ALBANY — At a recent Budget and Priorities Working Group meeting, NYISO presented its final recommendations for 2026, which will define where the ISO puts its market design resources. The storage-as-transmission project, while on the budget, faces an uncertain future.  

While the project will be on the budget for 2026, NYISO does not consider the project to be “continuing.” This designation means a project was approved in a prior year and has progressed to a late stage of project development and is picked up automatically in the following prioritization cycle.  

“We’re going to add storage as transmission to be included into the budget,” said Kevin Pytel, director of product and project management for NYISO, at the Aug. 25 BPWG. “This does create resource constraints for us, adding this in. We do not have all the resources necessary to complete this project.” 

That means the ISO does not think it has the money and staffing hours to complete the project as budgeted but also does not want to abandon it. That leaves storage as transmission in the unusual position of waiting for other projects to meet milestones early and under budget so resources can be shifted to it.  

The storage as transmission project would allow energy storage systems to act as regulated transmission, making them eligible for cost-of-service rate recovery and to be considered as transmission solutions in ISO planning processes. Assets developed under the “storage as transmission” designation would not be dispatched by the wholesale market beyond what would be necessary for them to remain ready to inject or withdraw from the grid.  

The ISO’s initial proposal limited storage as transmission to 200 MW systemwide with 20 MW per substation. (See NYISO Outlines Storage as Transmission Proposal.) 

Pytel said that due to resource constraints, storage as transmission would not receive a continuing status even though it has hit a development milestone of “functional requirement specifications” that ordinarily would grant it that status. In the NYISO project development cycle, some project development milestones like “development complete” automatically continue into the next year. Pytel said if other projects come in under budget, then storage as transmission would receive extra money and work hours.  

“But when we come back and talk about project prioritization in April or May of next year, we will not have a strong handle on whether or not we’re really marching toward the deliverable,” Pytel said. “I can confidently say that when we come back … we would not consider this as continuing.” 

Pytel added it’s unlikely NYISO staff would be able to work on storage as transmission by Q1 of 2026. 

“I am extremely concerned about what I am hearing,” said Kevin Lang, a lawyer representing the City of New York. “You have a project, but it’s not clear what work you’re actually going to do on it or when you might be doing the work.” 

Lang said this is troubling because the ISO hadn’t really committed to work on the project and it wasn’t clear whether or when resources would open up to make it possible. 

“The NYISO is acting as a barrier to technology and that is wholly inconsistent with your mission and its wholly inconsistent with open markets,” Lang said. He asked that the ISO provide a list of the other projects ahead of storage as transmission so market participants could weigh in on whether the projects at the front of the line were prioritized appropriately.  

Pytel said those other projects were discussed in the last BPWG when the ISO had presented stakeholder scoring. Storage as transmission received modest scores in the stakeholder survey. Twenty-five stakeholders supported the project, with most of them in the public power/environmental sector and end-use consumer. Some generators and transmission owners also supported the project. It came in 12th out of 28 projects by weighted score.  

Tony Abate, representing the New York Power Authority, said he saw things differently. He credited the ISO for its flexibility and for being generally progressive on including new resources. He didn’t think the ISO was putting up a barrier to an imminent storage application that would benefit ratepayers. 

Chris Hall, representing the New York State Energy Research and Development Authority, thanked Pytel for not dropping the project completely and leaving some way for it to be finished. He said that while the current proposal was limiting, it could serve as a platform to leverage future use cases.  

Other Business

The ISO presented an update on how its budget forecasts from 2024 compared to actual spending for 2025. So far, the ISO generally is on target with a $3.8 million over-collection. NYISO forecasts that the over-collection will continue through the end of 2025, totaling $7.2 million. Additionally, NYSIO collected $1.4 million more than expected due to interconnection study deposit cash balances.  

At the same time, NYISO predicts an under-spend of about $4.6 million due to lower-than-expected professional fees and higher-than-expected “miscellaneous revenues.”  

Patrick Kelly, NYISO’s controller and assistant treasurer, said that was in large part due to savings seen in consulting. Some of the savings is due to the cancellation of the Public Power Transmission Need project, which would have served offshore wind. (See NYISO Cancels Offshore Transmission Studies.) Kelly anticipates $1.4 million in labor savings due to the PPTN cancellation.  

Kelly said that as of June, NYISO anticipates an excess of $11 million between over-collections and under-spends.