POWER

TRENDSNew York’s
Evolving Electric Grid
2017

NEW YORK
INDEPENDENT
SYSTEM OPERATOR
THE NEW YORK INDEPENDENT
SYSTEM OPERATOR (NYISO)
is a not- for-profit corporation responsible for
operating the state’s bulk electricity grid,
administering New York’s competitive wholesale
electricity markets, conducting comprehensive
long-term planning for the state’s electric
power system, and advancing the technological
infrastructure of the electric system serving
the Empire State.

FOR MORE INFORMATION, VISIT:

www.nyiso.com

FOLLOW US:
twitter.com/NewYorkISO
linkedin.com/company/nyiso

Power Trends 2017 is printed on Mohawk Options 100% PC, which is made with 100% post-consumer
recycled fiber, and manufactured entirely with Green-e certified wind-generated electricity.
From the CEO
Welcome to Power Trends 2017.
The New York Independent System Operator
(NYISO) is proud to produce this annual review
of New York’s power grid and the factors
that shape the future of the electric system.
In the pages ahead, Power Trends 2017 will provide important
information on the status of the power grid in New York today,
the changes to our power system that we have seen and expect to see
in coming years, and insights into how emerging trends affect how the
grid is operated, how resources perform in the NYISO’s wholesale
markets, and how we plan for the future of the power grid in New York. BRADLEY C. JONES
Technological, social, economic, and policy trends have combined
to make this a time of exciting innovation for our electric system. In the
Empire State, the NYISO is at the heart of those changes, serving the needs of consumers,
addressing public policy goals, and ensuring that the power to drive our economy is where it is
needed, when it’s needed.
Since 1999, the NYISO’s competitive markets for wholesale electricity have powered reliability,
increased efficiency, and supported the secure operation of the grid. NYISO markets saved an
estimated $7.8 billion in fuel costs for New Yorkers, outpaced gains in efficient operation of the
grid by 300% over the national average, and saved nearly $613 million by reducing energy reserves
needed to maintain reliability. In the period since competitive wholesale markets have been in
place, New York’s power sector has reduced Carbon Dioxide emissions by 43%, Nitrogen Oxide
emissions by 87%, and emissions of Sulfur Dioxide by 98%.
Power Trends 2017 focuses on the impacts from the growth in distributed energy resources;
public policy initiatives and resulting regulatory oversight challenges; the economic impacts of
sustained low natural gas prices on future asset investment and plant operations; and the challenge
of developing large scale renewable resources in upstate with our largest demand in southeastern
New York and New York City.
New York is at the forefront of innovation in the energy landscape. The NYISO is proud to
play an important role in that innovation. Together with our Market Participants, federal
and New York State policymakers, the NYISO will continue to advance New York’s electric system
towards an efficient, affordable, and reliable future.

Sincerely,

Bradley C. Jones
President and CEO
Power Trends 2017

2017
Load & Capacity Data
A report by
The New York Independent System Operator, Inc.

“Gold Book”

DATA USED IN POWER TRENDS 2017

is from the 2017 Load and Capacity Data
Report (also known as the “Gold Book”),
unless otherwise noted.

Published annually by the NYISO,

the “Gold Book” presents New York Control Area
system, transmission and generation data and
NYISO load forecasts of peak demand, energy
requirements, energy efficiency, and emergency
demand response; existing and proposed
resource capability; and existing and proposed
transmission facilities.

The “Gold Book” and other NYISO publications

are available on the NYISO website

www.nyiso.com
 Power Trends 2017

POWER
TRENDS
New York’s
Evolving Electric Grid

2017
Contents
EXECUTIVE SUMMARY.................................................................. 8
A Grid In Transition...................................................................................................... 8
Changing Energy Usage & Moderating Peak Demand .....................................................9
Aging Infrastructure.................................................................................................. 10
Transmission Expansion to Meet Public Policy Needs................................................... 11
Cultivating Green Power ............................................................................................ 11

STATE OF THE GRID..................................................................... 12

Demand Trends & Forecasts............................................................................................. 12
Energy Usage.....................................................................................................................12

Peak Demand................................................................................................................... 12

Figure 1: Annual Electric Energy Usage Trends in New York State: 2000-2016....................................... 13

Figure 2: Annual Electric Energy Usage by Region: 2015-2016.............................................................. 13

Figure 3: Electric Energy Usage Trends and Forecast in New York State: 2000-2027.............................. 13

Figure 4: Electric Peak Demand Trends in New York State — Actual & Forecast: 2000-2027................... 14

Figure 5: Peak vs. Average Load in New York State: 1998-2016............................................................. 14

Energy Efficiency & Distributed Energy Resources................................................................14

Figure 6: P rojected Impact of Energy Efficiency Programs and

Distributed Energy Resources on Peak Loads & Energy Usage: 2017 & 2027........................... 15

Daily & Seasonal Demand Patterns.................................................................................... 15

Figure 7: Seasonal Hourly Demand Patterns: 2016................................................................................ 15

Resource Trends........................................................................................................ 16
Generation....................................................................................................................... 16

Figure 8: New Generation in New York State: 2000-2017....................................................................... 16

Figure 9: Aging Capacity: Gas Turbines & Steam Turbines Nearing Retirement ........................................17

Expansion & Contraction.................................................................................................... 17

Figure 10: Generation Additions and Retirements: 2000-2017.............................................................. 17

Extending Plant Operations for Reliability........................................................................... 18

 Contents

Transmission .................................................................................................................... 19

Figure 11: New Transmission in New York State: 2000-2017.................................................................. 19

Distributed Energy Resources & Demand Response .............................................................20

Figure 12: Demand Response: Summer 2017 Capability ....................................................................... 20

Distributed Energy Resources Roadmap..............................................................................21

Resource Outlook............................................................................................................. 21
Reliability Assessment .......................................................................................................21

Reliability Outlook .............................................................................................................24

Figure 13: Statewide Resource Availability: Summer 2017..................................................................... 24

Installed Reserve Margins..................................................................................................24

Resource Diversity & Energy Costs.......................................................................................25

Figure 14: Power Resources & Reliability Requirements: 2010-2017..................................................... 25

Fuel Mix in New York State..................................................................................................26

Figure 15: G
 enerating Capacity in New York State by Fuel Source —
Statewide, Upstate New York and Downstate New York: 2017................................................ 28

Figure 16: E lectric Energy Production in New York State by Fuel Source —
Statewide, Upstate New York and Downstate New York: 2016................................................ 29

Figure 17: Capacity Factor of Generators by Type ................................................................................... 30

Figure 18: New York State Fuel Mix Trends: 2000-2017.......................................................................... 30

Electricity Prices & Fuel Costs .......................................................................................31

Figure 19: Natural Gas Costs and Electric Energy Prices: 2000-2016..................................................... 31

Energy Prices & Demand .................................................................................................... 31

Capacity Prices.................................................................................................................. 31

Reliability & Markets .................................................................................................32

A Changing Mix of Supply Resources.........................................................................................32

Figure 20: Proposed Generation by Fuel Type: 2016 .............................................................................. 33

New York’s Gas Delivery Infrastructure................................................................................34

Contents
Natural Gas Power Generation in New York State .................................................................35

Market Approaches to Addressing Fuel Supply & Performance Assurance .............................36

Nuclear Energy Trends........................................................................................................37

CHALLENGES & OPPORTUNITIES ..................................................39

Public Policy & Markets..............................................................................................39
Transmission Infrastructure as Enabler................................................................................39

Figure 21: 2030 Renewable Capacity Projections for Clean Energy Standard Compliance...................... 41

Planning Transmission Infrastructure for Public Policy Requirements....................................42

Western New York Public Policy Need...................................................................................42

AC Transmission Upgrade Public Policy Need........................................................................42

Current Cycle of the Public Policy Transmission Planning Process..........................................43

Figure 22: Public Policy Transmission Needs In New York State.................................................... 43

Aging Infrastructure...........................................................................................................44

Figure 23: Age of New York Transmission Facilities by Percentage of Circuit Mile.................................... 44

Figure 24: Regional Usage and Production in New York State: 2016....................................................... 45

Transmission Congestion....................................................................................................45

Figure 25: Transmission Congestion Corridors in New York State ........................................................... 46

Merchant Transmission Proposals ......................................................................................47

Interregional Planning ....................................................................................................... 47

Environmental Quality & Renewable Power..........................................................................48

Power Plant Emission Trends ..............................................................................................48

Figure 26: New York Emission Rates from Electric Generation: 2000-2016............................................. 49

Federal Clean Power Plan ..................................................................................................50

Cumulative Impact of Environmental Regulations ................................................................51

Figure 27: Summary of Environmental Regulations and Estimated Impact on New York Generation ........ 52

Markets Designed for Renewable Integration ......................................................................53

 Contents

Wind Power .......................................................................................................................53

Figure 28: Wind Generation in New York: Installed Capacity: 2003-2017............................................... 54

Figure 29: Wind Generation in New York State: Energy Produced: 2003-2016........................................ 54

Energy Storage ..................................................................................................................54

Solar Power ....................................................................................................................... 57

Figure 30: Existing and Proposed Wind and Solar Capacity in New York State (MW) ............................... 58

Figure 31: Distributed Solar in New York: Historic & Forecast................................................................. 59

Clean Energy Policy ...........................................................................................................59

Clean Energy Standard ......................................................................................................61

NYISO Solar Study..............................................................................................................63

Figure 32: Solar Penetration Implications for Net Load - Typical Winter Day............................................ 64

Figure 33: Solar Penetration Implications for Net Load - Typical Summer Day......................................... 64

Market Design Options for Encouraging Investments in Clean Energy Resources....................64

Integrating Distributed Energy Resources............................................................................65

Roadmap to New Opportunities...........................................................................................66

Figure 34: Integrating DER in Wholesale Markets .................................................................................. 66

Figure 35: Today’s Electric Grid ............................................................................................................. 67

Figure 36: Tomorrow’s Electric Grid ....................................................................................................... 67

Technology & Infrastructure........................................................................................68

Emerging Technologies ......................................................................................................68

Grid Security......................................................................................................................69

Concluding Comments ............................................................................................... 71

Great Expectations ............................................................................................................71

GLOSSARY..................................................................................72
ENDNOTES..................................................................................76
Executive Summary
A Grid In Transition
The power grid has been described as the greatest engineering achievement of the 20th
century.1 Without it, according to the National Academy of Engineers, “…that ready surge
of electrons would not exist — nor would the modern world as we know it.”2 We live in a
period of unmatched technological innovation, shaping how we consume electricity and how
investors and market participants will serve the needs of consumers in the future. Marching
headlong into the 21st century, the impact of the power grid on our daily lives becomes ever
more apparent. The complexities of operating and planning the system are increasing.
The grid and its capabilities underpin all aspects of the NYISO’s competitive markets.
When the grid is constrained and power is unable to flow freely, markets are less efficient.
The emerging story of the New York electric system is a tale of two grids — a tale of clean
energy abundance and surplus generating capacity upstate and fossil-fuel dependence and
high demand downstate. Limited transfer capability from upstate to downstate means that
this tale of two grids is also a tale of two markets — where the expansion of clean energy
resources is unable to reach downstate load centers, suppressing upstate wholesale prices
to the point where the economic viability of generation needed for reliability is jeopardized.
It is a time of both continuity and change for the grid. The centralized grid exists as
a dependable mainstay, yet faces unprecedented growth and evolution as large-scale
renewables and distributed energy resources connect and place new demands on grid
functionality.
Historically, power flowed instantaneously from generators across a vast network
of transmission and distribution lines before reaching consumers, who used it for home
lighting, office electronics, and powering subway systems that move millions through our
nation’s largest city. Growing demand for energy from the grid was met through physical
expansion of the grid to increase its generating and delivery capacity.
Today’s grid has grown in complexity as historical patterns give
way to emerging trends that reflect technological advances in how
electricity is generated and consumed. The grid of the future will
not only deliver energy from distant power plants across the system
in support of individual needs, it will deliver energy produced by
homeowners and businesses that can support local system needs,

“ The power grid whether on “blue-sky” days with moderate energy demand or in
has been described times of constraints and severe weather.
as the greatest Public policy at the federal and state levels has aided, if not
engineering hastened, this transformation. While changes in federal leadership
achievement of bring new perspectives to the political and regulatory framework,

”
the 20th century. an emerging trend driven by technological, social, and economic
forces, which are increasingly looking for opportunities to expand
— The National the capabilities and flexibility of the grid, rather than expanding the
Academy of Engineers

8 | Power Trends 2017

 Executive Summary

grid itself, remains. This means historical, predictable demand patterns that characterized
infrastructure planning over much of the last century are shifting. Consumers, increasingly
empowered with intelligent digital technologies and advanced communications tools, are
transitioning from traditional purchasers of energy to becoming active participants on the
grid, adjusting their energy use patterns to reflect grid conditions and tailoring their energy
use to meet their own needs for reliability and clean power.
The New York Independent System Operator (NYISO) is at the center of this
changing landscape. Working with New York State and federal policymakers and over
400 Market Participants, the NYISO serves as an independent organization responsible
for operating New York’s bulk power grid and wholesale energy markets, 24 hours a day,
every day of the year.
This evolving landscape introduces new variables that the
NYISO, through its expertise in operating New York’s power grid,
advanced energy market design, open and transparent system
planning, and collaboration with policymakers and market
participants, is uniquely poised to meet in order to continue to
reliably and efficiently respond to the energy needs of New Yorkers.
How consumers think about and use electricity is changing as
quickly as the technology that generates and delivers it. The NYISO’s
► TheNew York
Power Trends 2017 report is intended to provide information
and analysis on current and emerging trends that are working Independent System
to transform the power grid and wholesale electricity markets. Operator (NYISO)
is at the center of this
Shifting patterns of demand for electricity serve to influence how
changing landscape.
investors, policymakers, and consumers view electricity production,
Working with New
transmission, and consumption.
York State and federal
policymakers and over
These patterns include:
400 Market Participants,
■■ Energy efficiency and distributed energy resources. the NYISO serves as an
■■ Infrastructure replacement and expansion. independent organization
■■ Economic influences led by low natural gas prices responsible for operating
and changing consumption forecasts. New York’s bulk power
grid and wholesale energy
■■ Public policies aimed at reducing emissions.
markets, 24 hours a day,
■■ Expanding renewable power resources.
every day of the year.
■■ Providing customers more power choices.

