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In re Application of Boundless Energy NE, LLC

Supreme Court, Albany County

January 13, 2017

In the Matter of the Application of Boundless Energy NE, LLC, Petitioner,
Public Service Commission of the State of New York, New York Independent System Operator, Inc., North American Transmission Corporation, North American Transmission, LLC, Nextera Energy Transmission New York, Inc., Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Niagara Mohawk Power Corporation D/B/A National Grid, New York State Electric and Gas Corporation and New York Transco LLC, Respondents.

          Charles M. Pratt, General Counsel to Petitioner Boundless Energy NE, LLC.

          Kimberly A. Harriman General Counsel to Respondent Public Service Commission of the State of New York.

          John C. Graham, of counsel Three Empire State Plaza.

          Hunton and Williams, Joseph J. Saltarelli, of Counsel, Attorneys for Respondent New York Independent System Operator, Inc.

          DENISE A. HARTMAN, J.

         In this CPLR Article 78 proceeding, petitioner Boundless Energy NE, LLC (Boundless) seeks to vacate a Public Service Commission (PSC) Order Finding Transmission Needs Driven by Public Policy Requirements, dated December 17, 2015 (Transmission Needs Order). The PSC, following a comparative evaluation process, identified a need driven by public policy requirements to provide additional transmission capacity in the upstate-to-downstate corridor; invited specific applicants to submit all or part of their transmission development proposals to respondent New York Independent System Operator, Inc. (NYISO) for further review; and asked other applicants, including petitioner, to withdraw their original proposals or provide an explanation or statement of intent. Petitioner also challenges a PSC order dated February 23, 2016, denying rehearing and asks the Court to direct NYISO to hold in abeyance further decisions with respect to the Transmission Needs Order.

         Because NYISO is not a proper party to this proceeding, NYISO's motion to dismiss the petition as against it is granted. [1] And because Boundless has not demonstrated that the PSC's Transmission Needs Order is contrary to law or irrational, the petition against the PSC is denied.

         The AC Transmission Proceedings

         In 2012, the PSC solicited proposals to "increase transfer capacity through the congested transmission corridor, which includes the Central East and the [Upstate New York/Southeast New York (UPNY/SENY)] interfaces, " by 1, 000 megawatts (Proceeding on Motion to Examine Alternating Current Transmission Upgrades, R1323, at 2). [2] Four transmission developers submitted 22 proposals, with Boundless submitting two of them. The proposals were submitted pursuant to the licensing and siting procedures of Public Service Law Article VII. Referring to them as the Alternating Current Transmission Proceedings (AC Transmission Proceedings), the PSC performed a comparative analysis of the proposals, taking into consideration the anticipated transfer capacity increase, cost, and environmental impacts. In July 2015, PSC staff produced an interim report (R631). According to that report, the approval of a new 720 megawatt generation facility required the staff to update its analysis before issuing a final report (Interim Rpt., at ii). The interim report recommended that a number of projects be eliminated from consideration, but proposed continued study of seven projects, including the Boundless proposals (Interim Rpt., at 7-8).

         NYISO's Public Policy Transmission Planning Process

         In August 2014, while the AC Transmission Proceedings were underway, NYISO commenced parallel proceedings to fulfill its public policy transmission planning role pursuant to NYISO's Open Access Transmission Tariff (Tariff) with the Federal Energy Regulatory Commission (FERC) (see R729). FERC's regulatory authority focuses on ensuring that generators have nondiscriminatory access to transmission facilities and that rates for such access are reasonable. NYISO's solicitation of proposed public policy transmission needs resulted in multiple proposals, which NYISO forwarded to the PSC. Pursuant to the FERC Tariff, the PSC was required to identify public policy requirements driving transmission needs after notice-and-comment rulemaking in accordance with the State Administrative Procedures Act (SAPA). In a July 20, 2015 Order Addressing Public Policy Requirements for Transmission Needs, the PSC issued its determination with respect to other areas of the State, but deferred its determination of public policy-driven transmission needs in the Eastern New York transmission corridor pending the staff's review in the AC Transmission Proceedings (R729).

         The Combined Proceeding

         In September 2015, PSC staff issued its final report, recommending that the PSC declare public policy needs for transmission facilities consistent with its identification of three proposals, not including Boundless's, as best meeting transmission needs in a cost-effective manner, with minimal environmental impacts (R604).

         After receiving the final report, on October 7, 2015, the PSC published a notice of proposed rulemaking, which stated that the PSC was "considering whether to adopt, modify, or reject, in whole or in part, certain proposals to relieve congestion between Upstate and Downstate New York to be transmission needs driven by Public Policy Requirements" (2015-40 NY St. Reg. 91). The PSC then held hearings and conducted additional analyses.

         The Challenged Orders

         On December 17, 2015, the PSC issued an Order Finding Transmission Needs Driven by Public Policy Requirements (R464). In the order, the PSC, among other things, identified the transmission needs as a detailed portfolio of projects, divided into two segments; set criteria for NYISO to apply in evaluating proposed transmission solutions; requested the entities that had proposed the projects recommended in the final report to submit those project proposals to NYISO; requested that the remaining entities, including Boundless, withdraw their proposals; and required any entity that declined to withdraw its proposal to submit to the PSC a written explanation and declaration of future intent. It also declared that the Transmission Needs Order constituted a written statement provided to NYISO as part of its Public Policy Transmission Planning Process ...

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