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UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Astoria Generating Company, L.P. and)
TC Ravenswood, LLC)
)
Complainants)
)
v.)Docket No. EL11-50-000
)
New York Independent System Operator, Inc.)
)
Respondent)
ANSWER TO MOTION TO STRIKE AND
REQUEST FOR LEAVE TO SUBMIT ANSWER AND ANSWER OF
THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.
In accordance with Rule 213 of the Commission’s Rules of Practice and Procedure the
New York Independent System Operator, Inc. (“NYISO”) respectfully submits this answer to the Motion to Strike and Motion for Leave to Answer of the NRG Companies (“Motion to Strike”). The NYISO also requests leave to answer and answers the Complainants’ Answer in Support of Motion to Strike (“Complainants’ October 31 Answer”).
NRG’s and Complainants’ statements regarding the alleged disclosure of confidential information contained in the NYISO’s October 12, 2011 answer (“October Answer”)1 are
inaccurate and unsupported. The NYISO did not disclose any confidential information in the October Answer and has not violated its tariffs. Therefore, there is no basis for the Motion to Strike, and it should be denied.
1 New York Independent System Operator, Inc. Request for Leave to Submit Answer and Answer to Pleadings Opposing Exemptions and Answer to Motion to Lodge, Docket No. EL11-50-000 (filed October 12, 2011) (“October Answer”).
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This answer also responds to one new argument by NRG against the NYISO’s mitigation
exemption determination for the Bayonne Energy Center (“BEC”). The fact that the NYISO has
elected not to respond to other aspects of NRG’s or the Complainants’ other arguments, or to the
Complainants’ Motion for Leave to Answer and Answer should not be construed as agreement
with them or as an admission of fault or error. To the contrary, the Complainants and NRG have
again failed to demonstrate that the NYISO’s mitigation exemption determinations were
unreasonable.
I.REQUEST FOR LEAVE TO ANSWER
The NYISO may answer the Motion to Strike as a matter of right.2 The NYISO also
requests leave to answer the portion of NRG’s pleading that is styled as an answer and, to the
extent that the Commission deems necessary, the Complainants’ October 31 Answer.3 The
Commission has discretion to accept answers to answers when they help to clarify complex
issues or to facilitate the resolution of a proceeding.4 The NYISO’s answer will help the
Commission’s resolution of this matter as it will clarify factual and legal misrepresentations and
errors in Complainants’ October 31 Answer and the portion of NRG’s pleading that is styled as
an answer.
2 18 C.F.R. 213(a)(3) (2011).
3 Because the Complainants’ October 31 Answer supports the Motion to Strike by making a wholly different allegation, it is arguably a distinct motion itself that the NYISO would be entitled to answer as of right.
4 See e.g., New York Independent System Operator Inc., 133 FERC ¶ 61,178 at P 11 (2011)
(allowing answers to answers and protests “because they have provided information that have assisted [the Commission] in [its] decision-making process”); Morgan Stanley Capital Group, Inc. v. New York Independent System Operator, Inc., 93 FERC ¶ 61,017 at 61,036 (2000) (accepting an answer that was “helpful in the development of the record…”).
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II.ANSWER
A.The October Answer Did Not Disclose Confidential Information
The Motion to Strike incorrectly claims that the NYISO disclosed material that
“constituted confidential market information entitled to protection.”5 Further, NRG’s assertion
that that the NYISO disclosed information entitled to protection “willfully and intentionally”6
has no support in the record of this proceeding. NRG refers to excerpts from a letter it sent to the NYISO which reflected NRG’s view that the Pre-Amendment Rules7 allow the NYISO to make final mitigation exemption determinations for a new entrant before the conclusion of the new entrant’s Class Year. That NRG reading, which is identical to the NYISO’s and the independent MMU’s, directly contradicts NRG’s litigation position in this proceeding. NRG’s statements are thus relevant and material because they underscore the unreasonableness of the novel tariff
interpretation that NRG offered for litigation purposes.
NRG asserts that its interpretation of the Pre-Amendment Rules constitutes “Protected
Information” under Attachment O to the Services Tariff. The support that NRG offers for its
claim is a selective excerpt of the tariff’s definition of “Protected Information.” NRG quotes the
phrase “information that has been designated as such in writing by the party supplying the
information to the ISO.... “8 However, NRG omits the definition’s limiting language which
5 Motion to Strike at 3. Specifically NRG takes issue with the October Answer at 11-12 and its Attachment I - Affidavit of Joshua A. Boles at Section V (“Boles Supplemental Affidavit”).
6 Id.
7 The “Pre-Amendment Rules” were the buyer-side capacity market power mitigation rules that existed in Attachment H to the NYISO Services Tariff prior to the November 27, 2010 effective date of the current In-City Buyer-Side Capacity Mitigation Measures. The NYISO’s mitigation exemption determination for BEC was made pursuant to the Pre-Amendment Rules.