Changing Energy Usage & Moderating Peak Demand

Government, utility, and community programs are changing historical consumption
patterns. The emergence of distributed energy resources such as rooftop solar

Power Trends 2017 | 9

Executive Summary

are transforming historical patterns of consumption and affecting consumer reliance

on electricity provided by the bulk electric system.

For instance:
As we saw in Power Trends 2016, year-over-year growth in the overall usage of electric
energy from New York’s bulk electric system continues to be flat or to decline slightly over the
next decade. Peak demand, which is a critical element to reliable system planning, is projected
to grow at a more moderate pace than previous forecasts. Reliability standards, based on
projected peak demand, drive the total amount of power capacity that must be purchased to
meet the system’s reliability needs.
Energy efficiency efforts and expansion of solar resources on the distribution system
continue to have a strong influence on future consumption forecasts. Energy efficiency is
expected to reduce peak demand on New York’s bulk power system by 230 MW in 2017 and by
1,721 MW in 2027. Distributed solar resources and other behind-the-meter resources are also
reducing demand for power from the bulk electric system as consumers install on-site systems
to meet some portion of their electricity needs.

Aging Infrastructure
While there have been significant additions to New York’s generating capacity since
2000, power plants age like all physical infrastructure. The need to maintain, upgrade
or replace aging generation infrastructure requires attention. At the same time, new
and upgraded transmission capacity will help to address concerns about maintaining
or replacing aging transmission infrastructure.
■■ Across the nation, the capacity-weighted average age of U.S. power generation
facilities was 29 years at the close of 2016.3 New York’s fleet of power plants had
an average age of 36 years, with nearly 2,000 MW of steam-turbine and gas-turbine
capacity of an age at which 95% of capacity using these technologies retires.
■■ Over 80% of New York’s high-voltage transmission lines went into service before
1980. Of the state’s more than 11,000 circuit-miles of transmission
lines, nearly 4,700 circuit-miles will require replacement within the next
30 years, at an estimated cost of $25 billion.4

As investment in clean and distributed energy resources

grows, the economic viability of older generating units is
increasingly challenged. While many of these resources are
operating beyond their initial design life, they still offer reliability
benefits to the grid. It will be important to plan for this transition
► 230 MW reduction toward clean and distributed energy resources to ensure that as
in peak demand older units retire, remaining and newer resources replacing them
for 2017 due to current are integrated into the grid and wholesale markets in a manner
energy efficiency efforts. that continues to promote reliability.

10 | Power Trends 2017

 Executive Summary

Transmission Expansion to Meet Public Policy Needs

A cleaner, greener, integrated grid to serve New York requires a modernized, upgraded,
and expanded transmission system to enable the new resource mix of a changing energy
landscape in New York. Upgraded transmission capability is vital to meeting public policy
goals and efficiently moving power to address regional power needs.
In New York, the tale of two grids includes distinct differences between upstate and
downstate regions in terms of power resources and consumer demand.

■■ All of New York’s existing major hydropower resources and wind power projects, and nearly
all currently proposed land-based wind power projects are located in northern and western
regions of the state — hundreds of miles from the high-demand metropolitan regions of
southeastern New York. Transmission enhancements would relieve constraints on the
system, making more effective use of current and future renewable resources.
■■ The downstate region of New York (Long Island, New York City, and the Hudson Valley -
Zones F-K) annually uses 66% of the state’s electric energy. Yet, that region’s power plants
generate only 53% of the state’s electricity. Enabling upstate resources to better serve
downstate consumers provides benefits such as grid resiliency, resource diversity, and
enhanced market competition.

Cultivating Green Power

New York State continues to be a national leader on environmental quality initiatives.
The Regional Greenhouse Gas Initiative, and New York’s Clean Energy Standard and
Reforming the Energy Vision are expected to shape the future emission profiles of New York
State’s electric generation and the mix of resources used to produce power. Competitive
wholesale electricity markets administered by the NYISO and overseen by federal regulators
have complemented environmental regulations and efforts to expand renewable power,
integrating renewable resources and fostering efficiencies that reduce emissions:
■■ From 2000 through 2016 New York’s air quality improved as power plant emission rates
dropped significantly. SO2 emissions rates declined 98%. NOX emission rates declined
87%. CO2 emission rates declined 43%.
■■ In 2016, 24.13% of New York’s electricity was produced by renewable resources.
Electricity produced from water, wind, solar and other renewable sources accounted for
33,192 gigawatt-hours (GWh) of the 137,532 GWh of electric energy generated in New
York last year.

The greatest engineering achievement of the 20th century is evolving to meet the
changing needs and priorities of the 21st century. Cleaner energy production and engaged,
responsive energy consumers are starting to reshape the grid. During this period of
transformation, the NYISO will enhance its markets to integrate these trends into the grid in
an efficient and reliable manner.

Power Trends 2017 | 11

State of the Grid
Demand Trends & Forecasts
Energy Usage
The first decade and a half of the 21st century can be characterized as a time of
transition for the grid. From 2000 through 2008 the NYISO managed the grid through
a period of growing energy use. Since that time, electricity provided by the grid has
decreased while energy production from distributed energy resources, such as solar, has
increased. Distributed Energy Resources (DER) are beginning to displace energy that was
traditionally supplied by the grid. However, displacement is not the same as elimination,
and the power provided by many distributed energy resources is not continuous, but
intermittent. When those intermittent resources are unavailable to supply the homes and
businesses that have installed them, the grid must still provide power to those homes and
businesses. As a result, planning for the reliable operation of the grid requires consideration
of the direct use of energy by consumers as well as the power provided to them on an
intermittent basis. Additional factors influencing the trend toward
reduced energy use from the grid include “slowing population
growth, market saturation of major electricity-using appliances,
efficiency improvements in appliances, and a shift in the
economy toward a larger share of consumption in less energy-
intensive industries.” 5
► “Behind-the-meter” The energy usage trend for the past several years in New York
A generation unit that State has been relatively flat. At the same time, there has been
supplies electric energy growth in behind-the-meter solar and other customer-based
to an end user on-site DER. When usage and the energy production of customer-based
without connecting to
distributed energy resources like solar are accounted for, we obtain a
the bulk electric system
better picture of how much energy the transmission system must be
or local electric
capable of delivering. The NYISO forecasts energy usage (including
distribution facilities.
the impacts of energy efficiency and customer-based DER) in New
York to decrease at an annual average rate of -0.23% from 2017
through 2027. The energy requirement for load without those impacts is growing at an
annual average rate of 0.7% over the same period.
As recently as 2014, long-term forecasts of energy usage projected 10-year average
growth at 0.16%. The 2015 forecast projected no (0.00%) energy growth and the 2016
forecast projected a moderate decline (-0.16%) in energy use.
Peak Demand
Peak demand is the maximum amount of energy use for a one-hour period during the
year. It represents a small fraction of annual overall electrical energy use.6 However,
it is an important metric because it defines the amount of energy producing resources, or
power capacity that must be available to serve customers maximum demand for energy.

12 | Power Trends 2017

 State of the Grid

Figure 1: 175,000
Annual Electric 170,000
Energy Usage
165,000
Trends in New
York State: 160,000

GWh
2000-2016 155,000

150,000
Actual
145,000
Weather
0
Normalized 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Reliability standards, such as Figure 2: Annual Electric Energy Usage by Region: 2015-2016
installed capacity requirements,
are based on projected peak REGION 2015 GWh 2016 GWh % CHANGE
demand. These reserve
requirements determine the New York State 161,572 160,798 -0.48%
(NYCA)
total amount of power capacity
that must be available to
Upstate 54,548 54,286 -0.48%
reliably meet the maximum (Zones A-E)
hourly energy needs.
New York’s all-time record Downstate 31,633 31,268 -1.15%
peak demand is 33,956 MW, (Zones F-I)
reached in July 2013 at the end
of a week-long heat wave. New York City 53,485 53,653 0.31%
(Zone J)
In 2016, the annual peak

reached 32,076 MW. It was
5.5% below the record, but Long Island 21,906 21,591 -1.44%
(Zone K)
2.9% above the 2015 peak
of 31,138 MW.

Figure 3: 176,000
Electric Energy 174,000
Usage Trends 172,000
and Forecast in 170,000
New York State: 168,000
166,000
2000-2027
164,000
GWh

Actual 162,000
160,000
Forecasts without 158,000
Impacts of Energy 156,000
Efficiency, Solar, 154,000
152,000
and Behind-the-
Meter Generators 0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027

Forecast

Power Trends 2017 | 13

State of the Grid

Peak demand in New York Figure 4: Actual

Electric Peak Demand Trends Forecasts without Impacts of
is forecast to grow at an annual
in New York State — Energy Efficiency, Solar, and
average rate of 0.07% from 2017 Actual & Forecast: 2000-2027 Behind-the-Meter Generators
through 2027. The NYISO’s long- Forecast
term forecasts of peak demand 38
have decreased from a projected 36
0.83% annual growth in 2014;
34
0.48% in 2015; and 0.21% in

MW (in thousands)
2016 to 0.07% in 2017. Absent 32
the impacts of energy efficiency 30
programs and DER, the 2017 peak
28
demand growth rate is 0.73%,
down from 0.84% in 2016. 26

0
 nergy Efficiency &
E
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Distributed
Energy Resources Figure 5: Actual Peak
Peak vs. Average Load in
Energy efficiency programs, New York State: 1998-2016 Average Hourly Load
distributed solar, and non-solar
35
distributed resources such as 33
energy storage or small generators 31

are combining to moderate the 29

MW (in thousands)

27
growth of energy supplied by the 25
grid, as well as peak demand. 23
21
Energy efficiency is improving 19
with new building codes and 17
appliance standards, along with 15
0
the proliferation of government,
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
utility, and
community programs designed to encourage usage of energy efficient
products. These energy efficiency gains are expected to reduce peak demand
on New York’s bulk power system by 230 MW in 2017 and by 1,721 MW in
2027. They are also expected to lower annual energy usage served by the
bulk power system by 1,330 GWh in 2017 and by 12,533 GWh in 2027.
Distributed solar resources in New York are expected to reduce
► 33,956 MW peak demand on the bulk power system by 450 MW in 2017and by 1,176
all-time peak demand MW in 2027. They are also expected to lower annual energy usage served
record set July 2013 at by the bulk power system by 1,845 GWh in 2017 and by 5,324 GWh in 2027.
the end of a week-long In addition to distributed solar, other behind-the-meter resources are
heat wave. In 2016, the expected to reduce peak demand on the bulk power system by 233 MW
annual peak demand
in 2017 and by 375 MW in 2027. They are also expected to lower annual
reached 32,076 MW.
energy usage served by the bulk power system by 1,584 GWh in 2017

14 | Power Trends 2017

 State of the Grid

and by 2,463 GWh in 2027. Figure 6:

(See page 65 ‘Integrating Projected Impact of Energy Efficiency Programs and Distributed
Energy Resources on Peak Loads and Energy Usage: 2017 & 2027
Distributed Energy Resources’
section for more discussion.) Reductions in Energy Forecast Reductions in Peak Forecast
 aily & Seasonal
D
25 3,500
Demand Patterns
3,000
The demand for electricity 20
fluctuates throughout the day 2,500

GWh (in thousands)

and varies by season. Within 15
2,000
the day, hourly demand for

MW
electricity is influenced by 10 1,500
the time of day and weather. 1,000
Seasonal variations in demand 5
patterns are largely weather- 500

related. It is worth noting that, 0 0

as New York grows the level of 2017 2027 2017 2027

renewable energy generation,

more and more of the electricity supply will be influenced by weather conditions as well. Wind
and solar generation vary with the level of wind and sunshine across the region. Ultimately,
enhanced transmission capabilities and expanded energy storage may offer grid operators
added tools to balance simultaneous variations in supply and demand, but the increased
influence of weather on both supply and demand will add complexity to grid operations.
In New York, the periods of peak demand occur during the summer when heat waves
prompt greater use of air conditioning and other climate controls. For example, the highest
recorded peak demand in New York (33,956 MW) occurred in July 2013. In comparison,
New York’s record winter peak demand (recorded in January 2014) totaled 25,738 MW.

