NYISO power prices jumped sharply in December on the back of sharp gains for natural gas stemming from extreme cold weather at the end of the month.

Locational-based marginal prices (LBMPs) averaged $52.63/MWh for the month, up 58% from November and nearly 20% from the same period a year ago, Robert Pike, NYISO director of market design and product management, told the ISO’s Business Issues Committee (BIC) on Wednesday.

The ISO’s year-to-date monthly energy prices averaged $36.56/MWh in December, a 7% increase from a year earlier. The average daily sendout was 444 GWh/day, compared with 403 GWh/day in November and 433 GWh/day a year earlier.

New York natural gas prices surged 260% over the previous month, averaging $7.59/MMBtu at the Transco Z6 hub. Prices were up 73% from a year ago. Natural gas prices for the month peaked at $31.16/MMBtu on Dec. 29, five days into a severe cold snap.

Distillate prices gained 20.1% year on year, with Jet Kerosene Gulf Coast averaging $13.47/MMBtu, up from $13.04 in November. Ultra Low Sulfur No. 2 Diesel NY Harbor averaged $13.91, compared with $13.70 a month earlier.

The ISO’s local reliability share was 9 cents/MWh, down from 20 cents/MWh from the previous month, while the statewide share dropped 18 cents/MWh from the previous month to -78 cents/MWh. Total uplift costs were lower than in November.

Ongoing JOA Dispute with New Jersey

Reviewing the Broader Regional Markets report, Pike noted that the New Jersey Board of Public Utilities last month filed a complaint with FERC against PJM, NYISO, Consolidated Edison, Linden VFT, Hudson Transmission Partners and the New York Power Authority. The complaint challenges the implementation of the mutual benefits provisions of the Joint Operating Agreement between NYISO and PJM and requests amendments to it.

Pike said the ISO last month jointly filed with the other respondents to request an extension of the Jan. 11 answer deadline to Feb. 23. The commission granted the extension, which was unopposed by the BPU.

The report also noted the ISO is taking further steps to improve modeling consistency between real-time commitment (RTC) and real-time dispatch (RTD) and examine changes to look-ahead evaluations to improve scheduling and price convergence. The ISO published a white paper on the topic last month and will further explore RTC-RTD convergence this year.

BIC Recommends ICAP Manual Revisions

The BIC also recommended revisions to the Installed Capacity (ICAP) Manual covering deliverability requirements for capacity imports from PJM, effective May 1.

Zachary Smith, NYISO manager of capacity market design, told the committee that the ISO finished modifying the documentation requirements for capacity imports across the PJM AC ties. His report outlined changes that would require PJM-based ICAP suppliers to provide NYISO with evidence of firm transmission service for all capacity import obligations on the day Spot Market Auction results are posted.

Suppliers that fail to provide documentation by the deadline would be subject to penalties and deficiency charges. Monthly deadlines, which will be posted on the ICAP event calendar, would be the same for all imports.

The committee will continue evaluating deliverability requirements for other interfaces and imports.

New Price Correction Deadlines

The committee also approved modifying price-correction deadlines by using business days rather than calendar days in the period calculation. If approved by NYISO’s Management Committee and Board of Directors, the Tariff revision would reset deadlines to four business days after the market day for real-time prices, and two business days after the market day for day-ahead prices. The change is subject to FERC approval.

Michelle Gerry, the ISO’s price validation supervisor, told the BIC that ISO-NE allows five business days for real-time price corrections and three days for day-ahead, while PJM stipulates 10 calendar days for both categories.

NYISO would continue to provide notice as soon as any price correction is processed and post a detailed correction within 10 days of each correction, as well as the quarterly price correction report recapping all corrections for each quarter.

NYISO Applies Wind Forecast Fee to Solar

The BIC voted to recommend Tariff changes that would charge New York’s utility-scale solar facilities for acquiring solar forecasts, similar to how the ISO currently recovers the costs for wind forecasts.

The changes would be implemented in mid-2018 and would also apply to meteorological data requirements. The ISO will next year pursue Tariff modifications for the economic dispatch of solar.

In a report on solar integration, David Edelson, NYISO operations performance and analysis manager, explained that the grid operator procures a centralized solar forecast for each of its 11 load zones, for both behind-the-meter and individual utility-scale resources.

Edelson said the new cost recovery mechanism is modeled on the ISO’s wind forecasting fee, which is $500/month for each resource, plus $7.50/MW (nameplate) per month. The proposed Tariff changes would modify the forecasting fee rate to $6.20/MW (nameplate) per month for both wind and solar resources so that the fees remain in line with the costs NYISO incurs to develop the forecasts.

Applying these rules to front-of-the-meter solar resources will improve NYISO’s ability to reliably integrate higher levels of solar onto the grid, Edelson said.

— Michael Kuser