FERC on Wednesday reaffirmed its support for NYISO’s 17-year amortization period for demand curves in its installed capacity market, rejecting protests from the New York Public Service Commission and consumer stakeholders (ER21-502).

The commission’s latest order amends but essentially upholds its May ruling, when the commission reversed course and approved NYISO’s proposal to shorten the assumed operational lifetime of a hypothetical natural gas peaking plant from 20 to 17 years. The commission approved the ISO’s proposal after the D.C. Circuit Court of Appeals issued a remand, ordering the commission to reconsider its prior rejection. (See FERC Accepts NYISO’s 17-Year Amortization Period Proposal.)

NYISO’s proposal was in response to New York’s Climate Leadership and Community Protection Act, which mandates strict net-zero emission goals and makes it more challenging for fossil fuel power plants to operate in the state. NYISO had used a 30-year amortization period until 2014, when the commission approved the 20-year term to reflect the technological, market and environmental risks of investing in the proposed proxy plant.

The PSC and consumer stakeholders argued the 17-year amortization period could increase capacity costs by $400 million over the 22-month period from July 2023 through April 2025. They also said the commission’s ruling runs afoul of its previous rulings rejecting the same proposal.

FERC rejected these arguments, saying it provided a “full and rational explanation” for its reversal and emphasized the ISO’s compliance filing was in line with its directives.

The order included a dissent from Commissioner Mark C. Christie that reiterates his previous arguments, which contend FERC’s decision to accept NYISO’s 17-year proposal undermines the commission’s original rulings and ignores expert opinions from industry stakeholders.