Figure 7: Seasonal Hourly Demand Patterns: 2016

25
24
Summer SUMMER
23
(Jun-Sep) 22
21
MW (in thousands)

Winter 20 WINTER FALL

(Dec-Mar) 19
18
17
Fall 16
(Oct-Nov) 15
14 SPRING
13
Spring
12
(Apr-May)
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of Day

Power Trends 2017 | 15

State of the Grid
684
D TOTAL
NAMEPLATE
Figure 8: CAPACITY ADDED
New Generation SINCE 2000:
in New York State: 11,733 MW
2000-2017
UPSTATE
117 459 3,055
B E F

211 862
A B C
DOWNSTATE
912
Resource Trends G
74
Generation 0 H
Since 2000, private power producers and I
3,958 1,401
public power authorities have added 11,733 MW
J K
of new generating capacity in New York State.
This additional generation represents approximately 30% of New York’s current generation.
Over 80% of that new generation has been developed in southern and eastern New York,
where power demand is greatest. New York’s wholesale electricity market design, which
includes locational based pricing and regional capacity requirements, encourages investment in
areas where the demand for electricity is the highest.
Other additions to New York’s power-producing resources resulted
from upgrades to existing power plants in upstate regions,
or were largely influenced by physical factors, such as the suitability
of wind conditions in the northern and western regions of the state.
While there have been significant additions to New York’s generating
capacity since 2000, power plants age like all physical infrastructure. The
►80% of new
need to maintain, upgrade or replace aging generation infrastructure
generation has been
developed downstate
requires attention.
(Zones F-K) since 2000. Across the nation, the capacity-weighted average age of U.S. power
generation facilities was 29 years at the close of 2016. New York’s fleet of
power plants had an average age of 36 years.7
Renewable power projects such as wind and solar units are among New York’s newest
generating facilities, averaging 8 years and 3 years respectively. Combined cycle units fueled
by natural gas, many of which were built after the start of New York’s wholesale electricity
markets, have an average age of 16 years. The average age of New York’s hydropower facilities
is 55 years, although the major hydropower projects have undergone life extension and
modernization within the past decade and a half. New York’s nuclear power projects average
40 years old and the only three remaining coal-fired power plants in New York have an average
age of 43 years. A growing amount of New York’s steam-turbine and gas-turbine capacity is
reaching an age at which, nationally, a majority of similar capacity has been deactivated. In 2017,
520 MW of steam-turbine generating capacity in New York State is 62.5 years of age or older,
an age at which, nationally, 95% of such capacity has ceased operations. For gas turbines,
16 | Power Trends 2017
 State of the Grid

1,400 MW of capacity in New York Figure 9:

State is 46 years of age or older. Aging Capacity: Gas Turbines & Steam Turbines Nearing Retirement

Nationally, 95% of capacity using Nationally, 95% of Steam Turbine plants retire by the time it reaches 62.5
years of operation. Similarly, 95% of Gas Turbine plants cease operating by
this technology has deactivated by
the time it reaches 46 years of operation. The chart shows the amount of
this age. By 2027, more than 7,250 capacity in operation in New York which is approaching these ages.
MW of gas-turbine and steam-
8
turbine based capacity in New York
will reach an age beyond which 7

95% of these types of capacity have 6

deactivated. These metrics suggest

MW (in thousands)
5
that deactivation of these important
4
capacity resources is imminent, and
replacement capacity may need to 3
be commissioned. 2

Expansion & Contraction 1

New power plants are built and 0

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
existing facilities are upgraded to
Gas Turbine capacity in Steam Turbine capacity in
expand generating capacity as the
operation for 46 years or more operation for 62.5 years or more
demand for electricity and available
supplies of power warrant new investment. Alternatively, power plants may elect to retire
or suspend operation (i.e., “mothballing”) in response to economic circumstances, physical
plant conditions, or regulatory requirements.
According to the U.S. Energy Information Administration (EIA), more than 27,000 MW
of generating capacity was added nationwide in 2016, the largest amount of added capacity
since 2012. The additions offset the retirement of 12,000 MW of capacity, yielding a net capacity
gain of 15,000 MW, the largest change since 2011. 2016’s net gain followed a 4,000 MW decline
in net capacity in 2015 — the largest net drop in capacity recorded in the United States.8

Figure 10:
Generation Additions and Retirements: 2000-2017 Additions Retirements

3,000

2,500

2,000
Nameplate MW

1,500

1,000

500

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Power Trends 2017 | 17

State of the Grid

Since 2000, 11,733 MW of new generation have been added to New York’s electric
system (and existing facilities have improved their generating capacity), while nearly
7,000 MW have retired or suspended operation. The pattern of expansion and contraction
has ranged from the net addition of more than 2,000 MW between 2005 and 2006 to a net
reduction of more than 1,100 MW between 2012 and 2013.9
Generation additions were primarily natural gas-fueled or wind-powered.
Since 2000, approximately 2,000 MW of generation fueled by coal have retired or
suspended operation.
The pattern of expansion and contraction has continued in recent years, with price
signals from the NYISO’s markets encouraging more efficient resources to enter the market
while signaling less efficient generation that is no longer viable to exit the market. These
locational signals serve to inform investors not only when to add generation, but where
to invest in new resources on the grid to most efficiently serve consumer needs.
In parallel, new renewable generation is responding to state and federal policies supporting
its deployment. In 2012, statewide power resources exceeded peak demand and reserve
requirements by more than 5,000 MW. By 2015, the margin had declined to approximately
2,340 MW. In 2017, the surplus of power resources beyond reliability requirements
totaled 1,649 MW.
The narrowing margin between available capacity and peak system demand reflects the
balance that markets provide in maintaining sufficient resources to meet reliability while
encouraging the closure of those resources that offer less value to the grid. The NYISO’s
markets have maintained this balance through price signals that sustain reliability in an
economically efficient manner. However, power plant retirements can present challenges to
electric system reliability.
Extending Plant Operations for Reliability
Federal and state regulations require advance notice of plant retirements. The NYISO
conducts what is referred to as a “deactivation assessment” to determine the reliability
impact of the planned retirement. If the assessment identities a reliability need, it may be
addressed by the long-term planning process or alternate means.
A 2015 FERC order concluded that Reliability Must Run (RMR)
agreements that pay a generator to remain in service because they
are needed to maintain reliability on the bulk power system should
be a “last resort” and “be of a limited duration so as to not perpetuate
out-of-market solutions that have the potential, if not undertaken in
an open and transparent manner, to undermine price formation.”10
Pursuant to a 2016 FERC order, the NYISO made further tariff
►11,131 circuit
revisions to select from among the resources that should be used
miles of high voltage
to meet reliability needs caused by generator deactivations and to
transmission lines move
energy throughout NYS.
allocate and recover the costs of regulated solutions through its
tariffs when necessary.

18 | Power Trends 2017

 State of the Grid

Transmission
New York’s bulk power system moves electricity over 11,131 circuit-miles of high-voltage
transmission lines to meet the needs of energy consumers from the remote and sparsely
populated regions of the Adirondacks to the densely packed heart of Manhattan.11 Over 80%
of the transmission system went into service before 1980, with nearly 4,700 circuit-miles
likely needing replacement within the next 30 years, at an estimated cost of $25 billion.
The power demands of the downstate metropolitan New York region have attracted
the development of various transmission projects, primarily interregional high-voltage
direct-current projects connecting the Southeastern New York region to neighboring
electricity markets. More than 2,700 MW of transmission capability have been added
to serve New York’s electric system since 2000.
These investments include:
■■ The Cross-Sound Cable, which links Long Island with ISO-New England.
■■ The Neptune Regional Transmission System, connecting Long Island with PJM.
■■ The Hudson Transmission Partners project.
■■ The Linden Variable Frequency Transformer project also link New York with PJM.

Figure 11: TRANSMISSION

New Transmission CAPABILITY ADDED
in New York State: SINCE 2000:
2000-2017 UPSTATE
2,765 MW

TRANSMISSION
OWNER
TRANSMISSION
SOLUTIONS (TOTS):
450 MW

CROSS SOUND
DC CABLE:
HUDSON TRANSMISSION 330 MW
PROJECT:
660 MW DOWNSTATE
New
Transmission
CONED M29 AC:
Existing 350 MW
Transmission LINDEN VFT: NEPTUNE DC CABLE:
315 MW 660 MW

Power Trends 2017 | 19

State of the Grid

In June 2016, three intrastate projects collectively named the Transmission Owner
Transmission Solutions (TOTS) were placed in service. They are estimated to increase transfer
capability into Southeastern New York by 450 MW.
Further upgrades and enhancements of New York’s transmission infrastructure are being
planned to address congestion concerns, deliver renewable power resources from remote
locations, and make better use of the full range of New York’s power resources.
Distributed Energy Resources & Demand Response
Demand response enlists large electricity consumers and aggregations of smaller energy
users to reduce consumption from the grid during periods of peak demand or in response
to price signals. Demand response providers continue to adapt as technology enables
increasingly sophisticated management of power consumption.12
62
Figure 12: D
SPECIAL CASE RESOURCES
Demand Response: (MW BY NYISO ZONE)
Summer 2017 Capability
SUMMER 2017
PROJECTED CAPABILITY:
1,192 MW
UPSTATE
74 38 91
B E F

302 117
A B C
DOWNSTATE
54
G
7
25 H
I
372 50
J K

Prior to the establishment of wholesale electricity markets, the electric system

addressed growth in peak demand with comparable increases in generating capacity.
Demand response programs have provided a conservation-orientated alternative by
incentivizing and coordinating consumers to reduce their use of electricity from the grid.
According to the Federal Energy Regulatory Commission, demand response resources
in the nation’s seven ISO/RTO regions totaled 31,754 MW in 2015 (up from 28,934 MW
in 2014), representing 6.6% of peak load (up from 6.2% in 2014).13
Large power customers and aggregated groups of smaller consumers participate in
several demand response programs developed in the NYISO markets.14 In summer 2016,

20 | Power Trends 2017

 State of the Grid

the programs involved 3,593 end-use locations providing a total of 1,266.7 MW of load
reduction capacity, representing 3.9% of the 2016 summer peak demand. The 2016
enrollment level represented a 4.4% decline in demand response capacity compared
to the 2015 level.
For the summer of 2017, the NYISO’s largest demand response program, Special
Case Resources, is projected to be capable of providing up to 1,192 MW. Additionally, the
Emergency Demand Response Program is expected to be able to provide 75 MW.

Distributed Energy Resource Roadmap

The NYISO’s Demand Response Programs have historically offered opportunities

for Distributed Energy Resources (DER) to participate in wholesale markets as capacity
suppliers. In keeping with advances in the technologies, the NYISO issued a DER Roadmap
in February 2017 outlining a series of market enhancements that are designed to
more fully integrate these resources into NYISO markets and operations. DER offer
the potential to make load more dynamic and responsive to
wholesale market price signals, potentially improving overall
system efficiencies. The NYISO’s market enhancements seek to
permit dispatchable DER (i.e., controllable resources) with various
capabilities to participate in the wholesale markets. Integrating DER
in this manner will require enhancements to system planning and
grid operations as well as market design to better align resource
investments and performance with system needs and conditions.
The NYISO contemplates implementing these enhancements over
the next three to five years consistent with the timing of state and ► Comprehensive

federal energy policies. Reliabilty Plan

Resource Outlook
Reliability Assessment
The NYISO conducts comprehensive system planning to
maintain the long-term reliability of New York’s bulk electric system.
Every two years, the NYISO’s Comprehensive Reliability Planning
Process examines the reliability of the state’s electric system over
a 10-year planning horizon. Using a multi-faceted approach, the
► Reliability Needs
NYISO’s planning process strives to achieve market-based solutions
Assessment for more
whenever possible. This allows developers and investors to assess
visit www.nyiso.com.
and assume the risks of such investments to avoid imposing the
costs on rate-paying consumers.
Reliability planning is the key to maintaining the integrity of the electric grid.
The NYISO regularly performs an evaluation through its Reliability Needs Assessment.

Power Trends 2017 | 21

State of the Grid

If the assessment finds emerging needs, the NYISO solicits market solutions. Regulated
solutions are also solicited as a backstop, in the event they are needed to maintain grid
reliability. Then, a Comprehensive Reliability Plan details the solutions proposed for meeting
any needs identified through the process. If a regulated backstop solution is required to meet
reliability needs, the NYISO selects the most efficient or cost-effective transmission project.
The costs of a transmission project can be allocated to, and recovered from, those customers
benefitting from the upgrade through the NYISO’s tariffs following regulatory approval.
The NYISO’s planning studies use complex computer models to assess the capability
of the transmission system and the adequacy of resources that connect to that system to
meet New York’s electric needs. There are numerous factors included in these models
to determine whether there are any reliability needs, including: the impact of changes
in generation and transmission resources available to the electric system, forecasts of
consumer demand and peak loads, economic outlook data, weather models, and the impact
of demand response resources that are paid to reduce energy
► Here’s how the NYISO usage at peak times.
planning process works:
The 2016 Comprehensive Reliability Plan, issued in April
Identifying needs: Using a
2017, contains the NYISO’s most recent analysis of potential
market-oriented process, NYISO
reliability needs. It found no new resources need to be added,
examines a 10-year horizon to
meaning that the bulk power system is expected to be capable
assess the future reliability of
of meeting peak electrical demand even if a contingency event
the power system.
occurs, such as the loss of a large generator. Further, the Plan
Encouraging market-based determined that updated local transmission plans from utilities
solutions: NYISO’s market-based for their local transmission systems will address previously
approach encourages private- identified needs. The Plan concluded the system, as studied,
sector investment in projects will meet reliability criteria over the 2017-2026 period.
to improve New York’s energy
While finding no reliability needs, the 2016 plan noted
infrastructure.
that reliability margins could change over the study period
Evaluating proposed solutions: based upon the following changes in assumptions and potential
When projects are proposed, risk factors.
NYISO rigorously studies them to ■■  n January 9, 2017, Entergy and Governor Cuomo announced an
O
be sure they will operate safely and agreement to close Indian Point units 2 and 3 in 2020 and 2021,
securely if connected to the grid. respectively.15 The NYISO will perform the appropriate reliability
Since launching its planning impact analysis for this scenario through a Generation Deactivation
process in 2005, NYISO has Assessment as well as the 2018 Reliability Needs Assessment.
conducted seven assessments, Using the most up-to-date information of the resource mix, system
five of which identified emerging conditions, and forecasted system needs in New York, the NYISO
reliability needs. In each case, the will conduct its studies and provide federal and state policymakers,
markets responded to address the market participants, investors, and the public with clear information
needs and the NYISO did not need to determine the impact of the Indian Point retirement. If a reliability
to implement a regulated solution need is revealed, the NYISO will address the need through market-
through its tariff. based solutions or with a regulated solution, if necessary.

