Professional Documents
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Description
Approval is being requested for a total DOA of $2,999,000 to allow for the design, engineering
and construction of attachment facilities and system upgrade facilities required to accommodate
the interconnection of the BP Alternative Energy NA, Inc. (“BP Energy”) Cape Vincent Wind
Farm (“Cape Vincent Wind”) to the National Grid Transmission System. The NYISO has
determined National Grid to be the connecting Transmission Owner, as per the NYISO Open
Access Transmission Tariff (OATT).
Category: Mandatory
Risk score: 49 - Customer Driven
Finance
Sanction Cost & Range $2,726,000 $2,453,000 to $2,999,000
Cost volatility: P20 cost: Not Available P80 cost: Not Available
Probability that project cost will exceed 10% tolerance: Not Available
Project included in approved Business Plan? Yes
Project cost relative to approved Business Plan -$614,000
If cost > approved B Plan how will this be funded? Fully Reimbursable
Other financial issues: This project has been included as a placeholder in the approved
business plan, CNYX60. This project as presented is a decrease to the approved
business plan. When the business plan was created the estimates were conceptual and
have been better defined during the NYISO interconnection process. All project costs are
fully reimbursable from the developer.
Resources
Availability of internal resources to deliver project: Amber
Availability of external resources to deliver project: Amber
Operational impact on network system: Amber
Note – Amber due to uncertainty of developer’s schedule
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Key issues
• The total project cost to interconnect the Cape Vincent Wind Farm (“Cape Vincent”) to the
National Grid Transmission System is fully reimbursable by the customer.
• This project will interconnect to the new 115kV Rockledge Station, which is being
constructed for the interconnection of the St. Lawrence project (AMIC 0964), via a single
breaker tap arrangement. The point of interconnection will be the Rockledge Station tap on
the existing bus. The wind farm is located in the Town of Cape Vincent in Jefferson County
NY. The project’s collector stations will interconnect to the Rockledge Station via a
developer owned, 6 mile 115kV transmission line. The NYISO has determined National Grid
to be the connecting Transmission Owner, as per the NYISO Open Access Transmission
Tariff (OATT).
• The total project cost and schedule are dependent on Rockledge Station being constructed
and turned over to National Grid before the Cape Vincent project interconnection is
constructed. It is expected that System Delivery (internal RDV) will complete construction on
the National Grid work scope. This assignment will be made after the interconnection
agreement is signed. (See Appendix C for Draft Interconnection Agreement Milestone
Schedule.)
• BP Alternative Energy NA, Inc. (“Developer”) is constructing a 210 MW wind generation farm
consisting of one hundred forty (140) GE 1.5 MW wind turbines which will be interconnected
in two phases. Phase I will comprise 95 turbines (142.5 MW) and Phase II will include the
remaining 45 turbines (62.4 MW). The output from each turbine will be stepped up to 34.5
kV through individual pad mount 690V/34.5kV, 1.75 MVA transformers. The 140 units will be
distributed over 13 radial 34.5-kV feeder lines which will be brought to two separate
collection stations, approximately 2 miles apart, one for each phase. At the collection
substations the power output will be transformed to 115 kV through two non-regulated, wye-
grounded transformers, one for each phase. The Phase I and Phase II transformers will be
115/34.5 kV, 95/127/160 MVA and 115/34.5 kV, 45/60/75 MVA, respectively.
• A new 115kV single breaker tap will be constructed at the Rockledge Station by National
Grid and serve as the Delivery Point for the project. BP Energy will furnish and install
metering transformers and provide space for National Grid metering equipment, at its
collector station. The furnishing and commission of the RTU and Metering equipment will be
done at the customer’s expense per section 7.1 of LGIA. The project will also encompass
required protection upgrades at National Grid’s Black River and Coffeen substations. These
upgrades, as defined in the facilities study report, may require outages at the substations.
• All work performed by National Grid is 100% reimbursable as per the Large Generator
Interconnection Agreement (“LGIA”) that the NYISO, BP Energy and NMPC are negotiating
and will execute, subject to Sanction Paper Approval. The LGIA is consistent with the Terms
and Conditions of Attachment S and X of the NYISO OATT and will be filed at the FERC
upon execution.
