The New York State Public Service Commission (PSC), in an Oct. 13 order, determined that the New York ISO (NYISO) should continue to analyze a transmission solution to relieve congestion in western New York.
Accordingly, the PSC said that it directs the NYISO to proceed to a full evaluation and selection, as appropriate, of the more efficient or cost-effective transmission solution to meet the public policy transmission need. The PSC further stated that it identifies the need to undertake certain non-bulk transmission facility upgrades in order to fully achieve the objectives of the public policy transmission need.
“Inadequate transmission capability is causing transmission congestion in Western New York, which prevents renewable resources from being accessed across the State,” Commission Chair Audrey Zibelman said in an Oct. 13 statement. “With this decision, we will move forward with efficient, cost-effective transmission projects and upgrades that will un-bottle critically important energy resources to meet Governor Cuomo’s goal of having half of our energy come from renewable resources by 2030.”
The issue of congestion has existed for some time in western New York, but it has increased following recent power plant retirements, the PSC said in its statement. This proceeding is separate and apart from the ongoing Alternating Current transmission upgrade proceeding to ease flow of electricity from north to south, the PSC said.
As noted in the order, the PSC in July 2015 issued an order identifying congestion relief in western New York as a public policy requirement, as defined under the NYISO’s federally approved open access transmission tariff (OATT). Under the OATT, any public policy requirements identified by the PSC that may be driving the need for additional transmission facilities, referred to as public policy transmission needs, are forwarded to the NYISO to solicit potential solutions and to prepare a viability and sufficiency assessment of the proposed projects, the PSC said.
In November 2015, the NYISO solicited potential solutions for resolving the identified congestion in western New York, and in response, the NYISO received proposals from eight developers, which proposed 15 projects – that is, 12 transmission projects and three non-transmission proposals. The NYISO on June 1 submitted a report for the PSC’s consideration detailing the results of its viability and sufficiency assessment, the PSC added, noting that on June 22, a notice of proposed rulemaking was published in the State Register seeking comments from interested entities on the NYISO’s report.
In response to the notice, various entities filed comments, including North American Transmission; Niagara Mohawk d/b/a National Grid; NextEra Energy Transmission New York; New York Transco; NYISO; and the New York Power Authority (NYPA)/New York State Electric & Gas (NYSEG).
The PSC also noted that the NYISO’s public policy transmission planning process (PPTPP) was developed to comply with FERC’s Order No. 1000, which required the development of a planning process for the consideration of public policy driven transmission needs.
The PPTPP consists of four main steps, including the identification of public policy requirements/public policy transmission needs; the solicitation of proposed solutions to identified public policy transmission needs; the evaluation of the viability and sufficiency of proposed transmission and non-transmission solutions to a public policy transmission need; and upon confirmation of the transmission need by the PSC, the evaluation and selection by the NYISO of the “more efficient or cost-effective” transmission project to satisfy the public policy transmission need.
The PSC also said that the PPTPP establishes the commission’s role in identifying any public policy requirements, and confirming that such requirements continue to exist after reviewing the results of the NYISO’s viability and sufficiency assessment. The NYISO OATT defines a public policy requirement as a federal or New York statute or regulation, including an order issued by the commission adopting a rule or regulation subject to and in accordance with the State Administrative Procedure Act, any successor statute, or any duly enacted law or regulation passed by a local governmental entity in the state, that may relate to transmission planning on the bulk power transmission facilities, the PSC said.
In referring the Western New York Public Policy Transmission Need, the PSC said that it directed the NYISO to consider solutions for increasing western New York transmission capability sufficient to ensure the full output from NYPA’s Niagara hydroelectric generating facility, as well as certain levels of simultaneous imports from Ontario across the Niagara tie lines.
