N.Y. PSC: NYISO should select more cost-effective solution to address AC Transmission public policy needs

The New York State Public Service Commission (PSC), in a Jan. 24 order, said that it finds that the New York ISO (NYISO) should proceed to a full evaluation of the proposed transmission solutions deemed viable and sufficient for purposes of addressing the persistent congestion across the Central East and Upstate New York (UPNY)/Southeast New York (SENY) interfaces.

The PSC also said that the NYISO should select, as appropriate, the more cost-effective or efficient transmission solution to address the AC Transmission Public Policy Transmission Needs (PPTNs). Additionally, the PSC said that it adopts the cost allocation methodology outlined in the NYISO’s analysis for recovering the costs of the transmission upgrades, which the NYISO should file with FERC.

As noted in the order, the PSC in December 2015 issued an order finding that the need for certain upgrades across the Central East and UPNY/SENY portions of the AC transmission system were being driven by a public policy requirement, as defined under the NYISO’s federally approved open access transmission tariff (OATT).

The PSC said that its December 2015 order ultimately found that relieving constraints across the Central East (“Segment A”) and UPNY/SENY (“Segment B”) portions of the transmission system – collectively, the AC Transmission PPTN – would advance numerous public policies.

The PSC noted that it described the segments as:

  • Segment A: Edic/Marcy to New Scotland; Princetown to Rotterdam – Construction of new 345-kV line from Edic or Marcy to New Scotland on existing right of way (ROW) – primarily using Edic to Rotterdam ROW west of Princetown; construction of two new 345-kV lines or two new 230-kV lines from Princetown to Rotterdam on existing Edic to Rotterdam ROW; decommissioning of two 230-kV lines from Edic to Rotterdam; related switching or substation work at Edic or Marcy, Princetown, Rotterdam and New Scotland
  • Segment B: Knickerbocker to Pleasant Valley – Construction of a new double circuit 345-kV/115-kV line from Knickerbocker to Churchtown on existing Greenbush to Pleasant Valley ROW; construction of a new double circuit 345-kV/115-kV line or triple circuit 345-kV/115-kV/115-kV line from Churchtown to Pleasant Valley on existing Greenbush to Pleasant Valley ROW; decommissioning of a double circuit 115-kV line from Knickerbocker to Churchtown; decommissioning of one or two double circuit 115-kV lines from Knickerbocker to Pleasant Valley; construction of a new tap of the New Scotland-Alps 345-kV line and new Knickerbocker switching station; related switching or substation work at Greenbush, Knickerbocker, Churchtown and Pleasant Valley substations
  • Upgrades to the Rock Tavern substation – New line traps, relays, potential transformer upgrades, switch upgrades, system control upgrades and the installation of data acquisition measuring equipment and control wire needed to handle higher line currents that will result as a consequence of the new Edic/Marcy to New Scotland; Princetown to Rotterdam and Knickerbocker to Pleasant Valley lines
  • Shoemaker to Sugarloaf – Construction of a new double circuit 138-kV line from Shoemaker to Sugarloaf on existing Shoemaker to Sugarloaf ROW; decommissioning of a double circuit 69-kV line from Shoemaker to Sugarloaf; related switching or substation work at Shoemaker, Hartley, South Goshen, Chester, and Sugarloaf

The NYISO in February 2016 issued a solicitation seeking potential solutions to resolve the public policy requirement identified by the PSC, and in response, the NYISO received proposals from six developers, which submitted a total of 16 projects, including 15 transmission projects and one non-transmission proposal.

The PSC also noted that in an October 2016 filing, the NYISO concluded that four developers submitted 13 transmission projects that were viable and sufficient to solve the AC Transmission PPTN, including: Niagara Mohawk Power d/b/a National Grid/New York Transco LLC; NextEra Energy Transmission New York; North America Transmission (NAT)/New York Power Authority (NYPA); and ITC New York Development.

The PSC further noted that in its December 2015 order, it prescribed a cost allocation and recover methodology that is to be based on a “beneficiaries pay” approach for allocating costs, whereby those that derive the benefits of a project are to bear the costs. The PSC added that in order to assign 75% of the project costs based on the economic beneficiaries of reduced congestion, the NYISO followed, to a large extent, the same methodology it uses to allocate costs under its economic planning process, known as the Congestion Analysis and Resource Integration Study, or CARIS.

The NYISO conducted an illustrative analysis of the difference in zonal energy payments for each NYISO load zone between the base case and project case with Segments A and B in service. That analysis showed that, overall, 89.5% of the costs would be allocated to downstate zones (G-K) and 10.5% to upstate zones (A-F), the PSC added.

As TransmissionHub reported, various entities in early January submitted comments on the matter. The NYISO, for instance, said that it supports the PSC determining that the NYISO should continue to evaluate the proposed solutions identified in the NYISO’s October 2016 AC Transmission Public Policy Transmission Need Viability & Sufficiency Assessment (assessment).

In its Jan. 24 order, the PSC noted that there was a consensus among commenters that the circumstances that led the PSC to identify the AC Transmission PPTN continue to exist, and that the PSC agrees that persistent congestion on the Central East and UPNY/SENY interfaces continues to contribute to higher energy costs for downstate customers and to limit the accessibility of renewable resources located upstate.

Various commenters urged the PSC to direct the NYISO to move forward with evaluation and selection of a transmission solution to meet the public policy requirement, the PSC said, adding that it agrees that new 345-kV electric transmission upgrades should be fully evaluated by the NYISO for purposes of addressing the persistent congestion across the Central East and UPNY/SENY portions of the transmission system.

The PSC noted that it has repeatedly found that there are numerous potential benefits of implementing the AC Transmission upgrades, and has supported an allocation whereby 75% of the costs are allocated to the economic beneficiaries of the projects and 25% of the costs are distributed based on a state-wide load ration share. The PSC said that it continues to find that that 25% allocation compensates for the non-economic benefits that would be realized by all ratepayers.

Among other things, the PSC said that it encourages developers to pursue cost-containment incentives or comparable mechanisms before FERC to ensure that ratepayers retain the economic benefits of the NYISO’s competitive transmission process and that the NYISO can select the most cost-effective or efficient solution.

About Corina Rivera-Linares 3065 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.