswood’s Proposed Amendments

The Commission should find that good cause exists to reject TC Ravenswood’s proposed

amendments in its August 26 Motion and should grant TC Ravenswood’s request for waivers and the

16 Id. at 11.

17 See Motion to Intervene and Comments of the New York Independent System Operator, Inc., TC Ravenswood, LLC, Docket No. ER11-4200-000 (August 5, 2011); Motion to Intervene and Comments of Consolidated Edison Company of New York, Inc., TC Ravenswood, LLC, Docket No. ER11-4200 (August 12, 2011).

18 August 26 Motion at p. 1.

19 See August 26 Motion at pp. 1-2.

initiation of a settlement process as set forth in its August 2 Motion. TC Ravenswood’s claims for why it must withdraw its requests at this late stage contradict its August 2 Motion and recent filings with the NYPSC, and simply are not credible in light of TC Ravenswood’s prior statements and actions. If the Commission accepts TC Ravenswood’s proposed amendments, TC Ravenswood’s unwarranted
turnabout could result in significant harm to the New York Restoration Program.

i. TC Ravenswood is Adequately Compensated for Its Participation in the New York Restoration

Program and Has Not Provided Any Evidence that It Will Suffer Financial Harm If Its Participation Is Extended Beyond September 30, 2011.

In its August 26 Motion, TC Ravenswood raised for the first time financial concerns regarding
its ability to participate in the New York Restoration Program due to the amount of payments it recovers
as an installed capacity provider. On July 11, 2011, TC Ravenswood, along with Astoria Generating
Company, L.P. (“Astoria”), submitted a complaint against the NYISO alleging that the NYISO had
improperly applied buyer-side market power mitigation rules to a certain facilities, resulting in lower
capacity payments for TC Ravenswood and Astoria.20 In its August 26 Motion, TC Ravenswood cited
this proceeding and stated that it “cannot commit to provide Black Start Service . . . on a forward basis
because of uncertainty whether available market revenues will support continued operation of the
underlying capacity.”21

TC Ravenswood’s claim that it cannot commit to participate in the New York Restoration

Program due to concerns regarding its capacity compensation is inconsistent with TC Ravenswood’s
previously stated position. As detailed above, in its August 2 Motion, TC Ravenswood expressly
informed the Commission that “its request for waivers is not related to the compensation that it is paid

20 See Astoria Generating Company, L.P. and TC Ravenswood, LLC v. New York Independent System Operator, Inc., Complaint Requesting Fast Track Processing, Emergency, Interim Relief, And Shortened Comment Period, Docket No. EL11-50-000 (July 11, 2011)

21 August 26 Motion at p. 2.

for Black Start Service”22 and did not identify any other financial concerns in connection with providing
black start and system restoration service. At the time of its August 2 Motion, TC Ravenswood had all
of the same information regarding its potential future capacity compensation as it has today. As
indicated above, TC Ravenswood filed its complaint on July 11, 2011, nearly one month prior to its
submitting its August 2 Motion to the Commission. In addition, as noted below, TC Ravenswood
informed the NYPSC as late as August 19, 2011, that it was seeking waivers from the Commission to
extend its participation in the New York Restoration Program.23 TC Ravenswood has not provided any
information indicating a changed circumstance regarding capacity or capacity compensation that
occurred between August 19 and August 26. Moreover, TC Ravenswood has not indicated any reason
why it cannot continue to participate in the New York Restoration Program while its separate complaint
regarding the NYISO’s application of long-standing In-City buyer-side mitigation rules is pending
before the Commission in a separate proceeding.

TC Ravenswood has not provided any evidence indicating that it is suffering financial harm as a
result of its participation in the New York Restoration Program or that it would suffer financial harm if
it provided such service during the requested waiver period. TC Ravenswood, like all other generators
participating in the New York Restoration Program, is paid a set annual fee to cover the nominal costs
related to its participation in the program. In addition, TC Ravenswood can recover additional
verifiable costs associated with the performance of operator training and the conducting of black start
tests.

22 August 2 Motion at p. 3.

23 See TC Ravenswood, LLC’s Request and Comments in Support of IPPNY’s Request for an Extension of Time to
File Comments on Petition Until Expiration of 45 Day Comment Period Under State Administrative Procedure Act,

In the Matter of Consolidated Edison Company of New York, Inc.’s Request for a Declaratory Order Regarding

Discontinuance of Blackstart Service New York State Public Service Commission Case No. 11-E-0423 (August 19, 2011) (“TC Ravenswood August 19 NYPSC Filing”).