• The construction of the project is expected to be completed by October 2014. It is
anticipated that the LGIA will be executed in the 3rd quarter 2010.
• This project is in the fiscal year 10/11 business plan with budget dollars in fiscal years 11
and 12. Budgeted dollars will need to move from FY 11/12, to FY 12/13, 13/14, 14/15 and
FY 15/16. The total budgeted capital dollars is $615,000 more than the estimated project
total cost presented herein. Place holder funding numbers are CNYX60 and CNYX60R.
• The commercial terms and the project execution schedule are subject to the pending
approval of the Large Generator Interconnection Agreement (“LGIA”) between NMPC, BP
Energy, and the New York Independent System Operator (“NYISO”) by the Federal Energy
Regulatory Commission (the “FERC”).
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• Tax obligations associated with the project will be the responsibility of BP Energy, in
accordance with Article 5.17 of the LGIA.
• Outages will be required. These outages will be defined and outage and construction plans
created after the Interconnection Agreement is executed and BP Energy has issued the
authorization to proceed, as per step 2A of the playbook. Final e -igineering design, and
outage and construction plans will be completed so as to ensure minimization of outage
requirements.
Key milestones
• Engineering Start — October 2012
• Construction Start — April 2014
• Prepare Equipment Ratings — July 2014
• Facilities Ratings to NYISO — August 2014
• Commissioning — December 2014
• Completion — January 2015
• Project closure — June 2015
Climate change
Contribution to National Grid's 2050 80% emissions reduction target: Neutral
Impact on adaptability of network for future climate change: Neutral
Are financial incentives (e.g. carbon credits) available? Not known
Recommendations
The Asset Management Investment Committee is invited to:
(a) APPROVE the investment of $2,726,000 in the range $2,453,000 to 12,999,000 for
completion by January 2015. This includes DOA for procurement events associated
with these projects.
(b) NOTE that Mary Ellen Paravalos is the Project Sponsor.
(c) NOTE that Francis Kane is the Project Manager and has the approved financial and
procurement delegation to deliver the project.
(d) APPROVE entering into a Large Generator Interconnection Agreement (LGIA) with BP
Energy and the NYISO.
9
Signature._. 0)
. ........... ..... ............. 1 `)
Mary Ellen Paravalos, Vice President Transmission Regulation and Commercial
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1. Background
In January 2006, BP Energy submitted an Interconnection Request to the NYISO for the Cape
Vincent Wind Farm Project (“Cape Vincent Wind”) to identify the means with which to
interconnect the 210 MW wind farm generating facility to the company’s transmission system.
As per Attachment S and X of the NYISO OATT, the NYISO has deemed National Grid to be
the Transmission Owner for this project.
The total estimate for the company’s work on the Cape Vincent Wind Project is estimated to be
$2,634,000. BP Energy is responsible for all actual costs.
2. Driver
BP Energy has filed an Interconnection Request in compliance with the NYISO OATT. National
Grid has been deemed to be the Connecting Transmission Owner and is required to provide the
transmission interconnection for this project. A feasibility study, system reliability impact study
and facilities study have been performed to determine the technical requirements, cost and
schedule for the proposed interconnection. An Interconnection Agreement is being negotiated
between National Grid, BP Energy and NYISO. Sanction approval is required prior to National
Grid entering into the agreement.
This project is mandatory and has been given a risk score of 49, customer driven.
3. Project Description
The project includes engineering, design, and construction of a single break tap at the
Rockledge Station, protection upgrades at Coffeen and Black River substations, and installation
of an RTU and revenue metering at the Cape Vincent Wind collection station.
The system upgrades at Coffeen substation are associated with the addition of Cape Vincent
Wind substations and single breaker tap at the Rockledge Station. The Line 3 and Line 5 CT
ratios will be raised to 500/5, and existing line relays reset. To prevent islanding of the Cape
Vincent Wind Farm when the Coffeen R40 breaker opens, dual channel DTT transmit will be
installed to trip the wind farm when the line breaker opens.
The system upgrades at the Black River substation are associated with the addition of the Cape
Vincent substations and single breaker tap at the Rockledge Station. The Line 3 CT ratio will be
raised to 500/5, and existing line relays reset.
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Outages will be required for some of the work at the stations. These outages will be defined and
outage plans created after the Interconnection Agreement and Authorization to Proceed, as per
step 2A of the playbook. Final engineering design will be completed so as to ensure
minimization of outage requirements.
