23.4.5.7.3The ISO shall make such exemption and Unit Net CONE determination for each Examined Facility that comprises a Project.

23.4.5.7.3.1 [Reserved for future use]

23.4.5.7.3.1For Examined Facilities participating in the Class Year immediately following Class Year 201921, and any subsequent Class Year Study, Additional SDU Study, and Expedited Deliverability Study that are commenced after JulyAugust 1, 20202, the ISO shall first determine whether any Examined Facility is exempt under Section 23.4.5.7.2 (d). Tthe ISO shall then conduct the Part A Exemption Test for all Examined Facilities in the manner described below prior to making any other exemption determinations under Sections 23.4.5.7.2(b), (c), and (ed).  If an Examined Facility passes the Part A Exemption Test described below and also passes the Part B Exemption Test described above in 23.4.5.7.2(b), it will be awarded a Part B Exemption; however, for the sole purposes of evaluating other Examined Facilities under the Part A Exemption Test and Part B Exemption Test, the capacity associated with the Examined Facility will continue to be treated as having received a Part A Exemption in order to ensure that another Examined Facility will not receive a Part A Exemption for the capacity of the Examined Facility that was awarded the Part B Exemption after having passed both the Part A and Part B Exemption Tests.

23.4.5.7.3.1.1The ISO shall begin the Part A Exemption Test by dividing the Examined Facilities into Part A Group 1 Examined Facilities and Part A Group 2 Examined Facilities based upon the factors listed below in Section 23.4.5.7.3.1.3 of this Services Tariff and on the ISO’s projection of the time frame when each Examined Facility will come into service.  The ISO will post a list of each group of Examined Facilities on its website in accordance with Section 23.4.5.7.3.1.4 of this Services Tariff.  The ISO will rank all Examined Facilities in the Part A Group 1 Examined Facilities based upon the ISO’s determination of each Examined Facility’s specific Net Cost of New Entry except that all Public Policy Resources included in the Part A Group 1 Examined Facilities will be evaluated before other Part A Group 1 Examined Facilities.  The ISO will rank all Examined Facilities in the Part A Group 2 Examined Facilities based upon the ISO’s determination of each Examined Facility’s specific Net Cost of New Entry except that all Public Policy Resources included in the Part A Group 2 Examined Facilities will be evaluated before other Part A Group 2 Examined Facilities.  Each of the Examined Facilities in the Part A Group 1 Examined Facilities will be evaluated for the Part A Exemption Test using the Part A Mitigation Study Period Years 1 through 3.  Upon completion of that evaluation, each of the Examined Facilities in the Part A Group 2 Examined Facilities will then be evaluated for the Part A Exemption Test using the Part A Mitigation Study Period Years 4 through 6.  

23.4.5.7.3.1.2 For each Capability Year in a Part A Mitigation Study Period Years 1 through 3, the ISO will determine whether, in accordance with Section 23.4.5.7.15, the average ICAP Spot Market Auction price for each Capability Year in the Part A Mitigation Study Period Years 1 through 3 is higher than 75 percent of the Mitigation Net CONE that would be applicable to the Examined Facility during that same Capability Year.  For any Capability Year in which this threshold is met, the Examined Facility will qualify for a Part A Exemption for that Capability Year and any subsequent Capability Years.  The Examined Facility, however, will be subject to an Offer Floor for any prior Capability Years in which the threshold was not met unless it otherwise qualifies for an exemption provided in 23.4.5.7.2 (b), (c), (d), (e), or as Cleared UCAP.  The Part A Exemption Test will be performed for each Examined Facility sequentially by rank.  In its evaluation of each Examined Facility located in the New York City Locality for each Capability Year, the ISO will conduct the Part A Exemption Test for the New York City Locality prior to its evaluation for the G-J Locality.  Following completion of review of all three Capability Years in the Part A Mitigation Study Period Years 1 through 3, this process is then conducted for the Part A Group 2 Examined Facilities for each Capability Year in the Part A Mitigation Study Period Years 4 through 6. The ISO will determine if, in accordance with Section 23.4.5.7.15, the average ICAP Spot Market Auction price for each Capability Year in the Part A Mitigation Study Period Years 4 through 6 is higher than 75 percent of the Mitigation Net CONE that would be applicable to the Examined Facility during that same Capability Year.  If this threshold is met, the Examined Facility will qualify for a Part A Exemption for that Capability Year and any subsequent Capability Years.  The Examined Facility, however, will be subject to an Offer Floor for any prior Capability Years in which the threshold was not met unless it otherwise qualifies for an exemption provided in 23.4.5.7.2 (b), (c), (d), (e), or as Cleared UCAP.  The Part A Exemption Test will be performed for each Examined Facility sequentially by rank.  In its evaluation of each Examined Facility located in the New York City Locality for each Capability Year, the ISO will conduct the Part A Exemption Test for the New York City Locality prior to its evaluation for the G-J Locality. 

