|
Merchant Power Issues
Limits on Merchant Power Plant Shutdown
"As the electric industry proceeds with the transition to more competitive electric markets, it has become apparent that the unanticipated retirement of lightly regulated generating facilities, owned by entities independent of traditionally-regulated utilities, could have implications for the reliability of electric service. **** The movement to competitive energy markets, however, raises the issue of maintaining adequate generation capacity, which the integrated utilities formerly supplied, needed to ensure reliability. If independent owners of lightly regulated generation units can shutdown their units without triggering any sort of regulatory oversight, it is possible that the level of generation supply might decline to a point that would threaten the reliability of electric service. Since no mechanisms for that type of regulatory oversight are currently in place, there is a need to explore appropriate policies and procedures for obtaining notice of generation retirements in order to prevent or mitigate any adverse impacts a retirement may have on system reliability. Accordingly, a proceeding is commenced to revisit the lightened regulation orders governing independent generators, and to examine whether to establish generator retirement policies and procedures."
PSC Order Establishing Notice Requirement for Intention to Retire Generating Plants - 12-14-05
Notice Soliciting Comments on Power Plant Retirements - 07-27-2005
FERC Reply In Support of Motion to Hold Proceedings in Abeyance and for Voluntary Remand - 08-12-2005
PULP Comments - 09-09-2005 -
The Commission has ample jurisdiction to address issues stemming from retirement of power plants by electric companies and there is a wide range of potential remedies. * * * * The Commission should deter unanticipated power plant retirements by requiring electric companies to file long range plans addressing their future operations to prevent unanticipated shutdowns, and to give ample notice of all anticipated shut downs."
Mirant Comments - 9-09-2005
"As a threshold matter, Mirant Companies does not believe the Commission has authority to constrain a wholesale supplier's decision to exit the wholesale market. **** [T]he Commission should first allow the stakeholder process at the NYISO to develop appropriate generator retirement policies and procedures within the next six months. **** Only the NYISO, subject to the approval of FERC, can modify the wholesale market rules to provide adequate compensation to keep a generator pperating that is needed to maintain reliability. **** The Commission should refrain from attempting to take any action to develop generator retirement policies and procedures
New York Utilities Comments- 9-09-2005
“[T]he unanticipated retirement of lightly regulated generating facilities could have critical implications for the reliability of electric service in New York State. **** [T]he Commission should request the NYISO to use its stakeholder process to develop a generator retirement notification procedure, incorporate it into its CRPP, and ensure that the CRPP also analyzes and addresses the potential reliability implications of unanticipated generator retirements. **** The Commission should avoid the premature consideration of proposals to provide non-market based compensation to generators in order to have them run for reliability reasons. The implementation of such proposals could undermine the competitive wholesale market structure of the NYISO, and could provide an incentive to generators to claim a need to retire in order to gain access to non-market based revenue streams. **** FERC has been charged with approving reliability rules and measures applicable to various entities, including generation facilities, which could include requiring generators to provide notice of retirements. **** These FERC responsibilities create a potential for jurisdictional conflict.”
AES Comments - 9-09-2005
"[T]here currently are no notice requirements in New York delineating the process to be used to retire a generating facility.... **** If a generating facility is found to be needed for reliability reasons, there must be a set number of days to reach agreement on payment to allow for further operations. If agreement cannot be reached, the generating facility must have the unilateral right to cease operations. **** AES does not believe that the Commission possesses jurisdiction over a wholesale generator's decision to retire its facility. **** [T]he NYISO stands in the best position to most effectively address these issues.... **** [T]he NYISO already has taken several steps in this direction by developing a Comprehensive Reliability Planning Process (CRPP) to identify and evaluate New York's short-term and long-term reliability needs. **** If reliability-based needs are identified ... that are not projected to be addressed by market-based solutions, the CRPP calls for the development of a regulated transmission, generation or demand response 'back-stop' solution to resolve the reliability need. **** [S]everal environmental initiatives currently are under consideration that could have a 'significant future impact on resource availability of existing generating units, and thus, the reliability of the interconnected system'. **** Problematically, the units likely to be most affected by such initiatives also are the very units that the NYISO identifies as critical to maintain fuel diversity, and, concomitantly, system reliability. **** [T]he Commission should direct the Transmission Owners to conduct reliability analyses of their local distribution systems annually that look out over a ten-year horizon. **** If reliability needs are identified on its local system associated with the projected retirement of a needed generating facility, the Commission should direct the affected Transmission Owner to either enter into temporary or longer term contracts with the generating unit at issue or make the necessary transmission upgrades, where appropriate, to ensure the continued reliability of the system." **** [S]uch contracts could be similar to the power purchase and other agreements that were accepted by the Commission as part of the divestiture transactions."
