Winter Gas Record Set
New York’s natural gas demand set a single-day record in February, although the winter was much milder than the average over the past 30 years.
The winter operations review presented at the NYISO Management Committee meeting on Wednesday showed that only three relatively brief cold snaps occurred over the winter, with the worst one in mid-February. Cold snaps in December and January, when daylight hours are shorter, have greater potential to stress the electric system, said Wes Yeomans, NYISO’s vice president of operations.
On Feb. 13, during the coldest three-day period of the winter, the ISO set a 6.6 Bcf single-day record for natural gas demand, exceeding the previous mark of 6.4 Bcf set in February 2015. Yeomans said 100% of the natural gas system’s capacity was reached that day, for both heating and electricity generation.
The record was as much a function of the low cost of natural gas as power demand, Yeomans said. “Gas prices remained below oil prices for the day,” he said.
NYISO relies heavily on dual-fuel capable generation, so when natural gas supply becomes constrained — or when it becomes uneconomic relative to the cost of oil-fired generation — fuel-switching becomes more widespread. That did not occur during this stretch.
The peak load in mid-February was 22,951 MW. No demand response resources were called upon this winter.
“Our winter peak was below the 50/50 forecast by quite a bit,” Yeomans said. The peak of 23,317 MW on Jan. 19 was the lowest winter peak since at least 2004. The forecasted peak was 24,515 MW.
Yeomans said the fuel-monitoring platform the ISO created to improve reliability also appeared to be “working well.”
ICAP Demand Curve Reset
The committee voted to set the capacity market demand curve every four years with an annual reset, an increase from the current three-year cycle. The demand curve was introduced more than a decade ago.
“The change is recognizing calls from stakeholders,” said Paul Hibbard, vice president of the Analysis Group, the consultant hired by NYISO.
The changes more accurately reflect the New York wholesale market as generation assets enter and leave, Hibbbard said. The annual reset would consider the gross cost of new entry and forecast energy and ancillary services revenues, as well as adjusting historical revenues to reflect market conditions.
Another factor in extending the cycle is the 18 to 20 months needed for setting the demand curve.
The change needs to be ratified by the NYISO Board of Directors. Further refinements would be performed over the next several months, in advance of a filing with FERC by Nov. 30. NYISO anticipates an operational date of May 1, 2017.
— William Opalka