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04

AVANGR I D

December 5, 2016
VIA ELECTRONIC FILING
Honorable Kathleen Burgess, Secretary
New York State Public Service Commission
Three Empire State Plaza, 19th Floor
Albany, New York 12223
Re:

Case 16-E-0558

Dear Secretary Burgess:


Please find enclosed for filing the Comments of Avangrid Networks, Inc. in the
above rulemaking.
Thank you for your attention to this matter.
Sincerely,

Thorn Dickinson
Vice President, Business Development
AVANGRID Networks, Inc.
70 Farm View Drive
New Gloucester, ME 04443
cc: Noelle Kinsch, Esq.

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BEFORE THE
NEW YORK STATE
PUBLIC SERVICE COMMISSION
___________________________________________________
In the Matter of the Rules and Regulations of the Public Service
Commission, Contained in 16 NYCRR Proposed Public Policy
Transmission Needs/Public Policy Requirements, As Defined
Under the NYISO Tariff
____________________________________________________

Case 16-E-0558

COMMENTS OF AVANGRID NETWORKS, INC.


AVANGRID Networks, Inc., (AVANGRID) hereby submits these comments in response
to the Notice of Proposed Rule Making issued on October 19, 2016 regarding the New York
State Public Service Commissions (PSC) identification of Public Policy Transmission
Needs/Public Policy Requirements, as defined under the NYISO tariff. AVANGRID agrees with
the other stakeholders submitting comments to the New York Independent System Operator
(NYISO) that New Yorks clean energy and carbon emission reduction Public Policy
Requirements cannot be met without the addition of substantial new renewable resources in
upstate New York, and that those generation resources will require additional transmission to
permit their interconnection to the New York transmission system and to transmit their output
to downstate load centers. AVANGRID has developed a proposal for a 1,000 MW underground
HVDC interconnection (in two alternative configurations) joining the renewable energy-rich
areas upstate with the load centers downstate. This proposal provides a feasible, cost effective
and environmentally sensitive solution to New Yorks need for this additional transmission
transfer capability. AVANGRID respectfully recommends that the PSC find that a Public Policy
Transmission Need exists for the transmission facilities necessary to support the needed
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additional renewable generation and provide the NYISO, in its order finding such a Public Policy

Transmission Need, flexible but clear decisional criteria for evaluating and selecting
transmission solutions which support the achievement of the States Public Policy
Requirements.
I.

IN ORDER TO ADDRESS THE PUBLIC POLICY REQUIREMENTS IDENTIFIED BY


STAKEHOLDERS, INCLUDING AVANGRID, THE PSC SHOULD DETERMINE THAT PUBLIC
POLICY TRANSMISSION NEEDS EXIST FOR ADDITIONAL TRANSMISSION TRANSFER
CAPABILTY BETWEEN UPSTATE AND DOWNSTATE NEW YORK.
A.

The Identified Public Policy Requirements

In responses to NYISOs August 1, 2016 Public Policy Requirements solicitation issued as


part of the NYISOs 2016-2017 Public Policy Planning Process, AVANGRID and other
stakeholders1 identified several Public Policy Requirements, all of which drive the need for the
development of additional transmission within New York State. These Public Policy
Requirements include the PSCs (1) Clean Energy Standard (CES)2 and (2) Reforming the
Energy Vision (REV) Order;3 (3) the New York Department of Environmental Conservations
(DEC) implementation of the Regional Greenhouse Gas Initiative (RGGI);4 (4) the federal

The other stakeholders submitting responses to the NYISO solicitation include the City of New York, the New York
Power Authority (NYPA), Niagara Mohawk Power Company d/b/a National Grid (National Grid), Central Hudson
Gas & Electric Corporation (Central Hudson), the New York Transmission Owners (NYTOs) (Central Hudson,
NYPA, National Grid, Orange and Rockland Utilities, Inc., New York State Electric & Gas Corporation and Rochester
Gas and Electric Corporation), New York Transco, H.Q. Energy Services (U.S.) Inc., NextEra Energy Transmission
New York, PSEG Long Island, PPL TransLink, LLC, Poseidon Transmission 1, LLC, Invenergy, LLC, and North America
Transmission.

