Daniel Galaburda
Assistant General Counsel
April 29, 2011
The Honorable Kimberly D. Bose Secretary
Federal Energy Regulatory Commission 888 First Street, N.E.
Washington, DC 20426
Re: Niagara Mohawk Power Corporation
Docket No. ER11-______-000
Dear Secretary Bose:
Pursuant to Section 205 of the Federal Power Act (16 U.S.C. § 824d), Sections
35.7 and 35.9 of the Commission’s regulations (18 C.F.R. §§ 35.7, 35.9 (2010)), and
Order No. 714 (Electronic Tariff Filings, FERC Stats. & Regs. ¶ 31,276 (2008)),
Niagara Mohawk Power Corporation (“Niagara Mohawk”) d/b/a National Grid
(“National Grid”), hereby submits for Commission acceptance the attached electronic
version of its Amended and Restated Agreement for The Retail Transmission of
Expansion Power Between Niagara Mohawk Power Corporation and the Power
Authority Of The State Of New York, previously designated Niagara Mohawk Power
Corporation, FERC Electric Tariff Rate Schedule 159, First Revised Volume No. 1
(“RS-159”). Pursuant to Order No. 714, this agreement has been designated Original
Service Agreement No. 1743, under the New York Independent System Operator, Inc.
(“NYISO”) Open Access Transmission Tariff (“OATT”), FERC Electric Tariff,
Original Volume No. 1 (“SA 1743”).
SA 1743 is an amendment to RS-159, which is a “grandfathered transmission
agreement” under NYISO OATT Attachment L. As discussed below, SA 1743 results
in limited amendments to RS-159, extending the period during which its rates may not
be increased. In accordance with Order No. 714, the attached electronic version is the
first filing of RS-159 under the eTariff system, and supersedes the previous, paper
version of the rate schedule. National Grid also submits herewith the Stipulation and
Agreement Regarding Rate Design, Customer and Markets Issues (the “Stipulation”),
in which the agreement of the requisite parties to the changes in RS-159’s rate freeze
period are memorialized.
National Grid also respectfully requests waiver of the Commission’s 60-day notice requirement, to permit SA 1743 to go into effect as of February 1, 2011, the date on which the RS-159’s rate freeze would have expired according to its terms in the absence of the Stipulation.
40 Sylvan Road, Waltham, MA 02451
T: 781-907-1847 F: 781-907-5701 daniel.galaburda@us.ngrid.com www.nationalgrid.com
The Honorable Kimberly D. Bose April 29, 2011
Page 2
I.Background
Niagara Mohawk, a subsidiary of National Grid USA, is a public utility subject to the Commission’s jurisdiction, which owns facilities located in the State of New York. National Grid’s high-voltage New York transmission facilities have been
placed under the operational control of NYISO. Niagara Mohawk’s local delivery, distribution, and retail sales operations are subject to the jurisdiction of the New York Public Service Commission (“NYPSC”).
The Power Authority of the State of New York (“NYPA”) is the nation’s largest state public power authority, and is an instrumentality of the State of New York. NYPA is not subject to the Commission’s jurisdiction.
RS-159 is a bilateral agreement between NYPA and Niagara Mohawk
governing the retail transmission portion of delivery service for so-called “Expansion
Power.” Expansion power is low-cost hydropower generated by NYPA, and is
currently delivered by Niagara Mohawk to designated industrial end-users pursuant to
New York state law.1 RS-159 was amended in 2004 pursuant to a Commission-
approved settlement2 between Niagara Mohawk, NYPA, and certain Niagara Mohawk
Expansion Power industrial customers. The settlement did a number of things,
including dividing Expansion Power allocated to approved customers into two
categories: Existing Allocations and New Allocations. Pursuant to this settlement,
retail transmission service to New Allocations (i.e., allocations of Expansion Power
made after the effective date of the settlement) is provided under the NYISO OATT.
By contrast, retail transmission service for Existing Allocations (i.e., those allocations
of Expansion Power that were made before the effective date of the 2004 settlement)
remain subject to RS-159, with the added proviso that these delivery rates and
associated loss factors are to be frozen for a specified period at the levels in effect on
August 31, 2003. The provisions and amendments discussed in this transmittal letter
thus apply only to Existing Allocations of Expansion Power.
The 2004 settlement also amended RS-159 to provide that, as of the effective
date of the settlement, “the standard of review for any and all changes to the [rate
change] provisions . . . hereof, proposed by any of the Sponsoring Parties to be
effective during the Rate Plan Period shall be the ‘public interest’ standard of review
set forth in United Gas Pipeline Co. v. Mobile Gas Services Corp...”3 The “Rate
Plan Period” refers to the retail rate plan approved by the NYPSC in connection with
the merger between National Grid USA and Niagara Mohawk. The Rate Plan Period
was set by NYPSC to expire December 31, 2011 unless NYPSC approved new retail
1See N.Y. Pub. Auth. L. § 1005(13).
