The Federal Energy Regulatory Commission on Tuesday accepted NYISO’s new method for calculating payments for voltage support services (VSS), which will keep the overall expenditure constant in the near term (ER15-1042).

FERC said in April that the ISO needed to more fully explain its proposed methodology. The existing rate was set in 2002. (See FERC Requests More Info on NYISO Voltage Compensation Change.)

NYISO derived the $2,592/MVAR compensation rate by dividing the total VSS compensation paid to qualified VSS suppliers in 2012 by the total lagging and leading reactive power capability of all qualified VSS suppliers in 2012.

“This explanation demonstrates that the proposed amendments maintain the approximate total dollar value of the current VSS program in the near term,” FERC wrote.

NYISO used 2012 as the base year for its calculations when it began developing the proposal. From 2014 onward, the payments will be tied to the consumer price index.

“We find that by applying a VSS compensation rate to both leading and lagging reactive power capability, NYISO’s proposal reasonably addresses the failure of the existing rate to address a significant shift in reliability needs, from primarily lagging reactive power support to primarily leading power support,” FERC also wrote.

The revisions are effective Jan. 1.

— William Opalka