Daniel Galaburda
Assistant General Counsel
April 29, 2011
The Honorable Kimberly D. Bose Secretary
Federal Energy Regulatory Commission 888 First Street, N.E.
Washington, DC 20426
Re: Niagara Mohawk Power Corporation
Docket No. ER11-______-000
Dear Secretary Bose:
Pursuant to Section 205 of the Federal Power Act (16 U.S.C. § 824d), Sections
35.7 and 35.9 of the Commission’s regulations (18 C.F.R. §§ 35.7, 35.9 (2010)), and
Order No. 714 (Electronic Tariff Filings, FERC Stats. & Regs. ¶ 31,276 (2008)), Niagara
Mohawk Power Corporation (“Niagara Mohawk”) d/b/a National Grid (“National Grid”),
hereby submits for Commission acceptance the attached electronic version of its
Amended and Restated Agreement for The Retail Transmission of Replacement Power
Between Niagara Mohawk Power Corporation and the Power Authority Of The State Of
New York, previously designated Niagara Mohawk Power Corporation, FERC Electric
Tariff Rate Schedule 19, First Revised Volume No. 1 (“RS-19”). Pursuant to Order No.
714, this agreement has been designated Original Service Agreement No. 1742, under the
New York Independent System Operator, Inc. (“NYISO”) Open Access Transmission
Tariff (“OATT”), FERC Electric Tariff, Original Volume No. 1 (“SA 1742”).
SA 1742 is an amendment to RS-19, which is a “grandfathered transmission
agreement” under NYISO OATT Attachment L. As discussed below, SA 1742 results in
limited amendments to RS-19, extending the term of the agreement, as well as the period
during which its rates may not be increased. In accordance with Order No. 714, the
attached electronic version is the first filing of RS-19 under the eTariff system, and
supersedes the previous, paper version of the rate schedule. National Grid also submits
herewith the Stipulation and Agreement Regarding Rate Design, Customer and Markets
Issues (the “Stipulation”), in which the agreement of the requisite parties to the changes
in RS-19’s termination date and rate freeze period are memorialized.
National Grid also respectfully requests waiver of the Commission’s 60-day
notice requirement, to permit SA 1742 to go into effect as of February 1, 2011, the date on which the contractual commitments contained in RS-19 would have expired according to their terms in the absence of the Stipulation.
40 Sylvan Road, Waltham, MA 02451
T: 781-907-1847 F: 781-907-5701 daniel.galaburda@us.ngrid.com www.nationalgrid.com
The Honorable Kimberly D. Bose April 29, 2011
Page 2
I.Background
Niagara Mohawk, a subsidiary of National Grid USA, is a public utility subject to the Commission’s jurisdiction, which owns facilities located in the State of New York.
National Grid’s high-voltage New York transmission facilities have been placed under
the operational control of NYISO. Niagara Mohawk’s local delivery, distribution, and
retail sales operations are subject to the jurisdiction of the New York Public Service
Commission (“NYPSC”).
The Power Authority of the State of New York (“NYPA”) is the nation’s largest state public power authority, and is an instrumentality of the State of New York. NYPA is not subject to the Commission’s jurisdiction.
RS-19 is a bilateral agreement between NYPA and Niagara Mohawk governing
the retail transmission portion of delivery service for so-called “Replacement Power.”
Replacement Power is low-cost hydropower generated by NYPA, and is currently
delivered by Niagara Mohawk to designated industrial end-users pursuant to New York
state law.1 RS-19 was amended in 2004 pursuant to a Commission-approved settlement2
between Niagara Mohawk, NYPA, and certain Niagara Mohawk Replacement Power
industrial customers. The settlement did a number of things, including dividing
Replacement Power allocated to approved customers into two categories: Existing
Allocations and New Allocations. Pursuant to this settlement, retail transmission service
to New Allocations (i.e., allocations of Replacement Power made after the effective date
of the settlement) is provided under the NYISO OATT. By contrast, retail transmission
service for Existing Allocations (i.e., those allocations of Replacement Power that were
made before the effective date of the 2004 settlement) remain subject to RS-19, with the
added proviso that these delivery rates and associated loss factors are to be frozen for a
specified period at the levels in effect on August 31, 2003. The provisions and
amendments discussed in this transmittal letter thus apply only to Existing Allocations of
Replacement Power.
The 2004 settlement also amended the termination provisions of RS-19 to extend
that agreement beyond its originally scheduled termination date of August 31, 2007. As
amended by the 2004 settlement, RS-19 currently provides that it “shall remain in effect
for the duration of the Rate Plan Period, unless further extended by written agreement of
the Authority [i.e., NYPA] and Contractor [i.e., Niagara Mohawk].”3 The Rate Plan
Period refers to the retail rate plan approved by the NYPSC in connection with the
merger between National Grid USA and Niagara Mohawk. The Rate Plan Period was set
1See N.Y. Pub. Auth. Law § 1005(13).
2See Niagara Mohawk Power Corp., 108 FERC ¶ 61,035 (2004).
