FERC Approves Change in Allocation of NYISO Costs

FERC has approved a change in the allocation of NYISO's budgeted annual operating costs and Commission-assessed regulatory fees among NYISO market participants, with the new allocation to be maintained for a period of at least five years.

Specifically, FERC approved changing the allocation such that the allocation is 72% to load and 28% to wholesale suppliers, effective January 1, 2012. Previously, the allocation had been 80% to load, and 20% to wholesale suppliers.

The change had been opposed by generators.

"[I]n recognition that cost allocation determinations involve expert opinion, which may vary among experts depending in some measure on which Market Participant they represent, we find that the tariff leaves the determination of NYISO Operating Cost allocation to an independent consultant with no stake in the outcome," FERC said. Noting that NYISO employed such an independent consultant in determining the 72/28 split, "we will not address alternate opinions or arguments respecting the details or relative merits of the particular analyses of the consultant here," FERC said.

FERC further denied protests to NYISO's modification, finding that NYISO followed the established stakeholder process to determine when to review and, if warranted by the review, to modify the allocation. The Commission also found that the requirements of the tariff have been satisfied.

FERC's order also establishes that for 2012 the rate applied to a market participant engaging in virtual transactions will be $0.0871 per cleared virtual transaction in the billing period, based on a projected annual revenue requirement in 2012 of $2.6 million. In addition, for 2012 the rate applied to a market participant purchasing TCCs will be $0.0372 for each TCC held during the billing period, based on a projected annual revenue requirement in 2012 of $4.9 million.