10 Krey Boulevard Rensselaer, NY 12144
August 16, 2010
Ms. Kimberly D. Bose Secretary
Federal Energy Regulatory Commission 888 First Street, N.E.
Washington D.C. 20426
Re: New York Independent System Operator, Inc., Compliance Implementation Plan,
Docket No. ER07-521-___
Dear Ms. Bose:
In compliance with Paragraph 18 and Ordering Paragraph B of the Commission’s
July 15, 2010 order (“July 2010 Order”)1 in the above-captioned proceeding, the New York
Independent System Operator, Inc. (“NYISO”) respectfully submits this detailed implementation plan including a timetable for offering Load Serving Entities (“LSEs”) fixed price Transmission Congestion Contracts (“TCCs”) between any point of injection and the LSE’s load zone (“nonhistoric fixed price TCCs”).
As is discussed in greater detail below, the NYISO intends to file proposed tariff
revisions early in 2012 describing the requirements for purchasing and holding non-historic fixed
price TCCs in conjunction with tariff revisions necessary to implement a new “Multi-Duration
Centralized TCC Auction.” As the Commission recognized, the NYISO intends to offer non-
historic fixed price TCCs as part of its Autumn 2012 Multi-Duration Centralized TCC Auction
process. Once these non-historic fixed price TCCs are offered, the NYISO would be in full
compliance with the Commission’s long term firm transmission rights policies as set forth in
Order Nos. 681 and 681-A.2
The NYISO’s implementation plan, described in detail herein, concentrates on the
software revisions necessary to move the current single duration TCC auction format to one that
allows auction participants to bid to purchase and offer to sell a variety of TCC durations during
a single auction round.3 Tariff revisions to describe both the procedural changes in the Multi-
1 New York Independent System Operator, Inc., 132 FERC ¶ 61,030 (2010).
2 Long-Term Firm Transmission Rights in Organized Electricity Markets, Order No.
681, FERC Stats. & Regs. ¶ 31,226 (July 20, 2006), reh’g denied, Order No. 681-A, 117 FERC ¶ 61,201 (November 16, 2006).
3 As part of this project, the NYISO, with its stakeholders’ support, is also expanding the
opportunities in the monthly Reconfiguration Auction to allow Market Participants to submit
- 1 -
Honorable Kimberly D. Bose August 16, 2010
Page 2
Duration Centralized TCC Auction and the process for purchasing, and the responsibilities of
holding, non-historic fixed price TCCs will also be pursued during this implementation period.
I.Communications
Communications and correspondence regarding this filing should be directed to:
Robert E. Fernandez, General Counsel
Elaine D. Robinson, Director of Regulatory Affairs
*Mollie Lampi, Assistant General Counsel
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702
rfernandez@nyiso.com
erobinson@nyiso.com
mlampi@nyiso.com
*Persons designated to receive service
II.Detailed Implementation Schedule
August, 2010Concept Design Approval
Working with stakeholders since 2009 the NYISO has finalized the
concept design for a Multi-Duration Centralized TCC Auction. At
their August Business Issues Committee (“BIC”) meeting,
stakeholders approved the broad design. The BIC approval noted
that the availability of non-historic fixed price TCCs would be
coordinated with the first Multi-Duration Centralized TCC Auction.
4
bids to buy and offers to sell TCCs for any month(s) in the capability period. Software changes to implement this functionality are subsumed in the software revisions discussed herein.
4 See BIC presentation at
http://www.nyiso.com/public/webdocs/committees/bic/meeting_materials/2010-08-
04/Agenda_11_TCC_EFP1_MD_Mkt_Design_Revised.pdf
Honorable Kimberly D. Bose August 16, 2010
Page 3
Fourth Quarter,Detailed Market Design
2010The NYISO will continue to work with stakeholders on the details
of the Multi-Duration Centralized TCC Auction functionality. In addition, the NYISO will start working with stakeholders to
develop the appropriate credit policies necessary to support all changes being made to the TCC auction process.
Fourth Quarter,Software Specifications
2010The NYISO’s auction software is constructed both in house and by
Nexant, a software vendor. Software for the TCC Automated
Market System (“TCC AMS”) is developed in-house and consists,
primarily, of the web-based interface used by TCC auction
participants to submit their bids and offers and receive information
from the NYISO on their TCC auction activity. In addition to the
modifications to the TCC AMS, software changes to accommodate
the new TCC auction format are necessary in the Credit
Management System and in related data and storage systems (“in-
house, auction-related software”). The TCC auction solution engine
is provided by Nexant.
Beginning in the fourth quarter of 2010, the NYISO will complete
a functional requirement specification document (“FRS”)
describing the changes needed in the TCC AMS to, among other
things, move from bid and offer screens that allow TCCs to be
purchased and sold only in single-duration rounds to functionality
that will allow TCCs to be purchased and sold in multiple duration
rounds. The FRS will specify software applications and responses
plus provide a detailed list of business and user needs that the
Multi-Duration Centralized TCC Auction design will be required to
support.
