NYISO on Thursday discussed potential steps to better align New York State Reliability Council (NYSRC) studies for setting the statewide installed reserve margin (IRM) with the ISO’s studies for establishing locational minimum installed capacity requirements (LCRs) for the zones associated with the Hudson River Valley, New York City and Long Island.

The IRM and LCR studies have historically used many of the same starting assumptions, with several exceptions, such as the former’s use of the preliminary forecast of the following year’s peak demand, while the LCR study uses the final peak load forecast, said Joshua Boles, NYISO senior manager for market operations. Boles presented proposals to determine market requirements to the Installed Capacity Working Group (ICAPWG).

Stakeholders discussed related proposals, such as expanding the number of peak load hours identified for use in allocating the obligations of load-serving entities in the Installed Capacity (ICAP) Market and updating procedures to better align the LCR process with the IRM process.

NYISO and its stakeholders recently adopted an economic optimization method for establishing LCRs, which resulted in the ISO, per its tariff, adding several assumptions to the LCR study process that are not present in the IRM study process.

NYISO’s tariff also requires it to incorporate transmission security limits (TSLs) into the IRM study. Stakeholder proposals include using the IRM study peak load forecast in the LCR study process. The NYSRC has prioritized evaluating the appropriateness of incorporating TSLs into the IRM study.

The NYSRC will discuss this evaluation in May. “We are reviewing if tariff changes are necessary and expect to have an answer for stakeholders by mid-March or April,” Boles said in response to a stakeholder who urged moving fast enough to have any possible revisions in effect for 2022.

NYISO establishes ICAP market requirements for the spot market auction construct each year to help the grid operator and the NYSRC satisfy the one-day-in-10 years loss of load expectation standard. These requirements determine the minimum quantity of ICAP that loads must purchase.

Peak Hour Forecasts

On expanding the number of peak load hours for use in allocating LSE obligations in the ICAP market, Ethan D. Avallone, NYISO capacity market design technical specialist, asked whether transmission owners could fold that additional information into their process.

The current process of setting the minimum unforced capacity (UCAP) requirements for LSEs is based on the single peak load hour identified by the ISO, which is ultimately used by the TOs to assign capacity obligations to the LSEs serving load by transmission district.

“Aside from that, when the ISO does provide a single peak load hour today, some things are already added back in, but should the TOs and NYISO add back other things into the load forecast?” Avallone said.

NYISO each September identifies the New York Control Area (NYCA) peak load date and hour for the current capability year. For example, in September 2021, the ISO will provide this information for the 2021 capability year.

The peak hour load received from the TOs includes demand reductions during that hour from all special case resources (SCRs), which are demand response resources participating in the capacity market, but the TOs choose whether their own load reduction programs that do not overlap with SCRs should be added back into the load.

Municipal generating units that participate in the capacity market are also added back into the load, but there currently is no adjustment to add back generation from resources not participating in the wholesale markets, such as production from rooftop solar.

Ryan Carlson, NYISO senior resource adequacy analyst, reviewed possible updates to LCR procedures to better align that process with the IRM process, such as in the handling of updates to load forecasts after the October IRM Study lockdown date, and whether updates should be made only if changes are also made to the data and assumptions used to calculate the IRM.

Stakeholders want NYISO to perform additional review of year-over-year changes and include drivers of those changes as part of the informational LCR results presented to stakeholders in the fourth quarter of each year.

In presenting a comparison of the IRM final base case with the final LCRs, Carlson said, “These results were definitely discussed here very broadly, which spurred the potential idea of changing the LCR process around to reduce what some saw as volatile results.”

The ISO plans to return to the ICAPWG with updates in April.