UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION New York Independent System Operator, Inc. ) PJM Interconnection, L.L.C. ) Docket Nos. ER ) MOTION FOR LEAVE TO ANSWER AND ANSWER OF PJM INTERCONNECTION, L.L.C. Pursuant to section 213(d)(2)(ii) and 713(d) of the Federal Energy Regulatory Commission s ( Commission ) Rules of Practice and Procedure, 1 PJM Interconnection, L.L.C. ( PJM ) submits this motion for leave to answer and answer to Public Service Electric and Gas Company s ( PSE&G ) request for rehearing (the Rehearing Request ) of the Commission s Order issued on October 6, In the October 6 Order, the Commission accepted New York Independent System Operator, Inc. s ( NYISO ) and PJM s (together the RTOs ) joint filing in this docket of proposed revisions to the Joint Operating Agreement between NYISO and PJM 3 primarily addressing interchange scheduling and Market-to-Market ( M2M ) coordination at the ABC and JK Interfaces upon the termination of the unique arrangement referred to as the 1000 MW Wheel or Con Edison Wheel on April 30, C.F.R (d)(2)(ii) and 713(d). 2 New York Independent System Operator, Inc. and PJM Interconnection, L.L.C., 161 FERC 61,033 (2017) (the October 6 Order ). 3 NYISO Open Access Transmission Tariff, Attachment CC Joint Operating Agreement Among and Between New York Independent System Operator Inc. and PJM Interconnection, L.L.C. ( JOA ). 4 Proposed Revisions to Joint Operating Agreement Addressing Interchange Scheduling and Market-to-Market Coordination on the ABC Interface and JK Interface After the 1000 MW Wheel Concludes of New York Independent System Operator, Inc. and PJM Interconnection, L.L.C., Docket No. ER (Jan. 31, 2017) ( Joint Filing ).

2 I. INTRODUCTION AND SUMMARY The Rehearing Request is focused on two issues. 5 First, PSE&G submits that the Commission was in error when it accepted the Joint Filing and the implementation of a natural system flow offset, referred to as an Operational Base Flow ( OBF ) of 400 MWs into PJM over the JK Interface and 400 MWs into New York on the ABC Interface when scheduling interchange and when determining target flows without providing for a cost allocation methodology. 6 This issue was addressed by PJM and the NYISO in their answer to protests and comments filed in this docket on February 21, In the October 6 Order, the Commission correctly found that the JOA need not assign cost responsibility to ConEd for PJM RTEP projects, including the Bergen-Linden Corridor Project. 8 Second, PSE&G challenges the Commission s reliance on the RTOs studies to support the reliability need for the OBF. 9 While this challenge is also addressed by the RTOs Answer to Protest 10 and the Commission s findings that the OBF mechanism is just and reasonable, 11 PJM provides herein an update to the information provided in the Answer to Protest regarding the studies and schedule for reducing the OBF to zero. Based upon PJM s updated forward looking 5 Rehearing Request at 6. 6 The New Jersey Board of Public Utilities requested rehearing of the October 6 Order on the same grounds. 7 See; Answer of Independent System Operator, Inc. and PJM Interconnection, L.L.C. filed on March 10, 2017, ( Answer to Protests ) at October 6 Order P Rehearing Request at Answer to Protests at October 6 Order PP

3 planning studies, PJM notified the NYISO on September 8, 2017, that the OBF can be reduced to zero as of October 31, II. MOTION TO FOR LEAVE TO ANSWER REHEARING REQUEST While the Commission s rules generally do not permit responses to requests for rehearing, the Commission allows such responses for good cause. 13 PJM seeks leave to answer to clarify the issues in order to assist the Commission in its decision-making process. Specifically, given the highly technical nature of the issue, PJM seeks to assist the Commission with the specific allegations made by PSE&G concerning PJM s modeling III. ANSWER TO REHEARING REQUEST A. The Commission Correctly Found That the JOA Need Not Assign Cost responsibility to ConEd for PJM RTEP Projects. PSE&G challenges the Commission s finding that the OBF does not require an allocation of costs to New York because it is an operational protocol related to reliability needs identified in Northern New Jersey and does not entitle ConEd to firm transmission service or rollover rights for any set period of time. 14 This is the same point asserted by PSE&G in the protest filed on February 21, 0017, in this docket 15 and PJM s response therein applies equally to PSE&G s positions in the Rehearing Request. 12 See September 8, 2017, letter from PJM to NYISO attached hereto as Exhibit A (the September 8 OBF Notification Letter ). 13 See, e.g., Cal. Indep. Sys. Operator Corp., 129 FERC 61,241, at P 16 (2009) ( We will accept the answers and responses to the requests for rehearing because they provide information that assisted us in our decision-making process. ); KN Wattenberg Transmission LLC, 94 FERC 61,189, at 61,671 (2001) (finding good cause to accept an answer to a request for rehearing in order to insure a complete record in this proceeding. ); Tex. E. Transmission, LP, 131 FERC 61,164, at P 1 n.3 (2010) (accepting answer to a request for rehearing that aided the Commission s decision-making); Sw. Power Pool, Inc., 126 FERC 61,153, at P 18 (2009) (accepting answers that aided the Commission s decision-making). 14 Rehearing Request at 7; citing October 6 Order P Motion to Intervene, Comments and Protest of Public Service Electric and Gas Company, Docket No. ER (Feb. 21, 2017) ( PSE&G Protest ). 3