National Grid will provide to BP Energy (at BP Energy’s expense) an RTU to be installed by BP
Energy at its collection substation.
New revenue metering and associated data links will be installed at the Rockledge station and
Cape Vincent collection station.
Engineering review and field inspection of Cape Vincent’s stations will be completed by
customer facilities engineer.
Any and all National Grid transmission and distribution facility relocation costs caused by the
Project. National Grid will work with the developer to identify these areas as soon as possible.
These costs have not been identified and are not included in this sanction paper.
4. Business Issues
Consistent with the provisions of Attachment S and X of the NYISO OATT, this is a fully
reimbursable project for National Grid. National Grid has been deemed to be the Transmission
Owner. A Large Generator Interconnection Agreement (“LGIA”) is being drafted by the three
parties, and its terms and conditions with conform to the pro-forma language of Attachment X.
The LGIA will be filed at the FERC.
A brief summary of some key Articles in the Large Generator Interconnection Agreement can be
found in Appendix B to this sanction paper.
5. Options Analysis
- The project was studied by incorporating the procedures of the NYISO OATT, Attachment X -
Large Generator Interconnection. As this connection is mandated under the NYISO FERC
Electric Tariff, OATT, Attachment X, Large Generator Interconnection Procedures and
Agreement (“Attachment X”), “Do Nothing” is not an option.
- Construct a new single breaker tap at the Rockledge Station to serve as the interconnection
facilities for the Cape Vincent Wind Farm Project. This is the recommended option.
6. Milestones
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During the work at Rockledge, Black River and Coffeen substations, specific attention will be
given to any work that will be done around energized equipment in the control buildings.
All necessary permitting and property rights (ROW, easements or land transfer) are the
responsibility of, and will be obtained by, BP Energy.
National Grid will make clear and separate distinction between the work done by BP Energy and
the Company so as to avoid potential environmental impacts during the course of the work.
BP Energy is responsible for obtaining all the necessary local and state approvals for the project
to go forth.
BP Energy’s 34.5kV and 115kV lines, including their communication circuits for protection
systems, may be crossing National Grid-owned distribution circuits. All line outages will be
coordinated with Regional Control, in accordance with applicable Regional Control Procedures.
Outages will be required for some of the work at the stations. These outages will be defined and
outage plans created after the Interconnection Agreement and Authorization to Proceed, as per
step 2A of the playbook. Final engineering design will be completed so as to ensure
minimization of outage requirements.
The outreach level for this project is considered low. Most National Grid work will be within
existing substations. The developer will be responsible all permitting and rights of way.
National Grid will engineer, design, procure, construct and test all changes and upgrades at
existing facilities.
Investment Recovery
8. Investment Classification
This connection is mandated under the NYISO OATT, Attachment X, Large Generator
Interconnection Procedures and Agreement (“LGIA”), as such procedures and agreements are
regulated by FERC.
The project was studied as per the requirements of the NYISO OATT, Attachment X - Large
Generator Interconnection Procedures and Agreement.
9. Regulatory Implications
This connection is mandated under the FERC mandated NYISO OATT, Attachment X, Large
Generator Interconnection Procedures and Agreement. Upon sanction approval, the Large
Generator Interconnection Agreement (“LGIA”) will be finalized, executed by NMPC, BP Energy
and the NYISO, and filed at FERC.
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Financial Impact
.05 2.28
sanction
Capital
.08 2.73 0 0 0 0 2.81
plan
Variance
-.08 -2.73 +.05 +.94 +1.1 +.19 -.53
to plan
Unit cost
NA NA NA NA NA NA NA
allowance
Proposed
O&M
Proposed
0 0 0 0 0 0 0
Sanction
Proposed
Sanction
($m)
Material .490
Labor .290
Other .420
Transportation .023
Reimbursement 2.725
Labor Adders .437
Contractor .435
AFUDC .181
Salvage TBD
Removal 0
O&M .450
Retirement TBD
Total 2.726
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The estimates, cost responsibility, payment provisions and the project execution schedule are
subject to pending approval of the Large Generator Interconnection Agreement (“LGIA”)
between NMPC, BP Energy, and the NYISO by the Federal Energy Regulatory Commission
(“FERC”).
