By Michael Kuser

FERC last week denied NRG Energy’s request for rehearing of a January order concerning NYISO Tariff revisions intended to correct a pricing inefficiency in the ISO’s capacity market (ER17-446-003).

NYISO proposed the revisions last November to address situations in which a generator exports power out of an import-constrained locality, creating increased counter-flow on the transmission constraints between that locality and other zones in the New York Control Area (Rest of State).

The ISO proposed to use a locality exchange factor, reflected as a percentage, to calculate the amount of Rest of State generation that can be imported into the locality to replace a portion of the exported capacity. The ISO would multiply this factor — 47.8% for the G-J locality — by the amount of exported capacity to determine the additional capacity that can be procured from outside the locality as a result of the export.

NRG protested the Tariff changes, expressing concerns about NYISO’s “apparent” assumption that an exporting resource would indefinitely continue to provide capacity benefits to its locality through counter-flows produced by its exports. The company noted that, under the Tariff, any resource that ceases to participate in the capacity market — by continuously exporting for three years — loses its capacity resource interconnection service (CRIS) rights and therefore can no longer provide a capacity discount to the locality in which it resides.

In its January order, FERC rejected NRG’s protest, but the company’s request for rehearing alleged that the commission erred in approving NYISO’s filing without fully addressing its concerns on how a generator that loses its CRIS rights should be considered for purposes of the locality exchange factor methodology.

NRG also asked FERC to clarify that a resource cannot claim resource adequacy benefits once it loses its injection rights in New York. In the alternative, the company sought clarification that a continuously exporting unit that loses its CRIS rights cannot be counted in the ISO’s installed reserve margin modeling.

Clarifying Order Language

FERC’s Oct. 25 order denied NRG’s rehearing request, but granted — in part — what NRG was seeking.

“The express relief [NRG] seeks is for the commission to clarify a statement in the Jan. 27 order rather than to change the commission’s determination,” the commission said.

FERC acknowledged that its Jan. 27 order “may cause confusion” in how it addresses the relationship between the locality exchange factor and CRIS rights. That order meant to convey that, under the existing NYISO Tariff, the locality exchange factor does not apply to the exported capacity of a generator that has failed to maintain its CRIS rights, the commission said. The factor should be applied only to locational export capacity, and by definition would not apply to exports from a resource that has lost its CRIS rights.

But the commission demurred on NRG’s alternative request for clarification.

“It is our understanding that a unit that exports and loses its CRIS rights after three years would not be counted in installed reserve margin modeling,” the commission said. “However, installed reserve margin modeling is performed by the New York State Reliability Council, not NYISO, and we find questions regarding the establishment of the installed reserve margin to be beyond the scope of this proceeding regarding NYISO’s proposed revisions to its [capacity] market design.”