Re: Filing of an Executed Merchant Transmission Facility Interconnection

Agreement Among the New York Independent System Operator, Inc.,

Consolidated Edison Company of New York, Inc., and Hudson Transmission Partners, LLC and Request for Critical Energy Infrastructure Information Designation, Docket No. ER11-___-000

Dear Ms. Bose:

Pursuant to Section 205 of the Federal Power Act,1 Section 35.12 of the Commission’s
Regulations,2 and Section 11.3 of its Large Facility Interconnection Procedures (“LFIP”), the
New York Independent System Operator, Inc. (“NYISO”) and Consolidated Edison Company of
New York, Inc. (“Con Edison”) (collectively “Joint Filing Parties”) hereby tender for filing an
executed Merchant Transmission Facility Interconnection Agreement (“Interconnection
Agreement”) as Service Agreement No. 1719 among the NYISO, Con Edison as the
Transmission Owner, and Hudson Transmission Partners, LLC (“HTP”) as the merchant
transmission project Developer (collectively, “the Parties”).3 With the exceptions noted in
Section II of this letter, the Interconnection Agreement conforms to the NYISO’s pro forma
Large Generator Interconnection Agreement (“LGIA”) that is contained in Attachment X of the
NYISO’s OATT.

The Joint Filing Parties request an April 20, 2011, effective date for the Interconnection
Agreement and further request waiver of the normal 60-day notice period, as discussed fully
below.

1 16 U.S.C. § 824d (2006).

2 18 C.F.R. § 35.12 (2008).

3 Capitalized terms not otherwise defined in this letter have the meaning set forth in Attachments S and X of the NYISO’s Open Access Transmission Tariff (“OATT”).

Honorable Kimberly D. Bose April 29, 2011

Page 2

I.Background

The Interconnection Agreement governs the interconnection of HTP’s merchant

transmission facility (the “Merchant Transmission Facility”). The Merchant Transmission

Facility is a 660MW back-to-back HVDC (AC input-DC conversion-AC output) transmission
project that will connect the PSE&G Bergen Substation (“PSE&G Substation”) located in
Ridgefield, New Jersey, with the Connecting Transmission Owner’s West 49th Street Substation in New York City.

The Merchant Transmission Facility includes 2100 feet of 230kV alternating current

(“AC”), solid dielectric cable connection from the PSEG Substation to a back-to-back converter station facility, to be constructed in Ridgefield, New Jersey (the “Converter Station”). The
Converter Station, which includes 230kV and 345kV Switchyards, will convert AC power to DC and back to AC. A 345kV AC underground and underwater cable system will be constructed
and installed from the Converter Station to the Connecting Transmission Owner’s West 49th
Street Substation in New York City. The high-voltage AC power cables will interconnect PJM and New York City along a route that is entirely underground, installed either in existing
roadways, an existing railway tunnel, or buried beneath the Hudson River. The Merchant
Transmission Facility will have only unidirectional flow from PJM to the New York Control
Area. The Merchant Transmission Facility and Developer’s Attachment Facilities will have an operating range between 60MW and 660MW, subject to system conditions as described in
Sections 9.5.1 and 9.5.2 of the Interconnection Agreement.

A simplified schematic illustrating the major components of the Merchant Transmission Facility and Developer’s Attachment Facilities are included in Appendix A, Figure A-1, which is designated as CEII for the reasons discussed in Section III, infra. The Point of Interconnection is defined as the point at the Connecting Transmission Owner’s West 49th Street Substation
between existing circuit breakers 7 and 8 as shown in Figure A-1 of Appendix A of the
Interconnection Agreement.

The Interconnection Agreement substantially conforms to the NYISO’s pro forma Large
Generator Interconnection Agreement (“LGIA”) contained in Attachment X of its Open Access
Transmission Tariff (“OATT”). However, as discussed in the next section, the Interconnection
Agreement has been changed from the pro forma LGIA to reflect the fact that HTP is a merchant
transmission project Developer and not a generator Developer. The NYISO’s LFIP provides that
Attachment X applies to merchant transmission project Developers as well as generator project
Developers. For ease of reference, the Joint Filing Parties have included a blackline of the

Interconnection Agreement against the NYISO’s pro forma LGIA to highlight these changes.