22 | Power Trends 2017

 State of the Grid

■■ Based on the best information available at the time the evaluation was initiated in
March 2016, the 2016 Reliability Needs Assessment assumed the R.E. Ginna and
James FitzPatrick nuclear power plants would be deactivated.16 With the Public
Service Commission’s approval of a Zero Emission Credit (ZEC) policy for the upstate
nuclear facilities in 2016, both plants are continuing to operate, which increases the
reliability margin compared to what was included in the study.

■■ The 2016 Reliability Needs Assessment includes over 1,000 MW of assumed

generation additions. If anticipated resources do not materialize within the assumed
timeline, the resource adequacy margin will decrease.

■■ The retirement or unavailability of generating units beyond those already contemplated

in the study could accelerate resource adequacy needs, transmission security violations
and reduce transmission transfer capabilities.

■■ Generation resources could elect to offer capacity into neighboring markets,

which would either reduce or eliminate availability in the New York Control Area (NYCA).
Accordingly, the NYISO will continue to monitor imports, exports, generation and
other infrastructure.

In the spring of 2018, the NYISO will begin developing the 2018 Reliability
Needs Assessment. Scheduled for completion in the fall of 2018, it will evaluate
the 2019-2028 planning horizon, identify any potential reliability needs and
establish the process for soliciting solutions, if necessary.
The NYISO continually examines the reliability of the state’s bulk electric system by
monitoring the implementation of local transmission plans and potential risk factors.
In addition to its regular reliability planning processes, the NYISO conducts a facility-
specific Generator Deactivation Assessment to address any short-term reliability needs that
could result from a generator deactivation.
1. Under NYISO rules, a generator must provide the NYISO with at least
365 days’ notice of its intent to deactivate.
2. Within 90 days of receiving a formal deactivation notice, the NYISO
assesses whether any reliability needs will arise over a five-year period.
3. This process addresses near-term reliability needs that could result
► 3,000 MW
from a generator’s deactivation.
of potential generator
4. If a reliability need must be addressed before the NYISO’s next deactivations were
comprehensive reliability assessment, the NYISO can seek solutions, examined as part of the
which can include transmission or, as a last resort, a Reliability Must 2017-2026 RNA study.
Run (RMR) agreement with a generator.

Potential generator deactivations in the 2017-2026 study period total more

than 3,000 MW.

Power Trends 2017 | 23

State of the Grid

Reliability Outlook Figure 13: Statewide Resource Availability:

Summer 2017
For the summer of 2017, power resources
available to serve New York State total 40,799 45
MW. These resources include the installed 40
generating capacity of in-state power 35
projects, imports available to the system,
30
and projected levels of demand response

MW (in thousands)
participation. 25

While the total power resources available 20

in 2017 is 753 MW below last year’s level, 15
available power resources remain above the
10
projected peak demand of 33,178 MW plus
the reserve requirement, a combined total 5

of 39,150 MW. 0
Available Resources Required Resources
This estimate of total resources measures
the maximum potential of resources. In-State Generation Load Forecast
However, outages of generating and Demand Response Installed
transmission facilities or lower-than- Capability Reserve
Margin
expected participation in demand response Import Capability

can reduce the availability of resources.

Similarly, the forecasted peak represents a baseline estimate. Weather extremes could
produce peak demand ranging from 29,980 to 35,487 MW in 2017.

► New York’s Installed Installed Reserve Margins

Reserve Margin: New York’s electric system maintains generating capacity
The not-for-profit New beyond projected need, akin to a household emergency fund.
York State Reliability These reserves mean the electric system is prepared to cope with
Council develops and equipment breakdowns, severe weather, or other unplanned events
monitors compliance with that could affect system reliability.
reliability rules specifically
The availability of more supply than may be required by the
established for New York
highest anticipated level of demand for electricity is a fundamental
State’s electric system.
requirement for reliable electric system operations. This reliability
Those rules include an
requirement is known as the Installed Reserve Margin, or “IRM.”
Installed Reserve Margin,
Each year the NYISO works with the New York State Reliability
established annually
Council (NYSRC) to conduct an IRM study. The analysis evaluates the
with approval from the
expected load in relation to the anticipated available resources and
Federal Energy Regulatory
other system conditions.
Commission and the
New York State Public The primary reliability criterion examined is the Loss of
Service Commission. Load Expectation (LOLE) that requires that the probability of an
unplanned system outage should not be more than one instance in

24 | Power Trends 2017

 State of the Grid

a 10-year period. NYSRC reliability rules also include more specific

or more stringent criteria that account for special circumstances
within the New York Control Area, such as the configuration of the
bulk power system and the severe consequences that may result
from power interruptions in New York City and Long Island.
Factors that influence the setting of the IRM include load
forecasts; variance in load due to uncertainties related to weather;
historical performance of generation and demand response ► The approved
resources; constraints on the transmission system; emergency Installed Reserve
operating procedures that can be deployed during system Margin (IRM) for a full
emergencies; and emergency assistance available from year, including the Summer
neighboring regions. Capability period that
The approved IRM for the 2017/2018 Capability Year, including began on May 1, is 18%,
the Summer Capability period that begins on May 1, is 18% up up slightly from the
17
slightly from the previous IRM of 17.5%., The IRM requires previous IRM of 17.5%.
utilities, energy service companies and other load-serving entities to
purchase capacity equal to 118% of the forecasted peak summer load. Factors influencing
the slight increase to the IRM include reductions in anticipated load, changes stemming
from modeling import capabilities, updated modeling of wind generation, and updated
assumptions about generator performance based on recent data.

Resource Diversity & Energy Costs

Both the reliability of the electric system and the price of power are affected by
the mix of fuels used to generate electricity. A balanced array of resources enables
the electric system to better address issues such as price volatility, fuel availability,
and requirements of public policy.
Figure 14: Reliability
Market factors and public policy Power Resources and Reliability Requirements
influence the mix of generation Requirements: 2010-2017 Available
technologies and fuels used to produce Resources

power. Private investment is driven by 45

economic factors — the relative costs of 44
43
fuel, operation and maintenance, as well
42
as the costs of siting, permitting, and
MW (in thousands)

41
construction. For example, the current 40
price advantage of natural gas is driving 39
38
significant development of gas-fired
37
generation throughout the nation, and 36
placing economic pressure on resource 35
types that use less economic fuels or 34
0
have higher costs to produce energy. 2010 2011 2012 2013 2014 2015 2016 2017

Power Trends 2017 | 25

State of the Grid

Policy goals and environmental regulations, which

vary regionally and by state, affect fuel mix through overall
emissions caps and targeted emissions standards, which
require power plants that burn fossil fuels to limit production
► Capacity
and/or install pollution controls. New York and 28 other states
and Energy
in the nation have adopted renewable portfolio standards with
There are differences between
the goal of having “green power” resources, such as solar and
a generator’s ability to produce
wind, provide a specified portion of generation.
power (capacity) and the amount
of electricity it actually produces Fuel Mix in New York State
(energy).
The NYISO’s markets, like those of other regions of the
Capacity: is the maximum electric country, select the least-cost mix of resources to reliably meet
output that a generator can produce. the needs of energy consumers, regardless of the type of
It is measured in MW. fuel used to supply energy to the grid. While fuel mix is not a
Energy: is the amount of electricity determinant in which units are selected in the NYISO markets,
a generator produces over a specific the diversity of the fuel mix has both reliability and economic
period of time. It is measured in implications that are important to operating the grid.
megawatt-hours (MWh). (A generating From a statewide perspective, New York has a relatively
unit with a 1 MW capacity operating diverse mix of generation resources. However, in New
at full capacity for one hour will York, the tale of two grids includes a supply mix that is
produce 1 MWh of electricity.) less diverse within the various regions of the state. For
Capacity Factor: measures actual example, the combination of more stringent air quality
generation as a percentage of regulations, limitations to the ability to flow energy across the
potential maximum generation. transmission system, and reliability standards that establish
(A generator with a 1 MW capacity local generation requirements in the downstate region
operating at full capacity for full year, have resulted in the power demands of New York City and
or 8,760 hours, would produce Long Island being served with generation primarily fueled
8,760 MWh of electricity and have by natural gas. However, many of these are dual-fuel units
an annual capacity factor of 100%.) capable of using oil when necessary, which provides fuel
Generators: do not operate at diversity and reliability benefits to the system.
their full capacity all the time. A In addition to looking at capacity, the maximum potential
unit’s output may vary according output of the various types of power plants, it is important to
to weather, operating conditions, consider the actual energy generated by those power plants.
fuel costs, market prices, and/or For example, power plants that run on fossil fuels
scheduling instructions from the (natural gas, oil and coal) account for 66% of New York’s
grid operator. generating capacity. However, generation powered by fossil
The ability of generators to operate fuelsamounted to only 45% of the total electric energy
at full capacity also varies by the type produced in New York during 2016. Nuclear and hydropower
of facility, the fuel used to produce generation facilities maximize their output compared to their
power, and the unit’s technology. relative share of capacity.

26 | Power Trends 2017

 State of the Grid

1. Nuclear, with 14% of statewide capacity, produced 30% of the total electric
energy in New York last year.
2. Hydropower, with 11% of statewide capacity, produced 19% of New York’s
electric energy in 2016.
New York’s fleet of fossil fuel power plants includes older facilities with higher operating
expenses or fuel costs, which are selected to run only during periods of higher demand.
While these facilities add to overall capacity totals, they contribute less to the annual
amounts of electric energy produced in New York.
Renewable resources, such as hydro, wind and solar energy, have no fuel costs and are
selected in wholesale market auctions to operate more frequently than older and potentially
less efficient fossil units.
However, the fuel supplies of these renewable resources are made variable by weather
and climate conditions. The intermittency of renewable project operation influences the
reliability of their supplies, measured by a metric called “capacity factor.” Capacity factor
compares how much electricity a generator actually produces with the maximum output
it could produce at continuous full-power operation.
Generators with comparatively low fuel and operating costs are usually selected
in wholesale electricity markets to consistently supply baseload power. They typically
have average annual capacity factors 70% or higher. Lower capacity factors indicate that
a generator operates less frequently, such as during peak demand periods, or that its
operation depends on the intermittent availability of its fuel supply such as hydro, solar,
and wind energy.
Consider, for example, nuclear, hydro, wind and solar energy:
1 . Nuclear had an 88% capacity factor and hydropower had
a 71% capacity factor in 2016.
2. Wind power performed at a 25% capacity factor.
3. Distribution-level solar performed at approximately 15%. ► Renewable

The relative capacity factors of different types of generation resources, such as

are important considerations in planning the future fuel mix. hydro, wind and solar
For example, based on 2016 operating performance, it would require energy, have no fuel
approximately 3.5 MW of wind capacity to produce the same amount costs and are selected in
of energy as 1.0 MW of nuclear capacity over the course of a year. wholesale market auctions
This is due to the variable nature of supply from these intermittent to operate more frequently
resources. From an operational perspective, the intermittent nature than older and potentially
of these resources is further challenging, as they cannot respond less efficient fossil units.
to dispatch signals in the same manner that dispatchable supply
resources can. For example, these resources can be signaled to supply less energy
when reliability conditions warrant such instructions, but cannot increase output in

Power Trends 2017 | 27

State of the Grid

NYCA CAPACITY
Figure 15:
Generating Capacity
in New York State 1%
by Fuel Source —
Statewide, Upstate 5% 6%
New York 4%
and Downstate
New York: 2017
11% 2017 Capacity MW
Oil 2,499
Dual Fuel (Gas/Oil) 18,529
Gas 3,588
Coal 1,011
Nuclear 5,375
Hydro 4,251
14% Hydro PS 1,407
Wind 1,740 48%
Other Renewables 378
TOTAL 38,777
3%

9%

UPSTATE CAPACITY DOWNSTATE CAPACITY

(Zones A-E) (Zones F-K)

1% 1%
1%
2% 10% 5% 9%
12%
8%
6% 7%

2017 Capacity MW
Gas 1,400 2017 Capacity MW
Oil 816 Gas 2,188
Dual Fuel (Gas/Oil) 1,746 12% Oil 1,684
Coal 1,011 Dual Fuel (Gas/Oil) 16,783
Nuclear 3,334 Nuclear 2,042
Hydro 3,903 Hydro 348
27% Hydro PS 1,167
Hydro PS 240
Wind 1,740 Other Renewables 234
7%
Other Renewables 144 TOTAL 24,445
TOTAL 14,333

23% 69%

28 | Power Trends 2017

 State of the Grid

UPSTATE ENERGY
Figure 16: (Zones A-E)
Electric Energy Production in New York State by Fuel Source —
Statewide, Upstate New York and Downstate New York: 2016 1% 2% >1%
6% 8% 2%
NYCA ENERGY 1% >1% 2%
PRODUCTION 2016 Production GWh
3% 2% Gas
Oil
5,145
17
Dual Fuel (Gas/Oil) 1,343
Coal 1,493
Nuclear 26,511
Hydro 24,577
38% Hydro PS 464
19% 2016 Production GWh Wind 3,943
41%
Other Renewables 1,361
Oil 136 TOTAL 64,855
Dual Fuel (Gas/Oil) 52,450 38%
Gas 7,787
Coal 1,493
Nuclear 41,638
Hydro 26,314
Hydro PS 836 DOWNSTATE ENERGY
Wind 3,943 (Zones F-K)
Other Renewables 2,935 2%
1% >1%
TOTAL 137,532 2% 4%

30% 6% 21%
2016 Production GWh
2% Gas 2,643
1% 1% Oil 119
Dual Fuel (Gas/Oil) 51,107
12% Nuclear 15,126
Hydro 1,737
Fossil Fuel Hydro PS 371
Zero Emission Other Renewables 1,574 70%
UPSTATE Hydro PS
ENERGY TOTAL 72,677
Other Renewables
PROFILE
(Zones A-E)

85% UPSTATE
1%
2%

Central East 23%

Constraint
DOWNSTATE
ENERGY
PROFILE
(Zones F-K)
DOWNSTATE 74%
In 2016, the Central East interface limited flows of energy
from upstate to downstate 53% of the time in the NYISO’s
Day-Ahead Market, limiting the delivery of clean energy
resources to meet downstate energy needs.

