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case number 23-1192 et al.

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New York State Public Service Commission for the Federal Energy Regulatory Commission.

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Mr. Schwartz for the petitioner.

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Mary for the respondent.

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Thank you for the intervener.

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Morning, Council.

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Schwartz, please proceed when you're ready.

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Good morning.

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Thank you.

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May it please the court, Jeffrey Schwartz for the New York State Public Service Commission.

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I'd like to reserve two minutes for rebuttal.

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The orders on review here raise rates by hundreds of millions of dollars because of a speculative assumption that New York will force fossil fuel generators to retire by 2040.

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But FERC has never found that New York must, that New York will, or is even likely to force such retirements by then.

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The remand order found no record evidence for that assumption.

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And the later orders agree.

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The May 19th order held that the zero emission target can be achieved in more than one way and does not require all fossil fuel resources to cease operating.

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The October 4th order similarly held, we continue to find that the Climate Act does not require all fossil fuel resources to retire by 2040.

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And FERC agreed with extensive evidence submitted by the market monitor that in 2040 New York will still need

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large quantities of dispatchable thermal resources to preserve reliability.

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Now, if New York does not require retirement by 2040, if, for example, it adopts a net emission framework that allows some fossil fuel resources to keep running, or if it keeps the fossil fuel resources around on standby as a reliability backstop, or if it requires retirement by 2043 instead of by 2040,

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In each of those cases, consumers will have been forced to pay hundreds of millions of dollars that were never needed and that they can never get back.

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So has any of that happened yet?

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No.

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Those questions have not been answered yet.

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Which way does that cut?

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Because if those questions haven't been answered yet and they haven't been teed up, it seems like what the commission ratified makes some sense because

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under, even in the way that we remanded the case, you take the existing state of play as a given, and you don't sort of project forward to anticipate things that haven't come about.

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Correct.

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But the existing state of play when the system operator filed in November 20 was a law that required, that does not regulate generators at all directly.

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There are no, it regulates only the New York agencies and tells them to regulate to achieve two goals.

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And as it pertains to the New York commission,

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the Climate Act put forward two goals that the Commission has to pursue simultaneously, reducing emissions and protecting reliability.

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And at every stage of the implementation, when the initial program was due in mid-2021, which was seven months after the system operator filed, and every two years thereafter, when the New York Commission reviews the program, it's supposed to consider reliability along with

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reducing emissions.

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And frankly, if those things conflict, the liability wins.

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New York is not going to turn out the lights in New York in order to hit the zero emission target.

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So the reason why uncertainty cuts in favor of maintaining the existing preact amortization period is that doing it the other way

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risks charging customers hundreds of millions of dollars that were never necessary for them to pay, right?

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Because let's say that New York were to decide tomorrow that allowing these resources to continue, that they could continue in operation.

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Presumably in the next reset,

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the amortization period would revert to 20 years, but there would be no way for customers to get back the extra charges that were imposed uses the 17 year period.

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But if you do it the other way around, the generators are not at risk.

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If New York tomorrow were to say, in fact, yes, by 2040, all the fossil fuel generators

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will retire, then in the next reset, the numerator is still the same.

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The numerator is the full cost of entry of the hypothetical peaking plant.

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And the denominator isn't 17 years anymore.

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In the next reset, the denominator is 13 years.

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So the rates are going to be calculated in the next reset at a level sufficient for the generators to recover their costs.

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The agency says that the zone of reasonableness is a range.

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And that's true, but there are limits.

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And the most basic one is that the Federal Power Act requires balancing investor and consumer interests.

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That requirement is why it's wrong to conflate the zone of reasonableness with what a reasonable investor might do.

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The investor perspective is only half the equation.

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Consumer protection is why FERC's no-speculation precedent holds that speculating about future regulation can't justify a rate increase today.

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The need to protect consumers against potentially unnecessary charges is what takes the increase outside of the zone of reasonableness.

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The speculation makes it unreasonable.

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And the final point, the final limit on the zone of reasonableness is the evidentiary record.

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FERC here concluded in the remand order, I think it's in paragraph 31, that dispatchable resources like these will be needed for a liability, which makes it unlikely to presume that they're going to retire by 2040.

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The orders on review ignored these limits.

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They inquired only what an investor might think, not what's fair to consumers.

