10 Krey Boulevard Rensselaer, NY 12144

January 22, 2013

By Electronic Delivery

Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

Re: Filing of an Executed Amended and Restated Small Generator Interconnection
Agreement Among the New York Independent System Operator, Inc., New York
State Electric & Gas Corporation, and AES ES Westover, LLC and Request for
Waiver of the 60-Day Notice Period, Docket No. ER13-___-000

Dear Ms. Bose:

Pursuant to Section 205 of the Federal Power Act1 and Section 35.12 of the

Commission’s Regulations,2 the New York Independent System Operator, Inc. (“NYISO”) and
New York State Electric & Gas Corporation (“NYSEG”) (collectively, the “Joint Filing Parties”) hereby tender for filing an executed Amended and Restated Small Generator Interconnection
Agreement (“Amended Agreement”) as Service Agreement No. 1677 among the NYISO,
NYSEG as the Transmission Owner, and AES ES Westover, LLC (“Westover”) as the
Interconnection Customer.3

The Joint Filing Parties respectfully request that the Commission accept the Amended
Agreement for filing. Further, as described in Part III of this letter, the Joint Filing Parties
respectfully request a waiver of the Commission’s prior notice requirements to make the
Amended Agreement effective as of the date of execution of the Amended Agreement -
December 26, 2012.

I.Background

The Amended Agreement supersedes a Small Generator Interconnection Agreement (“SGIA”) among the parties that was filed in Docket No. ER11-2631-000, as Service
Agreement No. 1677 (“Original Agreement”). The Original Agreement was accepted by the Commission on February 3, 2011.4

1 16 U.S.C. § 824d (2013).

2 18 C.F.R. § 35.12 (2013).

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

4 New York Independent System Operator, Inc. and New York State Electric & Gas Corporation, Order, Docket No. ER11-2631-000 (Letter Order issued February 3, 2011).

Honorable Kimberly D. Bose January 22, 2013

Page 2

The Original Agreement stated that Westover was constructing a 20 MW battery-based
energy storage system (“Facility”) that would be located in the footprint of the retired Unit 7 at
the existing coal-fired Westover Generating Station owned by AEE2, L.L.C. (“AEE2”) in Union,
New York. The Original Agreement provided that the Facility would consist of ten 2 MW
batter/inverter units interconnecting at NYSEG’s Goudey Substation. The Original Agreement
anticipated that the Facility would initially consist of two 4 MW modules in what was
characterized in the Original Agreement as “Phase I” for a total of 8 MW, to be in operation in
December 2010. The Original Agreement then provided for a Phase II, described as the addition
of three 2MW modules for an additional 12 MW, to be in operation in April 2011.

As reflected in the Original Agreement, the interconnection of the Facility reflected a

unique arrangement involving third-party ownership of the Interconnection Facilities required for the Facility to interconnect. The Facility’s interconnection required existing Interconnection
Facilities owned by AEE2 and associated with the retired Unit 7 at the Westover Generating
Station. Indeed, the Original Agreement anticipated that the Facility would be stepped up to
115kV and 34.5 kV through the AES Westover Generating Station Transformer Bank 7, owned by AEE2. Westover leased these Interconnection Facilities through a Lease Agreement between Westover and AEE2 filed with the Commission on December 9, 2010.5 The Original Agreement specified that Westover had the right, pursuant to the Lease Agreement, to use the
Interconnection Facilities listed in the Original Agreement for the purpose of interconnecting the Facility and fulfilling its obligations under the Original Agreement.

II.Discussion of Changes

Since the filing of the Original Agreement, the ownership of the Interconnection

Facilities that were subject to the Lease Agreement has been transferred to NYSEG as part of the
Chapter 11 Bankruptcy proceeding pending in the U.S. Bankruptcy Court, District of Delaware,
Case No. 11-14138-KJC. The AES Westover Generating Station has retired, and it is anticipated
that the Westover Generating Station will be sold and dismantled in 2013. Pursuant to a
Stipulation Among Debtors, Purchaser and Westover dated October 9, 2012, Westover is
obligated, at its sole cost and expense, to remove certain Interconnection Facilities from the
Westover Generating Station to a new building to be constructed by Westover on property that it
owns by the later of February 28, 2013 or 60 days after the closing of the sale of the Westover
Generating Station. Westover is also required to perform certain work related to the relocation
of these facilities. As a result of these developments, the Original Agreement requires
modification, including:

• Revisions to references and descriptions of the now retired Westover Generating
Station;

5 See AEE2, L.L.C., Docket No. ER11-2328-000 (December 9, 2010).

Honorable Kimberly D. Bose January 22, 2013

Page 3

• Deletion of provisions regarding the Lease Agreement between AEE2 and

Westover (the Interconnection Facilities covered by the Lease Agreement are now owned by NYSEG, not AEE2 and therefore the Lease Agreement is not relevant to the Facility’s interconnection); and

• Revised description of the Point of Change of Ownership and re-classification of
certain equipment from “Interconnection Customer’s Interconnection Facilities”
to “CTO Interconnection Facilities” to reflect the conveyance of certain
Interconnection Facilities to NYSEG.

In addition, economic and other factors have led to a delay in the completion of the

originally anticipated Phase II. As a result of the delay in completion of Phase II, the description of Phase II in Attachment 2 and the Milestones specified in the Original Agreement require modification. The Joint Filing Parties therefore submit this Amended Agreement to reflect the modifications to the Original Agreement.

