December 28, 2010

VIA ELECTONIC FILING

The Honorable Kimberly D. Bose Secretary

Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

RE: Joint Filing of Small Generator Interconnection Agreement by and among
the New York Independent System Operator, Inc., Niagara Mohawk Power Corporation,
Niagara Wind Power, LLC and Erie Wind, LLC, Service Agreement No. 1676, Docket No.
ER11-____

Dear Secretary Bose:

The New York Independent System Operator, Inc. (“NYISO”), and Niagara Mohawk
Power Corporation d/b/a National Grid USA (“Niagara Mohawk”) (together, the “Joint Filing
Parties”), pursuant to Section 205 of the Federal Power Act (“FPA”)1 and Part 35 of the
Commission’s regulations,2 respectfully submit for filing Service Agreement No. 1676, an
executed Small Generator Interconnection Agreement (“Interconnection Agreement” or “Steel
Winds II IA”) by and among the NYISO, Niagara Mohawk, Erie Wind, LLC (the
“Interconnection Customer”) and Niagara Wind Power, LLC (collectively, the “Parties”). With
the exceptions noted in section II of this letter, the Interconnection Agreement conforms to the
NYISO’s pro forma Small Generator Interconnection Agreement (“SGIA”) that is contained in
Attachment Z of the NYISO Open Access Transmission Tariff (“OATT”).

In addition, for the reasons discussed below, this Interconnection Agreement is being

filed contemporaneously with Niagara Mohawk’s filing with the Commission the First Revised
Service Agreement No. 914 between Niagara Mohawk and Niagara Wind Power, LLC and Erie
Wind, LLC (“Amended Steel Winds I IA”). The Amended Steel Winds I IA supersedes the

16 U.S.C. § 824d.

18 C.F.R. Part 35.

Ms. Kimberly D. Bose, Secretary December 28, 2010

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Original Service Agreement No. 914 (“Original Steel Winds I IA”) between Niagara Mohawk and Steel Winds LLC (Niagara Wind Power LLC is Steel Winds LLC’s successor). 3

I.BACKGROUND AND OVERVIEW OF FILING

Niagara Wind Power, LLC (“Niagara Wind Power”) is the current owner of the existing

20 MW Steel Winds I wind generation plant that currently interconnects its wind plant to the

Niagara Mohawk’s transmission system through facilities located at an existing collection station
as described in the Original Steel Winds I IA. Erie Wind, LLC (“Erie Wind”) will own and
construct a 15 MW wind generation plant (“Steel Winds II”). As described in the Steel Winds II
IA, the interconnection of the Steel Winds II plant will utilize and require modifications to the
existing facilities located at the existing collection station currently used for the interconnection
of the Steel Winds I plant. As a result Niagara Wind and Erie Wind have agreed to an undivided
joint ownership interest in certain interconnection facilities that comprise the existing collection
station that are required to be utilized by both the Steel Winds I and Steel Winds II plants. These
jointly-owned interconnection facilities are described in Attachment 2 to the Steel Winds II IA
submitted in this filing.

Due to the jointly-owned interconnection facilities required to interconnect Erie Wind’s
Steel Wind II plant, the NYISO, Niagara Mohawk, Erie Wind, and Niagara Wind Power have
executed a four (4) party small generator interconnection agreement - the Steel Winds II IA - to
effectuate the interconnection of the 15 MW Steel Winds II plant. Erie Wind, the
Interconnection Customer under the Steel Winds II IA, will also have a sole ownership interest in
certain additional Interconnection Facilities described in Attachment 2 to this Interconnection
Agreement that are required to be constructed and installed to enable the interconnection of the
Steel Winds II plant to Niagara Mohawk’s transmission system. In recognition of these joint
ownership interests, the four parties have agreed to variations from the pro forma NYISO
SGIA.4

In addition, in order to accommodate Erie Wind’s development schedule and allow the
Steel Winds II plant to begin commercial operation prior to completion of required System
Upgrade Facilities that are described in Attachment 6 of the Interconnection Agreement, the
parties have agreed that an Interim Constrained Operation Period will begin upon the Initial
Synchronization Date of the Steel Winds II plant and will be terminated upon the earlier of (a)
December 31, 2011 or (b) ten business days after the System Upgrade Facilities and

Interconnection Facilities are In Service. During the Interim Constrained Operation Period, both
Niagara Wind and Erie Wind shall ensure that the delivered output of the combined Steel Winds
I and Steel Winds II Small Generating Facilities does not exceed 10 MW on each of the Lines
149 and 150.

Ms. Kimberly D. Bose, Secretary December 28, 2010

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II.PRO FORMA VARIATIONS

As noted above, the Steel Winds II IA is based on the NYISO’s pro forma SGIA;

however, the parties have agreed that a number of modifications to the pro forma SGIA were necessary primarily as a result of (A) the Jointly Owned Interconnection Facilities and (B) the Interim Constrained Operating Period. All of parties to the Steel Winds II IA (“Parties”) agree that these changes are necessary. The Parties, however, are aware that the Commission disfavors significant variations from the approved pro forma interconnection agreements, and have
accordingly made every effort to limit the number of changes.

The Commission has accepted changes to the terms of the pro forma interconnection

agreements where, as here, there are unique circumstances associated with the interconnections,
including “reliability concerns, novel legal issues or other unique factors.”5 The Joint Filing
Parties have included as Attachment B to this filing a blackline of the Steel Winds II IA against
the NYISO’s pro forma SGIA to highlight the extent of the changes to the pro forma and where
these changes occur in the document. The Joint Filing Parties respectfully requests that the
Commission accept these modifications in light of the unique factors and circumstances
explained herein.

