Calpine came to the NYISO Installed Capacity Working Group on June 17 with its proposal to create on- and off-peak transmission congestion contract auctions. 

The company unveiled its proposal in May to the Budget and Priorities Working Group. (See Calpine Proposes Time-varying TCCs at NYISO.) 

TCCs allow generators to hedge the congestion component of their output. Jung Suh, manager of ISO analytics for Calpine, said this was important for intermittent resources because of their varying load profiles. Calpine’s proposal would reduce the cost of congestion by better aligning it with load and generation behavior and improve the modeling of the system, he argued. 

“We just need more granularity in the marketplace,” Suh said. “Granularity is transparency, and transparency for the market is a good thing.” 

Tony Abate of the New York Power Authority asked Suh to clarify how the proposal would improve modeling of the system. Suh replied that TCCs themselves improve modeling the system as a side benefit as they naturally model congestion. But keeping TCCs to 24-hour blocks forces the model to consider only daylong averages, which does not reflect load. 

NYISO is the only grid operator not to offer time-granulated financial transmission rights, and one stakeholder wondered why that was. Suh said he wasn’t sure: Calpine made the same proposal five years ago and stakeholders supported it, but there may have been other, more pressing matters for NYISO that may have overshadowed the project, like integrating the Champlain Hudson Power Express line. 

Greg Williams, manager of TCC market operations for NYISO, said that to his recollection, market participants had not ranked the project highly enough five years ago to move forward. 

“This one has been on the list for prioritization since 2000, and it just hasn’t garnered enough support,” Williams said. 

Doreen Saia of Greenberg Traurig asked whether there were any provisions in the ISO’s governing documents that might come into play if trying to change the structure of the TCC market. 

Williams said there was some language that covers the concept of TCCs but that if anything were to go forward, more tariff revisions probably would be needed. He also said there wasn’t a credit policy that covers TCCs that has the ability to deal with on- and off-peak products. This would require “substantial revision.” It’s not impossible, Williams explained, but it would require more work. 

“The reality here is that there would be a great deal of additional effort that would be necessary — better policy, software systems and so on — to mode this forward,” Williams said.

Another stakeholder said they were worried that NYISO was falling behind the other ISOs in terms of their practices, lending support for updating the TCC market. 

Abate also pointed out that the Market Monitoring Unit already identified issues with the TCC market in the context of the ongoing dynamic reserves project. 

“My concern is that … I don’t think we can look at this in a vacuum without thinking about the impacts of the changes, the monumental changes, we’re already making with dynamic reserves,” he said.  

Another stakeholder responded to Abate saying they were thinking the same thing, but that is why they supported prioritizing the project. The TCC market would be affected by other changes and needed an update to reflect how intermittent resources and batteries impact the grid.