II. Variations From the NYISO’s Pro Forma LGIA

As noted above, the Interconnection Agreement is based on the NYISO’s pro forma

LGIA; however, the Parties have agreed to make a limited set of modifications to the pro forma
LGIA. These modifications are described below and are necessary to reflect (A) the unique

Honorable Kimberly D. Bose April 29, 2011

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characteristics of a Merchant Transmission Facility; (B) the unique characteristics of a Merchant
Transmission Facility spanning two separate Control Areas; (C) the absence of Connecting
Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities; 4

(D) the timing of execution of the Interconnection Agreement vis-à-vis the award of Unforced Capacity Deliverability Rights; (E) performance specifications for the characteristics of the
Merchant Transmission Facility; (F) principles associated with construction activity at Con
Edison’s West 49th Street Substation; (G) modifications expressly contemplated by the pro forma LGIA; and (G) necessary ministerial revisions. All of the Parties to the Interconnection Agreement agree to these changes.

The Commission has accepted changes to the pro forma LGIA terms where, as here,
there are unique circumstances associated with the interconnections, including “reliability
concerns, novel legal issues or other unique factors.”5 In fact, many of the modifications to the
pro forma LGIA in this Interconnection Agreement are substantially similar or identical to those
previously accepted by the Commission.6 The NYISO respectfully requests that the
Commission accept these modifications in light of the unique factors and novel legal issues
explained below.

A.Deviations to Reflect the Unique Characteristics of the Merchant

Transmission Facility

As noted above, it was necessary for the Parties to revise the pro forma LGIA because
the pro forma governs the interconnection of a generation facility, not a transmission facility.
First, the Parties have inserted the term “Merchant Transmission Facility,” which is defined in
the Interconnection Agreement as “generally a merchant facility for the transmission of
electricity, and specifically the Developer’s facility for the transmission of electricity as
described in this Agreement and the Appendices hereto.” In parallel to this addition to the
Interconnection Agreement, the Parties have replaced the pro forma term “Large Generating
Facility” with “Merchant Transmission Facility” throughout the Interconnection Agreement.
Similarly, the Parties have revised the definition of “Standard Large Generator Agreement” to
clarify that such term does not refer to this Interconnection Agreement. Consistent with those
revisions, the Parties have replaced the term “Standard Large Interconnection Agreement” with
“this Agreement,” “Interconnection Agreement” or “Merchant Transmission Facility
Interconnection Agreement.”

4 This project involves no Connecting Transmission Owner Attachment Facilities, no Stand Alone System Upgrade Facilities and no System Deliverability Upgrades.

5 See PJM Interconnection, LLC, 111 FERC ¶ 61,163 at PP 10-11, reh’g denied, 112 FERC ¶ 61,282

(2005).

6 See New York Independent System Operator, Inc. and Consolidated Edison Company of New York, Inc., 123 FERC ¶ 61,093 (Apr. 29, 2008) (accepting an interconnection agreement of a Merchant Transmission Facility); see also New York Independent System Operator, Inc. and Consolidated Edison Company of New York, Inc., Docket No. ER-11-2199-000 (December 28, 2010).

Honorable Kimberly D. Bose April 29, 2011

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In addition, revisions were necessary to account for the specific characteristics of a

transmission facility. Unlike a Large Generating Facility, a Merchant Transmission Facility

“transmits” power. Large Generating Facilities, by contrast, generate, produce, or export power. The Parties have therefore replaced the word “export,” “generate,” or “produce,” as applicable, with the word “transmit.”7 Similarly, the Parties have replaced the following terms:

 “generation” with “generation or transmission facilities;”8

 “generating facilities” to “merchant transmission facilities;”9

 “generating electricity for sale” with “transmitting electricity,”10  “generated at” to “transmitted on;”11