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And they answered in a way that speculates what New York will do and blinds itself to the evidence that the resources will be needed.

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And FERC then treated the result, a multi-hundred million dollar rate decrease, as just unreasonable per se.

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The flaws in FERC's reasoning are revealed by considering the fact that FERC held that the existing 20-year amortization period remains reasonable.

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That tells you several things.

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First, it says that the foundation for the 17-year period is shaky.

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If you knew that the resources were going to retire by 2040,

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then a 20-year period wouldn't be reasonable.

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The second thing it tells you is that FERC believes the system operator can run the system reliably today on the basis of the 20-year amortization period.

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And that means the shorter period and higher rates are unnecessary.

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The bottom line here is that this rate increase is based on the forecast of regulatory action that New York has not yet taken and may never take, and that the system operator can take into account if New York eventually does take.

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because raising rates needlessly is not just unreasonable.

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The court should vacate for ex-orders.

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Thank you, counsel.

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We'll give you some time for rebuttal.

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From the commission now, Ms.

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Perry.

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Thank you, your honor.

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In its remand decision, this court said that all the New York ISO needed to demonstrate in this proceeding was that the amortization period represented a reasonable estimate of the number of years an investor would inspect a gas-fired plant built in New York between 2021 and 2025 to remain commercially viable.

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The Commission reasonably found that the New York ISO met that standard here because of the fact that since the last reset proceeding, there had been passage of an act that required that there be zero emissions by 2040.

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But there was implementing regulations that still hadn't

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come to come to fruition yet exactly your honor but you have to appreciate remember that the point of the amortization period is to represent investors expectations of risk it's to it's to compensate them for risk and what you want somebody to do is today have the incentive to build a plant

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And the point is, is the investor looking today to build a fossil fuel plant is presented with the current circumstances of there is a 2040 emissions, zero emissions requirement.

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There are no regulations that permit them to meet that requirement any other way.

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Other than by ceasing operation, because there are no regulations that permit them to modify their facilities and continue to operate.

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There are no regulations that permit fossil fuel plants to continue to operate.

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after 2040 said the point is what the New York ISA said, as this court said in its remand decision, thus the developer of a fossil peaking plant would face substantial uncertainty about the financial returns of a fossil peaking plant starting in 2040.

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And that is the concern that the New York ISA was addressing because you want all of the investors to have adequate incentives to build a fossil fuel plant now.

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And the point is, if there are regulations, as the commission said, that come on later on, that is why there are periodic resets and new regulations that come on that don't exist now but do exist later.

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be taken into account in the next recent proceeding.

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This may be something to ask the Petitioners Council, too, but has anything concrete happened by way of regulations?

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To my knowledge, Your Honor, there's...

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What I know is that recently in 2023, the New York Public Service Commission had a proceeding in which it asked for comments on the scope of the zero emissions requirements in the scope of what constitutes the energy system, the electric system under the statute.

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And they asked for supplemental comments on that.

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And my understanding is that those supplemental comments were just filed.

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The due date was January 19th of this year.

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So I don't believe with regard to the issue.

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I thought this Climate Act required them to set up a program by June of 2021.

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It does, Your Honor.

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And if they had done that, then they wouldn't be here, presumably, because

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that they would have had the regulations in place and you could tell exactly what the situation would be unless they'd be repealed or changed or modified over the years.

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But because they didn't do that, they didn't comply with the act, the ISO had to submit every four years the information regarding what the amortization would be, right?

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That's right, Your Honor.

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And the point being that they do that under the commission's regulations in this court's remand decision based only on the laws and regulations that currently exist.

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And at the time, as the court said at the time,

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There was no, the New York Public Service Commission had not modified the 2040 zero emissions requirement and had given no indication that it planned to do so.

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Which is still the case.

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Which is still the case.

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And you will notice in their pleadings in this case, the New York Public Service Commission never says we're intending to modify these requirements.

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They're just saying we might, the statute permits us to, but we haven't decided.

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And so what the New York ISO has to do is to make investors now, investors who are building a fossil fuel peaking plant now, have sufficient incentives to build.

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And what they do that by making sure that the risk

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are adequately compensated.

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And right now, to an investor building a fossil fuel peaking plant, you have to say the passage of a statute that says zero emissions by 2040 is a risk to them.