23.4.5.7.3.1.3An Examined Facility will be in Part A Group 2 Examined Facilities unless: (i) it is already in-service; or (ii) the ISO has determined it (a) falls within a category of resources with a construction timeline of less than three years, including but not limited to small generators sized at or below 20 MW, solar photovoltaic installations, battery installations or uprates to existing generators and (b) is reasonable to project the facility could be in-service prior to the start of the second Winter Capability Period that falls within the Part A Mitigation Study Period Years 1 through 3.  Those Examined Facilities that meet either (i) or (ii) above will be in Part A Group 1 Examined Facilities.

23.4.5.7.3.1.4The ISO will post which Examined Facilities comprise the Part A Group 1 Examined Facilities and Part A Group 2 Examined Facilities [30 days after the effective date of this filing] for Class Year 2019; 120 days after the Annual Transmission Baseline Assessment lock down of any subsequent Class Year Study; and 30 days after the start of any applicable Expedited Deliverability Studies.

23.4.5.7.3.2The ISO shall compute the reasonably anticipated ICAP Spot Market Auction forecast price for any Mitigated Capacity Zone in accordance with Section 23.4.5.7.15. 

When the ISO is evaluating more than one Examined Facility concurrently in either a Class Year Study, Additional SDU Study or Expedited Deliverability Study, the ISO shall recognize in its computation of the anticipated ICAP Spot Market Auction forecast price that Generators or UDR projects will clear from lowest to highest, using for each Examined Facility the lower of (i) the first year value of its Unit Net CONE, or (ii) the numerical value equal to 75 percent of the Mitigation Net Cone, then inflated in accordance with 23.4.5.7 for each of the year two and year three of the Mitigation Study Period. However, if an Examined Facility has accepted its determination from a Class Year Study, Additional SDU Study, or Expedited Deliverability Study, then the Examined Facility shall also be included in the BSM Forecast for any subsequently completed Class Year Study, Additional SDU Study or Expedited Deliverability Study that utilized the same Mitigation Study Period that was used to evaluate the Examined Facility.  If an Examined Facility completes its Additional SDU Study after the completion of the Class Year Study that it originally entered but before the time the ISO completes a subsequent Class Year’s Annual Transmission Baseline Assessment study cases then that Examined Facility shall have a separate decisional process utilizing the Mitigation Study Period from the most recently completed Class Year Study.

23.4.5.7.3.3   [Intentionally Left Blank]

All Developers, Interconnection Customers, and Installed Capacity Suppliers for any Examined Facility that do not request CRIS shall provide data and information requested by the ISO by the date specified by the ISO, in accordance with the ISO Procedures.  For any such Examined Facility that is in a Class Year Study, Additional SDU Study or Expedited Deliverability Study on the date the ISO issues a notice to stakeholders that the decisional period of which the Examined Facility is a member has been completed but that only has ERIS rights, the ISO shall utilize the data first provided in its analysis of the Unit Net CONE in its review of the project in any future Class Year Study, Additional SDU Study, or Expedited Deliverability Study in which the Generator or UDR project requests CRIS. The ISO shall determine the reasonably anticipated Unit Net CONE with the costs to be determined in the Project Cost Allocation, as applicable, prior to or contemporaneous with the commencement of the Initial Decision Period, and shall provide to the Examined Facility the ISO’s initial determination of an exemption or the Offer Floor.

