FERC Reverses Prior Order, Allows NYISO to Prioritize Entry of Zero Emission Resources in New York’s Capacity Market
n February 17, 2022, FERC set aside its September 2020 order rejecting the New York Independent System Operator Corporations (“NYISO’s”) tariff revisions to the “Part A Test,” a component of NYISO’s buyer-side mitigation (“BSM”) rules. The now-approved changes on rehearing permit NYISO to prioritize entry of renewable resources, battery storage, and other zero emission resources (“Public Policy Resources”) in New York’s Installed Capacity (“ICAP”) Market, rather than prioritizing new resources purely on a least-cost basis. FERC also ordered NYISO to submit a compliance filing within 30 days proposing a new effective date for its tariff revisions. Commissioner James Danly issued a separate dissenting statement, arguing that the reversal was a “cynical attempt” to preference renewable resources. Commissioner Mark Christie issued a separate concurring statement, agreeing with the majority that the result was just and reasonable in NYISO after concluding that the costs of the change would be confined to New York.
NYISO originally submitted proposed revisions to its BSM rules, including to the Part A Test, in April 2020 (see September 16, 2020 edition of the WER for more background on the Part A Test and NYISO’s April 2020 filing). As relevant here, NYISO’s April 2020 filing proposed to change the Part A Test by evaluating Public Policy Resources in ascending order of Net Cost of New Entry (“CONE”) before evaluating any non-Public Policy Resources in ascending order of Net CONE. NYISO explained that its proposal was designed to reflect the fact that the development and entry of Public Policy Resources is reasonably certain, even if these resources do not have the lowest Net CONE, as a result of New York’s public policy initiatives, including the Climate Leadership and Community Protection Act (“CLCPA”). The CLCPA requires that 70 percent of energy consumed in New York be produced by renewable resources by 2030 and that all energy consumed in the state be completely emissions free by 2040.