 “generate test energy at” to “transmit test energy over;”12

 “produce or absorb reactive power” to “transmit reactive power;”13

 “production of electricity” to “transmission” or “transmission of electricity over the
Merchant Transmission Facility;”14

The Parties have also revised the pro forma LGIA to account for the metering

requirements associated with the Merchant Transmission Facility.15 First, in the definition of
“Metering Equipment” in Article 1, the Parties have added a reference to the Point of
Interconnection (as opposed to the “metering points”) as the location at which Metering
Equipment shall be installed. Second, the Parties have revised Article 7 (“Metering”) to delete
generator-specific language that is not comprehensible in the context of a Merchant
Transmission Facility.16 Article 7 has also been modified to require both Connecting
Transmission Owner and Developer to provide metering quantities, as required, to Developer or
NYISO upon request.17

Certain reactive power and voltage provisions in the pro forma LGIA have also been

revised to conform to the unique operating requirements of the Merchant Transmission Facility.

7 See, e.g., Interconnection Agreement at § 1 (“Definitions”); § 6.1 (“Pre-Commercial Operation Date Testing and Modifications’); § 9.5.2 (“Voltage Schedules”).

8 Id. at § 5.14.

9 Id. at § 9.6.2.2.

10 Id. at § 1, “Commercial Operation.”

11 Id. at § 5.17.2.

12 Id. at § 6.1.

13 Id. at § 9.5.2.

14 Id. at § 9.6.2.

15 See, e.g., Id. at §§ 9.5.1 and 9.5.2.

16 Id. at § 7.1.

17 Id.

Honorable Kimberly D. Bose April 29, 2011

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Article 9.5.1 (“Power Factor Design Criteria”) has been modified to delete inapplicable language
and to provide that the power factor will be maintained within the variable range of -50 MVAr
and +200 MVAr for an AC voltage range of 0.95 pu to 1.05 pu at the Point of Interconnection,
and by including a cross-reference to Appendix G, which includes additional details regarding
the manner in which Developer will maintain the power factor within these parameters. In
addition, Article 9.5.2 (“Voltage Schedules”) has been revised to (i) delete inapplicable
language; (ii) revise language such that it is tailored to the unique characteristics of the Merchant
Transmission Facility; (iii) provide that voltage at the Point of Interconnection is within the
range of 346kV to 362kV, in accordance with specific Connecting Transmission Owner
engineering requirements; and (iv) in light of the Merchant Transmission Facility’s impact on the
portion of the transmission system under Connecting Transmission Owner’s operational control,
to require notification to both the Connecting Transmission Owner and NYISO operators in the
event the Merchant Transmission Facility is unable to provide the requested assistance or
maintain the specified power factor.

Several other provisions included in the generator-focused pro forma LGIA are simply not applicable in the context of a Merchant Transmission Facility or are otherwise required to be revised. Accordingly:

• The Parties have deleted Article 5.4 (“Power System Stabilizers”), and Article 9.5.4

(“Governors and Regulators”) in light of their inapplicability in the context of a Merchant Transmission Facility;

• The Parties have qualified Article 5.17.2 (“Representations and Covenants”) by the
language, “as applicable to this Merchant Transmission Facility;”

• The Parties have revised Article 6.4 (“Right to Inspect”) to delete the reference to Power
System Stabilizers;

• The Parties have added language regarding the right to observe testing of the Merchant
Transmission Facility to the discussion in Article 6.3 (“Right to Observe Testing”) which
is limited, in the pro forma LGIA, to Attachment Facilities testing;

• The Parties have revised Article 9.6.4 (“System Protection and Other Control

Requirements”) to account for the potential tripping of not only the Merchant

Transmission Facility, but also the Connecting Transmission Owner’s facilities;18

• The Parties have further revised Article 9.6.4 to account for the manner and intervals at
which tests will be conducted related to System Protection Facilities;19

18 Id. at § 9.6.4.4.

19 Id. at § 9.6.4.6.

Honorable Kimberly D. Bose April 29, 2011

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• The Parties have revised Article 9.6.5 (“Requirements for Protection”) to delete language
regarding load interrupting capability and equipment that is not applicable to a Merchant
Transmission Facility;

• The Parties have revised Article 24.4 (“Information Supplementation”) to delete

references to voltage tests that are inapplicable to a Merchant Transmission Facility and to delete language regarding equipment to be tested, where such equipment is unique to generation facilities; and

• The Parties have further revised Article 24.4 to clarify that instead of voltage tests,

Developer shall provide the Connecting Transmission Owner and NYISO validated test recordings showing the responses of the Merchant Transmission Facility.