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It's an additional risk that didn't exist before.

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And the New York ISO is taking that risk into account in lowering the amortization period to 17 years.

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But how does this affect the anti-speculation precedent that's out there?

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Well, the anti-speculation precedent, actually the commission found ultimately, as this court in the remand decision said, any speculation about future actions by the New York Public Service Commission to implement the statute are squarely inconsistent with this commission's

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anti-speculation precedent.

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And so on remands, this court, the commission said,

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Following the guidance of the court in the remand decision, we find that the New York ISO is properly looking at the current state of affairs, which is there is a 2040 zero emission requirement.

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There are no regulations modifying that requirement and no regulations permitting anybody to be excused from that requirement.

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But the implementing regulations haven't been passed.

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That's right, Your Honor.

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This is always speculation.

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Isn't it?

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I mean, you're making a projection about what the future is going to hold.

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And maybe if you only project the future for the next 10 minutes, you're not speculating.

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But if you're talking about years, you absolutely are.

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And no matter which way you cut it, if you comply with the commission's position, you're speculating that the 2040 requirement is going to be changed.

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doing what the commission did, which is, we're not going to, we're gonna assume that that's part of it.

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I mean, the climate act had some effect.

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We can't say that it didn't have any effect, which is basically what the New York commission is saying.

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Right, your honor.

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And commission recognized that the nature of the inquiry that the New York ISO has to make, which is to estimate investor expectations of recovery

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for a gas plant into the future is necessarily a forward-looking assumption.

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And this is discussed in the October, 2020 order at paragraph 43 in the May, 2023 order at paragraph 35.

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But the point of the commission's anti-speculation precedent is when the New York ISO makes that judgment about investor expectation of risk, it should not incorporate into that judgment

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any speculation about the law changing in the future, the laws and regulations, no speculation about laws and regulations changing in the future.

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And so that's why in this case, the commission said that it's appropriate to think that an investor today would see additional risk from the fact that there has been this 2040 zero emission requirement imposed.

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So the speculation is only about laws.

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It's not about scientific development.

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or changes in the climate or any of that stuff, it's just laws?

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Is that what you're saying?

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Well, the anti-speculation precedent specifically goes to, as this court said in its remand decision, FERC's precedents required the New York ISO to take into account currently effective laws and regulations and avoid speculating about laws and regulations in the future.

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And that was the anti-speculation.

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Is that the remand decision?

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Yes, Your Honor, page two, the remand decision.

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And it's cited to the commission's 2014-2017 demand curve reset order at paragraph 74, which says the same thing, that it is specific to currently effective laws and regulations.

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Because to estimate the investor expectations,

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necessarily requires some forward-looking assumptions on the part of the New York ISO.

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But the point is, to sort of cabin those forward-looking assumptions, they're required to just use the current state of the law as a basis for estimating the investor's expectations.

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And how do the costs come in here?

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Because there's projected millions of dollars if you use the 17-year amortization schedules.

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So how did you all balance that?

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The point is this is a 205 filing that only has to do with the demand curve reset, which is the parameters of the cost of new entry for a new peaking plans.

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The tariff specifies, once there is a reasonable estimate of the cost of new entry, the tariff specifies then how the resulting rates are calculated.

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And then in this 205 proceeding, the tariff is not at issue.

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And so as the commission said, what happens is that once you have a just and reasonable cost of new entry, the result

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The resulting rate results from the previously approved rate design.

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And therefore, if they want to challenge, if they think that the tariff results in unreasonably high rates, they can file a complaint under section 206 to challenge the tariff and to challenge the rates that result from the tariff.

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But in this 205 proceeding, where the tariff is not at issue, it's beyond the scope of the proceeding.

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There's this Climate Act subject to

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a test under the Federal Clean Air Act.

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In other words, does EPA have preemptive authority?

[00:19:24] Speaker 04:
I don't know the answer to that, Your Honor.

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PERM doesn't control emissions, does it?

[00:19:28] Speaker 06:
No, Your Honor.

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No.

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And I thought that there was a general requirement for national ambient air standard, quality standards, that FERC puts into effect.

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One state, California, is exempt

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But I wasn't sure whether New York was exempt, too.

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I don't know the answer to that, Your Honor.

