Discussion about potential changes to the NYISO demand curve reset (DCR) process dominated a recent Installed Capacity Working Group meeting and will likely take up more oxygen in stakeholder meetings throughout the coming year.
“This project has the potential to deliver transformational changes to the market in the face of evolving grid conditions,” Michael Ferrari, NYISO market design specialist in capacity and new resource integration, told the working group Nov. 17 in presenting the project’s kickoff.
The Capacity Market Structure Review project identified the DCR as an area that needed improvement. The improvement project was prioritized for 2026, meaning NYISO has budgeted resources and labor hours for it.
Stakeholders have long complained that the DCR does not provide adequate price signals for new investment, value reliability contributions or provide sufficient consideration of long-term reliability impacts. During the latest DCR, stakeholders debated whether NYISO’s preferred proxy unit, a two-hour battery system, was appropriate or reflective of what might enter the market. In addition, stakeholders said the DCR has a steep learning curve, requires a lot of stakeholder engagement and provokes contentious debates during working group meetings.
Though Ferrari’s presentation noted all these concerns, “it doesn’t seem like the concerns expressed by Con Edison are in here,” a representative of the company said. “There have been multiple conversations on our end about concerns of higher costs to customers.”
Ferrari said stakeholder feedback highlighted in his presentation was “not a comprehensive list,” though the omission of price considerations was indeed an accident.
The presentation indicated NYISO would study how to improve or refine the definition of the proxy unit used to undergird the DCR process. The ISO also would look at restructuring the development of the net cost of new entry of the proxy unit, which sets prices for the curve; look at alternative curve slopes; and possibly develop a technology-agnostic approach to net CONE.
Stakeholders asked what a “technology-agnostic approach” meant with respect to net CONE. Ferrari said it meant NYISO was considering not choosing one specific unit to serve as the proxy for new generator entry to the market.
The ISO plans to issue a draft Issue Discovery Report at the ICAP Working Group’s Dec. 16 meeting. It will present the group with a detailed proposal of initial market design enhancements for consideration at a later meeting.