3See Original Sheet No. 10, Article IX of Substitute First Amended Rate Schedule FERC No. 19,
Docket Nos. ER03-989 et. al., (Filed April 21, 2004).
The Honorable Kimberly D. Bose April 29, 2011
Page 3
by NYPSC to expire December 31, 2011 unless NYPSC approved new retail rates before that date.4
A Niagara Mohawk retail rate case was initiated in 2010, and resulted in NYPSC putting new retail rates for Niagara Mohawk into effect as of February 1, 2011, thus
ending the Rate Plan Period referenced in RS-19 eleven months before RS-19 would
have expired in the absence of such action. As part of the discussions surrounding the retail rate case, however, Niagara Mohawk, NYPA, and certain other parties agreed that RS-19 and its “frozen” rates should remain in effect until December 31, 2011, as they
would have done in the absence of NYPSC’s early termination of the Rate Plan Period.5 The Stipulation, attached hereto as Attachment A, is the document memorializing this
agreement to extend the term and rate freeze period of RS-19 by eleven months (as well as a number of other items not relevant to RS-19).
II.Discussion
The changes to RS-19 for which approval is requested herein are minor in nature, and have no other effect than to extend the term and rate freeze of RS-19, both of which would otherwise expire earlier than the end date originally set for the expiration of the Rate Plan Period, and thus of RS-19 itself. The amended RS-19, submitted herewith as SA 1742, thus simply preserves the status quo ante. The amendments to RS-19 effecting this result are changes to Articles V and IX, as well as to Exhibit A.
The change to Article V provides simply that no change to transmission and
delivery charges or loss allowances under SA 1742 shall be proposed or made by Niagara Mohawk or NYPA to be effective prior to January 1, 2012.6
The changes to Article IX and Exhibit A provide that RS-19 will remain in effect
through December 31, 2011.7 Article IX of RS-19 states: “This amended and restated
Agreement . . . shall remain in effect for the duration of the Rate Plan Period, unless
further extended by written agreement of the Authority [i.e., NYPA] and Contractor [i.e.,
Niagara Mohawk].” Exhibit A contains similar language.8 While the Rate Plan Period
ended February 1, 2011, in this case the NYPA and Niagara Mohawk have agreed to an
extension beyond “the duration of the Rate Plan Period.” This agreement to extend RS-
19’s term is contained in the Stipulation, appended hereto as Attachment A, which
provides in relevant part: “The following rules shall apply to the Company’s service to
4See NYPSC Opinion No. 01-6, issued Dec. 3, 2001 in Case No. 01-M-0075.
5The Staff of the New York Department of Public Service is also a party to this agreement.
6SA 1742, Art. V.
7Id., Art. IX.
8Id., Exh. A, Sec. S.
The Honorable Kimberly D. Bose April 29, 2011
Page 4
NYPA customers during calendar year 2011 and thereafter until revised by the regulatory
authority with jurisdiction over such matters: (a) There shall be no changes made in
delivery rates or billing determinants for “Existing” allocations . . . of . . . [Replacement
Power] . . .”9 Pursuant to this language, NYPA and Niagara Mohawk have agreed to
amend Article IX and Exhibit A to provide that SA 1742 will remain in effect through
December 31, 2011.
While Articles V and IX are both secured by the Mobile-Sierra clause in Article XI of RS-19, Article XI by its own terms does not apply to changes made after the end of the Rate Plan Period. As explained above, the Rate Plan Period ended on February 1, 2011 when NYPSC placed new Niagara Mohawk retail rates into effect. Thus, NYPA and Niagara Mohawk have followed the Commission-approved provisions of RS-19 in extending its current rates through December 31, 2011.
It should also be noted that the amendments to RS-19 submitted here were
requested and agreed to by NYPA and the Staff of the New York Department of Public
Service (“DPS Staff”) as part of an effort to extend low delivery rates for New York
industrial customers until the end of the original Rate Plan Period; these changes were
part of a negotiated settlement between National Grid, NYPA, and DPS Staff, and are
part of a package of mutually dependent commitments that allowed these parties to avoid
extended litigation regarding Niagara Mohawk’s new retail rates. The fact that the
extension of RS-19’s term has been vetted and approved by two independent public
service agencies and is part of a more comprehensive settlement relating to retail rates
should also weigh in favor of the Commission accepting SA 1742 as submitted.
The only other amendments to RS-19 embodied in the attached SA 1742 are
changes to the caption and first paragraph of the agreement in order to reflect Niagara
Mohawk’s status as an affiliate of National Grid, and a change in the definition of the
term “Agreement” in Article I to reflect the new designation of the amended agreement.
For the foregoing reasons, Niagara Mohawk respectfully requests that the Commission accept Niagara Mohawk’s submission of SA 1742 for filing.
