Second Circuit Upholds FERC’s NYISO Capacity Zone Order
On April 2, 2015, the United States Court of Appeals for the Second Circuit (“Second Circuit”) upheld the Commission’s approval of a new capacity zone and demand curve for the New York Independent System Operator, Inc. (“NYISO”). Previously, on June 4, 2014, the Second Circuit denied an emergency motion requesting a stay of the implementation of the new zone (see June 9, 2014 edition of the WER).
Historically, the NYISO capacity market was divided into three distinct capacity zones: the Long Island Capacity Zone (covering Nassau and Suffolk Counties), the New York City Capacity Zone (covering all of New York City), and the New York Control Area (covering the entire state, including both the Long Island Capacity Zone and the New York City Capacity Zone). In two separate 2013 filings, NYISO proposed a new capacity zone, called the Lower Hudson Valley Zone (“LHVZ”), and a corresponding demand curve for the new zone. The new zone was proposed in part as a means of addressing transmission constraints within the NYISO region. In response, FERC issued two orders approving the creation of the new LHVZ, and the new demand curve for the LHVZ, respectively. Various parties (“Petitioners”) sought review of these orders from the Second Circuit.