Opinion ID: 2790973
Heading Depth: 3
Heading Rank: 3

Heading: State Transmission Upgrades

Text: We also reject New York Petitioners’ argument that it was arbitrary and capricious for FERC to decide to proceed with establishing the Lower Hudson Valley Zone despite the NYPSC’s claims that New York’s planned transmission upgrades would eliminate the transmission constraint on which the new zone was premised. 50 FERC rationally considered and rejected evidence introduced by the NYPSC regarding New York’s planned transmission upgrades. In its Zone Rehearing Order, FERC stated that it was “fully cognizant that the NYPSC has two proceedings underway that may result in the construction of major transmission facilities during the 2016‐2018 timeframe [which] could alleviate the long‐standing transmission constraint.” Zone Rehearing Order at P 18 (footnote omitted). But it explained that, “to date, no major new transmission facility has completed the certification review process required under Article VII of the New York State Public Service Law”—which “sets forth the existing certification review process for citing major utility transmission facilities in New York State”—and “there is no assurance that any facilities would be completed during the 2016‐2018 time frame.” Id. at P 18 & n.33. Similarly, in the Demand Curve Rehearing Order, FERC explained that “there is no assurance that any facilities would be completed during the 2016‐2018 time frame.” Demand Curve Rehearing Order at P 63. And in the Zone Order, FERC emphasized that “the transmission upgrades that the NYPSC expects to result from its proceedings have not yet been built.” Zone Order at P 23. As discussed above, FERC approved the Lower Hudson Valley Zone in order to ensure that the capacity market more accurately reflected true market conditions. 51 Because FERC explained that potential future transmission upgrades that might alter those conditions were speculative, it rationally explained its decision to act according to existing market conditions rather than speculative future conditions.