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But I mean, there are emissions.

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I would call for speculation, right?

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Well, there are other provisions of the Climate Act, which go to other departments, which specific go to specific emissions limits and that sort of thing.

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But I'm not aware that this particular provision has Clean Air Act implications.

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There are no lawsuits that you're aware of challenging the validity of?

[00:20:26] Speaker 04:
The Climate Act?

[00:20:27] Speaker 04:
Not that I'm aware of, Your Honor.

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questions.

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No further questions.

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Thank you.

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Thank you, Council.

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Interveners now, Mr Hughes.

[00:20:46] Speaker 01:
Thank you, Your Honor.

[00:20:47] Speaker 01:
Paul Hughes for Interveners, Independent Power Producers of New York.

[00:20:52] Speaker 01:
I just touched briefly on three points.

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The lack of regulations and speculation.

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Second, the risk calculus and third, governing 205

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First, on the fact that there are no regulations, as the court pointed out, New York has missed its deadline for implementing regulations.

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And FERC specifically found at paragraph 38, JA408, that that increases the aggregate risk that investors face because they don't know what the future looks like.

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And that aggregate increase in risk only supports the proposal that NISO made.

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Additionally, in IPNY 1, this court said the PSC has not exercised its discretion to modify the act's zero-admission target and given no indication it ever would.

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So the baseline is we know there is a zero-admission target, in fact, it's a requirement in the law.

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Now, it could be modified, but as investors currently confront the situation, it has not been done so.

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And I think that's the baseline that this court, in its prior decision, already set forward, and that establishes the reasonableness of the action.

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The second point, though, is the risk more broadly.

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As FERC explained at paragraphs 42 and 34 and 33 of its decision, that even if there is alternative options that allow these thermal plants to continue running post-24, they're most likely going to be vastly more expensive because they'll either use renewable natural gas or hydrogen

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or some other technology that is unproven at this point that has a much, much higher price point.

[00:22:24] Speaker 01:
And so that goes to, well, first, it's not even clear that it's technically feasible is what FERC said.

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It may not exist.

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But if it does exist to 2040, the evidence shows it's almost certainly going to be vastly more expensive.

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And that's ultimately what has the effect on the uncertainty.

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But the last quick point is under section 205, the standard here is very demanding.

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This is not about what the best rate is.

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It is whether or not this is a just and reasonable rate that's proposed by NISO and FERC was well within its authority to find that this was within the zone of reasonableness.

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And finally, New York can make decisions about its generation mix and its policy decision may be a very good decision for 2040, but that does have an effect on costs and that needs to be taken into account by developers ensuring that there is sufficient incentive

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to develop the kind of capacity that New York wants in 2040 in the future.

[00:23:19] Speaker 01:
And I think that is the natural effect of its decision.

[00:23:21] Speaker 05:
We've had some discussion about this speculation.

[00:23:25] Speaker 05:
And the way I understand it, there's a speculation with respect to the generators.

[00:23:32] Speaker 05:
But the Climate Act did not require generators to be

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ceasing operations, if you will, by 2040.

[00:23:39] Speaker 05:
They're allowing New York to set up its program to actually come into compliance with the Climate Act.

[00:23:47] Speaker 05:
And so when I'm thinking about my question on speculation, I'm talking about you can't figure out your plan based on speculation of the implementing regulations that have not been yet on the books.

[00:24:03] Speaker 01:
Yes, your answer that in two different ways.

[00:24:05] Speaker 01:
The first is, as I think this court understood speculation the last time this case was before the court was.

[00:24:11] Speaker 01:
The court said to reduce speculation, we take the Climate Act as the baseline, which says there's no fossil generation by 2040.

[00:24:19] Speaker 01:
But there is an unless in there, and I appreciate there's an unless.

[00:24:21] Speaker 01:
There could be other sorts of regulations that New York Public Service Commission could implement.

[00:24:27] Speaker 01:
But the question is, until those are implemented, what is the baseline that investors understand?

[00:24:32] Speaker 01:
And unless and until there is an exception that is put in place, the investors understand the baseline today is what the law requires.

[00:24:40] Speaker 01:
what this court very clearly said in its opinion, is that unless there is an exception, that there will be no thermal generation.

[00:24:48] Speaker 01:
So as a result, that massively increases the risk.

