Minutes of the Annual Meeting of the Power - New York Power ...

(NS Comments, § 2), but it does nothing to help their argument. Under their
Niagara contracts, the Neighboring States agreed to allow the Authority to
continue its existing practice of making credits to the RSR for such sales.
2. Contrary to NYAPP’s Assertions, the Authority’s Sales of
Ancillary Services into the NYISO Do Not Represent Additional
Firm Capacity.
NYAPP is mistaken when it asserts that there is additional firm capacity available
to be sold to preference customers. While much of Mr. Russell’s testimony is a
critique of the Niagara Study, which is not subject to review in this proceeding, it
is important to rebut some of NYAPP’s notions concerning the operations of the
Niagara Project.
When the Authority bids and then sells ancillary services in quantities that
exceed those associated with needs of contract customers, this does not reflect
an increase in the firm capacity of the plant. Rather, this may result in less
energy available to sell to contract load which NYPA makes up, as Mr. Russell
frequently observes, by purchasing energy from thermal sources to meet the
Authority’s contractual commitments to customers. The Authority is at risk for
gaining or losing net revenues in this market, but is providing a benefit to the
NYISO for these ancillary services for which it is well-suited. Likewise, a decision
not to sell ancillary services into the NYISO would not result in an increase the
firm capacity of the Project. Mr. Russell again appears to believe that the
nameplate capacity increase stemming from the Niagara Project Upgrade led to
a corresponding increase in firm capacity which serves as the basis for
“substantial sales into NYISO ancillary services markets.” (Russell at 28). This
Staff Analysis has already explained that such nameplate capacity increases did
not lead to a firm capacity increase of the Project. For the same reasons, Mr.
Russell’s reliance (at 33) on the installed capacity rating of the Niagara Project is
similarly misplaced.
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