NYISO CEO Rich Dewey told the Management Committee on Wednesday that staff are determining whether a technical problem related to the 2017-2021 installed capacity (ICAP) demand curve reset violates the ISO’s Tariff or constitutes a market problem.

“When we’re confident that the software is accurate and reflecting the right impacts … we commit that we will share that with market participants as soon as possible,” Dewey said. “Look for a meeting invite by the end of this week.”

NYISO acknowledged earlier in the month that the model used to estimate net energy and ancillary services revenue earnings for the hypothetical peaking plant resulted in a misalignment of natural gas prices with the actual delivery date associated with such prices. (See NYISO ICAP/MIWG Briefs Sept. 14, 2020.)

Staff’s final demand curve reset recommendations, posted Sept. 9, said that “based on the review of stakeholder feedback and discussions with the data vendor, the model has been updated to reflect that gas prices published by the vendor for a particular date reflect the price to utilize gas on the specified date (e.g., gas prices published with a Friday date represent the cost to utilize gas on that Friday).”

When no gas price is reported, the model will use the next available day on which data are published. For a non-holiday weekend, the gas price published for Monday will be used as the gas price for Saturday, Sunday and Monday, the ISO said.

Although it is too early to know the magnitude of the impacts from the software issue for the 2017-2021 period, delaying the October ICAP spot market auction is not an option, Dewey said. While NYISO has obtained a revised version of the model, it must be tested for unintended consequences, he said.

Peak Load of 30,660 MW on July 27

When Vice President of Operations Wes Yeomans reported satisfactory hot-weather operations to the MC on July 29, he said the three heat waves that month were starting to blend into one another. But the excessive heat did not continue into August, leaving the peak load of 30,660 MW recorded July 27 as the record for summer 2020. (See “Hot Weather Operations OK,” NYISO Management Committee Briefs: July 29, 2020.)

In his report on Wednesday, Yeomans said the peak load represented 95% of the 50/50 forecast of 32,296 MW. Daily mean temperatures in New York were above the 20-year average in June, July and August, and below average in May, with the highest temperatures recorded in Central Park (96 degrees Fahrenheit) and Albany (95 F), Yeomans said.

The ISO also operated satisfactorily through its first summer without Indian Point Unit 2, the Somerset coal station in western New York and the Cayuga generating facility north of Ithaca. It was also its first summer with the 1,000-MW Cricket Valley combined cycle plant.

Gov. Andrew Cuomo declared a state of emergency Aug. 5 after outages from Tropical Storm Isaias affected 920,000 customers, mainly on Long Island and around New York City.

“We did have multiple bulk electric system transmission elements tripped … mostly transmission lines over 100 kV, so the majority of the multiple transmission elements we had were 138 kVs that either tripped and came right back, or they tripped and locked out and the [transmission owner] was able to get them back quickly. … Some others, which had damage … took time to get back,” Yeomans said.

Steam up in NYC

The committee approved increasing the exemption from real-time generation penalties for units that supply the New York City steam distribution system by 10 MW to a total of 533 MW. The electricity output of the plants is driven by the city’s steam requirements, making the units unable to follow NYISO dispatch instructions.

The Business Issues Committee endorsed the change earlier this month. (See NYISO Business Issues Committee Briefs: Sept. 9, 2020.)

Chris Hargett of Consolidated Edison presented the same slides as at the BIC on increasing the exemption for the company’s East River Units 1, 2 and 6. The increase was needed because a number of projects completed over the past several years have increased the efficiency and output of Unit 6, Hargett said.

If the Board of Directors approves the revisions in October, NYISO will submit them to FERC under Federal Power Act Section 205.

2021 Draft Budget down $600K from 2020

For the second year in a row, NYISO is proposing a decrease to the budgeted revenue requirement, with the draft budget allocating $167.4 million across a forecast of 147.3 million MWh for a Rate Schedule 1 charge of $1.137/MWh, down from the 2020 budget of $168 million allocated across 154.3 million MWh ($1.089/MWh).

Alan Ackerman of Customized Energy Solutions, chair of the Budget and Priorities Working Group, presented the draft budget, reporting that the ISO is holding the number of staff positions steady. Every line item except computer services in support of projects and corporate insurance were cut from the 2021 projections made during the 2020 budget cycle. Major cuts in approved spending for 2020 have come through deferring some capital expenditures, such as $5 million to renovate the control room.

The ISO made a special effort to hold spending flat in light of the economic challenges facing many market participants as a result of the pandemic, Ackerman said.

The MC expects to vote on the final draft budget in October before it goes before the board for final approval in November.

Yes to ESR Bidding Rules

The MC recommended the board approve proposed capacity market bidding rules for energy storage resources (ESRs) reflecting their energy-duration limitations.

Market Design Specialist Sarah Carkner presented the 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 board approval, the ISO will later this year or in early 2021 submit the revisions to FERC and update the ICAP Manual with the new rules.

A Place for Solar in Dispatch

The MC also recommended the board approve expanding market rules for wind energy resources to also encompass solar resources.

The Tariff revisions would require dispatchable solar resources to submit flexible day-ahead and real-time offers and require them to respond to economic curtailment signals from the ISO. They would not be eligible for day-ahead margin assurance make-whole payments.

“Proposing the Tariff revisions at this time allows us to give as much notice as possible to new solar resources and existing ones as they look to understand what’s required to participate in NYISO markets going forward,” analyst Cameron McPherson said in presenting the revisions.

The rules would allow solar resources to indicate their economic willingness to generate, reducing the need for out-of-market curtailments and self-directed curtailments, he said.

If the board approves them, the ISO will file the revisions at FERC in November or December and look to implement them in 2021.

Committee OKs Credit Policy Enhancements

The MC recommended that the board approve changes to NYISO’s policy on extending unsecured credit to public power entities and government entities.

The Tariff revisions would make government entities eligible for up to $1 million in unsecured credit, as public power entities are currently. The credit would only be available for entities with investment-grade debt ratings.

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, said Sheri Prevratil, the ISO’s manager of corporate credit.

If the NYISO board approves the revisions in October, the ISO will make a Section 205 filing with FERC.

The MC also recommended board approval of proposed changes to the ISO’s transmission congestion contracts (TCC) credit policy to address concerns raised by GreenHat Energy’s default in PJM’s financial transmission rights market. The changes would allow for earlier recalculation of the collateral requirements for the second year of a two-year TCC.

NYISO also would use market clearing auction prices to calculate credit requirements for TCCs instead of congestion rents over the prior 90 days. The ISO said market-clearing prices, “which are forward looking, provide a more appropriate predictor of future payments due than historic congestion rent values.”

If the board approves them, the ISO will submit the changes to FERC in the fourth quarter.