In addition, discussions will continue with Nexant concerning
modifications required to the TCC auction solution engine
including modifications of its software to align with the changes being made in the TCC AMS. Any software development required in the Nexant software will be conducted in parallel with the
NYISO’s TCC AMS development.
December 1, 2010 Status Report to FERC
This first status report will describe the tasks that have been
completed in the implementation of the multi-duration TCC
auction.
Honorable Kimberly D. Bose August 16, 2010
Page 4
First Quarter, 2011 Software Requirements, or “Use Case” Development, Begins
The NYISO will develop “Use Cases” which describe a goal-
oriented set of interactions between the users and the system
including the detailed functionality required for the in-house,
auction-related software based on the output from detailed market
design discussions with stakeholders. Working from these Use
Cases, software developers will write the software design
specifications (“SDS”) necessary to re-design the in-house, auction-
related software.
Second Quarter,Software Design Specifications
2011The Use Case development that started in the first quarter is
expected to complete in the second quarter. Software developers
will then begin work on the SDS. While the tariff revision process,
that will begin in this quarter (see below) and conclude in the first
quarter of 2012, may lead to changes in functional requirements and
design specifications throughout that period of time, the principal
elements of the SDSs are planned to be complete by the end of this
quarter.
Additionally, the NYISO is targeting this quarter to complete
development of the new credit policy started in fourth quarter 2010.
Second Quarter,Stakeholder Tariff Revision Process Begins
2011Extensive tariff revisions will be necessary to support the Multi-
Duration Centralized TCC Auction and non-historic fixed price
TCCs purchase opportunity. The stakeholder tariff development
and approval process will begin in parallel with the development of
the SDSes, with NYISO-prepared draft tariff sheets and culminate
in final votes by the Management Committee and Board of
Directors. The process is expected to take between eight and nine
months at which time the revisions will be ready for filing with the
Commission.
Tariff revisions to implement related credit policy changes will be
pursued in tandem with the Multi-Duration Centralized TCC
Auction and non-historic fixed price TCCs tariff revisions.
Honorable Kimberly D. Bose August 16, 2010
Page 5
December 1, 2011 Status Report to FERC
The second status report will update the uncompleted tasks
described in the first status report, describe the tasks begun since
the first status report was filed, and report on the remaining tasks
necessary to meet the NYISO’s implementation schedule.
First Quarter, 2012 Tariff Filing
The NYISO will file tariff revisions implementing the Multi-
Duration Centralized TCC Auction and the non-historic fixed price TCCs program. These revisions will be filed at least 120 days
before planned implementation to allow time for LSEs interested in purchasing non-historic fixed price TCCs to understand the process and obligations of their purchase opportunity.
First Quarter, 2012 Testing
Before declaring that the software development is complete, the
NYISO conducts extensive software testing. Quality assurance and user acceptance testing of the revised in-house, auction-related and Nexant software will start in this quarter.
Second Quarter,Manual Revisions
2012In this quarter, the NYISO will develop revisions to the TCC
Manual to describe the multi-duration TCC auction process and the
process for purchasing non-historic fixed price TCCs. These will
also be provided to Market Participants for review and approval.
The NYISO will also be updating its TCC Auction User Guide.
Second Quarter,Market Trials
2012During the second quarter, the NYISO will also facilitate market
trials which offer stakeholders an opportunity to become familiar
with the new TCC auction functionality. Stakeholders that utilize
the TCC AMS will be asked to participate in these market trials by
submitting multi-duration bids and offers. The NYISO will
conduct the practice auction as if it were a real auction. No
financial consequences flow from this practice auction round and
no TCCs are awarded.
Honorable Kimberly D. Bose August 16, 2010
Page 6
Second Quarter,Testing
2012Testing of all in-house, auction-related software revisions
completes in this quarter once market trials, quality assurance and
user acceptance testing are finished.
Third Quarter,Multi-duration auction with opportunity to purchase non-
2012historic fixed prices TCCs is conducted
The Autumn Multi-Duration Centralized TCC Auction process will
commence in this quarter. LSEs interested in purchasing non-
historic fixed price TCCs will receive information on eligibility
requirements and on the process they will need to follow to
purchase their fixed price TCCs. The NYISO plans to post an
auction timeline developed with stakeholder input several weeks in
advance of the first auction and opportunity to purchase non-
historic fixed price TCCs.
III.Conclusion
For the foregoing reasons, the New York Independent System Operator, Inc., respectfully requests that the Commission accept its compliance implementation plan as fully complying with Paragraph 18 and Ordering Paragraph B of the July 2010 Order.
Respectfully submitted,
/s/ Mollie Lampi
Mollie Lampi
Assistant General Counsel
New York Independent System Operator, Inc.
10 Krey Blvd.
Rensselaer, New York 12144 (518) 356 7530
mlampi@nyiso.com
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in this proceeding in accordance
with the requirements of Rule 2010 of the Rules of Practice and Procedure, 18 C.F.R. § 385.2010
(2010).
Dated at Washington, DC this 16th day of August, 2010.
By: /s/ Catherine A. Karimi
Catherine A. Karimi
Sr. Professional Assistant
Hunton & Williams LLP
1900 K Street, NW
Washington, DC 20006-1109 (202) 955-1500
