Amanda C. Downey

Counsel

June 2, 2015

The Honorable Kimberly D. Bose Secretary

Federal Energy Regulatory Commission 888 First Street, N.E.

Washington, DC 20426

Re:Niagara Mohawk Power Corporation, d/b/a National Grid

Docket No. ER15-___-000

Amended and Restated Large Generator Interconnection Agreement with Fortistar North Tonawanda Inc.

Dear Secretary Bose:

Pursuant to Section 205 of the Federal Power Act (“FPA”),1 and Part 35 of the

Federal Energy Regulatory Commission’s (“Commission”) regulations,2 Niagara

Mohawk Power Corporation d/b/a/ National Grid (“National Grid”) submits an Amended
and Restated Large Generator Interconnection Agreement (“LGIA”) between National
Grid and Fortistar North Tonawanda Inc. (“Fortistar”). The attached LGIA (the
“Fortistar LGIA”) is designated as Service Agreement No. 2220 under the New York
Independent System Operator, Inc.’s (“NYISO”) Open Access Transmission Tariff
(“OATT”).

The Fortistar LGIA is an undisputed agreement between National Grid and

Fortistar for the continued provision of interconnection service to the generating facility owned by Fortistar and located in Oxbow, New York (the “Plant”), which has been
executed by both parties. National Grid requests that the Commission accept the Fortistar LGIA as of the effective date set forth therein, June 1, 2015.

I.Background

National Grid is a public utility with a transmission system in the State of New York. National Grid’s transmission facilities have been placed under the operational control of the NYISO.

Fortistar owns and operates the Plant, a 68.5 MW combined cycle natural gas-
fueled power plant.3 The Commission certified the Plant as a “qualifying cogeneration

16 U.S.C. § 824d.

18 C.F.R. Part 35.
Fortistar was formerly known as Oxbow Power of North Tonawanda, New York, Inc.

The Honorable Kimberly Bose June 2, 2015

Page 2

facility” (“QF”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”) in Docket No. QF89-111-000 on March 14, 1989. The Commission has since repeatedly recertified the Plant as a QF.4

Since May 14, 1987, National Grid has been a party to a Power Purchase

Agreement (“PPA”) for all electricity produced at the Plant. National Grid provides

interconnection service to the Plant pursuant to an interconnection agreement dated

March 2, 1993. National Grid and Fortistar have amended the PPA to eliminate the terms providing for National Grid to purchase all of the excess output of the Plant, creating the potential for Fortistar to sell electricity produced at the plant to third parties in addition to National Grid effective June 1, 2015.

II.The Fortistar LGIA

Pursuant to Commission policy, “[w]hen an electric utility . . . purchases the QF’s
total output, the relevant state authority exercises authority over the interconnection and
the allocation of interconnection costs. But when an electric utility interconnecting with
a QF does not purchase all of the QF’s output and instead transmits the QF power in
interstate commerce, the Commission exercises jurisdiction over the rates, terms, and
conditions affecting or related to such service, such as interconnections.”5 In accordance
with this policy, during the time when the PPA was in effect and the entire net output of
the Plant was sold to National Grid, the state had authority over the rates, terms, and
conditions of the interconnection. However, now that National Grid and Fortistar have
amended the PPA, the Commission exercises jurisdiction over the Fortistar
interconnection because it sets forth the rates, terms, and conditions for the provision of
interconnection service to permit the net output of the Plant to be sold to third parties in
the NYISO wholesale market.

With minor variations, the Fortistar LGIA follows the pro forma LGIA set forth in Appendix 6 of Attachment X to the NYISO OATT. The main difference between the Fortistar LGIA and the NYISO pro forma is that the Fortistar LGIA is a two-party
agreement between the transmission owner (National Grid) and the generation facility owner (Fortistar), whereas the pro forma NYISO LGIA is a three-party agreement among the transmission owner, the generation facility owner, and the NYISO.6

Commission precedent supports acceptance of the Fortistar LGIA as a two-party
agreement. In proceedings on two-party LGIAs between National Grid and generation
subsidiaries of Alliance Energy that were modeled on the pro forma NYISO LGIA

The Honorable Kimberly Bose June 2, 2015

Page 3

(collectively, the “Alliance Energy LGIAs”),7 the Commission found that the NYISO did
not need to be a party to the two-party Alliance Energy LGIAs, for the following reasons:

[T]hey are not the type of new generator interconnection agreements
envisioned by Order No. 2003; rather they are more like after-the-fact
interconnection operating agreements that govern the terms, conditions,
and rates associated with the continued operation and maintenance of
previously constructed facilities built to accommodate the interconnection
of the Alliance generators to Niagara Mohawk’s transmission system.
Accordingly, we will not require NYISO to be a signatory to these
unexecuted IAs.8

Like the Alliance Energy LGIAs, the Fortistar LGIA is not a new generator

interconnection agreement of the type envisioned by Order No. 2003. Instead, the

Fortistar LGIA governs the terms, conditions, and rates associated with the continued

operation and maintenance of the previously constructed facilities built to accommodate
the interconnection of the existing Plant to the National Grid transmission system.
Therefore, the Commission should accept the Fortistar LGIA as a two-party agreement.

