Second Circuit Denies Request to Stay NYISO’s New Capacity Zone

Jun 6, 2014

Reading Time : 2 min

NYISO itself took the unusual position of refusing to support either side.  It filed an amicus brief that expressly stated that NYISO supported neither party. NYISO sought to inform the court only that the issuance of a stay would require that it modify its complex auction software. NYISO stated that it would not be able to remove the NCZ from its calculations in the available time frame, though it would be able to do so before the next round of auctions begins on November 1, 2014. NYISO believed that it would be able to approximate the results of an auction without the NCZ in place if it were called upon to do so, but that it would have to request a tariff waiver from FERC to implement that solution. As an alternative, NYISO suggested that, if the court wished to order a stay, it could do so effective in November, by which point NYISO would be able to remove the NCZ from its software.

FERC’s Rehearing Order denied requests to delay or phase in the NCZ. It did grant rehearing on a narrow issue related to the ability of certain suppliers to withhold capacity, and it ordered NYISO to delete a provision in its tariff that could have been used to implement a withholding strategy. FERC declined to order NYISO to establish tariff rules for eliminating the NCZ if the deliverability issues that created it are resolved, but urged NYISO to address the issue through its stakeholders.

The 2nd Circuit’s order was extremely short.  It denied the request for a writ of mandamus as moot and denied the motions for an emergency stay by citing to the relevant standard.2 The court did not choose to explain which aspects of the standard the petitioners failed to satisfy. A longer order from the 2nd Circuit may be forthcoming, however, since the same parties have already petitioned the court for review of FERC’s Rehearing Order. They have not requested a stay.


1 New York Indep. Sys. Operator, Inc., 144 FERC ¶ 61,126 (2013); New York Indep. Sys. Operator, Inc., 146 FERC ¶ 61,043 (2014).

2 See In re World Trade Ctr. Disaster Site Litig., 503 F.3d 167, 170 (2nd Cir. 2007) (“The four factors to be considered in issuing a stay pending appeal are well known: ‘(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.’”)

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