FROM: Paul N. Belval, NEPOOL Counsel

M E M O R A N D U M

TO: NEPOOL Markets Committee

FROM: Paul N. Belval, NEPOOL Counsel

DATE: September 24, 2015

RE: Changes to GIS Operating Rules – Protected Information and Out-of-Region Resources

At its October 8, 2015 meeting, the NEPOOL Markets Committee will be asked to consider and vote on two sets of changes to the NEPOOL Generation Information System (“GIS”) Operating Rules (the “Rules”). The first set of changes relates to the provision of “Protected Information” to certain state agencies. The second set of changes would permit unit-specific GIS Certificates to be created for all hydropower resources in adjacent control areas, regardless of whether those hydropower resources are eligible under a New England renewable energy portfolio standard (“RPS”) or alternative energy portfolio standard (“APS”). Both sets of changes were referred by the Markets Committee to the NEPOOL GIS Operating Rules Working Group (the “Working Group”), and this memorandum describes the proposed changes and the Working Group’s discussion of those changes.[1]

Protected Information

Under Rule 5.3, certain GIS-related information is currently provided to the state governmental agencies listed in Appendix 5.3 to the Rules on a quarterly and annual basis. Most of the information provided under that Rule that relates to specific generator output or load requirements is required to be masked, thereby mitigating concerns that that information could be released publicly. Certain of that information, however, is categorized as “Protected Information” and, under Rule 5.3(d), that Protected Information is only provided to the state agencies that have executed a certification, included as Appendix 5.3A to the Rules, to treat that Protected Information as confidential and not subject to public disclosure. For generators, the Protected Information includes the generator’s asset identification number, its total generation or conservation for the period in question, and whether the generation or conservation data was provided to the GIS Administrator by a Third Party Meter Reader and, if so, the identity of that Third Party Meter Reader. For retail load serving entities, the Protected Information includes the total “Certificates Obligation” (i.e., the retail load) over the four most recent quarters and the total imports, in MWh, over the four most recent quarters.

Rule 5.3(d) provides that for state agencies other than the Connecticut Public Utilities Regulatory Authority (“CTPURA”) (formerly the Department of Public Utilities Control), each Account Holder must specifically request that the GIS Administrator provide its Protected Information to the relevant state agency. That Rule states, however, that CTPURA shall automatically receive Protected Information for any GIS Generator that is qualified as a Class I, Class II or Class III renewable energy source under the Connecticut RPS without any specific request from that GIS Generator.

The Maine Public Utilities Commission (“MPUC”) asked that Rule 5.3 be revised so that Protected Information is provided to it on the same basis as it is provided to CTPURA. Specifically, the MPUC requests that it be automatically provided with the Protected Information for GIS Generators that qualify as Class I or Class II renewable energy resources or Community-Based Renewable Energy Resources under the Maine RPS. As with the other relevant state agencies, the MPUC would still have to sign the certification agreeing to protect the confidentiality of that Protected Information.

In discussing the proposed changes to Rule 5.3(d) in its August 25 teleconference, the Working Group determined that the Protected Information under the Rules could be released after some time has passed. More specifically, the Working Group determined that state agencies may release Protected Information that relates to generation or load in a specific calendar year on or after October 15 of the subsequent calendar year. That date was chosen because it is the deadline for filing RPS compliance reports in Connecticut for previous year,[2] and that is the latest deadline of any New England state with an RPS. In addition, the Working Group determined that information related to a generator’s asset identification number and the identity of any Third Party Meter Reader is no longer required to be treated as Protected Information.

The proposed changes to Rule 5.3 and Appendix 5.3A described above are included in Attachment 1 to this memorandum. APX has determined that the proposed changes are not “Cardinal” and therefore can be adopted by the Markets Committee. The following resolution could be used to adopt the changes to the Rules discussed above:

RESOLVED, that the Markets Committee adopts the changes to the NEPOOL Generation Information System Operating Rules proposed and discussed at this meeting, which changes related to the treatment and disclosure of Protected Information, [with such changes thereto as were discussed at this meeting and] with such non-material changes thereto as the Vice-Chair of the Markets Committee may approve.