The ISO shall provide to each Examined Facility its price forecast and an initial determination (incorporating its revised Project Cost Allocation) prior to or contemporaneous with the commencement of the Initial Decision Period for the Class Year Study, Additional SDU Study, and the Expedited Deliverability Study and for each Subsequent Decision Period for the Class Year Study and Additional SDU Study no later than the ISO’s issuance of a Revised Project Cost Allocation for the Class Year Study and Additional SDU Study.

If an Examined Facility remains a member of the completed Class Year Study, Additional SDU Study, or Expedited Deliverability Study, the ISO shall inform the Examined Facility of the final Offer Floor determination(s) or the Offer Floor exemption(s) that will apply to the Examined Facility as soon as practicable after the date the ISO issues a notice to stakeholders that the decisional period has been completed, in accordance with methods and procedures specified in ISO Procedures.    

When evaluating Examined Facilities pursuant to this Section 23.4.5.7, the ISO shall seek comment from the Market Monitoring Unit on matters relating to the determination of price projections and cost calculations.  The responsibilities of the Market Monitoring Unit that are addressed in this section of the Mitigation Measures are also addressed in Section 30.4.6.2.13 of Attachment O to this Services Tariff. 

23.4.5.7.3.4If a Generator or UDR Project that would be an Examined Facility under the criteria provided in (II) of the Examined Facility definition in Section 23.2.1 has not provided written notice to the ISO on or before the Class Year Start Date for the Class Year Study or the Expedited Deliverability Study Start Date for the expedited Delivery Study with which it was eligible to examined, or any Examined Facility required to be reviewed does not provide all of the requested data by the date specified by the ISO, the proposed Capacity shall be subject to the Mitigation Net CONE Offer Floor for the period determined by the ISO in accordance with Section 23.4.5.7. 

23.4.5.7.3.5Except as specified in Section 23.4.5.7.6 with respect to Additional CRIS MW, an Examined Facility for which an exemption or Offer Floor determination has been rendered may only be reevaluated for an exemption or Offer Floor determination if it meets the criteria provided in (I) of the Examined Facility definition in Section 23.2.1 and was not previously in a Class Year Study, Additional SDU Study, or Expedited Deliverability Study at the time of their completion and the Examined Facility either (a) enters a new Class Year and requests CRIS or (b) intends to receive transferred CRIS rights at the same location.  An Expected CRIS Transferee  that received CRIS will be bound by the determination rendered and will not be reevaluated.  An Examined Facility under the criteria that had been set forth in Section 23.4.5.7.3 (III) prior to May 19, 2016, will not be reevaluated. 

23.4.5.7.3.6In order to become an Examined Facility in an Expedited Deliverability Study an eligible Project must (1) provide a written request to the ISO’s Market Mitigation and Analysis Department; and (2) satisfy all of the applicable data requirements in accordance with ISO Procedures prior to the start of the Expedited Deliverability Study.  Once the data submission is deemed complete by the ISO the eligible Project will be notified by the ISO that it has satisfied the data requirements to enter an Expedited Deliverability Study.

23.4.5.7.3.7If the Installed Capacity Supplier first offers UCAP prior to the first Capability Year of the Mitigation Study Period for which it was evaluated, its Offer Floor shall be reduced using the same numerical value for the inflation index that was used in the final determination issued under Section 23.4.5.7.4 (i.e., when the Examined Facility remains a member of the completed Class Year as identified in Section 23.4.5.7.4.  If the Installed Capacity Supplier first offers UCAP after the first Capability Year of the Mitigation Study Period for which it was evaluated, its Offer Floor shall be increased using the inflation rate identified in 23.4.5.7.