III. Effective Date and Request for Waiver
National Grid respectfully requests waiver, pursuant to Section 35.11 of the
Commission’s regulations (18 C.F.R. § 35.11), of the 60-day prior notice requirement set forth in Section 35.3 (18 C.F.R. § 35.3), in order to permit SA 1742 to become effective as of February 1, 2011, the date on which RS-19, including its rate freeze provisions, would have expired in the absence of the Stipulation.
9See Stipulation, Sec. G.1. at 4.
The Honorable Kimberly D. Bose April 29, 2011
Page 5
No harm will result to any entity as a result of the requested February 1, 2011
effective date. Indeed, customers will benefit from Niagara Mohawk’s agreement to
forego requesting increased delivery rates under SA 1742 at least until the beginning of
2012. Further, under long-standing practice, the Commission holds that waiver of the
60-day notice requirement “will generally be appropriate when the filing has no rate
impact or reduces the rate.”10 In this case, the filing of SA 1742 has no effect on rates
except to prevent them from rising during its term. In addition, the Commission “will
also generally grant waiver of the 60-day prior notice requirement . . . when the rate
change and the effective date are prescribed by contract . . .”11 As discussed previously,
here the rate schedule prescribes that the termination date may be extended by the
agreement of Niagara Mohawk and NYPA, which have agreed to such an extension in
this case. The fact that NYPA, which is the transmission customer under RS-19 and SA
1742, has agreed to the change in termination date to become effective on February 1,
2011, provides further justification for the Commission’s grant of a waiver.
Furthermore, no practical purpose would be served by declining to approve SA
1742 effective February 1, 2011. Such action would simply result in the creation of a
time period during which Niagara Mohawk could theoretically have raised its rates but
did not (from February 1, 2011 until the effective date of SA 1742), followed by a time
period during which Niagara Mohawk is formally barred from raising its rates (the
effective date of the amendments until the expiration of SA 1742 under the amended
termination provisions). As the practical effects of granting or not granting a waiver
would be identical in their impact, there is no reason not to grant such waiver.
For all these reasons, granting the requested waiver is appropriate, and National
Grid respectfully requests that the Commission do so. National Grid does not, however,
request that the Commission issue an order accepting SA 1742 on an expedited basis.
IV. Service Agreement Designation of the Amended RS-19
Pursuant to the Commission’s directives in Electronic Tariff Filings, Order No.
714, FERC Stats. & Regs. ¶ 31,276 (2008), and consistent with NYISO practice, National Grid has designated the amended RS-19 as SA 1742.
V.Attachments
In addition to this transmittal letter, the instant filing includes the following
attachments:
Attachment AStipulation and Agreement Regarding Rate Design, Customer and
Markets Issues, dated September 15, 2010.
10Central Hudson Gas & Electric Corporation, 60 FERC ¶ 61,106 at 61,337 (1992),
11Id. at 61,338.
The Honorable Kimberly D. Bose April 29, 2011
Page 6
Attachment BBlacklined version of Amended and Restated Agreement for The
Retail Transmission of Replacement Power Between Niagara
Mohawk Power Corporation and the Power Authority Of The State Of New York showing proposed amendments.
Attachment C Clean version of Amended and Restated Agreement for The Retail
Transmission of Replacement Power Between Niagara Mohawk
Power Corporation and the Power Authority Of The State Of New
York incorporating amendments and formatted as required under
Order No. 714
VI.Communications and Service
Communications regarding this filing should be addressed to the following
individuals, whose names should be entered on the official service list maintained by the
Secretary with respect to this docket:
Daniel Galaburda
National Grid USA
Service Company, Inc.
40 Sylvan Road
Waltham, MA 02451 (781) 907-1847
daniel.galaburda@us.ngrid.com
William Malee
Sean A. Atkins* Jamil Nasir
Alston & Bird, LLP The Atlantic Building 950 F Street, NW
Washington, DC 20004 (202) 756-3300
sean.atkins@alston.com
jamil.nasir@alston.com
Director of Transmission Commercial Services National Grid USA
Service Company, Inc.
40 Sylvan Road
Waltham, MA 02451 (781) 907-2422
bill.malee@us.ngrid.com
*Designated to receive service.
VII. Commission Regulations
This filing substantially complies with the requirements of Part 35 applicable to
filings of this kind. Niagara Mohawk requests waiver of any applicable requirement of
The Honorable Kimberly D. Bose April 29, 2011
Page 7
part 35 for which it has not specifically requested waiver or supplied data so that this filing may become effective as proposed.
Copies of this filing have been served upon Parties to the 2004 settlement, the NYPSC, NYPA and the NYISO.
Respectfully submitted,
/s/ Daniel Galaburda
Sean A. AtkinsDaniel Galaburda
Jamil NasirAssistant General Counsel
Alston & Bird LLPNational Grid
The Atlantic Building40 Sylvan Road
950 F Street, NWWaltham, MA 02451
Washington, DC 20004Tel: (781) 907-1847
Tel: (202) 756-3300Daniel.Galaburda@us.ngrid.com
sean.atkins@alston.com
jamil.nasir@alston.com
Counsel for Niagara Mohawk Power
Corporation d/b/a National Grid