[00:24:51] Speaker 01:
Now, it could be the case.

[00:24:52] Speaker 01:
The speculation is maybe, as New York says, things will change.

[00:24:56] Speaker 01:
But the reason that we don't think about what may happen down the road is because we're trying to understand the risk profile that investors today are saying.

[00:25:05] Speaker 01:
Should I build new capacity in New York?

[00:25:07] Speaker 01:
What is that going to look like?

[00:25:09] Speaker 01:
They have to understand what the cost of the return on their investment is.

[00:25:12] Speaker 01:
The second point, though, is even if we were to engage in the speculation that New York suggests, where they say, well, there may be ways that those thermal plants still has some utilization with hydrogen, with renewable natural gas.

[00:25:24] Speaker 01:
Those are the sorts of proposals that are being considered.

[00:25:27] Speaker 01:
Even if we were to engage in that speculation, that is vastly more expensive for the generator.

[00:25:32] Speaker 01:
And those technologies are not proven.

[00:25:34] Speaker 01:
So we start engaging in

[00:25:35] Speaker 01:
technological speculation is, is there even grid level hydrogen renewable natural gas that will be available in 2040?

[00:25:42] Speaker 01:
We don't know that speculation, and if so, it's almost assuredly going to be vastly more costly.

[00:25:49] Speaker 01:
All of that goes into why it was appropriate for the New York.

[00:25:52] Speaker 05:
But is your decision based on any speculation about the future regulations?

[00:25:58] Speaker 01:
No, we say the way that this minimizes, and I think this accords with what this court said the last time, is we take the Climate Act as given, which it currently says that there is no emissions post 2040, unless New York PSC does something in the future.

[00:26:15] Speaker 05:
Now, there is an ongoing research doesn't impose any requirements with respect to the generators.

[00:26:20] Speaker 01:
It does impose though a requirement on and the issue is that it's the what is a reasonable investor developer of a new plant going to understand.

[00:26:32] Speaker 01:
Do I.

[00:26:33] Speaker 01:
invest the hundreds of millions of dollars required to build bring new capacity to New York what's the return on that investment going to look like that decision they have to make today based on what they currently understand the baseline law to be and that's right are you aware of any new construction

[00:26:52] Speaker 01:
Well, I'm not, Your Honor, to the extent, though, that there has been proposals for new construction, we talk about this in briefs, the Astoria and the dance camera plants, that the New York Department of Environmental Conservation has denied permits for thermal plants on the basis of the Climate Act.

[00:27:07] Speaker 01:
What the New York Department of Environmental Conservation has said is building new thermal units is inconsistent with the Climate Act's requirements of zero emissions.

[00:27:17] Speaker 01:
So to the extent that there's been permitting applications that have been requested from the Department of Environmental Conservation, those have been so far denied on the basis of the Climate Act.

[00:27:28] Speaker 01:
And what I think that suggests is to the extent New York is pushing for a different sort of peaking facility, such as batteries and other zero emission options, that is within the prerogatives of New York to select its generation mix.

[00:27:44] Speaker 01:
But those are more expensive alternatives

[00:27:47] Speaker 01:
for having the peaking capacity that the people of New York need.

[00:27:51] Speaker 03:
So as your point is, if you're an investor looking out ahead.

[00:27:55] Speaker 03:
The Climate Act is just a real thing.

[00:27:57] Speaker 03:
It was enacted.

[00:27:58] Speaker 03:
It's a law.

[00:27:58] Speaker 03:
So you have to take that into account in charting the future.

[00:28:02] Speaker 03:
If there were regulations in effect, those would be real things too.

[00:28:04] Speaker 03:
But there's just not.

[00:28:06] Speaker 03:
And there wasn't at the time that the 20 years was reduced to 17.

[00:28:10] Speaker 03:
If those regulations come into being and that changes the outlook, that changes the horizon, then in the next cycle, that'll be taken into account.

[00:28:16] Speaker 03:
But as it stands now under our remand order,

[00:28:19] Speaker 01:
existing legal state of affairs is that there is a climate act there are no regulations and then you have to ask okay well then what does the road ahead look like in that universe that's precisely right your honor and that's why there's a reset every four years to take into account developments but in doing that are you telling me now that you're not looking at what those regulations may state or what you project them to do well your honor to minimize speculation we look at what the laws on the books today are and the laws on the books the climate act is

[00:28:48] Speaker 05:
And that's what I'm trying to get you to get to.