23.4.5.7.3.8Net Energy and Ancillary Services Revenue Projections for UDR Projects

For the purposes of making an exemption determination or Unit Net CONE determination pursuant to Section 23.4.5.7 for an Examined Facility that is a UDR project, the ISO will determine the likely projected net Energy and Ancillary Services revenues utilizing a methodology that reflects, as applicable, but is not limited to, the guiding principles set forth in Section 23.4.5.7.3.8.1. The ISO will implement this Section 23.4.5.7.3.8 in accordance with Section 23.4.5.7.3.8.2.

23.4.5.7.3.8.1The methodology used for a specific UDR project shall reflect the following guiding principles, where applicable:

(a)The design and characteristics of the UDR project as proposed in the Class Year, including whether it is proposed to be uni-directional or bi-directional.

(b)The market structure, scheduling rules, price formation rules, and other relevant characteristics and rules of the Control Area at each terminus of the UDR project.

(c)The reasonably projected effects of transactions utilizing the UDR project on NYCA and External Control Areas prices, including proxy bus prices.

(d)The reasonably projected cost to purchase energy, capacity, and ancillary services that would be transmitted into, and if the UDR project is proposed in the Class Year to be bi-directional also from, the Mitigated Capacity Zone, utilizing the UDR project at the rate determined by: (i) market-based clearing price mechanisms to the extent that the External Control Area uses them, or ISO market prices if an internal UDR project; (ii) a reasonable substitute, in the ISO’s judgment, to the extent that the External Control Area does not use market-based clearing price mechanisms to determine prices. The costs to purchase energy and capacity, and any other products associated therewith, shall not be based on advantages or sources of revenue that would not reflect arm’s-length transactions, or that are not in ordinary course of business for a competitive energy market participant.

(e)The reasonably anticipated fees for transmitting the ISO-projected energy, capacity, and ancillary services transactions utilizing the UDR project. These fees shall include any export fees, transmission services charges, ancillary services fees, scheduling fees, and other fees and costs.

(f)The reasonably projected opportunity costs (including fees) of selling energy, capacity, and any other products associated with the sale of energy, into an External Control Area in lieu of a sale transaction into the Mitigated Capacity Zone.

(g)The reasonably projected revenues from the sale of energy and ancillary services that would be transmitted into, and if the UDR project is proposed in the Class Year Study or Additional SDU Study to be bi-directional also from, the Mitigated Capacity Zone, utilizing the UDR project at the rate determined by: (i) market-based clearing price mechanisms to the extent that the External Control Areas uses them, or ISO market prices if an internal UDR project; (ii) a reasonable substitute, in the ISO’s judgment, to the extent that the External Control Area does not use market-based clearing price mechanisms to determine prices.  The revenues from the sale of energy, capacity, and any other products associated with the sale thereof, into an External Control Area shall not be based on advantages or sources of revenue that do not reflect arm’s-length transactions, or that are not in ordinary course of business for a competitive energy market participant.

(h)The effect of scheduling uncertainty and imperfect arbitrage on the projected costs and revenues from the purchase and sale of energy and ancillary services that are reasonably projected to be transmitted into, and if the UDR project is proposed in the Class Year Study or Additional SDU Study to be bi-directional also from, the Mitigated Capacity Zone, utilizing the UDR project.

23.4.5.7.3.8.2 Implementation

(a)The ISO shall seek comment from the Market Monitoring Unit on the methodology the ISO will use to project net Energy and Ancillary Services for each UDR project, and the inputs used to perform the calculation. The responsibilities of the Market Monitoring Unit that are addressed in this section are also addressed in Section 30.4.6.2.13 of Attachment O.

(b)The ISO shall post on its website a description of the methodology used for each UDR project, subject to any restrictions on the disclosure of Confidential Information or Critical Energy Infrastructure Information.

(c)If a Project withdraws from a Class Year Study or Additional SDU Study and then enters another Class Year (regardless of whether it has the same or a different interconnection queue position,) the ISO may utilize a different methodology than it previously used, provided it reflects, where applicable, the guiding principles set forth in Section 23.4.5.7.3.8.1 and implemented in accordance with Section 23.4.5.7.3.8.2(a) and (b).