Power Trends 2017 | 29

State of the Grid

the same manner as dispatchable Figure 17:

resources can. Capacity Factor of Generators by Type
The combination of fuels used
100%
to produce power in New York has
changed since 2000. New York’s 90%
capability to produce power from 88%
natural gas and wind has grown, as 80%

the generating capacity from coal-

70%
and oil-fired plants has declined. 71%
The portion of New York’s 60%
generating capability from natural
50%
gas and dual-fuel facilities grew
from 47% in 2000 to 57% in 2017. 40%
Wind power, virtually non-existent
in 2000, grew to 5% of New York 30%
State’s generating capability in 2017.
20% 25%
In contrast, New York’s
generating capability from power 10% 15%
plants using coal declined from
11% in 2000 to 3% in 2017. 0%
Capacity Factor
Generating capability from power
plants fueled solely by oil dropped
Nuclear Hydro Wind Behind-the-
from 11% in 2000 to 6% in 2017. Meter Solar

Figure 18: New York State Fuel Mix Trends: 2000-2017

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%
89%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Coal Oil Gas & Dual Fuel Nuclear Hydro Wind Other Renewables

30 | Power Trends 2017

 State of the Grid

The shares of generating capability from nuclear power plants and

hydroelectric facilities have remained relatively constant since 2000.
Nuclear accounted for 14% of New York’s generating capability in 2000
and 2017. Hydropower (including pumped storage) represented 15% of
the state’s generating capability in 2000 and 2017.
Electricity Prices & Fuel Costs
The average wholesale electric energy price in 2016 was $34.28 ► $34.28 per
per megawatt-hour (MWh), the lowest in the history of the NYISO. MWh, in 2016,
Wholesale electricity prices are directly influenced by the cost of the was the lowest
fuels used by power plants to meet the demand for electricity. Power average wholesale
plants fueled primarily by natural gas account for more than half of the electric energy price
electric generating capacity in New York State. Consequently, the price of in NYISO history.
natural gas and the cost of electricity are closely correlated.

Figure 19: Average Annual Average Annual

Natural Gas Costs and Electric Energy Prices: 2000-2016 Electric Energy Natural Gas
Cost ($/MWh) Cost ($/MMBTu)
$100
$12

$80 $10

Dollars/MMBTU
$8
Dollars/MWh

$60

$6
$40
$4

$20
$2

$0 $0
2000 2002 2004 2006 2008 2010 2012 2014 2016

Energy Prices & Demand

Wholesale electricity prices also rise and fall with power demands. Lower demand for
electricity allows a larger proportion of electricity to be generated by more efficient and less
costly facilities, resulting in lower prices. In 2016, the average demand in New York rose
slightly from 2015, but it was “still noticeably lower than those [average demand levels]
from 2010 to 2013,” according to the 2016 State of the Markets Report.
Capacity Prices
Capacity prices during the Summer 2016 Capability Period were lower than those of the
previous Summer Capability Period. The average Spot Market Auction prices in NYC were
$12.24/kW-month compared to $15.38/kW-month, and were $4.63/kW-month compared

Power Trends 2017 | 31

State of the Grid

to $5.72/kW-month in LI. The average Spot Market Auction prices over the Summer 2016
Capability Period were higher for NYCA and the lower Hudson Valley region, or the Zones
G-J Locality, i.e., $4.09/kW-month, and $9.24/kW-month compared to $3.83/kW-month,
and $9.10/kW-month respectively during the previous Summer Capability Period. These
changes were driven primarily by changes in the respective Locational Minimum Installed
Capacity Requirements (LCRs), as well as by the changes in available capacity.

Reliability & Markets

A Changing Mix of Supply Resources
As noted above, abundant domestic natural gas supplies and resulting low costs
of natural gas are working to drive wholesale electric energy to record-low prices.
■■ While the trend toward lower-cost natural gas is benefiting New York consumers in the
form of lower-cost energy supplies, New York’s markets are reflecting a national trend
where decreasing energy revenues is placing economic pressure on all generation
resources to remain commercially viable.
■■ Combined with more stringent environmental regulations that have been put in place to
reduce emissions from the power sector, both economic and public policy forces are producing
a growing reliance on natural gas for electricity generation throughout North America.
According to the U.S. EIA, coal’s share of the nation’s electricity generation has
decreased. In 2016, natural gas-fired generation exceeded coal’s share of the U.S.
electricity mix on an annual basis for the first time. In the U.S.,
natural gas accounted for an estimated 34% of the total annual
utility-scale power generation in 2016, compared with a 30%
share for coal-fired generation.18
The trend toward greater reliance on natural gas in the
power sector has brought the interaction between natural gas
infrastructure and the power grid into sharper focus, as it appears

“ Coal’s share
of the nation’s
that power grid reliability and economics will increasingly be
linked to the performance and reliability of the gas pipeline
infrastructure.
electricity generation
has decreased. In That interdependency between gas pipeline infrastructure
2016, natural gas and the bulk power system is heightened in New York State, where
accounted for 34% natural gas-fired power plants and dual-fuel power plants that
of total annual rely primarily on natural gas produced 44% of the electricity.
utility-scale power From a statewide perspective, New York continues to have a diverse
generation.
— U.S. Energy
Information
” mix of supply resources that includes wind, solar, hydro, and
nuclear-powered generating facilities. However, there is less fuel
mix diversity in the southeastern region of the state, where natural
Administration

32 | Power Trends 2017

 State of the Grid

gas-fired power plants and power plants capable of burning both natural gas and oil
are the predominant sources of power.
New York’s reliance on natural gas-fired capacity is expected to grow as power projects
using natural gas account for 56% of all proposed generating capacity.

Figure 20: 5,000

Proposed
4,500
Generation
by Fuel Type 4,000

3,500

3,000
MW

2,500
Natural Gas
2,000
Dual Fuel 1,500

1,000
All Others
500
Wind 0
Upstate Capital Region and New York City Long Island
Solar (Zones A-E) Hudson Valley (Zones J) (Zones K)
(Zones F-I)

This heightened interdependency between natural gas and electricity has prompted
numerous studies to identify what, if any, electric system reliability vulnerabilities might
be exposed by growing reliance on natural gas infrastructure for power generation.
Here are three studies and what they found:

1 . A 2014 study commissioned by the Eastern Interconnection Planning Collaborative (EIPC)

a. Examined natural gas-electric system interfaces and identified risks for New York that
include the threat of unplanned generator retirements combined with a growth in winter
demand and/or the deactivation of nuclear units.
b. Mitigating these risks, according to the report, are the robust dual-fuel capability already
in operation, the diversity of existing natural gas pipelines that serve the generators,
and the prospect of expanding pipeline capacity.

2. In February 2016, the NYISO shared with stakeholders the results of a study it undertook to
determine whether the New York Control Area (NYCA) system can reliably serve its electric load
during an extended cold snap, when access to gas supplies is more likely to be constrained.
To assess this risk, the NYISO tested the system’s ability to meet load under severe winter
conditions with expected generator availability and with increasing attrition in New York’s
nuclear fleet.

Power Trends 2017 | 33

State of the Grid

a. T he base-case scenario, which assumed the retirement of the Fitzpatrick nuclear unit in
addition to retirements of the Dunkirk and Huntley coal-fired generating facilities, found
that there would be no load curtailment provided that oil-fired facilities had access to
refueling or if oil tanks were filled to capacity at the onset of the two-week event.
b. The study’s nuclear retirement scenarios, which layered on the additional retirements of
all nuclear generating resources; including Ginna, Nine Mile 1 and 2, and Indian Point 2
and 3 facilities, caused an increasing likelihood of load curtailments when oil units were
limited to oil tank inventories and unable to refuel. In this most extreme scenario where
all nuclear units were assumed retired, and assuming no ability to replenish oil tanks, it
was predicted that load curtailments were likely to occur, beginning on the eighth day of
the cold-weather event. The finding underscores the value of fuel diversity afforded to the
system by dual-fuel units capable of switching to alternative fuel supplies during periods
of gas pipeline constraints that might otherwise affect system reliability.
3. In May 2016, the North American Electric Reliability Council (NERC) issued a report
focused on the operational risks to the power grid associated with high penetration of
natural gas-fired generation.19
a. T he study noted that “regions with a growing reliance on natural gas are increasingly
vulnerable to issues related to gas supply availability.” The report suggests that the
multiple pipelines supplying New York’s generators will help to avoid tight operational
margins in the near term.
b. It also identified activities and characteristics of New York’s system that support
continued fuel assurance; including the NYISO’s site visits and surveys of gas-fired
units throughout the system, dual-fuel requirements on generators interconnecting
to Local Distribution Company gas systems, and firm contracts for some gas-fired
generators that cover all or a portion of those generators’ capacity. NERC noted that
planned gas pipeline expansions in New York would prove beneficial in maintaining fuel
assurance going forward. Among NERC’s suggestions is for regions with high levels of
gas-fired generation to thoroughly examine reliability needs to determine if expanded
use of firm fuel contracts or dual-fuel capabilities are needed.

New York’s Gas Delivery Infrastructure

While the findings of the EIPC study and NERC report suggest that New York State
is currently well positioned to address natural gas demand for generators as well as
firm residential and commercial natural gas customers, future fuel assurance is less
certain. Numerous pipeline projects have been proposed in the region. Nevertheless, the
complex economics and financing arrangements of these efforts, combined with regulatory
proceedings related to these projects raise questions about the likelihood of building new
natural gas pipelines in the state.
In 2016, several proposed natural gas pipeline projects encountered economic and
regulatory hurdles that called into question the future of those projects. In some cases,

34 | Power Trends 2017

 State of the Grid

projects approved through federal regulatory proceedings were subsequently delayed or

denied permits in state-level regulatory proceedings.20 While pipeline siting is primarily the
domain of FERC and federal regulations, the difficulties in securing long-term commercial
commitments as well as challenges in securing state-level permits add layers of uncertainty.
Ultimately, this uncertainty in gas pipeline development underscores the challenges the
power generation sector faces with regard to natural gas infrastructure needed to support
improved fuel assurance and more attractive pricing.
Natural Gas Power Generation in New York State
Today, power plants using natural gas total 57% of New York State’s generating capability.
Within that set of gas-fired capacity, 84% is dual fuel that can use either natural gas or an
alternative fuel (typically oil).
1. During periods of high usage, reliability rules require many of these plants to be capable
of switching over to burn oil within seconds.
2. Outside of peak times, dual-fuel generators may choose
to run on whichever fuel is less expensive provided that
they remain in compliance with state and federal emissions
regulations.
3. This operational flexibility provides both fuel diversity and
reliability benefits.

Future use of oil combustion for power generation will be

restricted by New York City law.21
1. In 2015, New York City passed legislation that effectively bans
► 2017 Gold Book,
the combustion of residual fuel (i.e.; Number 6 fuel oil) for any
for more information
purpose beginning on January 1, 2020.
visit www.nyiso.com.
2. The law also bans the combustion of Number 4 fuel oil
(a product produced from the blending of Number 6 and Number 2 oil grades) beginning on
January 1, 2030.
3. The legislation was enacted as a measure to reduce negative health impacts associated with
the emissions of particulate matter. Upon the phase-out of Number 4 fuel oil, only Number 2
fuel oil will be permissible for use in power generation, heating, and other applications within
the borders of New York City.
4. In early 2017, local officials introduced legislation to accelerate the phase out of Number 4
22
fuel oil to 2025.
The legislation poses potential fuel assurance issues. Power generators with
dual-fuel capabilities currently using Number 6 fuel oil will face the need to retrofit their
facilities to accommodate the storage and combustion of Number 4 or Number 2 fuel oil
in order to retain functional dual-fuel capabilities beyond January 1, 2020. Based on
2017 Gold Book data, the rule will affect seven generation units in New York City with

Power Trends 2017 | 35

State of the Grid

a combined total installed capacity of 2,800 MW.