2See Niagara Mohawk Power Corp., 108 FERC ¶ 61,035 (2004).
3RS-159, Sec. P.
The Honorable Kimberly D. Bose April 29, 2011
Page 3
rates before that date.4 A Niagara Mohawk retail rate case was initiated in 2010, and
resulted in NYPSC putting new retail rates for Niagara Mohawk into effect as of
February 1, 2011, thus ending the Rate Plan Period referenced in RS-159 eleven
months before RS-159 would have expired in the absence of such action. As part of
the discussions surrounding the retail rate case, however, Niagara Mohawk, NYPA,
and certain other parties agreed that RS-159’s “frozen” rates should remain in effect
until December 31, 2011, as they would have done in the absence of NYPSC’s early
termination of the Rate Plan Period.5 The Stipulation, attached hereto as Attachment
A, is the document memorializing this agreement to extend the term and rate freeze
period of RS-159 by eleven months (as well as a number of other items not relevant to
RS-159).
II.Discussion
The changes to RS-159 for which approval is requested herein are minor in nature, and have no other effect than to extend the time period during which Niagara Mohawk agrees not to request increased rates for transmission, delivery, or associated losses under RS-159. In the absence of these changes, this obligation on Niagara
Mohawk’s part (enforced by the application of the stricter Mobile-Sierra standard to any such requested increase) would have expired earlier than the date originally set for the expiration of the Rate Plan Period. The amended RS-159, submitted herewith as SA 1743, thus simply preserves the status quo ante. The amendments to RS-159
effecting this result are changes to Sections H.4.d. and H.5.b.
The amendments being proposed in the instant filing to extend the rate freeze under RS-159 were agreed to among the parties in the Stipulation appended hereto in Attachment A, which provides in relevant part: “The following rules shall apply to the Company’s service to NYPA customers during calendar year 2011 and thereafter until revised by the regulatory authority with jurisdiction over such matters: (a) There shall be no changes made in delivery rates or billing determinants for “Existing” allocations . . . of . . . [Expansion Power] . . .”6
To implement the agreement in the Stipulation described above, the proposed
change to Section H.4.d. provides simply that no change to transmission and delivery
charges or loss allowances under SA 1743 shall be proposed or made by Niagara
Mohawk or NYPA to be effective prior to January 1, 2012. The proposed change to
Section H.5.b. uses similar language to proscribe changes to Exhibit I, which sets forth
transmission and delivery charges applicable to Expansion Power, during the same
time period.
4See NYPSC Opinion No. 01-6, issued Dec. 3, 2001 in Case No. 01-M-0075.
5The Staff of the New York Department of Public Service is also a party to this agreement.
6Stipulation, Sec. G.1.
The Honorable Kimberly D. Bose April 29, 2011
Page 4
While section H. is one of the sections secured by the Mobile-Sierra clause in
section P. of RS-159, it must also be noted that section P. by its own terms does not
apply to changes made after the end of the Rate Plan Period. As explained above, the
Rate Plan Period ended on February 1, 2011 when NYPSC placed new Niagara
Mohawk retail rates into effect. Thus, the parties have followed the Commission-
approved provisions of RS-159 in extending its current rates through December 31,
2011.
It should also be noted that the amendments to RS-159 submitted here were
requested and agreed to by NYPA and the Staff of the New York Department of
Public Service (“DPS Staff”) as part of an effort to extend low delivery rates for New
York industrial customers until the end of the original Rate Plan Period; these changes
were part of a negotiated settlement between National Grid, NYPA, and DPS Staff,
and are part of a package of mutually dependent commitments that allowed these
parties to avoid extended litigation regarding Niagara Mohawk’s new retail rates. The
fact that the extension of RS-159’s term has been vetted and approved by two
independent public service agencies and is part of a more comprehensive settlement
relating to retail rates should also weigh in favor of the Commission accepting SA
1743 as submitted.
The only other amendments to RS-159 embodied in the attached SA 1743 are changes to the caption and preamble of the agreement in order to reflect Niagara
Mohawk’s status as an affiliate of National Grid, and a change to the definition section of RS-19 reflecting the new designation of this rate schedule as SA 1743.
For the foregoing reasons, Niagara Mohawk respectfully requests that the Commission accept Niagara Mohawk’s submission of SA 1743 for filing.
III. Effective Date and Request for Waiver
National Grid respectfully requests waiver, pursuant to Section 35.11 of the
Commission’s regulations (18 C.F.R. § 35.11), of the 60-day prior notice requirement set forth in Section 35.3 (18 C.F.R. § 35.3), in order to permit SA 1743 to become effective as of February 1, 2011, the date on which RS-159’s rate freeze provisions would have expired in the absence of the Stipulation.