[00:28:51] Speaker 05:
You're only focusing on the Climate Act or are you also considering future implementing regulations?

[00:28:57] Speaker 01:
What I think this court's decision in the first case is we look at what laws are on the books today and the Climate Act exists.

[00:29:04] Speaker 01:
There is the possibility that regulations could create exceptions to it, but it's speculative if and when that will occur.

[00:29:10] Speaker 01:
We're already more than two years past the deadline requirement for those regulations to come.

[00:29:14] Speaker 01:
We don't know if and when they will come.

[00:29:16] Speaker 01:
And so that's why I think this court said the last time, the baseline is, the Climate Act, as Your Honor said, is a real thing.

[00:29:22] Speaker 01:
It exists.

[00:29:23] Speaker 01:
It bears on the risk that current developers must take into account when considering what actions or investments to undertake.

[00:29:32] Speaker 01:
And if that changes, then that will be addressed in the next reset period.

[00:29:36] Speaker 01:
But as it exists today, understanding the costs and benefits

[00:29:41] Speaker 01:
of a potential new infrastructure project.

[00:29:43] Speaker 05:
But without the regulations, are there any real requirements with respect to the fossil fuel or the generators?

[00:29:51] Speaker 01:
Yes, Your Honor.

[00:29:51] Speaker 01:
I think to the extent that there's any doubt about that, what I just mentioned about the Astoria and the dance camera plants demonstrate quite clearly that the New York Department of Environmental Conservation is quite clear that this has a real today meaningful effect in saying that a

[00:30:08] Speaker 01:
licenses for new thermal generation being denied on the basis of the Climate Act.

[00:30:13] Speaker 01:
So that does have a very, I think, meaningful, clear implication that the Climate Act is real, that it has real, meaningful obligations.

[00:30:23] Speaker 01:
And again, there's nothing wrong with New York making a decision about its generation mix for public policy reasons that New York

[00:30:31] Speaker 01:
seeks to foster.

[00:30:33] Speaker 01:
It just has implications for the cost of new capacity in the state when those decisions are made and what that does to forward-looking investment.

[00:30:42] Speaker 06:
Is there a legislative history for this climate act?

[00:30:46] Speaker 06:
A committee report or reports where their hearings were held?

[00:30:51] Speaker 01:
Your honor, I don't think there is particularly good

[00:30:54] Speaker 01:
pre-enactment history, what we've pointed to in the briefs is the best that we found, I think anyone's uncovered, which was there was governor, a memo, a governor's signing statement, and then a majority member remarks at the time of the signing, all of which identify moving New York off all fields.

[00:31:11] Speaker 01:
We talk about that in the briefs.

[00:31:12] Speaker 01:
But no hearings that you're aware of?

[00:31:14] Speaker 01:
I'm not aware of a particular committee reports, your honor, that go into detail about this.

[00:31:19] Speaker 01:
It was rather done by the- Was New York in general

[00:31:22] Speaker 06:
prepare the legislature, does the New York legislature in general, some states don't, prepare committee reports?

[00:31:32] Speaker 01:
Your honor, I don't know generally the answer to that question.

[00:31:34] Speaker 01:
I do know we did look here, and so far as I'm aware, we had not.

[00:31:37] Speaker 06:
And you're not aware that your client said, would have testified in any hearings that were held on this?

[00:31:44] Speaker 01:
My client is active in these issues.

[00:31:46] Speaker 01:
So for example, it was noted there was a comment period for

[00:31:49] Speaker 01:
the current regulations of my client has participated in that.

[00:31:54] Speaker 01:
I understand, Your Honor.

[00:31:55] Speaker 01:
I'm just making the point broader than my client is active.

[00:31:57] Speaker 01:
I'm not aware, though, of any statements that they made.

[00:31:59] Speaker 01:
I'd be happy to research that and provide a letter to the court if they did.

[00:32:06] Speaker 03:
Thank you, counsel.

[00:32:07] Speaker 01:
Thank you, Your Honor.

[00:32:16] Speaker 03:
George, we'll give you the two people you had left.

