Huntley Power LLC on Dec. 7 filed with the Federal Energy Regulatory Commission an application to revise its cost-of-service agreement originally filed on October 14.
The Oct. 14 filing included an unexecuted cost-of-service agreement under which Huntley proposed to provide the New York Independent System Operator (NYISO) and Niagara Mohawk Power d/b/a National Grid with reliability must run (RMR) service from Huntley Units 67 and 68.
After reviewing reliability determination letters filed with the New York Public Service Commission (NYPSC) on Oct. 30 from NYISO and National Grid and through subsequent discussions with the NYISO, Huntley submitted this amended filing to reflect different terms and conditions to the cost-of-service agreement as well as an updated Rate Schedule.
Huntley, a wholly-owned subsidiary of NRG Energy (NYSE: NRG), owns and operates the coal-fired Huntley generating facility located in Western New York. Despite the significant investment in environmental controls over the past decade, it is not currently economic to operate. On Aug. 25, Huntley submitted a 180-day notice to the NYPSC that Huntley intends to retire Units 67 and 68 on March 1, 2016.
After Huntley provided the notice to the NYPSC, NYISO and National Grid performed studies to assess the reliability impacts of the Huntley Generating Facility’s retirement, effective March 1, 2016. On Oct. 30, after the initial filing was made for two unit operation, NYISO and National Grid informed the New York Department of Public Service that there would be a reliability need if certain transmission upgrades are not completed by June 1, 2016.
In fact the NYISO’s Oct. 30 letter advised that prior to the update of National Grid’s local transmission plan to reflect the retirement of Huntley, National Grid and NYISO identified low voltage issues adjacent to the Huntley Station with Huntley out of service. As a result of this assessment, Huntley Unit 68 could be needed for reliability. In reliance of the fact that there may be a reliability need, NRG will begin spending money promptly to ensure that reliable service can be provided.
With the new information provided on Oct. 30, Huntley has revised its Oct. 14 filing to:
- Reflect the reliability need for one unit;
- Decrease the term of its RMR Agreement from forty-eight months to a minimum of four months;
- Revise cost-of-service testimony to reflect the above changes with a unilateral option for the NYISO to extend the Minimum Term to seven months; and
- Amend the non-rate terms and conditions based on negotiations with the NYISO.
The NYISO authorizes Huntley to state that it agrees that if a Huntley unit is needed to address reliability, only one unit will be needed. In addition, given currently available information, the NYISO agrees that the proposed duration of the RMR Agreement appears reasonable. NYISO has also authorized Huntley to indicate that under the circumstances presented, including the short duration of the proposed RMR Agreement, it concurs with the non-rate terms and conditions in the Huntley Rate Schedule except for Sections 3.4 (Participation in NYISO ICAP Market) and 5.3 (Additional Expenditures), and that it takes no position on the proposed rate.
Huntley requests that the commission accept the amended Huntley Rate Schedule without suspension or modification, to be effective on March 1, 2016.
Huntley Units 67 and 68 are coal-fired units, with 218 MW of nameplate capacity apiece, that began operating in 1957 and 1958, respectively. The units are located in Tonawanda, N.Y., and are interconnected to the National Grid system in NYISO’s Zone A.