This estimate (±20%) is for the identified work. However, BP Energy is responsible for paying all
of National Grid’s actual costs. Cost recovery is addressed in the LGIA, Article 11 –
Performance Obligations, which includes, by reference, Attachment S and Attachment X of the
NYISO OATT. If Congestion costs are incurred with this project, efforts will be made to
minimize these costs to the furthest extent possible. The (LGIA) allows NG to petition for
recover of these costs from the developer.
The entire $2, 726,000 estimated cost will be paid in accordance with Article 11 and 12 -
Performance Obligations and Invoice, respectively, of the LGIA by BP Energy. Article 17 of the
LGIA addresses Default issues and Article 18 of the LGIA addresses Indemnity, Consequential
Damages and Insurance, consistent with Attachment X of the FERC Electric Tariff NYISO
OATT.
This project will not create an income tax liability for National Grid per Article 5.17 of the LGIA,
but it will create O&M, property tax and communications costs liabilities for National Grid as per
Section 15 below.
During the Interconnection study process BP Energy has posted security and National Grid has
been reimbursed for actual costs. Following Attachment S and X in accordance with the LGIA,
BP Energy will post security and will make monthly payments of actual costs incurred by
National Grid.
The entire $2, 726,000 estimated cost will be paid by BP Energy in accordance with the LGIA,
Article 11 Performance Obligations and Article 12-Invoice. Article 17 of the LGIA addresses
Default issues and Article 18 of the LGIA addresses Indemnity, Consequential Damages and
Insurance, in compliance with Attachment X of the FERC Electric Tariff NYISO OATT.
This estimate (±20%) is for the identified work. However, BP Energy is responsible for paying all
of National Grid’s actual costs. Cost recovery is addressed in the LGIA, Article 11 –
Performance Obligations, which includes, by reference, Attachment S and Attachment X of the
NYISO OATT. Congestion costs may be incurred with this project. The (LGIA) allows NG to
petition for recover of these costs from the developer.
During the Interconnection study process BP Energy has posted security and National Grid has
been reimbursed for actual costs. Following Attachment S and X in accordance with the LGIA,
BP Energy will post security and will make monthly payments of actual costs incurred by
National Grid.
14. NPV
National Grid is in the process of negotiating, with BP Energy, a schedule that it considers to be
a reasonable amount of time to complete its work. This schedule will be depicted in Appendix B
of the Large Generator Interconnection Agreement. In the event that project delays are incurred,
there is a Reasonable Efforts Standard definition that applies. (A draft of the milestone schedule
is in Appendix C to this paper.)
This project has a direct interaction with the St. Lawrence Wind Project (AMIC 0964), under
which Rockledge Station is to be constructed. Delay in the construction and energization of the
Rockledge Station will delay the interconnection construction for Cape Vincent Wind. A
resanction will be required, should material changes in the Rockledge Station schedule occur.
In the event the actual cost exceeds the estimated cost, BP Energy is responsible for the actual
costs. A brief summary of some key Articles in the Large Generator Interconnection Agreement
can be found in Appendix B to this sanction paper.
If BP Energy abandons the project prior to completion, in accordance with LGIA, Article 5.14,
BP Energy will be responsible for National Grid’s costs. A brief summary of some key Articles in
the Large Generator Interconnection Agreement can be found in Appendix B to this sanction
paper.
Outage and construction plans will be created after the Interconnection Agreement is executed
and BP Energy has issued the authorization to proceed, as per step 2A of the playbook. These
plans will be incorporated into the Scope document, which will be reviewed and approved prior
to completion of Step 2A. If the approved Scope document differs from the approved sanction,
then re-sanction requirements will be evaluated, and re-sanction completed, if deemed
necessary.
