Sunday, April 30, 2017

NYISO Provides Update on Capacity Export Concerns

By Michael Kuser

RENSSELAER, N.Y. — NYISO updated stakeholders last week on its response to concerns over capacity exports, providing a status report on modeling revisions and recommending stakeholders consider broad policy changes as part of the ISO’s 2018 Project Prioritization Process.

The ISO is attempting to insulate consumers from anticipated capacity price spikes in the Lower Hudson Valley and New York City zones expected as a result of FERC’s October order allowing the 1,242-MW dual-fuel Roseton 1 generator to export some of its capacity to ISO-NE. The plant, 43 miles north of New York City, is in the import-constrained G-J locality.

In January, FERC approved NYISO’s plan to change its capacity market rules to recognize the impact of counterflows. The new rules use a “locality exchange factor” to reflect how much capacity from “rest of state” can replace capacity exported from an import-constrained locality. The prior rules assumed that 100% of a generator’s exports from an import-constrained area must be replaced with generation in that locality.

In February, the ISO submitted a compliance filing eliminating a one-year transition rejected by FERC (ER17-446). (See FERC OKs NYISO Capacity Revision; Rejects Transition Plan.)

ISO officials now are working with General Electric to develop a probabilistic approach to determining the locality exchange factor. The new methodology could replace the deterministic method designed last year and approved by FERC.

Emilie Nelson, vice president of market operations, told the April 12 Business Issues Committee meeting that “the subject is proving more complicated than expected.”

GE presented its proposed methodology and export topologies at the March 22 meeting of the Installed Capacity Working Group. It is expected to present preliminary results of its analysis at the working group’s April 19 meeting.

NYISO Zones F&G to ISO-NE | General Electric presentation to NYISO Installed Capacity Working Group, March 22, 2017

By June 1, the ISO plans to file an informational report with FERC outlining work that will remain to be done after that date.

NYISO recommended stakeholders consider the topics of capacity imports, payments to capacity-exporting generators and capacity resource interconnection service in the 2018 Project Prioritization Process, which allows stakeholders and the ISO to rank proposed initiatives against one another based on expected benefits and costs. The initial list of project candidates and descriptions will be on the agenda at the Budget & Priorities Working Group meeting April 26.

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