Case 15-E-0302, Proceeding on Motion of the Commission to Implement a Large-Scale Renewable Program and a
Clean Energy Standard, Order Adopting a Clean Energy Standard (issued August 1, 2016) (the CES Order).

Case 14-M-0101, Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision, Order
Instituting Proceeding (issued April 25, 2014)(REV Order).

See 21 NYCRR Part 507 (2014) and 6 NYCRR Part 242 (2014).

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Clean Power Plan (CPP)5; and (5) New York Citys Roadmap to 80x50.6 For brevity sake,

AVANGRID does not repeat its response dated September 30, 2016 herein, but incorporates it
by reference.
Two fundamental, and related, public policy objectives underlie the Public Policy
Requirements identified by AVANGRID and the other stakeholders: (1) New York State requires
that significantly more of the States electricity will come from renewable resources in the
future; and (2) New York State is committed to continuing to significantly reduce carbon
emissions from its energy sector. The CES, in fact, mandates that 50% of electricity consumed
in New York by 2030 will be generated by renewable resources,7 and at the same time requires
all New York load-service entities (LSEs) to procure new renewable resources to serve their
retail customers, by the procurement of Renewable Energy Credits (RECs)8 and continued
participation and leadership in RGGI and support from the federal Clean Power Plan.9
B.

The Need for Significant New Renewable Resources in Upstate New York

To achieve these Public Policy Requirements, it is clear, as noted by all of the responding
stakeholders, that New York State will need a significant increase in its renewable energy
resources in coming years. The New York State Department of Public Service Staff (DPS Staff)
has found that slightly more than 33,700 GWh of incremental renewable generation must be

40 CFR Part 60, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating
Units; Final Rule, available at: https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22842.pdf.

See One NYC: 2016 Progress Report, available at:


http://www1.nyc.gov/html/onenyc/downloads/pdf/publications/OneNYC-2016-Progress-Report.pdf.
7

CES Order at 12.

CES Order at 14.

CES Order at 13.

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added to the State's fuel mix in order to achieve the CES target of 50% renewable by 2030.10

NYISO likewise estimates that in order to meet the CES target, New York State needs: 1)
approximately 25,000 MW of new solar capacity, to meet the target solely with solar resources;
2) approximately 15,000 MW of wind capacity, to meet the target solely with wind resources;
or 3) approximately 4,000 MW of hydroelectric capacity, to meet the target solely with high
availability hydroelectric resources.11
It is also clear that much of this new, renewable generation will necessarily come from
upstate New York, thereby placing increasing strains on the transmission paths running
between upstate and the load centers in downstate New York. The draft New York State
Resource Planning Analysis prepared by the DPS Staff, in fact, assumes that approximately
12,000 MW of renewable generation (the vast majority of which will be utility scale solar and
wind) will be developed in NYISO Zones A through F by 2030.12 The current NYISO
interconnection queue supports this assumption, as the queue includes over 4,450 MW of new
wind, solar and hydro generation facilities in development in NYISO Zones A through E for
service by 2020.13 This is not surprising given the significant wind pockets and land available for
utility scale solar development in northern and western upstate New York.
C.

The Need for Additional Transmission between Upstate and Downstate

10

Staff White Paper on Clean Energy Standard, Department of Public Service, Case 15-E-0302, Jan. 25, 2016 (CES
White Paper) at 7.

11

Comments of the New York Independent System Operator, Inc., Case 15-E-0302, Apr. 22, 2016, at 4-5.

12

See New York State Resource Planning Analysis, Draft Presentation, Oct. 25, 2016, at Slide 17.

13

See NYISO Interconnection Queue, available at


http://www.nyiso.com/public/markets_operations/services/planning/planning_resources/index.jsp.

