NYISO shared a detailed analysis of New York’s late June heat wave, in which significant operating reserve shortages elevated energy prices.
“We had committed mostly everything that was available on the system, as well as the fact that we went short on reserves throughout the [state] for the peak hour,” Nate Gilbraith, manager of energy market design for NYISO, told the Business Issues Committee on Aug. 13. “That means the day-ahead market did not procure the full 2,620-MW reserve requirement.”
NYISO was short about 300 MW of reserves. The real-time market scheduled energy that did not have a corresponding day-ahead energy schedule to meet the needs because the day-ahead market did not “foresee” scheduling needs, Gilbraith said.
Real-time load exceeded the day-ahead forecast and market expectations. Imports from other regions, also affected by the heat wave, were much lower. Some generators experienced outages and derates, with some of those because of the heat wave. Actual load increased real-time market needs by over 900 MW. (See NYISO Issues Energy Warning as Heat Wave Boils New York.)
“What I am hearing you say is, as a consequence of having a tighter system, [reserves] aren’t there anymore as something that can be grabbed when you need them,” said Doreen Saia, chair of Greenberg Traurig’s energy and natural resources practice. “So we need to be much more purposeful when we’re looking at the day-ahead forecast.”
“I’ll say it back to you in another way: I think we need to make sure our operators have the tools to ensure reliability in real time,” Gilbraith said. “The fact we came out of the day-ahead market a bit short raises some questions … with how we set our market rules.”
In some areas, transmission flows met or exceeded facility ratings, causing transmission shortage pricing to occur. This was particularly acute on Long Island, where congestion exacerbated already high statewide prices. On June 24, during the peak evening hours, statewide prices were $2,000 to $3,000/MWh. On Long Island, prices exceeded $7,000/MWh.
A stakeholder asked whether there was more information on how much behind-the-meter solar and special-case resources contributed to load reduction. Gilbraith said that beginning at 6 p.m., BTM solar dropped off very rapidly and so did not contribute as much. Additional analysis of SCRs will be forthcoming, he said.
Stakeholders also asked why neighboring regions did not provide imports as expected. This was in part because the weather was much hotter than forecasted across multiple footprints.
“What we saw on this day was really across the entire Eastern Seaboard,” Gilbraith said. “So everyone is now in a situation where they do not have their reliability reserve requirements. … It was one of those emergency drills that we run through that you don’t ever want to actually be in.”
July Market Performance
NYISO also presented its July market performance report to the committee. The locational-based marginal price for July was $78.89/MWh, higher than the $58.96/MWh seen in June and far higher than the $47.42/MWh seen in July 2024.
Natural gas prices and distillate prices were both higher than in June. This was the largest driver of price increases in New York, according to the ISO.
NYISO noted that for the past couple of months, there have been overestimations in BTM solar forecasts relative to the actual power they provided. Some of this is because of smoke from the Canadian wildfires. The ISO is working on figuring out how much of the overestimation is from the smoke compared to forecasting issues.