The growing demand for natural gas by power generators, coupled with uncertainty over
the likelihood of future natural gas infrastructure expansions and local restrictions on the use
of fuel oil, is raising strategic concerns about the gas system. Specifically, there is increasing
concern over the gas system’s ability to keep pace with the needs of gas utilities serving
residential, commercial and industrial customers, while simultaneously meeting the
expanding needs of gas-fired power plants, especially during peak demand conditions
in winter and summer.
Market Approaches to Addressing Fuel Supply & Performance Assurance
Recognizing the need to incentivize fuel assurance in the context of competitive power
markets, ISO/RTOs are taking steps to ensure that economic incentives exist in those
markets for generators to achieve fuel assurance. The approaches being undertaken vary
from region to region, reflecting the acuteness of the issue within each region.
The NYISO in its stakeholder process has been developing and implementing market
structure improvements to send the correct price signals and incentives for generators to
maintain or procure adequate fuel supplies to operate in the event that their primary fuel
becomes unavailable.
Through the NYISO Electric and Gas Coordination Working
Group, stakeholders are addressing joint operational, planning and
market design issues. The working group has engaged in extensive
study and analysis of electric-gas issues. This includes research
that assessed the cost of providing fuel assurance through dual-fuel
capability and oil supply provisions, and compared the cost

“ Lower natural
gas prices have
of dual-fuel capability to firm pipeline transportation under a
range of scenarios.23
effectively driven Working with stakeholders, the NYISO adopted several energy
down wholesale market design enhancements to provide price signals for generators
power prices for to maintain fuel assurance.
all generators,
1. In November 2015, the NYISO implemented enhancements to
regardless of
its Shortage Pricing market design that strengthen incentives
whether they are
for generators to secure sufficient fuel to meet their Day-Ahead
using natural
schedules.
gas, coal, nuclear
power or renewable 2. The design allows energy prices to rise at times when the Real-Time
resources to generate energy market is unable to procure sufficient reserves or regulation

”
their electricity. to meet requirements.
3. The Shortage Pricing enhancements incent generator performance
— As reported by on critical days.
Moody’s rating agency
in March 2016

36 | Power Trends 2017

 State of the Grid

In addition to the Shortage Pricing enhancements, the NYISO is strengthening its

Scarcity Pricing system, which works to sustain appropriate price levels throughout Demand
Response events, when prices might otherwise fall once the resources are activated to
suppress demand. Through the Comprehensive Scarcity Pricing design the NYISO incorporates
the value of demand response resources into its pricing software to more appropriately reflect
resource lost opportunity costs in the energy, reserve, and regulation prices.
The NYISO and its stakeholders have generally focused their fuel assurance initiatives
on energy market design changes that seek to improve generator performance. However,
as the prospect of natural gas infrastructure expansions becomes less certain, there are
potential capacity market changes that could be implemented to supplement energy
market fuel assurance signals.
The already significant impact of natural gas costs on electric energy prices will continue
to grow with increased reliance on gas-fueled power generation. This trend reinforces the
need to bolster gas-electric coordination and address fuel assurance concerns.
As the rating agency Moody’s reported in March 2016, “Lower natural gas prices have
effectively driven down wholesale power prices for all generators, regardless of whether
they are using natural gas, coal, nuclear power or renewable resources to generate their
electricity.” 24
Performance assurance concerns in the generation sector vary based on regional
differences in terms of the fuel diversity of each region’s generator fleet and the availability
of natural gas pipeline infrastructure serving those regions. While ISO-NE and PJM have
both recognized fuel assurance as a concern in their efforts to sustain reliability, both are
pursuing different approaches reflecting the near-term acuteness of the concern.
ISO-NE, where fuel assurance concerns are perhaps the greatest
given that region’s reliance on natural gas and its limited gas
infrastructure, has already implemented “Performance Incentive”
capacity market design changes to improve the availability of
capacity resources during stressed system conditions. PJM, on the
other hand, is planning to transition from its Base Capacity Resource
product to a Capacity Performance Resource product similar to ISO-
NE’s over a four-year period. ► 100 nuclear power
Nuclear Energy Trends plants operate in the
U.S, 19% of the nation’s
There are currently 100 nuclear power plants operating in power was produced from
the U.S.25 In 2015, nuclear facilities produced 19% of the nation’s nuclear facilities in 2015.
power.26 New York’s six nuclear power projects generated 30% of 30% of the electricity
the electricity generated in the state last year. generated last year came
In recent years, however, owners of several nuclear-powered from New York’s six
generating projects have deactivated their units or announced plans nuclear power projects.

Power Trends 2017 | 37

State of the Grid

to retire their facilities. Competition from lower-cost natural gas power plants, increased
safety and security requirements, the moderation of demand for electricity, and increasing
cost of nuclear fuel and plant operations are negatively influencing the economics of
nuclear power projects.
According to the Nuclear Energy Institute, between 2002 and 2015, nuclear fuel costs
increased 21%, capital expenditures by 103%, and operating costs by 11% (in 2015
dollars per MWh).27
On January 9, 2017 Governor Cuomo and Entergy Corporation, owner of the
generating facility, announced an agreement to close the Indian Point Energy Center
by April 2021. The Indian Point Energy Center, located in Westchester County, includes
two nuclear power generating units capable of producing a total of 2,060 MW. Under the
agreement, plant operations could continue until 2025 should New York State determine
that an emergency condition warrants such an extension. Also as part of the agreement,
Entergy is to amend its NRC relicensing request, which previously sought a 20-year
extension, to comport with the agreement timeline. New York State has agreed, in turn,
to discontinue its legal opposition to the license extension. In its announcement, Entergy
cites increased operating costs, low current and projected wholesale energy prices and
declining revenues due to competition from low-cost natural gas resources as reasons
for retiring the facility.
Prior to the announcement of the closure of Indian Point, other
nuclear power plant operators in New York State indicated they
were facing economic pressure to retire, including the FitzPatrick
Nuclear Power Plant, located on Lake Ontario near Oswego as
well as the Ginna Nuclear Power Plant, located on Lake Ontario
near Rochester. With the Public Service Commission’s approval of
a ZEC policy for upstate nuclear facilities in 2016, both plants have
continued to operate. New York’s Clean Energy Standard will offer

“
out-of-market payments to eligible nuclear facilities in the state in
Between 2002 the form of ZEC payments. The ZECs are designed to reflect the value
and 2015, these facilities offer to consumers by generating energy without
nuclear fuel costs emissions, which the PSC determined was not adequately reflected
increased 21%, in wholesale market pricing for energy.28
capital expenditures
Elsewhere in the northeastern U.S., the Vermont Yankee
by 103%, and
Nuclear Power Station in southern Vermont retired at the end of
operating costs
2014, while Entergy announced plans to retire its Pilgrim Nuclear
by 11% (in 2015

”
Power Station in Plymouth, Massachusetts in May 2019, due to
dollars per MWh).
market conditions and increased costs.29 Additional units in New
— The Nuclear England and the Midwest have indicated they are facing similar
Energy Institute economic pressures to retire absent intervention in the markets,
as is being done in New York.

38 | Power Trends 2017

 Challenges & Opportunites

Public Policy & Markets

Transmission Infrastructure as Enabler
Nationwide, electric companies are continuing to build stronger and smarter energy
infrastructure to provide consumers with economic and reliable electric service and to
integrate new renewable resources to meet public policy objectives. According to the
Edison Electric Institute, in 2015 total transmission investment reached $20.1 billion,
a 97% increase from the 2014 total investment of $10.2 billion. Transmission investment
is expected to increase by another $2 billion to reach $22.5 billion in 2017.30
In 2013 The Brattle Group, an international economic consulting firm, conducted
a comprehensive study of the value of transmission investments. It identified benefits
that included enhanced system reliability, more effective market competition, capacity
cost savings, environmental benefits resulting from expanded
use of cleaner resources, and reduced costs of meeting public
policy goals.31 A 2015 update of that study stated, “Ultimately,
our transmission grid is the backbone that supports all future
policy changes in the electricity sector.”32 Even in the context of
expanding DER deployment, an integrated grid with a resilient
transmission system is necessary to capture the full value DERs
can offer to all of New York’s electricity consumers.
The value of transmission investments is being confirmed
by experience. The Southwest Power Pool (SPP) has determined

“
that its $5 billion investment in transmission will have a
Ultimately, our
multiplier effect of benefits to consumers. The SPP reports
transmission grid is
that “[o]verall, the NPV [net present value] of all quantified
the backbone that
benefits for the evaluated projects, including production cost
supports all future
savings, are expected to exceed $16.6 billion over the 40-year
policy changes in the
period, which results in a Benefit-to-Cost ratio of 3.5.”33
Over the past several years, the NYISO, New York
Transmission Owners, and New York State government
electricity sector.
— Toward More Efficient
”
have identified the need for new transmission investments Transmission Planning, The
Brattle Group, April 2015
in New York.
New and upgraded transmission capacity will help to address ► The Southwest Power
concerns about maintaining or replacing aging infrastructure; Pool (SPP) has determined
provide greater operational flexibility for dispatching resources; that its $5 billion investment
enhance access to operating reserves and ancillary services; in transmission will have
and facilitate the ability to remove transmission and generation a multiplier effect of benefits
resources for maintenance when needed. to consumers.

Power Trends 2017 | 39

Challenges & Opportunities

In 2016, Governor Andrew M. Cuomo and the New York State Public Service Commission
announced an ambitious clean energy mandate to address climate change, reduce air pollution
and support fuel diversity in New York State’s resource mix.
1. The Clean Energy Standard (CES) will require 50% of New York’s electricity come from
renewable energy sources like wind and solar by 2030.
2. The PSC has concluded that this mandate will require the delivery of approximately 70,500
GWh of renewable energy from existing and new resources by 2030.34
Achieving public policy objectives will require additional transmission capacity in
New York State to deliver renewable resources from upstate New York and northern
regions to consumers in downstate New York. Here again, the tale of two grids in New York
is important to understand. Much of New York’s renewable energy capability is in upstate
New York. The resource mix and geographic distribution of expected new renewable
resources are expected to dramatically change power flows in New York State. To maximize
the load served by renewable generation, cross-state energy transfers will increase —
even as statewide load is decreasing — due to the fact that more renewable generation
is available to serve the downstate load.
Key considerations:

1. As renewable penetration in the upstate regions exceeds the

load in those same regions, additional energy transfers from upstate
renewable resources to downstate load centers are necessary, subject
to transmission system capability. Failure to expand transmission
capabilities from upstate to downstate will induce market inefficiencies,
including increased curtailment of renewable generation to maintain
transmission system reliability or generator deactivations notice from
units needed for reliability. Further, if markets are unable to produce

“ Additional
transmission
appropriate price signals due to the expansion of renewable capacity
without an adequate expansion of transmission capability, the goal of
capability will achieving 50% renewable energy generation by 2030 is jeopardized
be required to because energy will not be deliverable from renewable resources to
transfer energy downstate load centers.
from renewable 2. Specifically, expansion of the New York transmission system in
resources to the St. Lawrence to Marcy corridor would allow developers of renewable
New York’s load resources to provide additional output onto the high-voltage system for
centers.
” delivery to consumers in downstate New York. Based upon the NYISO’s
experience, high-voltage transmission in the northern corridor would
— NYISO comments unbottle the hydroelectric generating capacity in that region, allowing that
to the PSC on
existing capacity to operate at its full output while simultaneously allowing
Clean Energy
Standard for the delivery of other renewable resources to consumers in the eastern
and southern load centers of New York State.

40 | Power Trends 2017

 Challenges & Opportunities

Figure 21:
2030 Renewable Capacity Projections
for Clean Energy Standard Compliance
UPSTATE

UPSTATE
(ZONES A-E)
PROJECTED
RENEWABLE CAPACITY:
12,472 MW

DOWNSTATE
(ZONES F-K)
PROJECTED
RENEWABLE
CAPACITY:
4,729 MW
Congested
Transmission

DOWNSTATE

3. Furthermore, new transmission capacity could allow

developers to explore sites that are attractive for wind
and solar resources, but are underserved by the existing
transmission system. Access to the transmission system
becomes an issue as many sites with convenient access to the transmission system have already
been taken or are under development. Conceptually, expanding the transmission system in certain key
locations could facilitate the interconnection of new wind and solar resources that are not in proximity
to the high-voltage transmission system, as well as unbottle energy from existing wind resources.
Further analysis will be required to identify the areas of the State that have high potential for
renewable resource development that could be facilitated through the expansion of the transmission
lines that connect to the backbone of the high-voltage transmission system.
Governor Cuomo has called for developing up to 2,400 MW of offshore wind power
by 2030 to support the overall CES mandate.35 To develop the offshore wind resource,
the New York State Energy Research and Development Authority (NYSERDA) has outlined
an offshore wind master plan for New York State.36 Fulfilling this level of offshore wind
development will require significant expansion of transmission capability into Long Island
and New York City.

Power Trends 2017 | 41

Challenges & Opportunities

Planning Transmission Infrastructure for Public Policy Requirements

Among the components of Order No. 1000, the FERC required
that planning processes consider transmission needs driven by public
policy requirements.
Transmission projects that fulfill such public policy requirements
will be eligible for cost recovery through the NYISO’s tariff — if they
are selected by the NYISO as the more efficient or cost-effective
transmission solution to the need identified by the New York State
PSC. Under provisions of the NYISO tariff, the New York State PSC
► Blueprint for the
reviews and identifies the public policies (including existing federal,
New York State
state or local law or regulation, or a new legal requirement that the
Offshore Wind Master
PSC establishes after public notice and comment under the state
Plan, NYSERDA
law). Once the New York State PSC determines the Public Policy
Transmission Needs, the NYISO solicits transmission and other types of projects, performs
planning studies, and selects the transmission projects that will meet those needs in a more
efficient or cost-effective manner.
Western New York Public Policy Need

In July 2015, the New York State PSC issued an order that identified relieving congestion
in the state’s western region as a Public Policy Transmission Need.37 The Commission
determined that reducing transmission congestion in the region could achieve significant
environmental, economic and reliability benefits throughout the state.
These include optimizing output from:
■■ The Niagara Power Project.
■■ Greater imports of renewable energy from Ontario.
■■ Increased operational flexibility and efficiency.