Out-of-Region Resources

The New England States Committee on Electricity (“NESCOE”) and the group of utilities and state regulatory agencies (the “Requesting Group”) that are cooperating on the multi-state clean energy Request for Proposals (the “RFP”)[3] have requested that the Rules be revised such that unit-specific Certificates could be created for all hydropower resources in adjacent control areas, regardless of whether those hydropower resources are eligible under a New England RPS or APS. The Requesting Group’s proposed changes to Rule 2.7 and Appendix 2.7A, which have been reviewed by the Working Group, are included in Attachment 2 to this memorandum

Currently under Rule 2.7(c), in order for a generating unit outside the ISO-NE Control Area to receive GIS Certificates reflecting its unit-specific characteristics (as opposed to the characteristics of the power mix of the originating control area in general), that generating unit must (a) be located in an adjacent control area and (b) be eligible under one of the RPS or APS fields listed in Part 2 of Appendix 2.4 of the Rules (which are the RPSs and APSs for the six New England states). Certain out-of-region hydroelectric resources that do not qualify under any of the New England RPSs or APSs may be eligible under the RFP. The RFP contemplates that all environmental attributes associated with the projects that are awarded contracts or other engagements through that RFP will be delivered either to the purchasing electric distribution companies or otherwise settled in New England. NESCOE and the Requesting Group would like to accomplish that function through the settlement of Certificates in the GIS, and for that reason are requesting these changes to the Rules.

The proposed changes to the Rules are also consistent with statutory requirements in both Connecticut and Rhode Island. Connecticut Public Act 13-303 authorizes the solicitation of proposals for “verifiable large-scale hydropower,”[4]. Similarly, the Rhode Island Affordable Clean Energy Security Act provides for the attributes imported into New England under that statute to be “verified through the expansion of the New England [Power] Pool Generation Information System or the development of another appropriate tracking and verification mechanism.”[5] The proposed changes would satisfy these two requirements.

The Markets Committee discussed these proposed changes at its June and August meetings. At the August meeting, the Markets Committee referred the language proposed by the Requesting Group at that time to the Working Group for review, with a direction to focus specifically on (1) double-counting of attributes for generating units that receive unit-specific Certificates, (2) the cost to NEPOOL of making the proposed changes and (3) the timing for the proposed changes. In response to that directive:

·  Language has been added to Rule 2.7(b) providing that the attributes associated with unit-specific Certificates for imported energy under Rule 2.7(c) would not be included in the “system mix” calculated under Rule 2.7(c) and providing that the “Gold Book” would be the source of attribute information for the NYISO system mix (to the extent APX determines that is practicable);

·  APX has reported that the proposed changes would be “Cardinal,” specifically the changes related to automating the upload of generation information from specified sources. As such, the changes would require an additional expenditure by NEPOOL in order to implement the change, and APX estimates the cost of the change (on a time and materials basis) at $50,000 to $75,000; and

·  The Requesting Group has asked that the change be approved at the November 6 Participants Committee meeting (based on a recommendation of the Markets Committee) so that bidders responding to the RFP, which is targeted for an October release date, will be able to factor the changes to the GIS and the Rules into their bids.

During the Working Group’s August 25 teleconference, a suggestion was made to include nuclear generating units in the category of non-RPS/APS-eligible generators in adjacent control areas that could receive unit-specific Certificates. There was not consensus among the Working Group to include nuclear generating units, and the Requesting Group subsequently determined that it did not want to include nuclear units in these changes, primarily because it might complicate and delay the requested changes and they did not want to seek changes that were outside of current requirements. The Requesting Group is not, however, adverse to considering that change in the future.[6]

The following resolution could be used to recommend the changes to the GIS proposed by the Requesting Group:

RESOLVED, that the Markets Committee recommends that the Participants Committee adopt the changes to the Generation Information System Operating Rules proposed and discussed at this meeting, which changes relate to the creation of unit-specific Certificates for generators in adjacent control areas and which changes will result in Cardinal changes to the GIS, [with such changes thereto as were discussed at this meeting and] with such non-material changes thereto as the Vice-Chair of the Markets Committee may approve.

cc: NEPOOL GIS Operating Rules Working Group

92069293.5

[1] A third set of changes to the Rules, relating to the creation of unit-specific GIS Certificates for generators in non-adjacent control areas, was also referred to the Working Group. The Working Group agreed that NEPOOL counsel would work with Brookfield Energy Marketing, the proponent of this change, APX, Inc., the GIS Administrator (“APX”), and ISO-NE to propose language for a Rule change for discussion by the Working Group. This effort is proceeding on a separate path.

[2] See Conn. Agencies Regs. 16-245a-1(a).

[3] The Requesting Group includes Eversource Energy, National Grid, United Illuminating, Unitil, the Connecticut Department of Energy and Environmental Protection, the Massachusetts Department of Energy Resources and the Rhode Island Office of Energy Resources. NESCOE is facilitating the development of the RFP.

[4] P.A. 13-303, Sec. 7.

[5] R.I.G.L. § 39-31-8.

[6] The same Working Group member who suggested including nuclear generating units to the changes to Rule 2.7 subsequently proposed adding “low carbon” and “carbon neutral” technologies to that language. We expect to discuss a referral of that proposal to the Working Group at the Markets Committee’s November meeting.