B. Deviations to Reflect the Unique Characteristics of a Merchant Transmission

Facility Spanning Two Separate Control Areas

The Parties further revised the pro forma LGIA to reflect the fact that the Interconnection
Agreement governs the interconnection of a Merchant Transmission Facility, portions of which,
including the Developer’s Attachment Facilities, are located beyond the New York Control Area
in the PJM Interconnection (“PJM”). As a result, the Parties have inserted references to PJM,
PJM’s Regional Entity, Reliability First Corporation (“RFC”), and Connecting Transmission
Owner on the PJM side - Public Service Electric and Gas Company (“PSE&G”) - as
applicable.20 For the same reason, the Parties have revised the definition of “Initial
Synchronization Date” in Article 1 to clarify that, as used in the Interconnection Agreement,
such term relates to the synchronization “with the New York State Transmission System.” The
Parties have also revised Section 6.1 (“Pre-Commercial Operation Date Testing and
Modifications”) to clarify that with respect to injection of test energy, injection is only permitted
in one direction: “injection into the New York Control Area” or “withdrawal from PJM.”

C. Deviations to Reflect the Absence of Connecting Transmission Owner’s

Attachment Facilities, Stand Alone System Upgrade Facilities, and System Deliverability Upgrade Facilities

Due to the specific design characteristics of the Merchant Transmission Facility, only one
party has Attachment Facilities - Developer. There are no Connecting Transmission Owner’s
Attachment Facilities covered by the Interconnection Agreement. The Parties have therefore
revised Article 5.8 to refer to “the Attachment Facilities” rather than “their respective
Attachment Facilities.” Also, the Parties have revised the definition of “In-Service Date” in
Article 1 such that it means the date upon which the Developer reasonably expects it will be
ready to begin use of either Connecting Transmission Owner’s Attachment Facilities or System

20 Id. at § 1 (Definition of “Applicable Reliability Council”); § 6.1 (“Pre-Commercial Operation Date Testing and Modifications”); § 8.2 (“Remote Terminal Unit”); § 9.4 (“Start-Up and Synchronization”); § 9.6.5 (“Requirements for Protection”).

Honorable Kimberly D. Bose April 29, 2011

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Upgrade Facilities to obtain back feed power. The Parties have also made limited revisions to

Article 5.11 to delete the requirement that Connecting Transmission Owner provide to Developer “as-built” drawing, information and documents for the Connecting Transmission Owner’s
Attachment Facilities, of which there are none.

In addition since there are no System Deliverability Upgrade Facilities and no Stand

Alone System Upgrade Facilities covered by this Agreement the Parties have deleted the

reference in Appendix A to System Deliverability Upgrade Facilities and have revised references in the Appendices to refer simply to “System Upgrade Facilities” rather than “Stand Alone
System Upgrade Facilities.”

D. Deviations to Reflect the Timing of the Execution of the Interconnection

Agreement Vis-à-Vis the Award of Unforced Capacity Deliverability Rights

HTP has elected to seek both Energy Resource Interconnection Service and Capacity
Resource Interconnection Service (“CRIS”).21 While the Class Year Study that included the
Merchant Transmission Facility concluded that it was deliverable and, therefore, eligible for
CRIS, the extent to which a transmission facility can be utilized to supply Unforced Capacity is
dependent upon it receiving Unforced Capacity Deliverability Rights (“UDRs”), among other
requirements. The Interconnection Agreement was executed prior to the project requesting or

