By Michael Kuser

RENSSELAER, N.Y. — NYISO said last week that several of its market design projects are behind schedule, leading some stakeholders to question whether the ISO has taken on more initiatives than its staff can handle.

A joint meeting of the Installed Capacity (ICAP) and Market Issues working groups Wednesday heard updates on the 2019 capacity and energy market design projects and efforts to integrate distributed energy resources.

Capacity Market Projects

Michael DeSocio, NYISO’s senior manager for market design, said a study on fuel and energy security “is slightly behind schedule due to additional time taken in vetting assumptions, methodology and results.” Analysis Group reviewed preliminary results of the study with stakeholders Aug. 2, and the ISO expects it to complete the final report before the end of the year.

NYISO expects to present a complete market design and associated Tariff revisions this quarter on a proposal to refine the eligibility and energy delivery requirements of external capacity suppliers.

The tailored availability metric project is taking longer than originally planned, but the ISO expects to present a market design concept this quarter. The proposal will be based on analysis done for availability-based resources using the equivalent forced outage rate demand (EFORd) to determine the seasonal derating factor (AEFORd).

The EFORd is the portion of time a unit is in demand but is unavailable because of forced outages and derates. NYISO believes that peak months should be weighted more heavily in the AEFORd calculation.

Analysis Group has been selected as the independent consultant for the 2019/20 demand curve reset project and kicked off the discussion at the ICAP/MIWG meeting Friday.

DeSocio said the competitive entry exemption for additional capacity resource interconnection service (CRIS) is slightly delayed but that a complete market design should be delivered this quarter, along with Business Issues Committee and Management Committee votes on it and related Tariff revisions.

An initiative aimed at revising market rules to repower aging generators, particularly in New York City, and ease barriers to entry to new generators also is slightly delayed, but the ISO still anticipates completion this year.

DER Market Design

NYISO’s work on projects related to DERs is mostly behind schedule, including a pilot demonstration program and efforts to enable DER technology and develop a participation model.

“It seems like a lot of the projects are slightly behind schedule,” said Couch White attorney Michael Mager, who represents Multiple Intervenors, a coalition of large industrial, commercial and institutional energy customers. “We’d certainly rather get to the right outcome than to the fastest outcome, but does the ISO have too many projects going?”

“I would appreciate a shorter project list,” DeSocio said. “We’re about at our limit of developing new proposals.”

DeSocio said enabling technology for DER “started as an effort thinking about the quantity of resources we’d need to participate in the market and how to minimize some of the overhead involved in getting DERs into the market.”

NYISO is exploring secure ways to use the Internet to ease DER integration, but the initiative is behind schedule because of delays with the DER model market design, although the ISO made a Tariff filing with FERC to establish a new aggregation participation model in June, DeSocio said.

He said the ISO will share results from the first round of pilot projects this year and begin looking at additional projects early in the fourth quarter. It plans to evaluate the feasibility of a second round of pilot projects in early 2020.

Energy Market Projects

The most prominent of the energy market design projects is the effort to price carbon into the wholesale electricity markets. An Analysis Group study on carbon pricing, previously expected to be completed in August, was delayed because of additional analysis requested by the NYISO Board of Directors.

CEO Rich Dewey told the Management Committee at the end of July that the board wants to ensure that the study captures all the impacts of the Climate Leadership and Community Protection Act (A8429), which requires the state to get 70% of its power from renewables by 2030 and eliminate carbon emissions from the power sector by 2040. (See “Carbon Study Delay to Include New Energy Law,” NYISO Management Committee Briefs: July 31, 2019.)

DeSocio said the ISO now expects Sue Tierney of Analysis Group to present results of the study in early October.

NYISO also is behind on constraint-specific transmission shortage pricing, which it had hoped would be completed by the second quarter this year. DeSocio said the ISO is considering whether it is prudent to request a stakeholder vote now given other project priorities and implementation timing.

“Given other priorities, it has taken longer to get us to the point where we can have a discussion and vote on the Tariff. … Considering the pressures to integrate energy storage and DER by 2021, we are considering when to re-engage with those discussions,” he said.

“This effort should not keep getting delayed,” responded Mark Younger of Hudson Energy Economics. “Maybe you need more people.”

FERC ordered the ISO to submit a compliance filing on enhanced fast-start pricing by Dec. 31 and to deploy it by the end of 2020.

DeSocio said the ISO is working with market participants and the External Market Monitor on a methodology for amortizing commitment costs of fast start resources when determining locational-based marginal prices and should be bringing a proposal to stakeholders “any day.”

NYISO also is continuing to research the need for load pocket operating reserves within New York City and hopes to complete a market design that meets the objective in the third quarter, he said. Market participants in March approved the creation of a Zone J reserve region, which was implemented June 26.

The project to develop reserves for resource flexibility is on schedule, and the ISO will present a proposal for discussion by the end of the third quarter, DeSocio said.

Finally, a study on ancillary service shortage pricing is on schedule to be completed by year-end, he said.

Modifying CRIS Expiration Rules

The working groups also discussed NYISO’s proposed tightening of CRIS expiration rules, which would prevent existing facilities from retaining CRIS if they do not enter the NYISO ICAP market for three years.

Associate Market Design Specialist Sarah Carkner presented NYISO’s proposal to modify the CRIS expiration rules and said the ISO decided earlier this year to discuss the issue separately from the class year redesign project.

The ISO proposes three distinct changes to CRIS expiration rules:

• Start of the CRIS expiration “clock” would be when the facility begins operation.
• Load modifiers not participating in the NYISO-administered markets would be CRIS-inactive. Load modifiers are DERs that do not actively participate in the NYISO’s markets but instead are used by load-serving entities to reduce the power they must procure from the ISO.
• A resource exporting capacity would not be inactive under CRIS even if it has not sold capacity in New York.

“The rule would be effective a few years after FERC acceptance to allow resources currently acting as load modifiers, and wishing to maintain their CRIS, an opportunity to enter the capacity market,” Carkner said.

David Clarke, director of wholesale market policy for Long Island Power Authority’s Power Supply Long Island, said his company favored the status quo. He asked if this was a modeling issue.

Zachary T. Smith, NYISO manager for capacity market design, said that “because the NYISO doesn’t have visibility of load modifiers not participating in NYISO-administered markets, we’re not sure if those resources are even generating anymore.”

Regarding treatment of exporters, DeSocio said, “We’re trying to create reciprocity with our neighbors … to make sure we’re being consistent in the region.”