NYISO last week asked for FERC approval to change its scarcity pricing logic, saying the proposed rules will more closely reflect the real-time value of demand response (ER16-425).

Scarcity pricing determines the value of energy and certain ancillary services when DR resources are called upon to maintain system reliability. The purpose is to ensure that real-time prices reflect the costs associated with deploying DR, the filing says.

NYISO said the filing was prompted by New York transmission owners’ concerns that its current methodology could result in uplift because of inconsistencies between prices and resource schedules.

NYISO is also proposing to increase the value of 30-minute reserves in the Southeast New York region from $25/MW to $500/MW, effective at all times. “This increase appropriately recognizes that [emergency demand response program] resources and [special case resources] have historically been called upon to protect reserves in SENY,” the ISO wrote.

NYISO is asking FERC to accept the revisions by Jan. 29, 2016, to give it enough time to develop and deploy software changes. The proposed revisions would become effective on or before June 30.

NYISO implemented its current, ex-post scarcity pricing logic in 2013. The logic allows it to adjust real-time energy prices after resource schedules have already been established in the load zones in which DR resources are used.

─ William Opalka