The NYISO solicited proposals to resolve the Western New York transmission need. Of the
proposed solutions submitted by developers, the NYISO determined that 10 proposals were
viable and sufficient.38 On October 13, 2016, following consideration of public comments, the
PSC issued an order confirming the Western NY Need and determining that the NYISO should
evaluate and select a transmission solution.39
AC Transmission Upgrade Public Policy Need

In December 2015, the New York State PSC advanced its AC transmission
proceeding to a competitive process managed by the NYISO by identifying a Public Policy
Transmission Need to relieve congestion on the UPNY-SENY and Central East interfaces,
which run from central New York, through the Capital Region to the Lower Hudson Valley.40
The Commission action limited the new transmission lines to replacing and upgrading
existing lines within existing rights-of-way, which is intended to reduce or eliminate adverse
environmental, landowner, and economic impacts.

42 | Power Trends 2017

 Challenges & Opportunities

In April 2016, developers submitted 15 transmission projects and one non-transmission

project in response to NYISO’s solicitation of proposed solutions. Following a stakeholder
review and comment period, the NYISO issued the AC Transmission Public Policy
Transmission Need Viability and Sufficiency Assessment.41 Out of the 16 proposed projects,
the NYISO identified 13 viable and sufficient projects, and filed its assessment with the PSC.
On January 24, 2017, following consideration of public comments, the PSC issued an order
confirming the AC Transmission Needs and determined that the NYISO should proceed with
its public policy process.42
For both the Western New York and the AC Transmission Needs efforts, the NYISO is
engaged in a detailed evaluation of the transmission proposals with respect to their benefits
to the transmission system, including their operability, expandability, performance and cost.
Following input from its stakeholders, the NYISO may select the more efficient or cost effective
transmission project that, pending siting approval, could be built and recover its costs under
the NYISO’s tariffs. NYISO expects to complete its evaluation process for Western New York in
2017 and for the AC Transmission Need in early 2018.
Current Cycle of the Public Policy Transmission Planning Process

The NYISO commenced a new Public Policy Transmission Planning Process on August
1, 2016 by providing a 60-day period to allow stakeholders or interested parties to submit
proposed transmission needs driven by Public Policy Requirements.

Figure 22: Public Policy Transmission Needs in New York State

Western New York Public Policy

Transmission Need
▪ Transmission constraints affect
UPSTATE
Niagra generation and Ontario imports
AC Transmission
▪ July 2015: PSC Order identified Upgrade Public Policy
Western New York as a Public Policy Transmission Need
Transmission Need
▪ Transmission
constraints affect
efficient flow of power
from upstate resources
to downstate demand
▪ Dec. 2015: PSC
Order identified AC
Transmission upgrade in
UPNY-SENY and Central
East as a Public Policy
Transmission Need

DOWNSTATE

Power Trends 2017 | 43

Challenges & Opportunities

The NYISO received, and subsequently submitted to the PSC, proposed transmission
needs driven by Public Policy Requirements from 12 entities. Respondents stated that the
Clean Energy Standard, in combination with other public policies including New York State’s
Reforming the Energy Vision (REV) and Offshore Wind Master Plan Blueprint, drives the need
for transmission in three common categories:
1. Deliverability of renewable resources from constrained regions within upstate
New York and Long Island.
2. Increased transfer capability from Northern New York and Quebec.
3. Increased cross-state transfer capability from west to east and from upstate to downstate.

Successful implementation of the Clean Energy Standard will require significant

transmission infrastructure upgrades. In comments filed with the Public Service Commission,
the NYISO voiced support for a PSC finding of a need for new transmission in support of
offshore wind and renewable resource development in northern New York.43
Aging Infrastructure
Over 80% of New York’s high-voltage transmission lines went into service before
1980. Of the state’s more than 11,000 circuit-miles of transmission lines, nearly 4,700
circuit-miles will require replacement within the next 30 years, at an estimated cost
of $25 billion.44
Figure 23:
The New York State PSC previously Age of New York Transmission Facilities
approved a set of projects collectively by Percentage of Circuit Mile
named the Transmission Owner
Transmission Solutions (TOTS). 100
They are expected to increase transfer
capability into southeastern New York
by 450 MW. 75
The transmission projects include:

■■ Marcy-South Series
Compensation and Fraser— 50
Coopers Corners 345 kV line
reconductoring.
■■ Construction of a second Rock 25
Tavern—Ramapo 345 kV line.
■■ Upgrading underground
transmission circuits from 0
Staten Island to the rest Age of Transmission Facilities in New York State
of New York City.
2000 1990 1980 Pre
to Present to 1999 to 1989 1980’s

44 | Power Trends 2017

 Challenges & Opportunities

These projects were placed Figure 24: Energy Use

into service in June 2016. Regional Usage and Production
Energy Production
in New York State: 2016
In 2012, the New York State
PSC initiated proceedings 120

to expand the transmission

capacity of the AC transmission 100
system that links upstate to
downstate.45 To encourage 80
transmission development

GWh (in thousands)

within existing rights-of-way
60
while limiting potential impacts
to communities, the New York
40
State PSC adopted an expedited
siting process for transmission
20
facilities built within the
current right-of-way “envelope”
(height and width). 0
UPSTATE DOWNSTATE
Transmission Congestion (Zones A-E) (Zones F-K)

On a statewide basis, New York has a surplus of power resources needed to sustain
system reliability. However, the reliability of the region’s power grid is made more complex by
physical limitations on the transmission system’s ability to freely move electricity from more
efficient generation resources where and when it is needed.
The downstate region (New York City, Long Island,
and the Hudson Valley — Zones F-K) annually uses 66%
of the state’s electric energy. Yet, that region’s power UPSTATE
plants generate only 53% of the electricity produced
in the state.
With regard to the regional variations in periods
of highest demand for electricity, 72% of New York’s
DOWNSTATE
peak power demand occurs downstate (Zones F-K).
Power plants in this region, however, which typically ► Thedownstate
use higher-cost fuel supplies because of more region (New York City, Long
stringent environmental requirements, are capable Island, and the Hudson Valley
of supplying only 63% of New York’s electricity — Zones F-K) annually uses
needs during peak periods. 66% of the state’s electric
NYISO’s markets are designed to use the lowest- energy. Yet, that region’s power
cost power available to reliably serve demand. plants generate only 53% of the
However, physical transmission constraints limit the electricity produced in the state.
economically-efficient dispatch of electricity and can

Power Trends 2017 | 45

Challenges & Opportunities

cause “congestion” on the system. The physical limitations of the transmission system, such
as thermal line ratings, can cause delivery constraints that may require the scheduling of
higher-cost electricity supply resources to serve areas unable to receive lower-cost energy
from other parts of the grid. More expensive, local generation must then be operated to
meet customers’ needs.
The NYISO evaluates congestion as part of its planning processes with its biennial
Congestion Assessment and Resource Integration Study (CARIS). The study is an economic
analysis of transmission congestion on the New York bulk power system and the potential
costs and benefits of relieving transmission congestion.
Solutions to congestion may include:
■■ Building or upgrading transmission lines and related facilities.
■■ Building generation within constrained areas.
■■ Employing measures to reduce demand for electricity in the congested locales.
The 2015 CARIS identified the most congested parts of the New York State bulk power
system based upon historic data (2010-2014) as well as estimates of future congestion
(2015-2024).
2015 CONGESTION
Figure 25: Transmission Congestion ASSESSMENT
Corridors in New York State AND RESOURCE
UPSTATE INTEGRATION
STUDY (CARIS)

Western
230 kV System
Central East

New
Scotland
to
Pleasant
Valley

Congested
Transmission DOWNSTATE

46 | Power Trends 2017

 Challenges & Opportunities

Those areas include:

■■ All or parts of the high-voltage transmission path from Oneida County
through the Capital Region (Central East).
■■ South to the Lower Hudson Valley (New Scotland — Pleasant Valley).
■■ The 230-kilovolt system in Western New York (Western 230kV).

The CARIS process analyzed generic transmission, generation, and demand response
solutions in these regions that could ultimately yield savings for power consumers.46
Merchant Transmission Proposals
In addition to the transmission projects noted above, several merchant plans for
transmission have also emerged and are in various stages of development. High-Voltage
Direct Current (HVDC) projects primarily designed to enhance transmission of power
within New York State include the 1,000-megawatt Empire State Connector, announced by
transmission developer OneGRID, which is a 260-mile project which would run between Utica
and New York City 47; and the West Point Transmission project, which aims to add a 1,000
MW facility from the Capital Region to a substation in Buchanan, NY. HVDC projects primarily
designed to bolster New York’s electrical ties with neighboring areas include the Champlain-
Hudson Power Express, proposed by Transmission Developers Inc., which is a 300-plus mile
transmission project designed to deliver up to 1,000 MW from Québec to New York City; 48
the Poseidon Transmission project, which is a 500 MW facility proposed to connect Long
Island with New Jersey; the Empire Interconnection and Glenwood
► The NYISO was a leader
projects on Long Island connecting with South Brunswick, NJ , each
of which aims to add a 275 MW facility; the Alps project, which in the formation of the Eastern
proposes to construct a 600 MW inter-tie between Rensselaer Interconnection Planning
County and Berkshire, Massachusetts; and the Grand Isle Intertie Collaborative (EIPC), which now
project, which aims to export a 400 MW from Plattsburgh, NY to involves 19 electric system
New Haven, VT. In addition, two projects, the Compass project planning authorities, and
in Rockland County and the Cedar Rapids project in St. Lawrence was created in 2009 as the
County each aim to add AC capability to New York’s grid. first organization to conduct
interconnection-wide planning
Interregional Planning analysis across the eastern
Under FERC Order No. 1000 and in collaboration with its portion of North America.
New England (ISO-NE) and Mid-Atlantic (PJM Interconnection)
neighbors, the NYISO expanded its interregional planning process based upon the existing
Northeast Coordinated Planning Protocol that had been in place for more than a decade. In
April 2016, the three ISO/RTOs issued the 2015 Northeast Coordinated System Plan.49 No new
needs for interregional transmission projects were identified by the plan.
The NYISO also conducts joint evaluations with planning authorities across the entire
Eastern Interconnection, a region that includes 40 states and several Canadian provinces from
the Rocky Mountains to the Atlantic Ocean and from Canada south to the Gulf of Mexico.

Power Trends 2017 | 47

Challenges & Opportunities

The NYISO was a leader in the formation of the Eastern Interconnection Planning
Collaborative (EIPC), which now involves 19 electric system planning authorities, and was
created in 2009 as the first organization to conduct interconnection-wide planning analysis
across the eastern portion of North America.50
Among its efforts, the EIPC conducted studies assessing a range of possible “energy
futures”, which found the reliability plans of electric system planners in the Eastern
Interconnection integrated well to meet potential reliability needs.
In March 2016, the EIPC issued its Report for 2025 Summer and Winter Roll-Up
Integration Cases. The “roll-up” cases combine the electric system plans of the EIPC
members in a comprehensive interconnection-wide model. The report evaluated summer
and winter peak periods for the year 2025. Examining the amount of power that can be
reliably moved between regions, based on current system plans, the report identified
potential additional transfer capability that may be available in various parts of the
Eastern Interconnect.
Environmental Quality & Renewable Power
The environmental impact of power production was among the considerations
deliberated by policymakers during the restructuring of the electric industry in the 1990s.
The Clinton Administration included electricity restructuring in the 1997 White House
Climate Change Initiative, saying, “With appropriate market-based provisions, electricity
restructuring legislation could reduce carbon emissions by creating incentives to produce
and use electricity more efficiently and with less pollution.”51
Since their inception, wholesale electricity markets have:
■■ Worked in concert with energy and environmental policies to foster more
efficient generation.
■■ Expanded renewable resources.
■■ Developed demand reduction programs —
all of which contribute to significant reduced emissions.

Power Plant Emission Trends

Based on available emissions data from the U.S. Environmental Protection Agency,
power plant emission rates (pounds/megawatt-hour) in New York have significantly
improved since the NYISO began administering competitive wholesale markets for power
in 2000. From 2000 through 2016, sulfur dioxide (SO2) emissions rates dropped 98%.
The emission rates for nitrogen oxides (NOX) and carbon dioxide (CO2) declined by 87%
and 43%, respectively, during that period.
■■ New York is part of the Regional Greenhouse Gas Initiative (RGGI), which is built around
an agreement among nine eastern states (Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) to restrict carbon

48 | Power Trends 2017

 Challenges & Opportunities

emissions from power plants through a mandatory, market-based CO2 allowance

cap-and-trade program.
■■ Through RGGI, electric power generators located in each participating state are required
to obtain a number of CO2 allowances equal to the number of tons of CO2 they emit.
■■ RGGI distributes the allowances to the market primarily through open auctions, though
generators may also obtain allowances through secondary trading markets.
■■ Generators required to obtain RGGI allowances can then factor the cost of these
allowances into their price offers in the NYISO market, effectively internalizing the cost of
CO2 emissions allowances into the price of energy sold in the NYISO’s wholesale markets.

