On September 7, 2016, FERC accepted the New York Independent System Operator Inc.’s (“NYISO”) proposed revisions to Attachment Y of its Open Access Transmission Tariff (“OATT”) to modify its Public Policy Transmission Planning Process. Additionally, FERC clarified its requirement that NYISO establish a cost allocation methodology for the transmission portion of an “Other Public Policy Project” that is selected during the regional transmission planning process consistent with Order No. 1000.

NYISO originally filed the proposed revisions on February 18, 2016. Under NYISO’s proposal, an “Other Public Policy Project” could include “a portfolio of transmission and non-transmission projects.” Nonetheless, according to FERC, NYISO proposed to treat such mixed use projects as if the entire portfolio was a non-transmission alternative, making the entire project ineligible for regional cost allocation. In an April 18 Order, FERC concluded that if an Other Public Policy Project contains a transmission component and is selected during the regional transmission planning process, then Order No. 1000 requires NYISO to allocate the costs of the transmission component consistent with its regional cost allocation method. FERC thus directed NYISO to submit a compliance filing explaining the cost allocation method that will be applicable to the transmission portion of an Other Public Policy Project.

On May 18, 2016, NYISO submitted its compliance filing and a request for clarification, or in the alternative for rehearing, of FERC’s findings related to the cost allocation method for the transmission portion of an Other Public Policy Project. Specifically, NYISO requested clarification that “the April 18 Order did not require [NYISO] to alter its role in only selecting among fully-transmission projects for purposes of cost allocation under the OATT.” In support of its request, NYISO argued that Order No. 1000: (1) requires public utility transmission providers to establish a process by which transmission needs driven by public policy requirements are identified in a regional transmission planning process and potential solutions to those needs are evaluated; (2) requires that the regional transmission planning process include a transparent, non-discriminatory process for evaluating and potentially selecting a transmission facility in the regional transmission plan for purposes of cost allocation, and consider non-transmission solutions on a comparable basis; and (3) does not require the selection of non-transmission solutions for purposes of cost allocation and recovery.

FERC accepted NYISO’s proposed OATT revisions as consistent with its April 18, 2016 Order and Order No. 1000. Further, FERC clarified that “the April 18 Order did not require NYISO to select a non-transmission component of an Other Public Policy Project; rather, to the extent that an Other Public Policy Project contains a transmission component, the April 18 Order directed NYISO to explain how the costs of that transmission component would be eligible for regional cost allocation.”

Additionally, FERC accepted several other minor NYISO proposals related to its public policy process. Those accepted proposals include extending deadlines governing the public policy process, revising the study process for public policy transmission projects, and slight revisions to NYISO’s OATT language regarding cost recovery by developers of public policy transmission projects.

FERC’s Order on Clarification and NYISO’s Compliance is available here.