RENSSELAER, N.Y. — NYISO stakeholders on Wednesday concluded an unusually lengthy public policy transmission planning process and reviewed a revised report and new analysis for selection of two AC transmission projects to improve transfer capability into the New York City area.

The new analysis by ISO staff followed a December decision by the Board of Directors to decline the Management Committee’s recommendation to build Project T029 — a standard 345-kV line from Knickerbocker to Pleasant Valley — on Segment B, a section of the grid feeding the Upstate New York/Southeast New York (UPNY/SENY) electrical interface. (See NYISO Board Partially Reverses AC Tx Project Selection.)

ISO staff are now recommending Project T019, as is the board, saying it has the highest incremental UPNY/SENY transfer capability, which results in the lowest cost-per-megawatt ratio, highest production cost savings, greatest CO2 emissions savings and highest Installed Capacity (ICAP) savings of the Segment B projects, Zach Smith, vice president for system and resource planning, told the committee.

The board did not object to the committee’s selection of Project T027, a double-circuit 345-kV line from Edic to New Scotland for Segment A, which feeds the Central East interface.

Advised by consultant Substation Engineering Co., NYISO reviewed seven proposals for Segment A and six for Segment B before making their choices last June. (See NYISO MC Supports AC Transmission Projects.)

Project T019 was proposed by National Grid’s Niagara Mohawk Power and NY Transco, while North America Transmission (NAT) and the New York Power Authority together proposed both projects T027 and T029.

Cost estimates for both NAT/NYPA projects ranged from $900 million to $1.1 billion. The estimated capital costs for T027 and T019 are higher, at $1.2 billion, but the project is made more cost-effective by the up to 550 MW of additional N-1 emergency transfer capability provided on UPNY/SENY by T019, Smith said.

The ISO estimates the two AC transmission projects, if approved by the board in March, will be in service by December 2023.

Process Matters

FERC earlier this month approved NYISO’s proposed Tariff revisions “to clarify, streamline and enhance” its public policy transmission planning process, including a provision to hold a technical conference prior to issuing a solicitation on a public policy transmission need (PPTN). Another provision removes a requirement that the ISO wait to evaluate and select a project until the New York Public Service Commission issues an order confirming a PPTN (ER19-528). (See NYISO Public Policy Tx Revisions Approved.)

Lawrence Willick of LS Power said the incremental benefits of T019 do not justify the incremental costs, but New York Transco General Counsel Kathleen Carrigan said the ISO on two occasions (including with the selection of T027 for Segment A in the AC Transmission PPTN and for the Western New York PPTN) has recommended projects with higher capital costs to be selected as the most efficient or cost-effective solution to satisfy a PPTN. In both cases, she said, the higher capital costs correlated to significantly greater benefits to the statewide electric system than the lower-cost alternative proposals. She contended that the ISO should take a similar approach in its recommendation for Segment B as well.

Several stakeholders requested an opportunity to address the board, and LS Power and NY Transco will make oral presentations on March 18, one day before the board meets, interim NYISO CEO Rob Fernandez said.

“We only wish to present if LS Power presents — if they don’t, we don’t,” Carrigan said. Fernandez responded that the ISO would work out the details soon. Comments on the PPTN review were due Friday.

Stakeholders in January informed the ISO of a modeling error in the analyses, specifically that the impedance data had been transposed for the New Scotland-Knickerbocker and Knickerbocker-Alps 345-kV projects.

“We corrected the impedance and confirmed it with the developers,” Smith said. “The ISO also revised its dispatch methodology after the board said it created a perception of a constraint. The board requested we dive a little deeper into operability analysis.”

Specifically, the impedance data correction impacted the UPNY/SENY limit, he said. For T019, the incremental UPNY‐SENY emergency transfer capability decreased from the previously calculated level of 2,100 MW to 1,850 MW. For T029, the data correction caused the incremental emergency transfer capability to increase from 1,150 MW to 1,300 MW.

Additional analysis also included a “sensitivity” in which the G‐J Locality is eliminated and a new H‐J Locality is created.

“The capacity scenario should be eliminated as being more misleading than useful,” said Mark Younger of Hudson Energy Economics, which helped the Independent Power Producers of New York submit comments on the analysis. IPPNY took no position on the board’s PPTN project selection.

Younger said it was unreasonable to assume capacity could be replaced in the more densely populated areas of Zones H and I for the same price as in the more rural Zone G, and that it was also impossible that the market would not respond to stopping payments to resources based on their locational value. He also noted that NYISO’s own analysis in the study showed that there continues to be a need for capacity in Zone G.

Entry and Exit Modeling

“One of the things that limits the benefits from the recommended projects is limited transfer capability south of the projects, so future increases in transfer capability south of these projects could lead to substantial additional benefits,” said Pallas LeeVanSchaick of Potomac Economics, the ISO’s Market Monitoring Unit.

“At the same time, if the PSC relies more on offshore wind than upstate renewables to achieve the goals of the Clean Energy Standard, then it would tend to reduce the benefits,” so the location and amount of intermittent renewables is in flux, he said in summarizing his report’s conclusions.

NYISO’s public policy transmission planning process calls for the Monitor to review and consider the impacts on the ISO’s markets.

The Monitor made several recommendations for improvement, but LeeVanSchaick particularly highlighted one: to model entry and exit decisions for generators in a manner consistent with the expected competitive market outcomes.

“If the ISO could incorporate entry and exit scenarios into its modeling, that would be very useful for ensuring the scenarios provide a realistic picture of the future benefits of the projects,” he said.

Marc Montalvo of Daymark Energy Advisors, representing the New York Department of State’s Utility Intervention Unit, said the UIU was concerned, as were several other stakeholders, about the qualitative measures being applied and decisions being reached in a different way from the MC’s understanding during its serious deliberations.

“We ought to make sure we are not creating a process that gives developers pause,” Montalvo said. “Given how much time and energy on behalf of the developers goes into the process, the last thing we want to see is a lack of confidence … whereby developers might choose not to participate, reducing the efficiency of market outcomes and possibly harming consumers.”

— Michael Kuser