No harm will result to any entity as a result of the requested February 1, 2011
effective date. Indeed, customers will benefit from Niagara Mohawk’s agreement to
forego requesting increased delivery rates under SA 1743 at least until the beginning
of 2012. Further, under long-standing practice, the Commission holds that waiver of
the 60-day notice requirement “will generally be appropriate when the filing has no
rate impact or reduces the rate.”7 In this case, the filing of SA 1743 has no effect on
7 Central Hudson Gas & Electric Corporation, 60 FERC ¶ 61,106, at 61,337 (1992),
The Honorable Kimberly D. Bose April 29, 2011
Page 5
rates except to prevent them from rising during its term. In addition, the Commission
“will also generally grant waiver of the 60-day prior notice requirement . . . when the
rate change and the effective date are prescribed by contract . . .”8 As discussed
previously, here the provisions of the contract limiting changes to rates expired on
February 1, 2011. The fact that NYPA, which is the transmission customer under RS-
159 and SA 1743, has agreed to the proposed amendments becoming effective on
February 1, 2011 provides further justification for the Commission’s grant of a waiver.
Furthermore, no practical purpose would be served by declining to approve SA
1743 effective February 1, 2011. Such action would simply result in the creation of a
time period during which Niagara Mohawk could theoretically have raised its rates but
did not (from February 1, 2011 until the effective date of SA 1743), followed by a
time period during which Niagara Mohawk is formally barred from raising its rates
(the effective date of the amendments until the expiration of SA 1743 under the
amended termination provisions). As the practical effects of granting or not granting a
waiver would be identical in their impact, there is no reason not to grant such waiver.
For all these reasons, granting the requested waiver is appropriate, and
National Grid respectfully requests that the Commission do so. National Grid does not, however, request that the Commission issue an order accepting SA 1743 on an expedited basis.
IV. Service Agreement Designation of the Amended RS-159
Pursuant to the Commission’s directives in Electronic Tariff Filings, Order No. 714, FERC Stats. & Regs. ¶ 31,276 (2008), and consistent with NYISO practice,
National Grid has designated the amended RS-159 as SA 1743.
V.Attachments
In addition to this transmittal letter, the instant filing includes the following attachments:
Attachment AStipulation and Agreement Regarding Rate Design, Customer
and Markets Issues, dated September 15, 2010.
Attachment BBlacklined version of Amended and Restated Agreement for
The Retail Transmission of Expansion Power Between Niagara
Mohawk Power Corporation and the Power Authority Of The
State Of New York showing proposed amendments.
8Id. at 61,338.
The Honorable Kimberly D. Bose April 29, 2011
Page 6
Attachment CClean version of Amended and Restated Agreement for The
Retail Transmission of Expansion Power Between Niagara
Mohawk Power Corporation and the Power Authority Of The State Of New York incorporating amendments and formatted as required under Order No. 714
VI.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 with respect to this docket:
Daniel Galaburda
National Grid USA
Service Company, Inc.
40 Sylvan Road
Waltham, MA 02451 (781) 907-1847
daniel.galaburda@us.ngrid.com
William Malee
Sean A. Atkins* Jamil Nasir
Alston & Bird, LLP The Atlantic Building 950 F Street, NW
Washington, DC 20004 (202) 756-3300
sean.atkins@alston.com
bradley.miliauskas@alston.com
Director of Transmission Commercial Services National Grid USA
Service Company, Inc.
40 Sylvan Road
Waltham, MA 02451 (781) 907-2422
bill.malee@us.ngrid.com
*Designated to receive service.
VII. Commission Regulations
This filing substantially complies with the requirements of Part 35 applicable to filings of this kind. Niagara Mohawk requests waiver of any applicable
requirement of part 35 for which it has not specifically requested waiver or supplied data so that this filing may become effective as proposed.
The Honorable Kimberly D. Bose April 29, 2011
Page 7
Copies of this filing have been served upon Parties to the 2004 settlement, the NYPSC, NYPA and the NYISO.
Respectfully submitted,
/s/ Daniel Galaburda
Sean A. AtkinsDaniel Galaburda
Jamil NasirAssistant General Counsel
Alston & Bird LLPNational Grid
The Atlantic Building40 Sylvan Road
950 F Street, NWWaltham, MA 02451
Washington, DC 20004Tel: (781) 907-1847
Tel: (202) 756-3300Daniel.Galaburda@us.ngrid.com
sean.atkins@alston.com
jamil.nasir@alston.com
Counsel for Niagara Mohawk Power
Corporation d/b/a National Grid
