SARATOGA SPRINGS, N.Y. — Gavin Donohue, CEO of the Independent Power Producers of New York, opened the group’s fall meeting last week by declaring as its top priority NYISO’s reset of the installed capacity demand curve.
Donohue noted the ISO’s prediction that New York’s Clean Energy Standard will significantly increase the need for reserve capacity and highly dispatchable resources.
“Combined with the uptick in announced plant retirements, it has never been more critical to get the demand curve reset right,” Donohue said. “The demand curve is responsible for setting reference prices. It will determine what resources enter the market over the next four years.”
The reset, which has been conducted every three years, is moving to a four-year cycle (with annual updates of some parameters). The ISO staff released its final recommendations Sept. 15 on the new parameters, which include net energy and ancillary services revenues and the gross cost of new entry in addition to reference point prices.
Staff adopted the recommendations of its consultant, The Analysis Group, for reference points for all but the New York Control Area. The firm recommended the reference points for all regions be based on dual-fuel requirements, while staff said the NYCA — the rest of state, excluding Long Island, New York City and the Lower Hudson Valley — should be based on gas only. Staff also shaved the proposed price for NYCA by 4.5%, rejecting the consultant’s proposal of $11.22/kW-month in favor of $10.72/kW-month.
Donohue also noted generators struggled with low load growth and record low gas prices, which he said are “driving previously economic facilities to the brink and resulting in various forms of state intervention.”
“It’s not clear how this effort will play out. But it’s clear that market-based solutions are always preferable to out-of-market solutions in New York state,” he said.
The ISO will accept written comments on the proposed demand curve through Oct. 3, with oral presentations to the Board of Directors on Oct. 17. The board’s finalized parameters will be filed for FERC approval by Nov. 30 with the revised curves taking effect May 1, 2017.
─ Rich Heidorn Jr.
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