Indeed, TC Ravenswood’s position that amending its waiver requests is necessary because

financial hardships will impede the Ravenswood Unit’s ability to participate in the New York

Restoration Program does not follow. If TC Ravenswood’s waivers are granted by the Commission, TC Ravenswood would receive annual payments of $350,000 for each of the three Ravenswood Units.
Moreover, TC Ravenswood would be able to recover annual testing, training, and equipment damage costs. Accordingly, TC Ravenswood’s claims that financial hardship is preventing it from keeping the Ravenswood Units in the program cannot be squared with the reality that in withdrawing the
Ravenswood Units, TC Ravenswood would forego revenues for a service that TC Ravenswood had up to one week ago indicated that it is able and willing to provide.

Nevertheless, the NYISO is aware that the compensation mechanism for the New York

Restoration Program was last reviewed in 2005 and may need to be updated in the future. For this very
reason, the NYISO has included as part of its package of proposed enhancements to the New York
Restoration Program a potential update of the set annual payment amount, along with providing for the
recovery of additional costs incurred by a generator in connection with its participation in the New York
Restoration Program. If TC Ravenswood has identified additional financial concerns that are not
covered by the proposed enhancements, the NYISO would be interested in exploring that with TC
Ravenswood and all other interested generators. The NYISO believes that the settlement process
initially requested by TC Ravenswood would be an appropriate forum for such a discussion.
In addition, while TC Ravenswood hints in its August 26 Motion that it may have to retire the Ravenswood Units based upon its concerns regarding capacity payments, it has not provided any
evidence in this proceeding, or informed the NYISO or the NYPSC, of its intent to actually retire the
Ravenswood Units.24 TC Ravenswood has, however, informed the Commission that the Ravenswood

24 If TC Ravenswood decided to retire the Ravenswood Units, it is required to provide the NYPSC with 180 days notice of its proposed withdrawal. See Proceeding on Motion of the Commission to Establish Policies and

Units remain capable of participating the New York Restoration Program and that it would provide

assistance to Con Edison in the event of an actual system blackout, regardless of its formal participation in the program. In the affidavit of John McWilliams provide by TC Ravenswood, Mr. Williams stated that: “to the best of my knowledge and after due diligence and review of the facts, circumstances, tests and operational performance, Unit 30 is able to perform its intended function as part of the transmission owner system restoration plan. The same is true for Units 10 and 20.”25

ii. The NYPSC Proceeding Initiated by Con Edison Does Not Impair TC Ravenswood’s, the

NYISO’s and Con Edison’s Ability to Resolve Their Concerns Regarding the New York Restoration Program through This Proceeding

In its August 26 Motion, TC Ravenswood also raised concerns regarding a proceeding initiated
by Con Edison before the NYPSC, in which Con Edison requests that the NYPSC find that generators
participating in the Con Edison portion of the New York Restoration Program must notify the NYPSC
and obtain the NYPSC’s written consent prior to withdrawing from the program.26 It is the NYISO’s
understanding that Con Edison initiated this proceeding due to its reliability concerns regarding the
potential withdrawal of important black start and system restoration resources on September 30, 2011,
along with its uncertainty regarding the timing and outcome of this proceeding before the Commission.
The NYPSC next meets on September 15, 2011, and may address Con Edison’s petition at that time as it is its last regular meeting before the scheduled withdrawal of the Ravenswood Units on
September 30, 2011. The NYISO believes that the Commission granting the requested relief is
appropriate even if the NYPSC takes the actions requested in Con Edison’s petition. The NYPSC

Procedures Regarding Generation Unit Retirements, Order Adopting Notice Requirements for Generation Unit

Retirements New York State Public Service Commission Case 05-E-0889 at p. 15 (December 20, 2005). To the best of the NYISO’s knowledge, TC Ravenswood has not provided such notice.

25 Affidavit of John McWilliams, Amendment No. 2 to Motion of TC Ravenswood, LLC, TC Ravenswood, LLC, Docket No. ER11-4200-000 (August 26, 2011).

26 See Petition of Consolidated Edison Company of New York, Inc. for Issuance of a Declaratory Order, In the

Matter of Consolidated Edison Company of New York, Inc.’s Request for a Declaratory Order Regarding

Discontinuance of Blackstart Service New York State Public Service Commission Case No. 11-E-0423 (August 12,
2011).

proceeding will not specifically address the status of the Ravenswood Units but instead would generally address requirements for NYPSC notice and approval for discontinuation of black start and system
restoration service. Furthermore, the NYISO believes that it is appropriate to address the underlying NYISO tariff issues through a FERC-administered proceeding. For this reason, the NYISO requests that the Commission grant the waivers requested here and initiate a process supervised by the
Commission to resolve the underlying issues raised here regardless of the timing of the Commission’s action vis-à-vis the NYPSC proceeding or the disposition of that proceeding.

iii.The Ravenswood Units Play a Unique and Important Role in the New York Restoration Program

and Cannot Be Replaced At This Time.

