Docket No. ER21-502-005
I dissent to the majority’s decision to change course from its now well-documented finding that NYISO must continue to use the previously approved 20-year amortization period for the 2021-2025 Demand Curve Reset (DCR) cycle. Both the New York State Public Service Commission (NYPSC) and the independent Market Monitoring Unit for NYISO (MMU) support the 20-year amortization.[1] I see no basis for us to reverse our earlier majority votes that were consistent with the positions of the NYPSC and MMU and well supported in the record.
As today’s order sets forth, this Commission has now issued two substantive orders[2] finding that NYISO’s 17-year amortization period should be rejected.[3] I continue to support those orders. Just a little over five months ago, a majority of the Commission clearly stated a 17-year amortization period was unjust and unreasonable:
[W]e continue to find that there is insufficient evidence to conclude that NYISO’s proposal to implement a 17-year amortization period when calculating the net annual cost of the hypothetical peaking plant used to define the ICAP Demand Curves in the 2021-2025 DCR is just and reasonable. . . . Rather than departing from Commission precedent to base our findings in this case on NYISO’s speculation, we rely on record evidence demonstrating that a 17-year amortization period is not just and reasonable.[4]
The NYPSC itself—the entity with the ability to establish the CLCPA program at issue here and modify obligations and targets—supports retention of the 20-year amortization period and rejection of the 17-year amortization period. The most recent filing in which the NYPSC participated decisively stated:
The NYISO’s decision to reduce the amortization period to 17-years makes an assumption about the future topology of the electric system that is not supported. While the [the Climate Leadership and Community Protection Act (the Act or CLCPA)] was enacted in July of 2019, the State has a detailed schedule in place for the phased implementation of its ambitious objectives. The State recognized that it would require substantial collaboration with stakeholders and experts to achieve the Act’s mandates. Consistent with a phased approach, the Act directed the NYPSC to undertake a review, by July 1, 2024 and every two years thereafter, related to the 70 by 30 Target and the 2040 Target to determine, among other matters, “factors that will or are likely to frustrate progress toward the targets.” In other words, the State still has substantial progress to make and its pathway remains largely undefined. As such, [FERC] is not speculating about future changes to the Act while the Act’s mandates are still being developed. While [FERC] precedent required the NYISO to “take into account currently effective laws and regulations and avoid speculating about laws and regulations in the future” when creating its DCR recommendations, continuing a 20-year amortization period follows the plain reading of the Act which explicitly provides for these implementation processes to be developed over many years and does not require all generation currently running on fossil-fuels or the hypothetical proxy unit to retire by 2040.[5]
Thus, the NYPSC, which, by the majority’s own admission, the CLCPA authorizes “to establish the program to meet the 2040 zero-emission target, and to take into account ‘safe and adequate electric service in the state under reasonably foreseeable circumstances’ in establishing such program. . . . [and] to modify the target and/or obligations to ensure such safe and adequate electricity service, and to suspend obligations temporarily for safety and reliability, contractual, or affordability reasons,”[6] unequivocally states that selecting the 20-year amortization period is not the result of speculation (as the majority now insists) but is rather the result of the “plain reading” of the CLCPA and the direct result of applying current New York laws and regulations.
Finally, I note that I cannot agree with the majority’s conclusion that “the rates that result from the 17-year amortization period are just and reasonable. We note that, as IPPNY points out, the rates produced using the 17-year amortization period are even lower in some zones than they were using a 20-year amortization period during the prior DCR.”[7] The majority draws this conclusion while failing to acknowledge that in the Remand Order, the Commission recognized that Consumer Stakeholders, including the NYPSC, “contend that implementing a 17-year amortization period would result in unnecessarily high net CONE estimates for the proxy peaking unit. Specifically, Consumer Stakeholders estimate that a 17-year amortization period would cause an increase in over $100 million in unhedged capacity costs for customers in New York State.”[8] The fact remains that this will lead to higher costs borne by consumers.
As I stated up front: I continue to find the proposal for a 17-year amortization schedule to be unjust and unreasonable and would have retained the 20-year amortization schedule.
For these reasons, I respectfully dissent
[1] The MMU notes in its comments that it “is responsible for monitoring the electricity markets. As the MMU, we are expected to provide comments on the ICAP [DCR] study and the NYISO’s recommendations for the proposed curves.” MMU December 21, 2020 Comments at 1 (footnote omitted). Therefore, the independent entity whose job it is to comment on NYISO’s recommendations with regard to the proposed demand curves and the amortization period at issue in this docket asserted that the Commission should retain the 20-year amortization period and reject the 17-year amortization period. Id. at 14 and passim.
[2] N.Y. Indep. Sys. Operator, Inc.,175 FERC ¶ 61,012 (2021); N.Y. Indep. Sys. Operator, Inc., 181 FERC ¶ 61,227 (2022) (Remand Order).
[3] N.Y. Indep. Sys. Operator, Inc., 183 FERC ¶ 61,130 at PP 9, 15-19 (2023) (Order).
[4] Remand Order at PP 25, 27 (footnotes omitted) (emphasis added).
[5] Consumer Stakeholders October 20, 2022 Answer at 7-8 (footnotes omitted) (emphasis added). The NYPSC is part of the Consumer Stakeholders group. The Consumer Stakeholders’ Answer was executed on behalf of the NYPSC by its General Counsel.
[6] Order at P 32 (footnotes omitted).
[7] Id. P 37 (footnote omitted).
[8] Remand Order at PP 23 (citing Consumer Stakeholders Answer at 8); see id. at P 33.