May 7, 2021
ESA Protests NYISO Transmission Owners’ Self-Funding Request
Currently, interconnection customers choose their own financing for required network upgrades in NYISO, and thereafter transfer control of these upgrades to TOs for their operations and management. The New York TOs are requesting that they be allowed to require interconnection customers to borrow from TOs for their financing, stating that they should have an effective first right of refusal to choose to finance required network updates and thus earn a return on those investments. The rationale for this filing is that the TOs believe they bear a variety of risks associated with these upgrades.
In our joint comments, we request that FERC reject the Tariff Filing by TOs. Because interconnection customers generally choose financing with a strong incentive to minimize costs, the New York TOs filing would mean that responsibility for controlling costs resides with the TOs, who would then earn a return that rises with the cost of financing. This incentive for the TOs would result in unjust and unreasonable rates for interconnection customers, including energy storage resources, if they are subjected to a variety of increased costs for interconnection service based on the TOs financing choices. Customers would also bear the unjust increase in costs in power purchase rates. Additionally, the examples of risk identified by the TOs in their filing are not pertinent to the specific network upgrades they are requesting to finance.