As detailed above, due to their size and location, the Ravenswood Units play a unique and
important role in the timely restoration of electric service to New York City in the event of an
unplanned outage. There are currently no units that can replace the Ravenswood Units in New York
City and provide comparable black start and system restoration capability. For this reason, the
withdrawal of the Ravenswood Units from the New York Restoration Program on September 30, 2011,
could significantly harm the robustness of the New York Restoration Program.
The NYISO notes that TC Ravenswood has previously indicated that it will continue to provide black start and system restoration assistance in the event of an actual blackout regardless of whether it remains in the New York Restoration Program beyond September 30, 2011.27 However, the NYISO and Con Edison must maintain black start and system restoration plans that specify the black start and system restoration resources upon which they will rely.28 It is not sufficient for the NYISO to assume

that certain generator owners would be willing to assist in an emergency. For purposes of planning
for, and coordination in the event of, an emergency, the NYISO and Con Edison must determine in

27 August 2 Motion at p. 3; TC Ravenswood August 19 NYPSC Filing at p. 5.

28 See New York State Reliability Counsel Reliability Rules, Measurement G-M1 #4 and #6 and G-M2 (Version 29, January 7, 2011).

advance which units to call upon under numerous scenarios. In addition, it is important that the black start and system restoration resources perform related testing and training to ensure their readiness to effectively assist in the event of a system emergency. As the NYPSC noted following the 2003
blackout, the black start and system restoration process in New York City was delayed in large part as a result of the failure of generators to start up as required due to lack of testing.29

iv.The Commission Should Find that Good Cause Exists to Reject TC Ravenswood’s Proposed

Amendments in its August 26 Motion and Grant TC Ravenswood’s Requests in its August 2

Motion.

For all of the reasons described above, the Commission should find that good causes exists to
reject TC Ravenswood’s proposed amendments, as the Ravenswood Units possess the capability to
participate in, and will be adequately compensated for participating in, the New York Restoration
Program, and their withdrawal on September 30, 2011, could result in significant harm to the robustness
of the New York Restoration Program. The Commission should also grant TC Ravenswood’s waiver
requests in its August 2 Motion, which will permit the Ravenswood Units to continue to participate in
the New York Restoration Program until April 30, 2012, and initiate a settlement process through which
the parties can seek to resolve their underlying concerns in a timely manner under Commission
supervision.

B. The Commission Should Grant the NYISO’s Waiver Request

If granted, TC Ravenswood’s waiver requests in its August 2 Motion would enable the

Ravenswood Units to remain in the New York Restoration Program until April 30, 2012, without

committing to a new three-year commitment period or being required to conduct a black start capability test during the waiver period, so that the parties can address TC Ravenswood’s stated operational

29 See New York State Department of Public Service Second Report on the August 14, 2003 Blackout (October

2005) (“Consequently, the units had not been tested, and the lack of testing of the units appears to have directly

contributed to the poor performance of most of the New York City black start generators”). This report is available
at: http://www.pulp.tc/NYPSCSecondReport3-06.pdf.

concerns, while ensuring the effectiveness of the New York Restoration Program. However, given TC
Ravenswood’s recent abrupt determination to again withdraw its units on September 30, 2011, the
NYISO is concerned that, notwithstanding a Commission waiver permitting TC Ravenswood to keep
the Ravenswood Units in the program until April 30, 2012, TC Ravenswood may still elect to withdraw
the Ravenswood Units on September 30, 2011. For this reason, the NYISO respectfully requests that
the Commission grant it a waiver of the commitment period and withdrawal provisions in Section

15.5.3.1 of Rate Schedule 5 of the Services Tariff to temporarily suspend the effective date of TC

Ravenswood’s withdrawal from September 30, 2011, until April 30, 2012. This waiver, in coordination
with the initiation of a settlement process supervised by the Commission, will provide an opportunity
for the NYISO, Con Edison, TC Ravenswood, and other generators participating in the New York
Restoration Program to complete the development and implementation of program enhancements, while
ensuring the timely restoration of electric service in New York City in the event of an outage. It is
important to understand that this waiver would not require TC Ravenswood to take any action or incur
any costs beyond what it has previously indicated to the Commission and the NYPSC that it was willing
to do.

The Commission has previously granted tariff waivers where: (i) a concrete problem needs to be remedied, (ii) the entity seeking the waiver acted in good faith, (iii) the waiver is of a limited scope, and (iv) the waiver will not have undesirable consequences, such as harming third parties.30 The NYISO submits that its waiver request satisfies these factors as described below:

(i) A concrete problem exists in this instance. The NYISO and Con Edison have identified

significant reliability concerns if the Ravenswood Units withdraw from the New York Restoration

Program on September 30, 2011. The Ravenswood Units play a unique and important role in the New
York Restoration Program, and their black start and system restoration capability cannot be replaced at

30 See, e.g., ISO New England, Inc., 117 FERC ¶ 61,171 at P 21 (2006).

this time. The NYISO and Con Edison, therefore, require that the Ravenswood Units remain in the New York Restoration Program until April 30, 2012, to provide the parties with additional time to develop and implement program enhancements that address TC Ravenswood’s operational concerns and the NYISO and Con Edison’s reliability concerns.