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The Authors of this paper assure that is accordance with TGP 11. The supporters listed below
have been consulted and each states that they support this proposal:
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APPENDIX A
One Line Diagram
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APPENDIX B
BRIEF SUMMARY OF KEY ARTICLES IN THE
LARGE GENERATOR INTERCONNECTION AGREEMENT (LGIA)
• Article 1: Definitions- Good Utility Practice: This section establishes the standard of
work that will be used and is defined as good utility practice. “Good Utility Practice
shall mean any of the practices, methods and acts engaged in or approved by a
significant portion of the electric industry during the relevant time period, of any of the
practices, methods and acts which, in the exercise of reasonable judgment in light of
the facts known at the time the decision was made, could have been expected to
accomplish the desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility Practice is not intended to be
limited to the optimum practice, method, or act to the exclusion of all others, but
rather to delineate acceptable practices, methods, or acts generally accepted in the
region”
Transmission Owner shall invoice Developer for such costs pursuant to Article 12
and shall use due diligence to minimize its costs. In the event the Developer
suspends work by Transmission Owner required under this Agreement pursuant to
this Article 5.16, and has not requested Transmission Owner to recommence the
work required under this Agreement on or before the expiration of three (3) years
following commencement of such suspension, this Agreement shall be deemed
terminated. The three-year period shall begin on the date the suspension is
requested, or the date of the written notice to Transmission Owner and NYISO, if no
effective date is specified”
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• Article 5. 15: Tax Implications- This section summarizes that “all payment or
property transfers made by Developer to Transmission Owner for the installation of
the Transmission Owner’s Attachment Facilities and the System Upgrade Facilities
shall be non-taxable” and provides further detail on the indemnification of cost
consequences of current tax liability as follows: “Developer shall protect, indemnify
and hold harmless Transmission Owner from the cost consequences of any current
tax liability imposed against Transmission Owner as the result of payments or
property transfers made by Developer to Transmission Owner under this
Agreement….”
• Article 11: Performance Obligation- This section states that the Developer’s
Attachment Facilities ( as outlined in Appendix A of the LGIA) will be designed,
procured, constructed, installed, owned and/or controlled at the Developer’s
expense. Also, the Developer will pay for the Transmission Owner’s design,
procurement, construction, installation of the Transmission Owner’s Attachment
Facilities ( also outlined in Appendix A of the LGIA). System Upgrade Facilities will
be designed, procured, constructed, installed and owned by the Transmission Owner
( detailed in Appendix A of the LGIA) and costs assigned to the Developer in
accordance with Attachment S of the NYISO OATT”.
• Article 12: Invoice- This section outlines the responsibilities of both the Transmission
Owner and Developer to provide monthly invoices of amounts due for work
performed during the preceding month. “Each invoice shall state the month to which
the invoice applies and fully describe the services and equipment provided”. In
addition, “within six (6) months after completion of the construction of the TOAF and
the SUFs, Transmission Owner shall provide an invoice of the final cost of the
construction of the TOAF and the SUF, in accordance with Attachment S to the
NYISO OATT”. “Invoices shall be paid within thirty (30) Calendar Days of receipt”.
• Article 14: Regulatory Requirements and Governing Law – This section summarizes
that the LGIA is “governed by the laws of the state of New York”
• Article 15: Notices- Billing and Payments- This section establishes the delivery
method appropriate for billing and establishes the appropriate addresses and contact
persons authorized to accept billing on behalf of the parties to the LGIA, in
accordance with Appendix F of the LGIA.
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APPENDIX C
LARGE GENERATOR INTERCONNECTION AGREEMENT (LGIA)
DRAFT MILESTONE SCHEDULE
Date
Milestone (mo/yr) Responsible
Execute Interconnection
1. 07/2010 ALL
Agreement
Issue written authorization
to proceed with
2. engineering, design and 07/2010 Developer
procurement of System
Upgrade Facilities
Provide security pursuant
3. 07/2010 Developer
to Section 6.3 of the IA
Complete construction of Saint Lawrence Wind (Acciona
4. 07/2012
Rockledge Substation Energy)
Transfer ownership of
Connecting Transmission Saint Lawrence Wind (Acciona
5. Owner Attachment 09/2012 Energy)/Connecting Transmission
Facilities – Rockledge Owner
Substation
Start engineering and
procurement for System
6. Upgrade Facilities and 10/2012 Transmission Owner
Transmission Owner
Attachment Facilities.
Submit final design and
equipment specs for the
7. Developer Attachment 10/2012 Developer
Facilities to the
Transmission Owner
Submit service request to
8. local Telco provider for all 01/2013 Developer
required services
Complete review of, and
issue comments on, final
design and equipment
specs for Developer
9. Attachment Facilities 02/2013 Transmission Owner
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