FERC accepts NYISO tariff changes re wind, effective June 18, 2008

The Federal Energy Regulatory Commission (FERC) approved on June 17 tariff changes proposed by the New York Independent System Operator (NYISO) last April, finding that the changes to the tariff:

will benefit, and encourage, wind and other intermittent generators by extending special payment provisions and penalty exemptions to an increased amount of such generation. Further, the proposal to implement a centralized wind forecasting mechanism will allow NYISO to more accurately predict the availability of wind resources which should reduce overall system operating costs.

The changes to NYISO’s tariff (among other things):

  1. increase the existing 1,000 MW limit to 3,300 MW of intermittent renewable resources eligible for: (i) an exemption from persistent under-generation charges; and (ii) payment for all Energy delivered to the wholesale Locational Based Marginal Price (LBMP) market;
  2. increase the capacity of intermittent renewable resources that are exempt from persistent undergeneration charges from 1,000 MW to 3,300 MW;
  3. implement an enforced centralized wind forecasting mechanism;
  4. require wind resources (with the exception of units in commercial operation as of January 1, 2002 a nameplate capacity of 12 MW or less) to collect from wind farms data regarding wind speed and wind direction and to transmit such data to NYISO or its agent electronically at least once every 15 minutes (24 hours a day, 7 days a week);
  5. add a new Rate Schedule 7 to the Services Tariff that will set forth the charges NYISO will assess on a monthly basis and that these charges will be applied to NYISO’s costs for providing the wind forecasting service. Wind resource will be assessed a fee to offset the costs of the proposed wind forecasting service. The charge will include two components: a fixed monthly fee of $500 and a separate monthly fee of $7.50 per MW of nameplate capacity;
  6. impose daily financial sanctions on wind resources that fail to provide the required meteorological data and that do not cure that failure after a reasonable notice period. The daily sanctions will be set at a level equal to the greater of $500 or $20/MW of nameplate capacity per day until the failure to provide data is cured;
  7. factor wind farm-specific energy output forecasts into “pass two” (Forecast Load Commitment) and “pass three” (Local Reliability Rules Commitment) of the Security Constrained Unit Commitment (SCUC) process (which performs a series of passes, or computer runs, that sequentially evaluate the generation resources bid against demand bids, NYISO load forecasts, ancillary services needs and reliability requirements and selects the optimal least-cost, security-constrained dispatch of generation to meet load). These passes evaluate the need to commit additional resources to meet NYISO’s forecast of next-day load and to meet specific New York City reliability needs. By considering wind forecasts in passes two and three of the SCUC process, NYISO states that it will minimize over-committing other resources when next-day wind energy would solve any capacity shortage identified in these passes without additional commitments to sell energy on behalf of any wind resource; and
  8. revise section 5.12.1 of the Services Tariff so that it no longer specifically exempts Intermittent Power Resources from a requirement to bid in the Day-Ahead and Real-Time Markets all capacity available for supplying 10-Minute Non-Synchronized Reserves since Intermittent Power Resources have no predictable ability to come on-line within ten minutes at a certain energy level. However, it states that wind resources may voluntarily offer their capacity in the Day-Ahead Market, which, if scheduled, would establish a commitment that such resources provide energy in real-time.

The tariff changes are effective June 18, 2008. FERC is required to file an informational report by June 17, 2010 “regarding the costs of this service, the revenues it has collected under its proposed Rate Schedule 7, and its disposition of these revenues”. Mark your calendars.

FERC’s order in Docket No. ER08-850 may be found here.


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