This is a settlement—an uncontested settlement as certified by the Settlement Judge. As today’s order recognizes: “The Commission’s approval of this Settlement does not constitute approval of, or precedent regarding, any principle or issue in these proceedings.”[1]
As noted by the Settlement Judge, the proposed use of the so-called “Modified Massachusetts Method” in the formula rate template and protocols reflected in the settlement may be inconsistent with Commission precedent.[2] The New York Power Authority (NYPA) recognizes that the use of this modified method is related to the transmission buildout necessary to implement New York’s state policies mandating renewable generation.[3] Consumers in New York will, of course, pay these costs, but they have recourse to the ballot box if they object.[4] Consumers in other states do not have such recourse, which is why these costs must be confined to New York, as they will be. This is just one more example of why the costs of public policy driven transmission projects must only be allocated to consumers in states that have consented to pay them.
For these reasons, I respectfully concur.
[1] Order at P 3.
[2] N.Y. Indep. Sys. Operator, Inc., 186 FERC ¶ 63,005, at PP 3, 25, 28-31 (2024) (certification of uncontested offer of settlement).
[3] NYPA, Dec. 8, 2023 Settlement Transmittal, Attach. A: Explanatory Statement at 7-8 (footnote omitted) (emphasis added) (“In response to New York State’s climate change initiatives, which require substantial construction of new transmission to accommodate large increases in renewable and other clean generation for the benefit of customers, NYPA reevaluated how it allocates A&G costs that are not directly assigned to transmission in order to ensure that costs are properly recovered on a cost-causation basis and that rates remain fair and reasonable. . . . Given the changes to NYPA’s cost structure, as explained above, NYPA found that a Modified Massachusetts Method using net plant, net revenue, and direct labor factors provided a more representative cost-causation based allocator than labor alone for NYPA’s indirect A&G costs. The move from a single labor allocation method to this three-factor allocation mechanism in the development of its transmission Formula Rate better reflects NYPA’s business and investment in New York’s climate initiative.”).
[4] See, e.g., N.Y. Power Auth., 185 FERC ¶ 61,102 (2023) (Christie, Comm’r, concurring at P 2 and n.3) (available at https://www.ferc.gov/news-events/news/commissioner-christies-concurrence-concerning-nypas-abandoned-plant-incentive-el23) (quoting N.Y. Indep. Sys. Operator, Inc., 179 FERC ¶ 61,102 (2022) (Christie, Comm’r, concurring at P 3) (available at https://www.ferc.gov/news-events/news/commissioner-christies-concurrence-nyiso-tariff-revisions-re-marginal-capacity) (quoting N.Y. Indep. Sys. Operator, Inc., 178 FERC ¶ 61,101 (2022) (Christie, Comm’r, concurring at PP 4-6) (available at https://www.ferc.gov/news-events/news/item-e-2-commissioner-mark-c-christie-concurrence-regarding-new-york-independent)).