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For this new wind and solar generation to be developed in upstate New York, however,
additional transmission will be needed both to permit the interconnection of these resources
and to transmit their output across the existing transmission constraints to the downstate load
centers. These comments focus on the latter need, but AVANGRID fully supports the PSC
identifying the local transmission necessary to interconnect the needed renewable resources as
a Public Policy Transmission Need in this rulemaking. Without these local transmission
facilities, such new renewable resources will not be constructed.
Even with the addition of the contemplated Western New York and AC Proceeding
Transmission Upgrades under solicitation in the on-going NYISO Public Policy Planning
Processes, additional transmission transfer capability will be needed across the existing
transmission constraints between upstate and downstate, including most notably the Central
East, Total East, UPNY/SENY and UPNY-ConEd interfaces, to permit New York State to meet the
identified Public Policy Requirements. The addition of the Western New York and AC
Proceeding Transmission Upgrades, assuming they are approved, permitted and constructed,
will increase the transfer limits across these existing constraints, but this increase alone will not
be sufficient to permit New York to achieve the identified Public Policy Requirements and to
eliminate the States long-standing transmission congestion bottleneck, since the addition of
significant renewable generation in upstate New York will once again heavily load the
transmission paths to the downstate load centers, as more costly and less environmentally

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friendly downstate thermal generation is displaced.14 This heavy loading will also occur in the

likely event New York relies more heavily in the future on imported renewable electricity from
the existing large-scale hydro generators in Quebec and Ontario to meet the States Public
Policy Requirements, given the intermittency of wind and solar resources, or should large
downstate generators, such as Indian Point, retire.
To determine the precise scope of the needed additional transmission capacity, the PSC
should undertake a rigorous study of the need for additional transfer capability across the
relevant interfaces between upstate and downstate New York as part of this rulemaking. The
on-going New York State Resource Planning Analysis is an appropriate start and should be
pursued expeditiously with input from interested stakeholders. To ensure the successful
implementation of its CES Order, the PSC should also find, with the details to be determined in
this additional analysis, that a Public Policy Transmission Need exists for transmission solutions
that facilitate the transfer of the needed, increasing quantities of renewable energy from
upstate to downstate across the existing interfaces in a cost effective manner, factoring in all
pertinent economic, reliability and environmental benefits and cost impacts including
congestion relief, energy and production cost savings and operational benefits.
D.

The Benefits an Additional Transmission Link between Upstate and Downstate


Provide to the Upstate Nuclear Generators

Increasing the transfer capability across the existing transmission constraints between
upstate and downstate in this way will also help New York State to meet its carbon emission

14

Of course, if the overhead alternating current (AC) 345 kV AC Proceeding Transmission upgrades ultimately are
not constructed due for some reason, the need for an alternative transmission link that increases the transfer
limits across the relevant interfaces, such as an underground HVDC solution like AVANGRIDs Connect New York
project discussed below, would only be increased.
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reduction public policy objective, by providing a long term solution to the economic challenges

facing New Yorks upstate generation fleet, including the upstate nuclear fleet (FitzPatrick,
Ginna and the Nine Mile Point facilities). For a number of years, these generators have
struggled financially due to low revenues arising from low Locational Based Marginal Prices
(LBMPs) due in large to part to congestion on the NYISO system. As such, these generators
have been at risk of early retirement. The PSC has found, however, that these resources have
provided a significant verifiable contribution ton New Yorks clean energy resource mix as
consumed by New Yorkers.15
To help preserve the upstate nuclear generators in the shorter term, the PSC in the CES
Order established the Zero Emission Credit (ZEC) mechanism whereby for a twelve year
period beginning in 2017 each LSE is directed to purchase ZECs (either from NYSERDA or
directly from the States upstate nuclear generators) in proportion to the electric energy load
served by the LSE in relation to the total electric energy load served by all LSEs in the New York
Control Area. The upstate nuclear generators will receive the ZEC payments in order to provide
additional revenue to keep these zero-emission facilities in-service until at least 2030.16
The ZEC mechanism, however, is currently subject to legal challenge and in any case is
not a long-term market solution to the fundamental pricing challenge faced by the upstate
nuclear fleet. Should New York State policy makers want these generation resources to survive
for the long term, they will need to have increased (and ideally unconstrained) access to the
higher priced downstate energy markets, which in turn will raise their energy and capacity

15

CES Order at 125.

