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New York generators urge FERC to block certain capacity sales

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New York generators urge FERC to block certain capacity sales

Washington — New York generators say resources in the PJM Interconnection should not be allowed to sell installed capacity into the New York Independent System Operator across transmission lines owned by companies that got out of their obligation to pay for the contentious Bergen-Linden Corridor project.

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The impermissible export of installed capacity over these transmission lines into NYISO will suppress ICAP clearing prices by as much as $4.32/kW-month in NYISO Zone J, the Independent Power Producers of New York said Tuesday in a complaint to the US Federal Energy Regulatory Commission.

"Such price suppression could ... significantly contribute to the premature retirement of otherwise economic resources that are needed for reliability and resiliency in the NYISO and PJM and will likely stymie investor confidence," IPPNY said. BLC PROJECT

The complaint is linked to who has to pay for the $1.2 billion BLC transmission project. On July 19, FERC launched settlement talks to figure out who should pay for the project.

PJM originally spread the cost of the project among Consolidated Edison Company of New York, Linden VFT, Hudson Transmission Partners and Public Service Electric and Gas. But one by one, most of the parties got out of their obligation to pay for the project, leaving PSEG -- and subsequently New Jersey ratepayers -- to foot much more of the bill.

Linden VFT and HTP got out of paying for the project by converting their firm transmission withdrawal rights with non-firm TWRs. Because of this conversion, PJM can curtail deliveries over Linden VFT's and HTP's facilities if the energy is needed in PJM, IPPNY argued. Since delivery is not guaranteed, resources should not be allowed to send installed capacity from PJM into New York over Linden VFT's and HTP's transmission lines, the group said. Instead, these resources should be offered into PJM's capacity market, the complaint said.

But NYISO is still allowing the sale of ICAP over these facilities based on PJM's assurances that those deliveries will not be curtailed, the group argued. NYISO's decision is affecting clearing prices and hurting reliability in both PJM and NYISO, the complaint said.

"With respect to the harm to PJM markets, the impermissible sale of ICAP artificially reduces the level of ICAP that would otherwise be available to supply the PJM market, which may unjustly be causing higher ICAP prices for PJM loads," the complaint said. RELIABILITY WORRIES

And NYISO faces the risk that ICAP exported over the VFT facility will not be available if PJM curtails such exports, IPPNY said. "If PJM is experiencing system stress in New Jersey for reasons other than an unexpected forced outage affecting the PJM system alone, it is likely that the NYISO is experiencing similar stressed system conditions in New York City," the complaint said.

IPPNY urged FERC to prohibit resources in PJM from scheduling ICAP to NYISO's Zone J over transmission lines that do not have firm TWRs, the complaint said. "Each monthly ICAP auction that occurs without a commission order directing the NYISO to prohibit these transactions will further add to the harms that have been incurred by NYISO and PJM customers since the beginning of the year," the complaint said. -- Kate Winston, kate.winston@spglobal.com

-- Edited by Matt Eversman, newsdesk@spglobal.com