The New York State Public Service Commission has adopted guidelines for a process for reviewing and approving regulated “backstop” projects to facilitate development of new resources, if needed to supplement the market.

“The Commission has the ultimate responsibility to ensure the reliability of the bulk power system,” said Commission Chairman Garry Brown. “To date, merchant proposals have been and continue to be more than sufficient to maintain reliability in the state. Nonetheless, if regulatory intervention is needed to address the energy reliability needs of the State, the guidelines established today by the Commission provide for a judicious and reasonable selection process for a potential regulated backstop project.”

Regulated backstop projects facilitate development of new resources by ensuring electricity infrastructure is constructed or sufficient energy demand reductions occur, if the market is not able to address the energy needs and related public policy goals of the state.

The review and approval process contemplates the Commission choosing the preferred reliability backstop project from among utilities’ or merchants’ proposals. Also, the Commission would undertake the appropriate regulatory and siting certification procedures, as required under Public Service Law.

The guidelines adopted by the Commission reflect recommendations developed by Staff of the Department of Public Service and interested parties in the Recommendations Regarding Review and Implementation of Regulated Reliability Solutions,

The Commission’s guidelines for approval of regulated backstop projects, if needed, address the following topics: the selection process and procedures for regulated reliability backstop projects; screening competing backstop projects and the consideration of public policy issues; and remaining issues for permitting and ensuring the construction of needed reliability projects.

The Commission’s December 2007 Order Instituting Electricity Reliability and Infrastructure Planning resulted in three initiatives. The first initiative regarding cost allocation and recovery procedures for required reliability backstop projects was addressed in the Commission’s April 2008 Order in this matter. The Commission adopted guidelines for the review and approval of required reliability backstop projects. The remaining initiative to develop a long-range electricity infrastructure plan will be commenced following the issuance of the State Energy Plan.