NYISO stakeholders at the Business Issues Committee on Wednesday recommended the Management Committee approve increasing by 10 MW the exemption from real-time generation penalties for units that supply the New York City steam distribution system.
Chris Hargett of Consolidated Edison presented the rationale for increasing the exemption, currently at 523 MW, for the company’s East River Units 1, 2 and 6, specifically a number of projects completed over the past several years that have increased the efficiency of Unit 6.
Hargett said that while Con Ed does not sell excess or unneeded electricity from the winter-peaking steam system on the wholesale market, the power is nonetheless available to NYISO for reliability reasons. Under normal conditions, the utility only dispatches the units to meet steam demands, given their operating characteristics.
If the MC approves the Tariff revision at its Sept. 23 meeting, and the Board of Directors does so in October, NYISO will make a Federal Power Act Section 205 filing with FERC.
Committee Approves ESR Capacity Bidding Rules
The BIC also recommended MC approval of proposed energy storage resource (ESR) bidding rules for installed capacity suppliers with an energy-duration limitation.
Market Design Specialist Sarah Carkner presented the ISO’s proposal for Tariff revisions specifying that such ESRs bid or schedule a bilateral transaction for their full injection range for all hours during the peak load window and to bid their full withdrawal range for all hours outside of the peak load window, or notify the ISO of a derate.
Given MC support and board approval, the ISO will later this year or in early 2021 submit the proposed Tariff revisions to FERC and update the ICAP Manual to accommodate the expanding capacity eligibility rules, at which time changes to the availability calculation for ESRs will be incorporated, Carkner said.
Incorporating Wholesale Market Solar in Dispatch, LBMP
The BIC recommended the MC approve revising market rules applied to wind energy resources to also encompass solar resources.
In the calculation of the locational-based marginal prices for wind and solar resources, the lower dispatch limit would be zero, and the upper dispatch limit would be the supply forecast, NYISO analyst Cameron McPherson said. The dispatch definitions would apply to both the day-ahead and real-time markets.
Solar resources would submit flexible offers indicating their willingness to generate at various price levels and would also receive, and be expected to respond to, NYISO economic dispatch instructions (down only) when prices are below their offer.
The proposed revisions leverage a set of existing rules and processes that require only incremental changes in order to accommodate solar, which is a prerequisite to deploying the co-located storage resource (CSR) market design within the hybrid storage model, McPherson said.
Additional resource flexibility will improve the ISO’s ability to accommodate increased levels of intermittent resources, and solar resources will be able to signal their economic willingness to generate, minimizing the need for out-of-market curtailments and self-directed curtailments.
If the MC and board approve, the ISO will file the proposed Tariff revisions at FERC in November/December and look to implement them in 2021.
Credit Policy Enhancements
The BIC recommended, with several abstentions, that the MC approve changes to NYISO’s policy on extending unsecured credit to public power providers and other government entities.
The proposed Tariff revisions would stipulate that government entities are eligible for up to $1 million in unsecured credit, as public power entities currently are, and require that a public power or government entity be an investment-grade customer to be eligible for $1 million in unsecured credit.
FERC in April granted the ISO a nine-month waiver allowing it to grant up to $1 million in unsecured credit to government entities that do not meet the current Tariff definition of a public power entity.
The ISO’s manager of corporate credit, Sheri Prevratil, said that NYISO recognizes there is some inherent risk associated with extending unsecured credit as a general matter, and that the proposed changes were consistent with all other customers who qualify for unsecured credit under the Tariff.
Investment-grade customers are those with a senior long-term unsecured debt rating of BBB- or higher by Standard & Poor’s or Fitch, or Baa3 or higher by Moody’s Investors Service. A customer without a rating may request a NYISO equivalency rating using its audited financial statements.
If the MC and NYISO board approve, the ISO will make a Section 205 filing in October.
The BIC also recommended MC approval of proposed enhancements to the ISO’s current transmission congestion contracts (TCC) auction practices and credit policy.
Currently, the second year of a two-year TCC is the only one for which the ISO solely holds a margin to cover declines in value relative to auction-determined market-clearing prices. Market participants support the ISO holding as collateral the higher of the payment obligation or holding requirement until the second year is paid, rather than paying for both years in advance, Prevratil said. The ISO also proposes using auction prices to calculate requirements for TCCs subject to only the historical congestion rent credit requirement.
NYISO currently does not recalculate the credit requirement for the second year until approximately one year after the initial award. The ISO recommends administering a one-year round for TCCs covering the same period as the second year five to six months earlier, which will ensure more current pricing is used.
If the MC and board approve, the ISO will submit the changes to FERC in the fourth quarter.