RENSSELAER, N.Y. — NYISO will soon announce the formation of a carbon pricing task force, CEO Brad Jones told the Management Committee on Wednesday.

The task force will “provide guidance on implementation, to explore how fast we can move forward on these issues,” Jones said.

NYISO in August released a Brattle Group report on pricing carbon into its wholesale energy market to support New York’s decarbonization goals. At a Sept. 6 public hearing held by the ISO and the New York Department of Public Service, stakeholders offered broad support for incorporating a $40/ton carbon charge into the market. (See NYISO Stakeholders Talk Details of Carbon Charge.)

Stakeholders are still concerned about how the costs for decarbonization will be allocated, and committee participants wondered who would be running the task force. Jones said the group will report to the grid operator’s Market Issues Working Group.

Hot September Causes Historic First in Flow Limits

Unseasonably warm weather in the second half of September led NYISO to secure the West Central interface to limit flows toward western New York, the first time the ISO had to secure flows in the reverse direction because of high levels of Lake Erie loop flows, COO Rick Gonzales said.

“This shoulder period is usually the time for generators and transmission owners to schedule their off-peak maintenance outages, so unusually warm weather during this period can present reliability challenges,” Gonzales said. “We did reschedule a number of major transmission maintenance outages to later in the week and bring on one additional generator to make sure that NYISO was meeting its reliability commitments.”

In his regular operations report, Gonzales highlighted that “peak load in August was even less than the peak load in July, so we didn’t even reach 30,000 MW of peak load this summer.” The balance of the operations report was delivered at the Business Issues Committee earlier in September. (See NYISO Business Issues Committee Briefs: Sept. 12, 2017.)

Mild Summer Poses Few Challenges

This summer was the fourth consecutive summer in which the ISO’s peak load fell short of the 50/50 forecast, Vice President for Operations Wes Yeomans said.

The Summer 2017 Hot Weather Operations report showed that actual ambient temperatures, total summer loads and peaks were all below 50/50 projections. New York did experience two instances of hot weather, but only for short durations.

A warm front crossed Upstate New York and New York City during June 11-13, with Albany registering temperatures of 95 F and LaGuardia Airport hitting 100 F. June 13 peak load was 29,126 MW.

NYISO’s summer peak of 29,699 MW occurred July 19, coming in far below the 50/50 peak forecast of 33,178 MW, Yeomans said. NYISO met all reliability operating criteria during the peak and required no statewide out-of-market commitments or demand response activations, he said.

Yeomans noted that New York State Electric and Gas this summer completed its Auburn Transmission Project, which included construction of a new 115-kV Elbridge-State Street line and re-conductoring of the existing line linking those points. The upgrades provide higher thermal ratings and alleviate the need for the coal-fired Cayuga plant to maintain local reliability.

A new 345-kV Dolson Avenue substation interconnection for the CPV Valley Energy Center was completed in early September and the second Ramapo phase angle regulator returned to service Sept. 14, Yeomans said.

2018 Budget up 5% on Security Enhancements

NYISO’s draft 2018 budget calls for $155.7 million in spending allocated across a forecast of 157.8 million MWh of usage, representing a Rate Schedule 1 charge of 98.7 cents/MWh, according to an overview presented by Alan Ackerman, chair of the Budget and Priorities Working Group.

The draft budget represents a 5% increase in revenue requirement from this year and a 0.3% decrease in projected megawatt-hours, translating into a 5.45% increase in transmission charges.

Among the ISO’s key priorities for next year are physical and cybersecurity enhancements to secure operations and meet audit and compliance needs. System and resource planning will focus on reliability and the support of studies requested by the Public Service Commission, including assessing potential public policy transmission needs such as offshore wind integration, Clean Energy Standard implementation and congestion in the North Country (the state’s extreme northern frontier, bordering Lake Ontario, Lake Champlain, the Saint Lawrence River, Vermont, Ontario and Quebec).

Busy NYISO Agenda Drives Consumer Impact Analysis

The ISO will conduct consumer impact analyses on five major projects for 2018, NYISO Senior Manager for Consumer Interest Liaison Tariq N. Niazi told the committee. The ISO conducts such analyses for projects with anticipated net production cost impacts of at least $5 million or changes in energy or capacity market prices of at least $50 million per year.

Also to be analyzed are projects incorporating new technology into ISO markets for the first time, those that allow or encourage a new market product and those that create mechanisms for out-of-market reliability payments. The grid operator leaves room in the process for unanticipated analyses, such as FERC directives where NYISO has implementation flexibility or emergent stakeholder issues.

For 2018 the projects being analyzed are:

• Integrating Public Policy: This project is attempting to accommodate state’s decarbonization goals with the wholesale energy and capacity markets and align the process with the Reforming the Energy Vision initiative.
• Buyer-Side Mitigation (BSM) of Repowering Projects: To encourage private investment, the ISO will seek to develop a specially tailored BSM evaluation process that reduces the potential for over-mitigation of repowering projects.
• Constraint Specific Transmission Demand Curves: The ISO will would study replacing its current transmission constraint pricing methodology with multiple transmission demand curves that can vary according to the importance, severity and/or duration of the transmission constraint violation. It would replace the current procedures, in which some transmission shortages are resolved by relaxation instead of by setting prices through use of a transmission demand curve. The goal is more efficient pricing of transmission constraints, reduced price volatility and more efficient resource scheduling.
• DER Participation Model: The ISO is evaluating potential modifications to its existing demand response programs as part of the Distributed Energy Resource (DER) Roadmap it announced in February. (See NYISO ‘Roadmap’ Sees Dispatchable DER by 2021.) The project will include the design of DER performance obligations, metering and telemetry requirements, baseline and performance measurement and verification rules, and resource modeling. It also will seek to develop ways to balance the simultaneous participation of DER in the wholesale markets and retail-level programs.
• Energy Storage Integration and Optimization: The ISO will continue to develop its model for the participation of energy storage in the wholesale markets, including improving the optimization of storage on a least-cost basis through more sophisticated energy constraint modeling. The goal is to improve modeling of resources that can inject and withdraw energy from the grid in response to ISO dispatch signals.

MC Approves Western New York Tx Proposal

The Management Committee voted unanimously to advise the Board of Directors to approve NextEra Energy’s proposed Empire State Line in western New York, as recommended by an ISO public policy transmission planning report. The ISO’s Business Issues Committee endorsed the same report earlier in September. (See Public Policy Tx Project Wins Key NYISO Endorsement.)

Dawei Fan, NYISO supervisor of public policy and interregional planning, presented the report, which represents NYISO’s first-ever evaluation of transmission needs stemming from public policy requirements.

NYISO received comments on the report from the New York Power Authority, NYSEG, New York State Energy Research and Development Authority, NextEra and LS Power’s North America Transmission, the last of which intends to pitch its own transmission project to the board on Oct. 16, before the board’s October meeting.

Several meeting participants sought more information about what topics would be discussed at the upcoming board meeting and whether their absence would “dilute” the impact of their already submitted comments. Howard Fromer of PSEG Power wanted to know if participants seeking to speak to the board planned to address legal arguments as opposed to more technical points.

NYISO Vice President for System and Resource Planning Zachary Smith responded that the comments would not focus on legal matters and asked that all supplementary comments be delivered to the RTO by Sept. 29. Stakeholders who want to speak directly to the board were asked to notify the RTO by Oct. 3.

— Michael Kuser