FERC rules for developer of 750-MW Caithness II project in dispute with NYISO

The members of the Federal Energy Regulatory Commission on Sep. 30 handed Caithness Long Island II LLC, the developer of a 750-MW power plant, a victory in an interconnection dispute with the New York ISO and the Long Island Power Authority (LIPA).

On July 10, Caithness Long Island II filed a complaint against NYISO pursuant to sections 206 and 306 of the Federal Power Act (FPA) and Rule 206 of the commission’s regulations. Caithness alleged that NYISO’s application of a local reliability requirement will violate its Open Access Transmission Tariff (OATT or Tariff) and Order No. 2003.

Specifically, Caithness seeks to prevent NYISO from applying the Long Island Local Reliability Interface Transfer Capability Test (Long Island Guideline) to identify System Upgrade Facilities required, as part of the 2015 Class Year Interconnection Facilities Study process, regarding Caithness’ request for Energy Resource Interconnection Service (ERIS).

Caithness is the developer of a 750-MW natural-gas fired, combined-cycle facility proposed to be built on Long Island in Brookhaven, New York (Caithness II Project). The Caithness II Project is a NYISO Class Year 2015 project and is currently being studied as part of the 2015 Class Year Interconnection Facilities Study. The proposed point of interconnection is at the Long Island Power Authority’s Sills Road 138-kV substation. Caithness is also affiliated with the owner of an existing 350-MW gas-fired power plant on Long Island that entered commercial operation in August 2009.

NYISO requested that the commission deny the complaint. NYISO argued, in part, that its determination that the Long Island Guideline should apply as an Applicable Reliability Requirement and Applicable Reliability Standard is consistent with its OATT and commission precedent. NYISO stated that pursuant to its Tariff requirements, it incorporated a Transmission Owner’s local criteria into the Applicable Reliability Requirement/Standard to serve as the basis for evaluating reliability impacts of the Caithness II Project under the NYISO Minimum Interconnection Standard. NYISO argued that it properly reviewed the Long Island Guideline and approved it as an appropriate Applicable Reliability Requirement under the NYISO Minimum Interconnection Standard after determining that it was required to address reliability issues on Long Island, which as an island has a grid system that has limited interconnection with the off-island grid.

NYISO stated that LIPA faces unique reliability concerns with the Long Island transmission system due to Long Island’s inherent limited interconnectivity with external resources and to the particular location on Long Island of load and generation resources that limit the ability to transfer power and operating reserves from generation resources to where it is required to assist in ensuring reliability. Thus, NYISO asserts that the Long Island Guideline is intended to address the potential adverse impact that a new generating resource could have if it degraded LIPA’s ability to transfer power and operating reserves from east to west via the portion of the Long Island transmission system critical to local transmission system operating reliability.

Said the Sept. 30 FERC decision: “We grant Caithness’ Complaint. As discussed below, we find that the Long Island Guideline constitutes a deliverability test and therefore using it to identify System Upgrade Facilities is inconsistent with Order No. 2003 and violates the NYISO OATT. With respect to Order No. 2003, the Long Island Guideline specifically states that it ensures ‘no bottling’ and allows ‘the output of all resources in one load center to be transferred to the adjacent load center.’ We find that such a requirement is effectively a deliverability test and conflicts with Order No. 2003.”

FERC added: “As noted above, in Order No. 2003-A, the Commission explained that to obtain NRIS, the interconnection customer has to satisfy a deliverability test to ensure that the generating facility, as well as other generating facilities in the same electrical area, can be operated simultaneously at peak load and that any output produced above peak load requirements can be transmitted to other electrical areas within the transmission provider’s transmission system. The Commission explained that the deliverability test ensures that the interconnection customer, along with other facilities in the area, can be operated simultaneously and that no capacity is bottled. Essentially, that is what the Long Island Guideline requires. Indeed, NYISO acknowledges that such a requirement represents a deliverability test.”

The commission also wrote: “While LIPA frames its need for the Long Island Guideline as a way to protect transfer capability necessary to move operating reserves, we find no reference of operating reserves within the Guideline. Also, we note that NYISO is already required, under its Tariff, to procure the necessary operating reserves in order to maintain reliability. We agree with Caithness that the issues concerning the operation of the 69 kV portion of the LIPA system are addressed by NYISO and LIPA operating procedures. Moreover, NYISO determines the appropriate amount and location of operating reserves necessary to maintain reliability on LIPA’s transmission system. Finally, we note that the Minimum Interconnection Standard contemplates the scenario envisioned by LIPA; specifically, the Minimum Interconnection Standard provides that any potential, adverse reliability impact identified by a proposed interconnection can be managed through the normal operating procedures of NYISO and the Transmission Owner.”

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.