16

CES Order at 127-28.

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revenues. This access can only be provided by additional transmission capacity between

upstate and downstate New York. Providing the upstate nuclear generators with increased
access to the downstate markets prior to 2030 will reduce the cost customers ultimately will be
bear on account of the ZEC mechanism, because future ZEC prices can decline if market energy
and capacity price forecasts go up; perhaps all the way to zero.17 Conversely, should New
York State not invest in additional transmission capacity between upstate and downstate, the
addition of the new, price-taking renewable resources in upstate New York needed to achieve
the States 50% by 2030 renewable power target threatens to further undermine the financial
viability of the upstate nuclear generators, even with the ZEC mechanism in place.
E.

The Connect New York Project: AVANGRIDS Proposed High-Voltage Direct


Current (HVDC) Upstate to Downstate Transmission Link

To address New York States need for additional transmission between the upstate
regions where the needed new renewable generation will be built and the downstate load
centers, AVANGRID has worked over the last several years to design an underground HVDC
transmission solution that would make beneficial use of the existing New York State Thruway
(Thruway) transportation right-of-way (ROW). AVANGRIDS Connect New York Project is
the result of these development efforts.
The Connect New York Project is designed to provide the needed increases to the
transfer limits at the Central East, Total East, UPNY/SENY and UPNY-ConEd interfaces by a 1,000
MW underground HDVC line located for the most part in the Thruway ROW. By burying the
Connect New York HVDC cables in this existing transportation corridor, which the residents of
New York have long supported, AVANGRID seeks to preserve the physical landscape of local
17

CES Order at 128.

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communities and protect the scenic views, property values, agriculture lands, sensitive

archeological areas and protected wetlands along the project route. Connect New York will
make exceptionally valuable use of this strategically located, but previously disturbed, corridor
that runs in precisely the path needed for increased power flows to downstate.
To facilitate the transmission of the incremental upstate renewable resources and the
upstate nuclear generation, the Projects northern HVDC converter station will be located
adjacent to, and interconnect with, the existing Edic 345 KV substation (Zone E) in the Town of
Marcy in Oneida County owned by National Grid. To best meet the Public Policy Transmission
Needs determined in this proceeding, AVANGRID has identified two alternative locations for
the southern HVDC converter station and interconnection facilities. AVANGRIDs preferred
solution is to locate the southern converter station adjacent to the existing 345 kV Pleasant
Valley substation (Zone G) in the Town of Pleasant Valley in Dutchess County owned by Con
Edison. AVANGRIDS alternative solution locates the southern converter station adjacent to
the existing Ramapo substation (Zone G) in the Village of Sloatsburg in Rockland County owned
by Con Edison.
AVANGRID is confident that both alternatives will prove to be cost effective solutions to
New Yorks States Public Policy need for additional transmission capacity between upstate and
downstate as discussed above.
II.

THE PSC SHOULD IDENTIFY EVALUATION CRITERIA WHICH PROMOTE THE SELECTION
AND DEVELOPMENT OF EFFICIENT, COST EFFECTIVE, ENVIRONMENTALLY SENSITIVE
AND CREATIVE TRANSMISSION SOLUTIONS THAT SATISFY THE IDENTIFIED PUBLIC
POLICY TRANSMISSION NEED/PUBLIC POLICY REQUIREMENTS.
AVANGRID also encourages the PSC, as part of any Order identifying the relevant Public

Policy Transmission Need/Public Policy Requirements, to exercise its discretionary authority


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under the NYISO Tariff and provide NYISO clear, objective and comprehensive criteria for the

evaluation and selection of transmission solutions or non-transmission projects to address such