4 The assertion that the Commission failed to meet its statutory duty or lacked substantial evidence to reach its conclusion that the OBF does not require an allocation of costs to New York is incorrect. The Commission supported its findings as follows:... The operating procedures that were put in place for the wheeling arrangement stemmed from the firm transmission service that was at the heart of the 2008 TSAs. We find that the proposed OBF is an operational protocol that was developed by the RTOs due to reliability needs identified in Northern New Jersey. The proposed OBF will not entitle ConEd to firm transmission service or rollover rights for any set period of time and therefore, NYISO and PJM cannot treat these flows as firm transmission for the purposes of planning and capacity market obligations. 16 PSE&G itself recognizes that the OBF does not appear to meet the definition of firm point-to-point transmission service, transmission service or similar terms under the RTO s tariff. 17 It is important to note that the RTOs did not decide the cost allocation issue, but rather the issue was decided in the 2009 Settlement Agreement as the Commission the recognized: (T)he RTOs developed the 400 MW OBF as an operating solution to reliability issues in Northern New Jersey identified in studies conducted to evaluate system conditions upon termination of the Con Edison Wheel. (T)he very 2009 Settlement Agreement to which PSE&G and NJBPU both are a party, by its own terms, relieves Con Edison of any further responsibility for the RTEP costs that [Con Edison] litigated, and lost, at FERC once the 1000 MW Wheel ends. The proposed JOA protocols filed herein do not reduce, or otherwise affect, Con Edison s RTEP obligations related to the 1000 MW Wheel. 18 The OBF is not firm transmission service under the PJM Tariff and this is further illustrated by the temporary nature of the OBF. For example, PJM requested and the NYISO 16 October 6 Order PP Rehearing Request at Answer to Protests at

5 agreed to reduce the initial 400 MW OBF to zero by October 31, Therefore, the OBF does not provide any of the attributes of firm transmission service. B. The Commission s Findings That the OBF is Just and Reasonable is Supported by the Substantial Evidence. PJM submits that the RTOs studies supported the need for the OBF. PJM studied peak conditions using historic hours from 2016 summer operations, which is prudent. Study cases and results were shared with NYISO for review. The goal of studying the various scenarios was to preserve the transfer limit that could occur to ensure that the new protocol was achievable without impacting reliability and to also ensure that emergency transfers can be shared by the RTOs during Capacity deficiency events and Transmission Emergencies. Emergency transfers are allowed between the RTOs under the JOA and are meant to help the area in need of mitigating an emergency condition that could lead to load shed without such emergency assistance. The use of the 2500 MW net interchange value was appropriate and represented the historic transfer limit that could occur. On rehearing, PSE&G does not dispute that the RTOs used conditions during the summer 2016 peak as the basis for analysis or that historic transfers greater than 2500 MWs could occur at some times. 20 However, PSE&G asserts that that the data provided by the RTOs revealed that the transfer level during the 2016 summer period has never exceeded 1600 MWs and averaged around 600 MWs. 21 This overlooks the point that even assuming a 1500 MW net interchange from PJM to NYISO (which is less than the See, September 8 OBF Notification Letter. 20 Rehearing Request at Id. 5

6 MW that PSE&G alleges occurred in 2016), 22 the studies still revealed reliability issues on the PSE&G north transmission system, which justify the need for the 400 MW OBF. 23 Thus, the Commission s finding that the RTOs have properly demonstrated the need for the proposed OBF through the use of actual historic flows and a reasonable net interchange 24 is supported by the evidence. The Commission correctly relied on the information on the record provided by the RTOs in Answer to Protest in this proceeding. 25 The RTOs stated as follows: Transmission Loading Relief ( TLR ) procedures are considered emergency procedures for PJM. 26 NYISO uses TLR procedures when necessary to maintain reliability. It is not prudent to plan to operate the system using TLR as a normal operating procedure to address long-term reliability or seasonal impacts, or to rely on TLR procedures to remove economic transactions when other, more market-friendly, operating procedures are available (such as utilizing an OBF). 27 TLR should be used to address conditions that are not anticipated. TLR procedures simply are not intended to be used in place of operating procedures, as PSE&G seems to suggest PSE&G Protest at Answer to Protests at 5; citing, Joint Filing, Attachment VII at October 6 Order P See, Answer to Protests at See Systems Operations Division, PJM Manual 13: Emergency Operations, PJM Interconnection, L.L.C., 99 (Feb. 23, 2017), 27 See Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs., Regs. Preambles 31,089, at 31,167 (1999) ( TLR and congestion management are both used to unload an overloaded transmission interface, and these two practices must work together. We consider congestion management and TLR are best used as sequential steps to unload a line, with congestion management used first to unload a line in a market-oriented manner, and TLR used to unload a line in a fair manner when either congestion management is unavailable or an emergency condition requires immediate action. ), order on reh g, Order No A, FERC Stats. & Regs., Regs. Preambles 31,092 (2000), petitions for review dismissed sub nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001). 28 Answer to Protests at 6. 6

7 In summary, the RTOs performed the correct studies and acted within their authority with respect to operations and the reliability needs of the systems and provided the Commission with the appropriate support for its findings. IV. CONCLUSION For the reasons stated above, PJM respectfully requests the Commission grant PJM s motion for leave to file this answer, and deny the Rehearing Request. Respectfully submitted, Steven R. Pincus Associate General Counsel PJM Interconnection, L.L.C. Craig Glazer Vice President, Federal Government Policy PJM Interconnection, L.L.C G Street, N.W., Suite Monroe Blvd. Washington, D.C Audubon, PA (202) (610) craig.glazer@pjm.com steven.pincus@pjm.com 7