[00:32:18] Speaker 02:
Thank you.

[00:32:19] Speaker 02:
There's a lot there.

[00:32:20] Speaker 02:
First, as to Dan Scammer, the permit denial goes to whether this is the right reference unit, not whether fossil fuel resources that are built will have to retire.

[00:32:30] Speaker 02:
Furthermore, that decision's reliance on the Climate Act provisions that we're talking about here was vacated by a subsequent ruling of the ALJ and then stayed for the proceedings precisely to wait for the New York Commission to issue implementing regulations.

[00:32:46] Speaker 02:
now.

[00:32:48] Speaker 02:
The other side said that it's not speculating about implementing

[00:32:56] Speaker 02:
reflects modeling parameters that fossil-fueled resources will cease operating by 2040 to meet Climate Act requirements.

[00:33:04] Speaker 02:
But FERC has said the Climate Act does not require fossil-fueled retirement.

[00:33:08] Speaker 02:
They absolutely are speculating that that's what the implementing regulations will do.

[00:33:13] Speaker 06:
It is no more speculative, however, to assume that fossil-fueled resources... It doesn't require it if your client passes regulations modifying it.

[00:33:23] Speaker 06:
Your client has not done that so until they do that it does require No, it has done neither right now.

[00:33:30] Speaker 02:
There are no regulations on the book note on the books Nobody could go to court and cite the Climate Act or any regulation of the New York Commission or the DEC insight to force a regulation because they're earning correct and they could not force the closure of any specific

[00:33:46] Speaker 06:
fossil fuel generator.

[00:33:48] Speaker 02:
Now, let's discuss what the state of the law was when the system operator filed in November of 2020.

[00:33:55] Speaker 02:
At that point, there was a climate act that required two things, emission reductions and reliability.

[00:34:02] Speaker 02:
There were no implementing regulations.

[00:34:05] Speaker 02:
FERC has admitted that the act of its own force does not require retirements to be implemented in more than one way, hasn't been implemented.

[00:34:14] Speaker 02:
does not define zero emissions or tell the New York Commission how to measure emissions, that it can be implemented on a net emission basis that would let fossil-fueled resources keep running, and that it requires the New York Commission at every stage, both initially and thereafter, to consider reliability.

[00:34:33] Speaker 02:
And FERC itself has reviewed the evidence and found that fossil-fueled resources are likely to be needed for reliability after 2039.

[00:34:41] Speaker 02:
So the question in this case

[00:34:44] Speaker 02:
comes down to, on that record, whether the mere existence of the emission reduction goal without any more justified imposing hundreds of millions of dollars in extra costs on consumers, even though those costs might never be needed.

[00:34:59] Speaker 02:
And remember, FERC said 20 years remains reasonable.

[00:35:03] Speaker 02:
The system operator can keep running the system reliably today on the basis of the existing amortization period.

[00:35:10] Speaker 02:
As for the New York Commission and its implementation of the law, again, in November 2020, the New York Commission wasn't even yet on the clock to have issued implementing regulations.

[00:35:21] Speaker 02:
That was seven months off.

[00:35:23] Speaker 02:
In fact, the New York Commission on the day before FERC changed its mind in this case, opened a proceeding to define zero emissions.

[00:35:30] Speaker 02:
That proceeding is underway.

[00:35:32] Speaker 02:
Comments have been recently received.

[00:35:35] Speaker 02:
New York is working avidly

[00:35:37] Speaker 02:
to try to implement the law.

[00:35:39] Speaker 02:
The first step it took in October 2020 was to try to promote the development of massive amounts of new renewable resources.

[00:35:46] Speaker 02:
But nobody is here saying, and FERC has not found, that that by itself is sufficient to allow the closure of the fossil fuel plants.

[00:35:54] Speaker 02:
Finally, one last point, Your Honor.

[00:35:57] Speaker 02:
The Federal Power Act requires balancing investor and consumer interests.

[00:36:02] Speaker 02:
All you've heard on the other side is investor, investor, investor.

[00:36:05] Speaker 02:
We're here representing the consumers and the court should vacate.

[00:36:09] Speaker 03:
Thank you, counsel.

[00:36:11] Speaker 03:
Thank you to all counsel.

[00:36:12] Speaker 03:
We'll take this case under submission.