obtaining any UDRs. Accordingly, the Parties modified Article 4.3, which requires a Developer
wishing to supply Energy, Installed Capacity or Ancillary Services to make application to do so
in accordance with the NYISO Services Tariff. In light of unique interrelation between CRIS
and UDRs involved in the context of a Merchant Transmission Facility, the Parties added
language to Article 4.3 clarifying that if the Developer wishes to supply Energy, Installed
Capacity or Ancillary Services, then Developer will make application to do so in accordance
with the NYISO Services Tariff and the NYISO Installed Capacity Manual. The Parties further
added, “[t]his Agreement does not in any way alter the Merchant Transmission Facility’s
eligibility for Unforced Capacity Deliverability Rights to the extent such Unforced Capacity
Deliverability Rights are requested by the Merchant Transmission Facility after execution of this
Agreement.” 22

E. Deviations to Reflect Merchant Transmission Facility and Developer

Attachment Facilities Performance Specifications

The Parties have revised Appendix G to tailor the language to the unique performance
specifications of the Merchant Transmission Facility and Developer’s Attachment Facilities.
Appendix G in the pro forma LGIA provides the detailed technical standards addressing, for
example, low voltage ride-through and power factor requirements applicable to a Wind

21 Id. at § 4.1.1.

22 Id. at § 4.3.

Honorable Kimberly D. Bose April 29, 2011

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Generating Plant. The Parties have replaced those inapplicable wind plant requirements with similar technical details as applicable to a Merchant Transmission Facility.

F.Deviations to Reflect Principles Associated with Construction Activity at Con

Edison’s West 49th Street Substation

The Parties have added a new appendix to the Interconnection Agreement - Appendix H. Appendix H provides the detailed principles associated with construction activity at Con
Edison’s West 49th Street substation. A similar such Appendix was added to interconnection agreements accepted by the Commission on April 29, 2008 in Docket No. ER08-618-000 and on December 28, 2010 in Docket No. ER-11-2199-000.23

G. Modifications Expressly Contemplated by the LGIA24

Article 2.2 of the Interconnection Agreement (“Term of Agreement”) provides for a term of ten (10) years. The language of Article 2.2 specifically provides that the Parties may elect a term longer than ten (10) years. Exercising the rights afforded to them by this language, the Parties have elected to insert a term of twenty-five (25) years.

Similarly, the Parties have revised Article 29.2 (“Conflicts”) as specifically contemplated by the pro forma LGIA. Article 29.2 provides for discrepancies or conflicts between or among terms and conditions of the cover agreement and its Appendices. The language of this Article specifically provides that the terms and conditions of the cover agreement shall be given
precedence over the Appendices, “except as otherwise expressly agreed in writing by the
Parties.” Exercising the rights afforded to them by this last clause, the Parties added a provision to this article expressly agreeing that the terms and conditions of the Appendices shall take
precedence over the provisions of the cover agreement in case of a discrepancy or conflict
between or among the terms and conditions of same.

H.Ministerial Revisions

Finally, the Parties have corrected certain numbering errors,25 formatting errors,26 and
other ministerial revisions, including (i) updating the Table of Contents to reflect the above-
referenced revisions; (ii) adding a clarifying word, “associated” to Article 5.12 regarding Access
Rights with respect to “associated safety rules and procedures;” and (iii) replacing the reference
in Section 9.6.3 to NPCC criteria A-3 with a reference to the NPCC Regional Reliability

23 See New York Independent System Operator, Inc. and Consolidated Edison Company of New York, Inc., 123 FERC ¶ 61,093 (Apr. 29, 2008) and see also, New York Independent System Operator, Inc. and Consolidated Edison Company of New York, Inc., Docket No. ER-11-2199-000 (December 28, 2010).

24 The Joint Filing Parties note these modifications here, but do not consider them non-conforming.

25 See, e.g., id. at 8.1 (revising Appendix “D” to Appendix “C”).

26 See, e.g., id. at Table of Contents.

Honorable Kimberly D. Bose April 29, 2011

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Reference Directory that has replaced NPCC criteria A-3. These changes have no impact on the substantive provisions of the pro forma LGIA.