Discussing the proposals that the NYISO received, the PSC said that projects that were unable to address all of the bulk power transmission security issues were deemed insufficient to meet the Western New York Public Policy Transmission Need. The NYISO determined that 10 transmission projects, out of the 12 remaining projects that provided sufficient information for the NYISO’s consideration, were viable and sufficient to satisfy that need; none of the proposed non-transmission solutions were deemed viable and sufficient by the NYISO, the PSC said.
The NYISO found that the full capability of each proposed project to unbottle Niagara hydroelectric generation and Ontario imports would not be realized if certain non-bulk transmission issues were left unaddressed. The PSC added that the NYISO recommended that those non-bulk transmission issues be addressed by whichever project is ultimately selected. Specifically, the NYISO recommended mitigation of the Niagara–Packard 115-kV #193 and #194 line overloads by reconductoring the lines or modification of the Niagara substation configuration, as well as the replacement of limiting substation terminal equipment for line #54 at the Gardenville 115-kV station.
The PSC added that its responsibility at this stage in the planning process is to make a determination, based on the NYISO’s viability and sufficiency assessment, as to whether a transmission solution to the previously identified public policy transmission need should continue to be analyzed by the NYISO, or whether a non-transmission solution should be pursued instead.
Based upon a consideration of that assessment by NYISO, as well as the comments received, the PSC said that it confirms that the relief of congestion in western New York continues to be a public policy transmission need warranting the NYISO’s full evaluation of the proposed transmission solutions that have been deemed viable and sufficient.
The NYISO’s comments pointing to its 2016 summer operating study is particularly telling, indicating that only 125 MW of imports would be capable of flowing across the New York/Ontario interface during summer peak load conditions, compared with an import capability of 1,875 MW, the PSC said. According to the NYISO, that is due to transmission constraints on the Niagara–Gardenville 230-kV lines, which results in frequent real-time congestion limiting Ontario imports and Niagara hydroelectric power flows east.
The PSC added that the NYISO will proceed to evaluate the remaining solutions to the Western New York Public Policy Transmission Need based on the established metrics and criteria established in the OATT, as well as the specific criteria previously identified by the PSC. Upon completion of its evaluation, the NYISO Board of Directors may select the more efficient or cost-effective transmission project to satisfy the public policy transmission need, the PSC said, noting that the project would be eligible for cost allocation and cost recovery under the NYISO’s OATT.
In response to commenters’ recommendations, the PSC said that it agrees with North American Transmission that there is a risk that the NYISO’s comparative evaluation may result in the selection of a project with an unreasonably low non-binding estimate, which could expose ratepayers to higher costs.
The PSC said that it strongly supports the use of risk mitigation proposals, such as cost containment measures, to ensure ratepayers are not exposed to higher costs than necessary. The NYISO should incorporate into its remaining process, as practicable, a mechanism for implementing risk mitigation measures and cost-overrun-sharing incentives, as the PSC believes that this additional information will be of assistance and may be crucial to discerning between close bids.
The PSC added that it “expects the NYISO to give due consideration to such measures when making any selection of a project for purposes of cost allocation and recovery.”
In order to establish an appropriate cost allocation methodology that is reflective of the PSC’s public policy objectives, the NYISO should apply the “beneficiaries pay principle,” and take into account the economic benefits associated with congestion relief and assign a portion of the project(s) costs to the beneficiaries, the PSC said. However, a portion of the costs may be allocated on a load-ratio share statewide given that increased access to renewables will reduce emissions and thus provide benefits statewide, the PSC said.
Among other things, the PSC said that the use of existing corridors is preferable from an environmental impact standpoint, and should serve to facilitate Article VII siting approval. Accordingly, the NYISO should administer its selection process in a manner that minimizes the acquisition of new rights of way, the PSC said.
Regarding the need to complete certain non-bulk transmission facility upgrades, the PSC said that it expects National Grid to undertake the upgrades necessary on the non-bulk system, such as those identified by the NYISO, and to receive reimbursement from the developer ultimately selected by the NYISO to receive cost recovery through the OATT.