NRG Energy Comments - 9-08-2005
"Existing [NYISO] market rules can be readily refined to adequately address generator retirement procedures and support market-based solutions to address identified reliability concerns through comprehensive system planning and notice procedures. Such rules would also reflect the fact that ultimately Transmission Owners, subject to the PSC's oversight, have the responsibility for ensuring reliable service to retail customers. NRG also supports the initial comments being filed by IPPNY in this proceeding."
IBEW Comments - 09-08-2005
"The Local Unions believe that notice should be required for any proposed retirements of lightly regulated independently owned generation suppliers. **** It should also be remembered that for a generating facility to be designated as an EWG, it must be shown to (1) benefit customers, (2) be in the public interest and (3) not violate state law. **** [T]he local Unions recommend that the Commission establish a collaborative to establish policies and procedures regarding generation unit retirements and/or abandonments that would ensure grid reliability, public safety, and economic stability throughout the State of New York."
NYSEG & RG&E Comments - 09-08-2005
"Although generating units formerly owned by integrated utilities have been sold to independent generators as part of the Commission's restructuring program, those units continue to be critical public resources. The state has an obligation to monitor the status of those units -- and other generation units in the state -- to ensure the reliability of service in the state. The PSC appears to have adequate authority under the Public Service law and under orders granting lightened regulation to certain non-utility generators to require the filing of information necessary for the PSC to monitor whether adequate generation will be available in the state.
IPPNY Comments - 09-08-2005
"As a threshold matter, IPPNY does not believe the Commission has authority to constrain a wholesale supplier's decision to exit the wholesale market or to require a wholesale supplier to provide any service. **** T&D utilities ultimately should be held responsible for ensuring that adequate generation resources are available to meet local reliability needs."
ISO Comments - 09-09-2005
"The abrupt shut-down of generators needed to maintain system reliability should be avoided at all costs. Efforts to maintain system reliability due to the loss of a generator should not be undertaken in a crisis. **** The NYISO, the PSC and other involved agencies would require a bare minimum period of six months to conduct an analysis to identify a short-term reliability problem and to respond to that problem with a suitable supply or demand-side resource. Transmission-based solutions would likely take longer than six months. Therefore, any PSC policy on generation retirements should require generation owners to provide not less than six months notice prior to permanently removing an electric generation unit from service. Any PSC policy on generation retirements should further state that if market-based solutions prove to be insufficient to ensure adequate resources on the non-bulk electric system the TOs are responsible for identifying regulatory back-stop solutions to resolve reliability problems that would be presented by the retirement of
generators."
Comments of Keyspan-Ravenswood - 09-09-2005
"KeySpan does not believe the Commission has jurisdiction to require a wholesale supplier to provide any services."
Comments of Multiple Intervenors - 09-09-2005
“The Commission should order ... that generators proposing to shut-down or mothball facilities give one year notice.... If it is determined that the generator’s proposal adversely affects reliability and power quality, the generator and the transmission owner should enter into discussions to craft a solution. The proposed solution should be reviewed by the Commission to determine whether it is just and reasonable.”
Comments of the City of New York - 09-26-2005 - "The City urges that the Commission and its Staff make use of the independent statutory authority of the NYPSC in this matter, and provide generators with a set of obligations that will complement NYISO procedures, but that will also have independent force. To rely on the NYISO, as some have suggested, is to potentially expose critical system reliability concerns to extensive semantic debates over the precise meaning of current or future NYISO tariffs and manuals, and perhaps to the uncertainties of the stakeholder process.”
Articles & Reports
Court OKs Lovett Closing Plan - The Journal News - 10-19-2006
Officials bright on summer power - Inside Bay Area - 05-16-2006
Deadline Looms for Deciding Fate of Lovett Plants in Stony Point - The Journal News - 02-13-2006
|
