Amanda Downey
Counsel

January 29, 2013

The Honorable Kimberly D. Bose Secretary

Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

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

Docket No. ER13-___-000

Filing of Cost Reimbursement Agreement with New York Power Authority and

Request for Waiver of Commission Notice Requirement

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 a Cost Reimbursement Agreement (“Reimbursement Agreement”) between National Grid and the New York
Power Authority (“NYPA”). The Reimbursement Agreement is designated as Service Agreement No. 1951 under the New York Independent System Operator, Inc.’s
(“NYISO”) Open Access Transmission Tariff (“OATT”).

The Reimbursement Agreement is an undisputed agreement between National
Grid and NYPA which will facilitate the elimination of potential line clearance issues
regarding NYPA transmission facilities that pass above structures owned or operated by
National Grid. National Grid respectfully requests that the Commission grant waiver of
its prior notice requirement to permit the Reimbursement Agreement to go into effect as
of November 9, 2012, the effective date set forth in the Reimbursement Agreement.

I.Background

National Grid is a public utility with a transmission system in the State of New York. NYPA is a corporate municipal instrumentality of the State of New York with its own transmission system in the State of New York. Both National Grid and NYPA have placed their transmission systems under the operational control of the NYISO.

NYPA seeks to address potential discrepancies between the design and actual field
conditions of certain of its transmission facilities in accordance with a facilities ratings

The Honorable Kimberly D. Bose January 29, 2013

Page 2

alert issued by the North American Electric Reliability Corporation on October 7, 2010 and updated on November 30, 2010. NYPA undertook a review of its transmission
facilities and identified a number of field conditions that may have the potential to result in discrepancies in line ratings. Some of the field conditions impacting NYPA’s
transmission facilities are where NYPA’s facilities pass over facilities owned or operated by National Grid. To eliminate line clearance concerns with NYPA facilities, NYPA has requested that National Grid design, engineer, procure, relocate, construct, and test those structures owned or operated by National Grid.3

II. Description of the Reimbursement Agreement and Filing Requirements

Pursuant to the Reimbursement Agreement, NYPA will pay for or reimburse

National Grid for the actual costs and expenses incurred in connection with work

performed by National Grid to facilitate the elimination of potential line clearance

concerns regarding NYPA transmission facilities that pass above facilities owned or

operated by National Grid. The Reimbursement Agreement sets forth the terms and

conditions of this work and certain related commitments by NYPA. The Reimbursement Agreement includes provisions addressing performance and schedule of the work,
indemnification and liability, insurance, and various standard provisions for utility cost reimbursement agreements.

Section 205 of the FPA authorizes the Commission to require public utilities to file
all rates and charges that are “for or in connection with,” and all agreements that “affect or
relate to,” jurisdictional transmission service or sales of electric energy.4 In the Prior
Notice Order, the Commission stated that the types of agreements that a public utility
must file include “a jurisdictional CIAC agreement,” which is defined as an “agreement
providing for the customer payment of contributions-in-aid-of-construction” of facilities
used to provide jurisdictional service, either in a single lump sum or over a period of
time.5 Commission precedent also indicates that engineering and pre-construction
agreements related to jurisdictional facilities can be construed as CIAC agreements.6

The Reimbursement Agreement relates to the recovery of costs for facilities which
include jurisdictional facilities and for engineering, procurement, and construction
services necessary to facilitate the elimination of potential line clearance issues identified
by NYPA. Therefore, the Commission will likely find it to be a CIAC agreement that
must be filed.

Reimbursement Agreement, Recitals, Article 3.0, and Schedule A.

16 U.S.C. §§ 824d(a)-(c) (2006).

Prior Notice and Filing Requirements Under Part II of the Federal Power Act, 64 FERC ¶ 61,139

Commission required the filing of seven letter agreements related to pre-interconnection activities in

anticipation of certain generator interconnections, “including procurement, engineering, and limited

construction.” See also GenPower Anderson, LLC v. Duke Energy Corp. and Duke Electric Transmission, 101 FERC ¶ 61,038 (2002) (requiring Duke Energy to file an engineering and design letter agreement that was entered into pending execution of an interconnection and operating agreement).

The Honorable Kimberly D. Bose January 29, 2013

Page 3

National Grid is performing these services at actual cost as set forth in Article 1 to
the Reimbursement Agreement and has not collected any funds pursuant to the
Reimbursement Agreement prior to the instant filing.7 The costs of these services are
properly allocated to NYPA because these services have been requested by NYPA to
address line clearance concerns on NYPA transmission facilities. The Commission
should find the price of the services to be performed pursuant to the Reimbursement
Agreement to be just and reasonable because National Grid will perform these services at
actual cost.

III. Effective Date and Request for Waiver

Pursuant to Section 35.11 of the Commission’s regulations,8 National Grid

respectfully requests waiver of the requirement contained in Section 35.3 of the

Commission’s regulations to file service agreements not more than 30 days after service has commenced,9 to allow the Reimbursement Agreement to become effective upon the effective date set forth in the agreement, i.e., November 9, 2012.

Granting waiver will not result in prejudice to any party. National Grid and NYPA have agreed to project milestones that anticipate completion of work pursuant to the
Reimbursement Agreement by December 31, 2013.10 Granting the requested waiver will facilitate the elimination of potential line clearance issues with NYPA transmission
facilities and is therefore consistent with the standard set forth by the Commission in
Central Hudson.11 For these reasons, the Commission should find that good cause exists to grant an effective date of November 9, 2012.

IV.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 for this proceeding:12

See Reimbursement Agreement, Section 1.0, definition of “Company Reimbursable Costs.” See

18 C.F.R. § 35.11 (2012).

18 C.F.R. § 35.3 (2012).

See Schedule B to the Reimbursement Agreement.
See Central Hudson Gas & Electric Corp., 60 FERC ¶ 61,106, at 61,338, reh’g denied, 61 FERC ¶

Amanda C. Downey Counsel

National Grid USA
Service Company, Inc.

40 Sylvan Road

Waltham, MA 02451 Tel: 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 Tel: 202-239-3300

Fax: 202-239-3333

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

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

V.Conclusion

For the reasons stated herein, National Grid respectfully requests that the

Commission accept the Reimbursement Agreement effective as of November 9, 2012.

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