FERC Subjects New York ESCOs to New Local Capacity Requirements

FERC has adopted without modification the New York ISO's proposal to create a new local capacity zone in the ICAP market, consisting of Load Zones G, H, I, and J (the G-J Locality), applicable to load-serving entities including ESCOs

Although Zone J is a part of the new capacity zone, Zone J will also continue to be a separate capacity zone with its own Locational Capacity Requirement and its own ICAP Demand Curve. Therefore, Zones G, H, and I, by themselves, will not have a separate Locational Capacity Requirement or ICAP Demand Curve. Rather, Zones G, H, I, and J together will have an aggregate Locational Capacity Requirement and ICAP Demand Curve.

This means that capacity located anywhere within the G-J new capacity zone could be used to meet the Locational Capacity Requirement of the new capacity zone.

NYISO did not propose to include Zone K in the new capacity zone, citing insufficient transmission capability.

NYISO did acknowledge that approximately 300 MW of generation capacity added to Zone K would be "fungible" with capacity in Zones G, H, and I – that is, 300 MW added to Zone K could displace an equal amount of capacity in Zones G, H, and I while maintaining the Loss of Load Expectation.

Various load interests argued that additional amounts of capacity added to Zone K could provide lesser, but significant, reliability benefits to Zones G, H, and I, and that Zone K should therefore be included in the new capacity zone.

FERC found NYISO's proposal to exclude Zone K from the new capacity zone to be reasonable at this time.

However, FERC noted that commenters have raised the possibility of modeling Load Zone K as an export-constrained zone.

"In light of the comments, the Commission would like to explore in a separate proceeding whether and how Zone K should be modeled as an export-constrained zone for future Demand Curve reset proceedings. Due to the complex nature of this issue, the Commission believes it should be explored in a Staff-led technical conference. Therefore, we direct Commission staff to conduct a technical conference in a separate docket to discuss with interested parties whether or not to model Load Zone K as an export-constrained zone for a future Demand Curve reset proceeding. The details of such conference will follow in a subsequent notice," FERC said.

FERC dismissed load protests seeking a phase-in of the new capacity zone.

Docket ER13-1380