III. Request for CEII Treatment

Pursuant to the Commission’s regulations at 18 C.F.R. §388.112 and 18 C.F.R. §

388.113, Con Edison requests that the one-line diagram included as part of Appendix A to the
Interconnection Agreement (Figure A-1) be protected from disclosure as Critical Energy
Infrastructure Information (“CEII”). This one-line diagram contains detailed, one-line
schematics of transmission lines, the Gowanus substation and generation facilities that, if
disclosed, could pose a threat to the security and the reliability of the New York State bulk power
system. This diagram provides more than simply the general location of critical infrastructure.
Unlike publicly available maps of power transmission lines and generation and substation
facilities, this schematic shows the exact nature and specific location of facilities and
transmission lines used to maintain the reliability of the New York State bulk power system.
This diagram, in Con Edison’s assessment, reveals such critical information related to the
facilities and transmission depicted therein that, if disclosed, could be useful to a person seeking
to disable the power grid. Therefore, the disclosure of this CEII diagram would pose a threat to
the reliability of the New York State bulk power system and to the health and safety of New
York residents. Moreover, the information revealed in this schematic reveals CEII which FERC
has determined to be exempt from mandatory disclosure under 5 U.S.C. § 552(b)(7)(F). The
diagram has been omitted from the Public version of the Interconnection Agreement included in
this filing. The diagram is included only in the CEII version of the Interconnection Agreement in
the filing.

All communications relating to this request for CEII treatment should be addressed to the following:

John BeckPaul A. Savage

Section ManagerAssociate Counsel

Consolidated Edison Company of New York,Consolidated Edison Company of New York,

Inc.Inc.

4 Irving Place, Room 1450-S4 Irving Place, Room 1815-S

New York, NY 10003New York, NY 10003

Phone: (212) 460-4244Phone: (212) 460-2764

Fax: (212) 529-1130Fax: (212) 529-9265

IV. Effective Date

The Parties request an effective date of April 20, 2011, the date of execution of the

Interconnection Agreement. The Commission has allowed interconnection agreements to

become effective on the date of execution, even when that date precedes the date that an

interconnection agreement is filed. Accordingly, the Parties request that the Commission grant a

Honorable Kimberly D. Bose April 29, 2011

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waiver of its prior notice requirements to the extent necessary to accommodate this requested effective date.

V.Communications and Correspondence

Communications regarding this filing should be directed to:

For the NYISO

Robert E. Fernandez, General Counsel

Karen Georgenson Gach, Deputy General Counsel *Sara B. Keegan, Senior Attorney

New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Phonel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
kgach@nyiso.com
skeegan@nyiso.com

For Consolidated Edison Company of New York, Inc.

* Paul A. Savage, Associate Counsel

Consolidated Edison Company of New York, Inc.

4 Irving Place, Room 1815-S

New York, NY 10003
Phone: (212) 460-4494
Fax: (212) 529-9265
savagep@coned.com

*Designated to receive service.
VI. Documents Submitted

The NYISO submits the following documents:

A.this filing letter;

B.a clean Public version of the Interconnection Agreement;

C.a blacklined Public version showing the Interconnection Agreement’s

changes from the body of the NYISO’s pro forma LGIA and the addition of

Appendix H; and

D.a clean CEII version of the Interconnection Agreement.

Honorable Kimberly D. Bose April 29, 2011

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VII. Service

The NYISO will send an electronic link to this filing to the official representative of each
of its customers, to each participant on its stakeholder committees, to the New York Public
Service Commission, and to the electric utility regulatory agency of New Jersey. In addition, a
Public version of this filing will be posted on the NYISO’s website at www.nyiso.com.

VIII. Conclusion

Wherefore, the NYISO respectfully requests that the Commission accept the attached Agreement effective as of April 20, 2011.

Respectfully submitted,

/s/ Sara B. Keegan

Sara B. Keegan
Counsel for the

New York Independent System Operator, Inc.

/s/ Paul A. Savage

Paul A. Savage

Counsel for Consolidated Edison Company of New York, Inc.