A. Revisions to reflect the Jointly-Owned Interconnection Facilities

The Steel Winds II IA contains several changes that address the joint ownership of

certain Interconnection Facilities. For example, the Steel Winds II IA contains several recitals that introduce and describe the existing collection station and the joint ownership of
interconnection facilities therein that are currently being utilized by the existing Steel Winds I plant that will also be utilized, as modified, for the interconnection of the Steel Winds II plant. In addition, the Interconnection Agreement contains several modifications and additions to the pro forma SGIA that address operational and administrative issues associated with the joint
ownership of Interconnection Facilities.

There are a number of areas where coordination between Niagara Wind Power and Erie
Wind is of particular concern. Section 1.5.7 was added to the document to reflect that Niagara
Wind Power will act as the Operational Contact for Erie Wind on issues related to Steel Winds II
plant and the existing collection station, which contains both the sole use Interconnection
Facilities and the Jointly Owned Interconnection Facilities required for both the Steel Winds I
and Steel Winds II plants. Section 2.3 provides that both Niagara Wind Power and Erie Wind
are obligated to provide access to the NYISO and/or Niagara Mohawk to inspect these facilities
prior to energization of these facilities. The amended language in section 4.1 provides that Erie
Wind and Niagara Wind Power are jointly and severally liable for the cost of modifications to
the Jointly Owned Interconnection Facilities, while changes in Article 6 indicate that all bills for
work conducted by Niagara Mohawk on behalf of Erie Wind pursuant to the terms of the
Agreement shall be provided to Niagara Wind Power as the designated operational contact.
Section 7.7 was added to the Interconnection Agreement to specifically recognize that Niagara

5 See PJM Interconnection, LLC, 111 FERC ¶ 61,163 at PP-10-11, reh’g denied 112 FERC ¶ 61,282 (2005).

Ms. Kimberly D. Bose, Secretary December 28, 2010

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Wind and Erie Wind are jointly and severally liable for all obligations and responsibilities related to the Jointly Owned Interconnection Facilities.

In addition changes were made to the Glossary of Terms found in Attachment 1 of the

Steel Winds II IA. These changes provide new defined terms where necessary, such as “Existing Collection Station,” “Jointly Owned Interconnection Facilities” and “Operational Contact” as well as modify existing defined terms in the pro forma SGIA. These changes were required to accurately describe the unique circumstance created by the joint ownership of interconnection facilities within the existing collection station.

B. Revisions related to the Interim Constrained Operating Period

The Interconnection Agreement has also been modified from the pro forma SGIA to

reflect the agreement of the Parties to provide for a limited period where the 20 MW Steel Winds
I plant and the 15 MW Steel Winds II plant are subject to a combined output limit of 20 MW
total with no more than a 10 MW maximum output on each of Niagara Mohawk’s lines 149 and
150. This Interim Constrained Operation Period will allow Erie Wind to bring its Steel Wind II
plant into service prior to the final construction and installation of the required System Upgrade
Facilities. This limited interim operation has been evaluated and reviewed by the Parties.

The Steel Winds II IA contains additional language that provides the terms and duration
of the Interim Constrained Operation Period. The additional language reflects that the Parties
have agreed that the delivered output of the combined Steel Winds I and the Steel Winds II
plants will be limited during this period. Section 1.9 was added to the Steel Winds II IA along
with additional defined terms required to describe this unique circumstance, including “Interim
Constrained Operation,” “Interim Constrained Operation Period” and “Final Interconnection.”

III.EFFECTIVE DATE

The Joint Filing Parties respectfully requests that the Commission accept the Steel Winds
II IA with an effective date of November 1, 2010, the date the Parties executed the 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.

IV.COMMUNICATIONS

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:

For the NYISO

Robert E. Fernandez, General Counsel

Karen Georgenson Gach, Deputy General Counsel *David Allen, Attorney

New York Independent System Operator

Ms. Kimberly D. Bose, Secretary December 28, 2010

Page 5

10 Krey Blvd

Rennselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702

rfernandez@nyiso.com
kgach@nyiso.com
dallen@nyiso.com

For Niagara Mohawk

*Daniel Galaburda

Assistant General Counsel National Grid

40 Sylvan Road

Waltham, MA 02451 (781) 907-1847

Daniel.Galaburda@us.ngrid.com

Sean A. Atkins

Stacey Tyrewala

Alston & Bird LLP

The Atlantic Building
950 F Street, NW

Washington, DC 20004
Tel: (202) 756-3300
Fax: (202) 756-3333

sean.atkins@alston.com

stacey.tyrewala@alston.com

*Designated to receive service.

V.Documents Submitted

The Joint Filing Parties submit the following documents

a. this filing letter;

b. the executed Small Generator Interconnection Agreement (“Attachment I”); and

c. the blacklined sheets showing the Small Generator Interconnection Agreement’s
changes from the body of the NYISO’s pro forma SGIA (“Attachment II”).

Ms. Kimberly D. Bose, Secretary December 28, 2010

Page 6

VI.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 complete
copy of this filing will be posted on the NYISO’s website at www.nyiso.com.

VII. Conclusion

Wherefore, the Joint Filing Parties respectfully requests that the Commission accept the attached Interconnection Agreement effective as of November 10, 2010.

Respectfully submitted,

/s/ David Allen

David Allen

Counsel for the

New York Independent System Operator, Inc.

/s/ Daniel Galaburda

Daniel Galaburda

Counsel for Niagara Mohawk Power Corporation d/b/a National Grid USA