(ii) The NYISO has acted in good faith in this instance. The NYISO has undertaken extensive
discussions since last December with TC Ravenswood, Con Edison, and other generators to attempt to
address all parties’ concerns regarding the New York Restoration Program requirements. The requested
waiver will maintain the New York Restoration Program, while providing time to address all parties’
concerns. The NYISO believes that this waiver will provide a good opportunity to resolve the parties’
underlying concerns in a way that benefits the New York Restoration Program and the generators that
participate in the program.

(iii) The scope of the waiver request is limited. The requested extension is limited to a seven
month period to provide the NYISO, Con Edison, and TC Ravenswood, and other generators with
additional time to complete the development and implementation of program enhancements. In
addition, this waiver will only directly impact one market participant - TC Ravenswood, and, as
described below, TC Ravenswood will not be harmed by this temporary extension of its participation in the New York Restoration Program.

(iv) The Commission’s granting a waiver will not have undesirable consequences or harm third
parties. TC Ravenswood is the only NYISO market participant that will be directly impacted by the
requested waiver, and it will not be harmed by the waiver. To the contrary, TC Ravenswood will be
paid for the Ravenswood Units’ participation in the New York Restoration Program during the waiver
period. TC Ravenswood has stated on multiple occasions that it will provide black start and system
restoration assistance from the Ravenswood Units in the event of an actual unplanned system outage.

Accordingly, the waivers will benefit TC Ravenswood by compensating it for a service that it has

indicated it is capable and willing to provide. Moreover, if the requested waivers are granted, the

Ravenswood Units will not be required to conduct another black start capability test during the waiver
period, thus avoiding any possibility of equipment damage as a result of a test as TC Ravenswood fears.
Finally, the waiver is temporary, and would only require TC Ravenswood to retain the Ravenswood
Units in the New York Restoration Program until April 30, 2012. Undesirable consequences could,
however, arise if a waiver is not granted. The NYISO and Con Edison have identified significant
reliability concerns regarding the New York Restoration Program if the Ravenswood Units, which are
important to the timely restoration of New York City in the event of an outage, withdraw on September
30, 2011.

C. The Commission Should Initiate a Settlement Process

The NYISO believes that a process supervised by the Commission is the best mechanism for

enabling the parties to resolve their concerns regarding the New York Restoration Program

requirements. The NYISO supports TC Ravenswood’s request in the August 2 Motion that the

Commission appoint a settlement judge to assist the parties in resolving their concerns.

Moreover, should the Commission decide to accept TC Ravenswood’s amendments, the NYISO, nevertheless, requests that the Commission still initiate a supervised process to thoroughly explore TC Ravenswood’s concerns. This process would be the most efficient means of reviewing and enhancing the New York Restoration Program requirements. The NYISO requests that any Commission process be open to all generators that participate in the New York Restoration Program.

D.If the Commission Accepts TC Ravenswood’s Proposed Amendments, It Need Not Waive

the NYISO’s Black Start Testing Requirements

In its August 26 Motion, TC Ravenswood maintains its request that the Commission waive
certain black start capability test requirements in the NYISO tariffs, so that its Ravenswood Unit 30,

which completed its most recent test outside the time limits specified in the NYISO tariffs, can remain
qualified as a black start and system restoration service provider.31 The purpose of this waiver was to

enable Unit 30 to participate in the New York Restoration Program for the extended period until April
30, 2012, without having to conduct a new black start capability test. If the Commission accepts TC
Ravenswood’s proposed amendments, Unit 30 need not be qualified to provide black start and system
restoration service. A waiver of the black start test requirements under such circumstances would be
meaningless.

IV.CONCLUSION

WHEREFORE, for the foregoing reasons, the New York Independent System Operator, Inc. respectfully requests that the Commission take the action described herein.

Respectfully Submitted,

/s/ Ted J. Murphy_________

Counsel for

New York Independent System Operator, Inc.

Dated: September 2, 2011.

31 August 26 Motion at p. 1.

CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing document upon each

person designated on the official service list compiled by the Secretary in this proceeding
in accordance with the requirements of Rule 2010 of the Rules of Practice and Procedure,

18 C.F.R. § 385.2010.

Dated at Washington, DC this 2nd day of September, 2011.

/s/ Ted J. Murphy

Ted J. Murphy

Hunton & Williams LLP 1900 K Street, NW

Washington, DC 20006-1109 (202) 955-1500