On August 20, 2020 in Docket No. EL20-65, the NYISO requested that FERC confirm that the NY Transmission Owners (NYTOs) have a right of first refusal to build, own, and recover the costs of upgrades to their existing transmission facilities and that this right encompasses upgrades proposed as part of another Developer’s transmission project that is selected by the NYISO to be included in its regional plan. The NYISO also requested that FERC confirm that if a NYTO exercises its right to build, own, and recover the costs of an upgrade that is included in another Developer’s proposed transmission solution that was selected by the NYISO, the NYTO should be treated under existing OATT provisions as the Developer for the upgrade portion of the project, except that the voluntary cost containment provisions would not apply. Finally, the NYISO requested that FERC clarify two specific points regarding the definition of “upgrade.” The OATT includes the Order No. 1000-A definition, which distinguishes an upgrade that may be subject to a right of first refusal from an entirely new transmission facility that must be subject to competition. However, the distinction between an upgrade and an entirely new transmission facility is not always clear and the ambiguity is expected to result in disputes given the likelihood that transmission projects addressing needs in New York will involve modifications to existing transmission facilities within existing rights of way. The NYISO requested that FERC clarify two specific points – would a new transmission facility that requires the retirement and decommissioning of a NYTOs existing transmission facilities and that connects to the transmission system in a different configuration constitute an upgrade and, if the facility would be treated as a new transmission facility, would the retirement or decommissioning of the existing transmission facilities require the agreement of the NYTO that owns the facilities or a state regulatory or court ruling authorizing the retirement or decommissioning?
Dr. Paul Dumais
CEO of Dumais Consulting with expertise in FERC regulatory matters, including transmission formula rates.