By William Opalka

New York regulators say the Federal Energy Regulatory Commission’s recent order on reliability-must-run agreements “interferes” with state authority as they try to address generation shortages in the state (EL15-37).

The New York Public Service Commission last week asked for a rehearing of FERC’s Feb. 19 order, which said the state must adopt uniform rules to prevent the need for protracted proceedings to ensure generators received compensation for continuing to operate. FERC said the lack of uniform rules created uncertainty that could compromise system reliability. (See FERC Orders NYISO to Standardize RMR Terms in Tariff.)

“The commission must reconsider the RMR order because it ignores the fact that the NYPSC has already exercised its authority to ensure the availability of generation facilities needed for reliability, and interferes with the NYPSC’s ongoing exercise of this authority in approving reliability support services agreements,” the PSC wrote.

The PSC has relied on RSSAs to delay the retirements of generating facilities needed for reliability, such as the Dunkirk plant outside Buffalo and the Cayuga plant in Lansing, near Ithaca.

The PSC said FERC “failed to provide evidence that the NYPSC-approved RSSAs were inadequate to the task of addressing the reliability concerns cited in the RMR order.”

The PSC also objected to a FERC proposal to require what it termed an excessive full cost-of-service rate. “Full COS rates are neither required, nor just and reasonable, where the provider of a public service intends to abandon that service,” the PSC wrote. “Indeed, it has long been a well-accepted regulatory principle that a public service provider may not abandon service and must continue service even at less-than-COS rates until the abandonment is authorized.”

FERC ordered NYISO to create a process for determining which generation resources seeking to deactivate are needed for reliability; how they should be compensated, including accelerated cost recovery for generators that require upgrades; and how RMR costs should be allocated.