Specifically, the Amended Agreement modifies the SGIA as follows:

• The body and attachments to the Amended Agreement reflect modifications to the

Original Agreement required by the current pro forma SGIA, certain provisions of
which were not in existence at the time the Original Agreement was executed;

• The body of the Amended Agreement reflects the following modifications to the

body of the Original Agreement: (1) a new effective date - the date of execution of the Amended Agreement; (3) changes to reflect that this is the “Amended and Restated” version of the Interconnection Agreement; and (4) ministerial
corrections to correct outdated contact information for individuals referenced in the Notice provision in Section 13.4;

• The body of the Amended Agreement removes a non-conforming provision that

appeared in the Original Agreement regarding O&M. In the Original Agreement,
the parties agreed to and the Commission accepted, a non-conforming revision to
Section 4.1 to reflect the unique circumstance requiring the Facility to
interconnect with the New York State Transmission System through NYSEG’s
existing Interconnection Facilities, expense related to which were already covered
by a preexisting operating and maintenance agreement previously entered into by
NYSEG. As NYSEG had already covered the expenses for the Connecting
Transmission Owner’s Interconnection Facilities through this previous agreement,
the parties agreed that NYSEG was the appropriate party to be responsible for the
expenses associated with owning, operating, maintaining, repairing, and replacing
the Connecting Transmission Owner’s Interconnection Facilities. As revised in
the Original Agreement, Section 4.1 therefore provided that NYSEG, and not
Westover, is responsible for these expenses. In the Amended Agreement, the
parties removed this non-conforming revision to Section 4.1.2, thereby putting the
O&M responsibility back on Westover, as anticipated by the pro forma SGIA.
The parties further explain Westover’s O&M obligations in Attachment 2;

Honorable Kimberly D. Bose January 22, 2013

Page 4

• Attachment 2 has been modified to (1) reflect existing equipment (equipment that
was anticipated at the time of the Original Agreement) and the current status of
the Phase II expansion of the Facility; (2) reflect the changes in ownership and
status of the AES Westover Generating Station; (3) delete references to the lease
agreement between AEE2 and Westover and are no longer relevant; (4) revise the
description of the Point of Change of Ownership in light of the changes in
ownership of certain Interconnection Facilities to NYSEG; (5) add language
regarding the sale and anticipated dismantling of the Westover Generating Station
and the requirement that Westover remove the 07-31 breaker and the Unit 7 13.8
kV Switchgear lineup, along with certain other equipment; (6) reclassify certain
facilities from Interconnection Customer Interconnection Facilities to Connecting
Transmission Owner’s Interconnection Facilities and resulting changes to
responsibilities for upgrade work and O&M; and (7) add language to address
Westover’s responsibilities with respect to relocation of Breaker 07-31 and the
Unit 7 13.8 kV Switchgear lineup;

• Attachment 3 has been modified to reflect an updated one-line diagrams; and

• Attachment 4 has been modified to reflect (1) updated Milestones associated with
the original Phase I and Phase II of the Facility, noting which Milestones are now
completed and which Phase II Milestones have been updated; and (2) new
Milestones associated with the relocation work.

The blacklined Amended Agreement attached to this filing shows all of these changes that were made to the currently effective Original Agreement. The Joint Filing Parties
respectfully request that the Commission accept this Amended Agreement.

III. Proposed Effective Date and Request for Wavier of the 60-Day Notice Period

The Joint Filing Parties request an effective date of December 26, 2012 for the Amended Agreement, which is the date of execution. The Joint Filing Parties respectfully request that the Commission waive its prior notice requirement in order to permit the requested effective date.
The Commission has previously permitted interconnection agreements to become effective upon the date of execution.6

6 See, e.g., New York Independent System Operator, Inc. and New York State Electric & Gas Corporation,
Docket No. ER11-2953-000 (April 7, 2011) (accepting interconnection agreement effective as of date of execution);
see also New York Independent System Operator, Inc. and Niagara Mohawk Power Corp., Letter Order, Docket No.
ER08-985-000 (June 26, 2008) (same); New York Independent System Operator, Inc. and New York Power
Authority, Letter Order, Docket No. ER08-861-000 (May 27, 2008) (same); New York Independent System
Operator, Inc. and New York Power Authority, Letter Order, Docket No. ER08-699-000 (May 16, 2008) (same).

Honorable Kimberly D. Bose January 22, 2013

Page 5

IV. 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
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
kgach@nyiso.com
skeegan@nyiso.com

For NYSEG

*Mark Chier

Manager, Programs/Projects
Electric Transmission Services

New York State Electric & Gas Corporation

18 Link Drive

Binghamton, NY 13902-5224 Tel: (607) 762-8073

Fax: (607) 762-8666
machier@nyseg.com

*Designated to receive service.

V.Documents Submitted

The NYISO submits the following documents: • this filing letter;

*Jeffrey A. Rosenbloom

Managing Attorney and Assistant Secretary

Rochester Gas & Electric

89 East Avenue

Rochester, NY 14649
Tel: (585) 724-8132
Fax: (585) 724-8668

jeffrey_rosenbloom@rge.com

Honorable Kimberly D. Bose January 22, 2013

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 New Jersey Board of Public Utilities. In addition, a complete
copy of the Public documents included with this filing will be posted on the NYISO’s website at
www.nyiso.com.

VII. Conclusion

Wherefore, the NYISO respectfully requests that the Commission accept the Amended Agreement effective as of December 26, 2012.

Respectfully submitted,

/s/ Sara B. Keegan

Sara B. Keegan
Counsel for the

New York Independent System Operator, Inc.

/s/Jeffrey A. Rosenbloom

Jeffrey A. Rosenbloom Counsel for the

New York State Electric & Gas Corporation