The pro forma NYISO LGIA contains a number of provisions that are applicable
to new interconnections but are not applicable to existing interconnections, such as the
interconnection of the Plant. However, National Grid and Fortistar have agreed to retain
those provisions in the Fortistar LGIA.9 This approach is consistent with the approach
authorized in PJM Interconnection, L.L.C.10 In that order, the Commission rejected a
proposal to delete inapplicable provisions from an LGIA, stating that “[i]f a provision of
a contract is not applicable, it is not applicable,” and concluding that “[u]nless confusion
is likely, modifications to a pro forma agreement that ‘clarify’ matters not in doubt are
not necessary.”11

The Alliance Energy LGIAs were filed and accepted pursuant to Commission proceedings in

The Honorable Kimberly Bose June 2, 2015

Page 4

National Grid and Fortistar have agreed to a ten-year term for the Fortistar LGIA,
which is the standard term under the pro forma NYISO LGIA.12 National Grid and
Fortistar have also included clarifying provisions in the Fortistar LGIA that differ from
provisions in the pro forma NYISO LGIA. In Article 27.2, the parties have agreed to
have a third arbitrator selected by consensus of both parties, because this is a two-party
agreement. In Article 27.4, the parties have changed the allocation of costs for a single
arbitrator from one-third per party to one-half per party, because the Fortistar LGIA is a
two-party rather than a three-party agreement. In Appendix E to the Fortistar LGIA, the
parties have replaced the developer certification statement concerning Trial Operation
and commencement of Commercial Operation with a statement that Fortistar commenced
Commercial Operation of the Plant effective as of September 7, 1993. The purpose of
this modification is to specify the date on which the Plant began Commercial Operation.
Each of the Alliance Energy LGIAs accepted by the Commission contained similar
clarifying provisions. In new Appendix H to the Fortistar LGIA, the parties have
clarified that, in accordance with Article 10.5 of the Fortistar LGIA, Fortistar will be
responsible for all reasonable operation and maintenance expenses and will pay such
expenses to National Grid under one of two procedures set forth in Appendix H.

III.Effective Date

The Commission’s regulations require service agreements to be filed not more than 30 days after service has commenced under the agreements.13 As discussed above, the Fortistar LGIA is intended to go into effect as of June 1, 2015, i.e., fewer than 30 days after the date the Fortistar LGIA is being filed. Therefore, National Grid requests that the Commission accept the Fortistar LGIA effective June 1.

IV.Documents Enclosed

In addition to this filing letter, attached are the following documents:

i.The Fortistar LGIA (Service Agreement No. 2220 under the NYISO

OATT), provided in clean format (Attachment A)

ii.Black-lined revisions showing the differences between the Fortistar LGIA

and the pro forma NYISO LGIA (Attachment B)

12See Fortistar LGIA at Article 2.2.

1318 C.F.R. § 35.3.

Amanda C. Downey
National Grid USA

Service Company, Inc.

40 Sylvan Road

Waltham, MA 02451 (781)907-2136

amanda.downey@nationalgrid.com

William L. Malee

Director, Transmission Commercial National Grid USA

40 Sylvan Road

Waltham, MA 02451 (781) 907-2422

bill.malee@nationalgrid.com

Sean A. Atkins

Bradley R. Miliauskas Alston & Bird LLP The Atlantic Building 950 F Street, NW

Washington, DC 20004 (202) 239-3300

sean.atkins@alston.com
bradley.miliauskas@alston.com

Copies of this filing have been served on Fortistar, the NYISO, and the New York State Public Service Commission.

VI.Conclusion

For the reasons stated herein, National Grid respectfully requests that the Commission accept the Fortistar LGIA effective as of June 1, 2015.

Respectfully submitted,

/s/ Amanda C. Downey

Amanda C. Downey
Counsel

National Grid USA

Service Company, Inc.

40 Sylvan Road

Waltham, MA 02451

Attorney for Niagara Mohawk Power
Corporation d/b/a National Grid