8 Motion to Strike at 4.
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clearly states that information so designated only constitutes “Protected Material” if the “designation is consistent with the ISO’s tariffs and this [Market Monitoring] Plan.” The complete definition defines “Protected Information” as
(a) information that is confidential proprietary, commercially valuable or
competitively sensitive or trade secret, (b) information that is Confidential
Information under Attachment F to the ISO OATT, (c) information that the
Market Monitoring Unit or the ISO is obligated by tariff, regulation or law to
protect, (d) information which, if revealed, would present opportunities for
collusion or other anticompetitive conduct, or that could facilitate conduct that is
inconsistent with economic efficiency, (e) information relating to ongoing
investigations and monitoring activities (including the identity of the person or
Market Party that requested or is the subject of an investigation, unless such party
consents to disclosure), (f) information subject to the attorney-client privilege, the
attorney work product doctrine, or concerning pending or threatened litigation, or
(g) information that has been designated as such in writing by the party supplying the information to the ISO or its Market Monitoring Unit, or by the ISO or its Market Monitoring Unit, provided that such designation is consistent with the ISO’s tariffs and this Plan.
The statements quoted in the October Answer do not fall into any of the categories of
Protected Information. The NYISO quoted only language articulating NRG’s legal
interpretation of the Pre-Amendment Rules. NRG’s tariff interpretation is not commercially
sensitive or valuable, does not present opportunities for parties that learn it to engage in anti-
competitive conduct, and is not otherwise eligible for confidential treatment for any reason. The
NYISO did not submit NRG’s letter, which included other information that was confidential, or
reveal anything about the letter that might inadvertently disclose NRG’s business strategies or
trade secrets.
Complainants are likewise wrong to assert that the NYISO’s very general response to
their October 7, 2011 Motion to Lodge disclosed confidential information concerning either or
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both of them.9 Complainants’ Motion to Lodge claimed that the NYISO was not responsive to
supplier requests related to market power mitigation issues. That claim is factually incorrect, and the NYISO’s October Answer sought to correct this inaccuracy. Complainants have offered no explanation of how the NYISO’s general language reveals any confidential information. Their unsupported assertion that it did so should be rejected by the Commission.
In short, NYISO takes seriously its obligations to enforce its tariffs including the
obligation to not disclose Protected Information. The NYISO carefully prepared the October
Answer to avoid revealing Protected Information. NRG and Complainants have not shown that the NYISO violated its tariff. The Motion to Strike and the Complainants’ October 31 Answer should therefore be denied.
B.The Motion to Strike Is Overbroad
It is not clear whether NRG is asking the Commission to strike the October Answer in its
entirety, as appears to be the case from its opening pages, or is making a request limited to
specific portions of the October Answer. In the event that NRG is requesting the former, its
requested remedy is overbroad and should be rejected.10 Under Commission precedent, there is
no basis to strike any portion of, let alone the entire, October Answer. As the Commission has
previously held “[m]otions to strike are not favored, and objectionable material will not be struck
unless the matters sought to be omitted from the record have no possible relationship to the
9 Complainants’ Answer at 2.
10 Motion to Strike at 1 (moving to “strike the [NYISO Answer]” filed on October 12, 2010 in this proceeding).
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controversy, may confuse the issues, or otherwise prejudice a party.”11 The NYISO has
established the relevance of the information from the NRG letter; therefore, there is no basis to strike that portion of the October Answer. Neither NRG nor Complainants have provided a basis for striking any other portion of the October Answer, and there is no basis to do so.
C.The NYISO Properly Calculated Revenues When Making the Mitigation
Exemption Determination for BEC
NRG asserts that because BEC’s air permit limited the facility to running a maximum of
4,748 hours per year, the NYISO used an incorrect number of run hours producing a “highly
unreasonable” estimate of BEC revenues. NRG submits the Reply Affidavit of Johannes P.
Pfeifenberger as support for the proposition that the reduced run hours would lead to a change in
revenues that would result in the imposition of an Offer Floor on BEC. However, as explained
in the attached Confidential Supplemental Affidavit of Joshua A. Boles Regarding Bayonne
Energy Center, even if BEC’s net energy revenues were calculated by the NERA econometric
model using 4,478 run hours, or even fewer, BEC would still pass the “Part B Test”12 and be
exempt from the Offer Floor. As Mr. Boles explains, BEC would be granted an Offer Floor
mitigation exemption even if a lower number of run hours were used, with and without the
345 kV adjustment.
11 See Power Mining, Inc., 45 FERC ¶ 61,311 at 61,972 n.1 (1988)); see also San Diego Gas &
Electric Co. 114 FERC ¶ 61,070 at P 20 (2006) (quoting Central Hudson Gas & Electric Corp., 92 FERC ¶ 63,004 (2000) and Power Mining, Inc., 45 FERC ¶ 61,311 at 61,972 n.1 (1988).
12 The “Part B Test” is the mitigation exemption test performed pursuant to the Pre-Amendment Rules in Services Tariff Attachment H Section 23.4.5.7.2(b).
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III.CONCLUSION
For the reasons set forth above, and in the attached Supplemental Affidavit of Joshua A. Boles Regarding Bayonne Energy Center, the NYISO respectfully requests that the Commission deny the Motion to Strike and accept the NYISO’s answer as described above.
Respectfully submitted,
/s/ Ted J. Murphy
Counsel to the
New York Independent System Operator, Inc.
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CERTIFICATE OF SERVICE
I hereby certify that I have this day caused the foregoing document to be served on the official service list compiled by the Secretary in this proceeding.
Dated at Washington, DC, this 9th day of November, 2011.
/s/ Ted J. Murphy
Ted J. Murphy
Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, DC 20037
(202) 955-1500
