ConEd Directed to Develop RFPs for New Resources Under Indian Point Contingency Plan

The previously reported Reliability Contingency Plan ordered by the New York PSC to be developed by Consolidated Edison and other parties shall include the form of Request for Proposals (RFPs) that would be issued to procure needed resources to address system reliability needs by the summer of 2016 in light of the potential closure of the Indian Point nuclear plant upon the expiration of its existing licenses by the end of 2015, a written order confirms.

"The RFP process will ensure that any process to procure replacement capacity or comparable facilities will be competitive, and, together with [a proposed] halting mechanism, will assist the Commission in controlling ratepayer cost exposure," the PSC said in a written order issued Friday.

The contingency plan should identify the potential projects that could be used to address reliability needs in the near-term or long-term, assuming the Indian Point Energy Center is retired at the end of 2015, the PSC said.

"To the extent available, suggestions should be included in the contingency plan where opportunities may exist to improve current regulatory processes to accelerate the development schedule, recognizing that there is a need to meet an aggressive timeline in the event Indian Point is retired," the PSC said [emphasis added].

The PSC did not address cost recovery or the disposition of energy and capacity from any new resources developed through the RFP in its instant order.

Specifically, the contingency plan shall include, among other things, an assessment of the procurement approaches that could be used to identify, evaluate, and competitively select the resources to meet the identified reliability needs, including potential RFP bidding structures, such as: (1) a fixed price Power Purchase Agreement; (2) a contract for differences; and, (3) Renewable Portfolio Standard-like contractual support.

Based on such assessment, the plan shall include a detailed description, including timing, of the procurement approach, RFP, and competitive selection process that would be undertaken to plan for a potential or known retirement of Indian Point Units 2 and 3. The plan shall also include a description of the major terms of the development agreement that would be offered to project(s) selected through the RFP.

The PSC directed that the plan include halting mechanisms that would be incorporated in any agreements to develop projects, in the event it becomes apparent that the Indian Point Energy Center remains operational and replacement capacity is not required, including how the project developer may be compensated for the development work completed prior to the halting.

Con Edison is to collaborate with NYPA, DPS Staff, and any other appropriate entities, and file the contingency plan by February 1, 2013.

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