The NYISO Market Monitoring Unit on May 5 told stakeholders it is independently analyzing the capacity market in parallel with the ISO’s ongoing Capacity Market Structure Review project.

“We want to help with a bit of quantitative modeling to help reason through some of the alternative structure proposals that have come out as part of this process,” said Joe Coscia of Potomac Economics. He said that his presentation to the Installed Capacity Working Group was intended to show his thinking and get feedback on possibilities. “We’ll follow up with a future presentation of results, so no numbers today.”

Coscia said the MMU is attempting to address the specific concerns of stakeholders with the current market. The analysis will address several questions:

• • Is there still value in a market designed to attract new entry in an environment where new generation development is driven by state contracts?
  • Do uniform net cost of new entry (CONE) demand curves result in “excessive rents” to existing resources?
  • Do bifurcated or “retention-driven” capacity markets improve efficiency or reduce costs?

Coscia said the study includes looking at the implications of using marginal capacity accreditation factors (CAFs) rather than average CAFs. This involves studying the calculation of effective load-carrying capacity for resources on the grid. Currently NYISO uses marginal CAFs, which can diminish the value of energy storage as more storage enters the market, according to a Brattle Group analysis.

Stakeholders asked whether the MMU’s analysis would try to account for state reimbursement programs for renewable energy. Coscia said the study will include an assumption that a portion of renewable energy entry into the market would not be driven by capacity prices.

Coscia gave a brief rundown of the MMU’s assumptions:

• • state-contracted renewables could meet 70% of load by 2033 and 100% of load by 2040;
  • 6 GW of battery storage and 9 GW of offshore wind would be satisfied by state contracts;
  • load growth based on the 2025 Gold Book’s forecasts; and
  • imperfect market participant foresight in investment and retirement decisions.

These assumptions would underlie different market designs, which would be tested under different “technology scenarios” (i.e., all fossil units retired by 2040, dispatchable renewable energy peakers available, etc.). The goal is to examine how alternative market designs might perform under different future economic and technological conditions, Coscia said.

“What we’re interested in doing is trying to simulate out the implications of what could happen if changes are made to the way that prices and settlements are being determined,” Coscia said. “We have no ability to predict the future about all these market conditions that could be taking place.”

He said this would be a helpful tool for looking at the tradeoffs and benefits of different market structures under different conditions.

Stakeholders also asked whether there would be sensitivities included in the analysis. Coscia said the MMU intended to look at different variations within the assumptions.

NYISO Presents Results of Transmission Congestion Contract Survey

NYISO conducted a poll of current transmission congestion contract market participants to see what the demand for TCCs of various durations in future auctions might be, as well as their preferred structure for this fall’s centralized auction.

Ten market participants responded to the survey. On average, they wanted roughly 22% of system capacity to be available at a one-year duration. The desired capacity for a six-month duration was roughly 44%. Multiple market participants said that they wanted a percentage of the available system capacity to be reserved from the centralized TCC auctions for release in the “balance of period” auctions.

In response to the survey, NYISO proposed an eight-round auction structure. The ISO would offer 20% of system capacity as one-year TCCs across three rounds and 45% of system capacity as six-month TCCs across four rounds. Both of these would be effective Nov 1.

Effective May 1, 2026, NYISO proposes 5% of system capacity be available as one-year TCCs in one auction round. The remaining 35% of the system capacity for the winter 2025/26 capability period was already sold in 2024.

Market participants and transmission owners are encouraged to provide feedback to the ISO.