Public Policy Transmission Need/Requirements.18
In order to promote competition, consistent with the requirements of FERC Order No.
1000 and the NYISO Comprehensive System Planning Process, the PSCs evaluation criteria
should not specify a precise transmission solution.19 Nor should the PSC specify the type of
acceptable technology, such as by specifying that only AC solutions be considered, or limit the
physical scope of any solution by prohibiting underground facilities or barring the crossing of
the Hudson River. Instead, the evaluation criteria should give NYISO latitude to encourage
creative solutions using all available technologies that can efficiently and cost effectively
address the identified Public Policy Transmission Need/Public Policy Requirements in an
environmentally sensitive way.
At the same time, the evaluation criteria should set clear, objective standards by which
NYISO can both assess the sufficiency of proposed transmission solutions and determine which
solution provides the more efficient or cost effective solution to satisfy the identified Public
Policy Transmission Need/Public Policy Requirements, as required by the NYISO Tariff.20 For
example, the sufficiency criteria could include the following:
a. Whether the proposed solution increases the transfer capability across the Central
East, Total East, UPNY/SENY and UPNY-ConEd interfaces by an amount sufficient to
materially increase the utilization of renewable energy on the New York system,
such that there is a significant likelihood that New York State will achieve its public
18

NYISO Open Access Transmission Tariff, Attachment Y, 31.4.2.1.

19

See Competitive Transmission Development v. New York Independent System Operator, Inc., 156 FERC 61,164,
P 40 (Sept. 8, 2016).
20

NYISO OATT, Attachment K, 31.4.6.5 & 31.4.8.

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policy renewable energy targets under a reasonably likely array of future conditions
(including load and transmission system topography) and generation development
scenarios;
b. How effective the proposed solution is in providing congestion relief in the form of a
reduction in Demand$ Congestion.21
c. How effective the proposed solution is in providing economic benefits in the form of
a reduction in system-wide production costs.
d. Whether the proposed solution will result in annual reductions in carbon emissions
across New York State in an amount sufficient to support New Yorks achievement of
its carbon reduction targets under RGGI and other applicable law;
e. Whether the proposed solution uses in an efficient and effective way existing rightsof-way to protect the physical landscape of local communities, except for de minimis
acquisitions that cannot be avoided due to unique circumstances;
f. Whether the proposed solution takes into account and minimizes impacts on scenic
views, property values, agriculture lands, sensitive archeological areas and protected
wetlands; and
g. Whether the proposed solution provides other reliability or operational benefits to
the New York transmission system, such as improved voltage regulation, control of
power transfers, and improved grid restoration capabilities.
AVANGRID also supports the NYISOs consideration of all of the metrics for determining
the more efficient or cost effective Public Policy Transmission Projects set forth in Section
31.4.8.1 of the NYISO OATT.
In addition to these metrics, the PSC should provide NYISO an additional metric which
values project cost certainty for selection of the more efficient and cost effective transmission
solution to the identified Public Policy Transmission Need/Public Policy Requirements. In the
AC Transmission Proceeding, the PSC called for developers to submit two cost estimates, one in
which the developer could assume full recovery of any prudent cost overruns and the other in
21

Demand$ Congestion can be calculated using the NYISO methodology as set forth in the NYISOs 2013
Congestion Assessment and Resource Integration Study Phase 1 (Aug. 12, 2013) at 14-15.
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which the developer bore the risk of sharing in 20% of any prudent cost overruns. This level of

risk sharing was acceptable to AVANGRID but the Company is open to cost containment
structures that require the developer to bear even greater levels of cost overrun risk. In fact, in
response to other competitive transmission solicitations, AVANGRID has submitted creative
proposals that provide a high level of cost certainty to customers as part of a detailed risk
sharing allocation mechanism. In a competitive transmission development environment, such
cost containment/risk sharing mechanisms should be part of all transmission proposals.

December 5, 2016

Respectfully submitted,

C
_________________________
Thorn C. Dickinson
Vice President, Business
Development
AVANGRID Networks, Inc.
70 Farm View Drive
New Gloucester, ME 04443
and
Noelle M. Kinsch
General Counsel
AVANGRID Networks, Inc.
99 Washington Ave., Suite 2018
Albany, NY 12210

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