Comments of New York Transmission Owners under RM11-26.

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Notice of Inquiry: Promoting Transmission Investment ) Docket No. RM11-26-000 Through Pricing Reform ) COMMENTS OF THE NEW YORK TRANSMISSION OWNERS I. BACKGROUND On May 19, 2011, the Federal Energy Regulatory Commission (FERC or Commission) issued a Notice of Inquiry (NOI) seeking comments on the scope and implementation of its transmission incentive regulations and policies. The NOI was partly motivated by the large and varied number of applications that the Commission has received in the last five years since the Energy Policy Act of 20051 was passed and since Congress directed the Commission to provide incentive rates to encourage development of transmission infrastructure. Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Power Authority, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation (referred to herein as the New York Transmission Owners) support the Commissions existing approach to tailoring incentives to the specific facts of a particular incentive request or project. This degree of flexibility is needed to address the particulars of specific projects. The Commission should avoid establishing prescriptive incentive policies or a one size fits all approach. The Commissions incentive policy has been very successful in promoting needed transmission investment consistent with the statutory intent of Congress in the Federal Power Act (FPA). 1 Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594. II. COMMENTS A. The New York Transmission Owners Support the Policy of Determining Incentives on a Case-By-Case Basis Tailored to Specific Circumstances. The New York Transmission Owners support the intent of Congress in Section 219 of the FPA2 and the Commissions policy in implementing this provision. New transmission can play an essential role in ensuring reliability and reducing transmission congestion. The New York Transmission Owners support the Commissions flexible incentive approach that allows a project developer to propose, and the Commission to approve, a package of transmission incentives that are tailored to the needs of the particular situation and/or project rather than a limited or inflexible menu of incentives that can unnecessarily limit the Commissions flexibility to tailor incentives to particular circumstances. The current Commission policy provides ample flexibility to tailor incentives to particular situations and to balance potential customer costs and benefits. B. If the Commission Revises the Menu of Available Incentives, ...