Monday, February 18, 2019

FERC Clarifies New York TOs’ Cost Recovery

New York transmission owners will be eligible for full cost recovery when regulated backstop solution reliability projects are canceled, FERC said last week, clarifying a 2017 order (ER17-2327-001).

The TOs asked for clarification or rehearing of the commission’s Oct. 17, 2017, order approving revisions to NYISO Rate Schedule 10, which were intended to expand its applicability for all regulated projects resulting from the ISO’s reliability, economic or public policy-driven transmission planning processes.

NYISO FERC Cost Recovery


The TOs said they were concerned about the 2017 order’s reference to Order 679, which implemented incentives ordered by Congress under Section 219 of the Federal Power Act and allows a public utility receiving a reliability incentive to recover only up to 50% of prudently incurred costs in abandoned projects.

The commission’s July 25 order clarified that Order 679 did not affect the TOs’ previously established right to 100% recovery on a reliability project if the ISO cancels it as unnecessary or if the project cannot be completed because of the failure to obtain necessary permits.

The commission approved the 100% recovery as part of the ISO’s Reliability Agreement in 2004. “This occurred before the promulgation of FPA Section 219 and the commission’s regulations issued in Order No. 679 implementing Section 219,” the commission said. “New York transmission owners’ right to cost recovery was thus not approved as an incentive under Section 219, nor could it have been.”

The order directed the ISO to remove the abandoned plant recovery provisions to avoid any ambiguity in the Tariff.

— Michael Kuser