NYISO: ‘Most significant’ tariff changes arise from Order 1000’s public policy requirement

The most significant changes to the New York ISO‘s (NYISO) tariff result from Order 1000’s requirement that transmission planning processes consider public policy objectives, the ISO said in its regional compliance filing Oct. 11.

The NYISO proposed a new cost allocation methodology (Section specific to transmission solutions that address needs driven by public policy requirements.

Some stakeholders objected to the new methodology, suggesting instead that the ISO apply the Congestion Analysis and Resource Integration Study (CARIS) process, an economic analysis of congestion, to public policy-driven projects. NYISO rejected that suggestion as inappropriate.

“[T]hat methodology was developed through extensive negotiation, and precisely defined for application to congestion projects,” NYISO said. “The CARIS methodology is also not an appropriate default cost allocation methodology because a public policy transmission project may have no economic benefits whatsoever.”

Likewise, applying the reliability cost allocation methodology would encounter the same problem of not knowing whether a public policy-driven project would address a reliability need or improve reliability in a quantifiable manner, NYISO said. The ISO added that those who objected to the ISO’s cost allocation proposal for public policy-driven projects failed to propose any viable alternatives.

“The proposed cost allocation methodology complies with the Order No. 1000 requirement that all entities whose transmission project has been selected in the regional transmission plan be eligible to seek cost recovery,” NYISO said.

The revision stipulates, among other things, that the focus of the cost allocation methodology will be on proposed regulated transmission solutions to transmission needs driven by public policy requirements identified by the New York Department of Public Service (NYDPS) or the New York Public Service Commission (PSC); projects analyzed as proposed solutions to transmission needs driven by public policy requirements may proceed on a market basis with willing buyers and sellers any time; and that cost allocation will be based on a beneficiaries pay approach.

The ISO also proposed a section of its tariff (Section 31.1.5) to define the public policy requirements process. Those interested in proposing public policy-driven transmission solutions must adhere to that process in considering projects that involve upgrades or expansions to bulk power transmission facilities.

The objective of the public policy requirements process is to: allow market participants and other interested parties to propose transmission needs that they believe are being driven by public policy requirements and for which transmission solutions should be evaluated; provide a process by which the NYDPS and NYPSC can identify the transmission needs for which transmission solutions should be evaluated; provide a process by which the ISO will request and evaluate proposed transmission solutions to the transmission needs that have been identified by the NYDPS and NYPSC; provide a cost allocation methodology for regulated transmission projects that are driven by public policy requirements and that have received an order from the NYPSC indicating it should proceed to request the necessary federal, state, and local authorizations for construction and operation; and coordinate the ISO’s public policy requirements planning process with neighboring control areas.

NYISO also added a provision requiring that each transmission owner consider whether there is a transmission need on its system that is driven by public policy requirements.

The ISO is otherwise largely in compliance with the regional planning requirements of FERC Order 1000 through its comprehensive system planning process (CSPP), the ISO said. The CSPP needs only minor modifications in order to come fully into compliance with the order, NYISO said in its regional compliance proposal.

NYISO’s tariffs are already in compliance with FERC’s right of first refusal (ROFR) requirement, as they do not contain any ROFR provisions, NYISO said. “They specifically allow for any developer to submit proposals for transmission reliability solutions, as well as economic transmission projects,” the ISO said.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.