New York IPPs urge FERC to act on ‘out-of-market’ contracts

Independent Power Producers of New York (IPPNY) on July 18 filed a letter with the Federal Energy Regulatory Commission asking it to act on a growing list of “out-of-market” reliability must run (RMR) agreements that it said are distorting the New York power market.

IPPNY had filed a still-pending complaint with the commission over a year ago against the New York Independent System Operator (NYISO) over two RMR contracts that it said were keeping power plants alive that would otherwise be shut, resulting in price depression in ISO markets. Earlier this year, it added a third RMR deal to the complaint.

In the July 18 letter, IPPNY enclosed a press release announcing the possibility of a fourth out-of-market RMR contract that it said would threaten the NYCA ICAP market. Exelon Corp./Constellation Energy Nuclear Group (CENG) filed a July 11 petition with the New York State Public Service Commission (NYPSC) requesting that the NYPSC order Rochester Gas and Electric (RG&E) to negotiate an Reliability Support Services Agreement to support CENG’s continued operation of its Ginna nuclear facility to maintain reliability in the region. CENG stated that without such a contract, it would recommend to its board that the facility cease operations and retire as soon as practicable.

In addition, IPPNY said it is aware of another resource in the New York Control Area (NYCA) installed capacity (ICAP) market that has filed a notice to mothball with the NYPSC and that may also seek an out-of-market contract. The local transmission owner has identified upgrades to the transmission system needed as a result of the pending Selkirk plant shutdown, it noted.

The IPPNY letter said the regional power market is in a “death spiral” and that FERC needs to act to stop these kinds of agreements. “I urge the Commission to grant the Complaint as quickly as possible to protect and defend the ICAP markets which the Commission has worked so hard to foster,” said the letter, signed by IPPNY President and CEO Gavin Donohue.

The Ginna Facility is a 581-MW single-unit pressurized water reactor located along the south shores of Lake Ontario in Ontario, N.Y., about 20 miles northeast of Rochester.

Selkirk Cogen Partners LP filed a June 6 update with the NYPSC saying that it had pushed back by two months the planned mothballing of Selkirk I and Selkirk II. The company originally notified parties like the New York ISO that this idling will take place on Sept. 1, 2014. That has been pushed back to Nov. 1, 2014. The company said in the brief notice that it reserves the right to make any further changes.

Said the Atlantic Power website: “The Selkirk Project is a 345 MW dual-fueled, combined-cycle, cogeneration facility located in Bethlehem, New York. The facility was constructed in two phases, Unit I and Unit II, which commenced commercial operations in 1992 and 1994, respectively. The Project is owned by Selkirk Cogen Partners, L.P., in which Atlantic Power has an 18.5% economic interest. Energy Investors FundOsaka Gas and the McNair Group indirectly own the remainder.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.