Figure 26: New York Emission Rates CO2 SO2 NOx

from Electric Generation: 2000-2016

4.5 0.45
NOx and SO2 Emissions Rate (lbs/net MWh)

4.0 0.40
CO2

CO2 Emissions Rate (tons/net MWh)

3.5 0.35
3.0 0.30
2.5 0.25
SO2
2.0 0.20
1.5 0.15
1.0 0.10
NOX
0.5 0.05
0.0 0.00
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Through this structure, RGGI creates incentives for generators to reduce their allowance
requirements. Nuclear or wind energy generators, for example, require no CO2 allowances
and thus, RGGI works in harmony with the NYISO’s competitive market structure to create
market-based incentives for investments in, and the operation of these types of zero-emission
resources. In the same manner, operators of more conventional fossil-fuel based generation
have incentives to improve the efficiency of their facilities to limit their exposure to costs
associated with RGGI allowances. In fact, a February 2017 report by energy consulting firm
MJ Bradley & Associates notes that many industry stakeholders “have come to see the auction
approach as the most efficient method of releasing allowances into the market without
picking winners and losers.”52 The study notes that as RGGI was being developed, researchers
evaluating various compliance options ranked the auction process ultimately used by RGGI
highly in terms of economic efficiency.
In 2014, the RGGI states agreed to set the cap at 91 million tons of emissions, declining
by 2.5% year on year through 2020. In addition to sustaining the CO2 reductions that have
already occurred, the cap was designed to yield an estimated 80-90 million tons of cumulative
emission reductions by 2020. Through RGGI’s 2016 Program Review, there is ongoing

Power Trends 2017 | 49

Challenges & Opportunities

discussion among the RGGI states to address continued emissions reductions beyond 2020,
though caps have not yet been established for this timeframe.
In the 2017 State-of-the-State message,53 New York Governor Andrew M. Cuomo called
on states participating in RGGI to agree to lower the emissions cap by at least an additional
30% below 2020 levels by 2030.54 He noted that, “as federal climate policy remains uncertain,
this bold action will renew the RGGI states’ commitment to lead the fight against climate
change and drive the transition to a new clean energy economy.”55 The Governor noted that
CO2 emissions from the power sector have been five to eight percent below RGGI cap levels by
over the past three years and that further reductions in the cap will complement state-level
policies to promote clean energy resources.
Federal Clean Power Plan
When the EPA issued the final rule on its Clean Power Plan in August 2015,
the NYISO’s analysis of it suggested that New York should be able to meet the plan’s
obligations while maintaining a reliable electric system.
In cooperation with the New York State Department of
Environmental Conservation, the NYISO prepared a study of the
Clean Power Plan to assess how New York’s compliance approaches
might interact with existing market rules and system reliability
criteria under various scenarios.56
Among the conclusions of the study were:

“ March 28,
2017 Executive
■■  ompliance with the Clean Power Plan is attainable in New York,
C
but when analyzed in the context of other emissions regulations
Order, directs such as RGGI and the Cross-State Air Pollution Rule (CSAPR)
the EPA to review Update Rule, compliance may require additional capacity
and reconsider resources and transmission reinforcements to maintain bulk
a number of final power system reliability.
rules, including
■■ T rading between states is an essential element for complying
the Clean
with the Clean Power Plan, and other environmental regulation,
Power Plan.
”
— Executive Order,
Promoting Energy
when considered among other air quality requirements aimed
at the power sector.

Independence and ■■ Increasing deployment of renewable resources in New York

Economic Growth increases the state’s compliance margin with the Clean Power Plan.

Legal challenges resulted in a February 2016 U.S. Supreme Court ruling to stay the
implementation of the plan pending review in the D.C. Circuit Court of Appeals. President
Trump’s March 28, 2017 Executive Order, “Promoting Energy Independence and Economic
Growth” directs federal agencies to review existing policies and practices that potentially
burden the development or use of domestically produced energy resources, with emphasis

50 | Power Trends 2017

 Challenges & Opportunities

on coal, oil, and natural gas. The Order directs the EPA to review and, if appropriate begin
the process to reconsider a number of final rules, including the Clean Power Plan. Further,
the EPA filed motions in the D.C. Circuit Court of Appeals to hold Clean Power Plan appeals
in abeyance as it reconsiders the initiative, a process that is likely to unfold over the course
of the next few years.57
While recent federal actions and ongoing legal proceedings have made the future of the
Clean Power Plan unclear, New York’s trajectory of pursuing state public policy initiatives
to achieve CO2 emissions reductions and the advancement of clean energy resources likely
will continue. New York State policies and regulations have historically driven much of the
investment in clean energy technologies and Governor Cuomo has sent clear signals that he
expects New York State to continue to be a national leader in this area.
The 2015 New York State Energy Plan set the stage for aggressive action on the
part of the state to reduce greenhouse gas emissions and promote the expansion of
renewable energy resources.58
Among the stated goals of the 2015 State Energy Plan are to:
■■ Reduce economy-wide greenhouse gas emissions by
40% in 2030 relative to 1990 emissions levels.
■■ Growing renewable energy resources to account for 50%
of the electricity consumed in the state by 2030. Through
the establishment of the Clean Energy Standard, the Public
Service Commission codified the renewable energy goals
in the State Energy Plan by mandating that all load-serving
► New York
entities procure Renewable Energy Credits to facilitate
State policies
investments in new renewable resources.
and regulations
■■ Advancing energy efficiency. have historically
driven much of the
Cumulative Impact of Environmental Regulations
investment in clean
To varying degrees, environmental regulations impact how energy technologies
generation is provided to the bulk power transmission system. and Governor Cuomo
These local, state, regional, and federal regulatory initiatives has sent clear signals
cumulatively may require owners of New York’s existing thermal that he expects New
power plants to make investments to achieve compliance. If the York State to continue
plant owners must make considerable investments, those costs to be a national leader
could impact whether they remain in the NYISO’s markets and in this area.
potentially affect system reliability. The NYISO has estimated that
as much as 32,400 MW in the existing fleet (72% of 2015 Summer Capacity) will have
some level of exposure to the environmental regulations identified below, with many
facilities exposed to multiple regulations.

Power Trends 2017 | 51

Challenges & Opportunities

Figure 27: Summary of Environmental Regulations and Estimated Impact on New York Generation

ESTIMATED CAPACITY
PROGRAM DESCRIPTION GOAL STATUS
AFFECTED (MW)

MATS Establishes Limits

for Emissions of
Sets Technology
Based Emission
In effect
Compliance
1,000

Mercury and
Hazardous Air Limits Required Deadlines
Air Toxics
Pollutants (HAP) by the Clean April 2015
Standards
from Coal and Air Act. and 2017.
Oil Fired Boilers

CSAPR Limits emissions of SO2

and NOX from power
Achieve and
maintain air quality
In effect
Compliance
27,600

Cross State
plants in 28 states consistent with Deadlines
Air Pollution
through the use of National Ambient 2015 and
Rule
emission allowances Air Quality May 2017.
with limited trading. Standards.

RGGI Nine State

Compact to Cap
RGGI Cap
established in 2014:
In effect with
Program Review
27,600

Regional
CO2 Emissions 91 million tons CO2 underway to
Greenhouse
from Power Plants. decreasing 2.5% yr./ review and
Gas Initiative
yr. through 2020. revise Cap.

CPP Federal Plan to

limit CO2 emissions
Reduce CO2
emissions by
Currently
under stay by
24,000

Clean
from steam 32% below 2005 U.S. Supreme
Power
and combined emission levels. Court.
Plan
cycle plants.

BTA  vailable for cooling

A
water intake
Limits damages
to aquatic biota
Reviewed when
water permits
18,400

Best
structures Implements from cooling are renewed.
Technology
Clean Water Act water intakes on
requirements to public waters.
protect aquatic biota.

NYC Phases out

use of residual
Reduce emissions
of Volatile
2020 Phase-out
of #6 oil.
2,800

RFO
fuel oil in Organic 2030 Phase-out
Phase Out
utility boilers. Compounds and of #4 oil.
particulates.

52 | Power Trends 2017

 Challenges & Opportunities

Markets Designed for Renewable Integration

Wholesale electricity markets and open access to the transmission system provided
by independent system operators facilitate development of renewable resources.
■■ Open access enables resources to interconnect to the grid and transmit power
with upgrades necessary to maintain system reliability.
■■ The NYISO shared governance system, which guides market evolution, provides
a forum for market participants and stakeholders to collaborate on market changes
that facilitate and integrate new technologies.

Participation in the wholesale electricity market is open to all resource types including:
■■ Conventional generation
■■ Renewable resources, storage resources, imports from other regions
■■ Demand response

Much of the investment since the creation of New York’s competitive marketplace
for wholesale electricity has been in clean, efficient combined cycle
units and renewable resources, as more than 6,800 MW of older, and
generally higher emitting, generation has retired or ceased operation.
Wind Power
Over the past decade, the design of New York’s wholesale
electricity markets has been revised to address the unique
characteristic of wind power by:
■■ Recognizing wind in 2006 as a “variable energy resource”
and revising market rules to exempt it from under-generation
penalties that apply to conventional generation.
► Wind-Powered
■■ Establishing a centralized wind forecasting system in 2008 to
generating capacity in NY
better utilize and accommodate wind energy by forecasting the
grew from 48 MW in 2005
availability and timing of wind-powered generation.
to 1,827 MW in 2017.
■■ Pioneering the economic dispatch of wind power in 2009 to Electricity generated by
adjust operating practices and enable more efficient use of wind power increased
wind resources. from 101 GWh in 2005
These and other market initiatives have supported the growth of to 3,943 GWh in 2016.
New York’s wind power resources. The generating capacity of wind-
powered projects in New York grew from 48 MW in 2005 to 1,827 MW in 2017. Electricity
generated by wind power increased from 101 GWh in 2005 to 3,943 GWh in 2016.
On March 2, 2017 wind power output in New York marked a new record of 1,574 MW.
At the time of record production, wind provided 9% of New York’s total generation.

Power Trends 2017 | 53

Challenges & Opportunities

Projects capable of supplying another 4,807 MW of wind power currently are

proposed for future interconnection with the New York bulk electricity grid. Nearly all of
the currently proposed projects are planned for sites in western and northern New York.
However, federal officials in March 2016 dedicated a 127-square-mile area off the coast of Long
Island for wind power development.59 Following a December 2016 auction to lease this area for
development, Statoil Wind US LLC, a Norwegian-based company with experience developing
offshore wind resources in Europe, secured the development rights with an offer of $42.5
million. Statoil has indicated its intentions to develop as much as 1,000 MW of wind capacity.
Additionally, the Long Island Power Authority (LIPA) approved a Power Purchase Agreement
(PPA) with Deepwater Wind LLC for the output of its proposed $1 billion wind farm to be sited
approximately 30 miles east of Long Island. LIPA awarded the PPA in January 2017 in support
of its efforts to meet expected load requirements for Long Island’s South Fork.
Governor Andrew Cuomo indicated the Statoil and Deepwater Wind projects are to be
only the start of a much grander expansion of offshore wind capacity to support the state’s
goals for CO2 emissions
reduction and renewable Figure 28: Wind Generation in New York -
Installed Capacity: 2003-2017
energy expansion. His State-
of-the-State message calls 2,000
1,730 1,746 1,754 1,827
for upwards of 2,400 MW of 1,800
1,634
offshore wind development 1,600
1,348 1,414
1,400
off the coast of Long Island by 1,162
1,274 1,274
1,200
2030, the year in which the
MW

1,000
state has planned to achieve 800
the Clean Energy Standard 600
425
goal of 50% renewable 400
279
energy generation. At the 200
48 48 48
same time, Governor Cuomo 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
directed NYSERDA and the
Department of Environmental
Conservation to undertake Figure 29: Wind Generation in New York State -
Energy Produced: 2003-2016
a comprehensive study to
determine the timing, costs,
and feasibility of reaching
100% renewable generation
on a statewide basis.
Energy Storage
Electricity is unique
among energy sources
because it typically must
be produced, delivered,
and consumed instantly.

54 | Power Trends 2017

 Challenges & Opportunities

Other energy commodities, such as natural gas, oil, or coal, can be produced and stored in
bulk, to be delivered and consumed as demand requires. Electricity storage, in contrast, has
historically been limited, costly, and complex.
The most widely used means of storing electricity for use by the power system has
been pumped storage hydroelectric projects that store water as potential energy during
off-peak hours for later use when demand for electricity is higher. Pumped storage
accounts for 4% of New York’s generating capacity. While a proven and effective resource
in supporting grid reliability, sites conducive to the development of pumped storage are
expected to be limited.
Additionally, New York has access to “storage” in the form of conventional hydroelectric
power projects with large reservoirs, both within the state and across the border in Quebec.
The water that flows into the reservoirs is captured and released to produce electricity when
needed. Again, the potential for expansion of such resources within New York is limited by the
availability of appropriate sites.
The variable nature of the power output from renewable resources has highlighted the value
of energy storage and its potential to balance renewable energy output. At the same time, energy
storage offers the potential to:
■■ Reinforce grid resilience during extreme weather events.
■■ Reduce transmission.
■■ Distribute costs by providing alternate means to address system needs.
■■ Shift demand away from higher-cost peak demand periods.

The combination of emerging applications for storage on the grid and technological
advancements that are reducing its costs and expanding its capabilities suggest that the
historical paradigm for grid-scale storage may be changing. As the technology continues to
advance, it may be increasingly practical to store electricity in bulk for delivery at a time when
the energy is most needed. Addressing these emerging trends requires a re-examination of
market rules to provide that markets are capable of integrating storage.
The NYISO has been a pioneer in refining its markets to facilitate the integration of storage
resources. In 2009, the NYISO became the first grid operator in the nation to establish market
rules for a new category of energy storage resources, which provide frequency regulation
service to balance supply and demand on the grid. In addition to the development of the
Limited Energy Storage Resource category, NYISO markets also accommodate participation of
storage in the wholesale
markets, including:
■■ Energy Limited Resources
■■ Demand Side Ancillary Services
■■ Special Case Resources

Power Trends 2017 | 55

Challenges & Opportunities

In 2016, the NYISO launched an Energy Storage Integration and Optimization60

initiative to examine the options available for storage to participate in the NYISO markets
and begin discussions with stakeholders on ways to enhance market accessibility for
storage resources.
Through this storage integration initiative:
■■ T he NYISO is working closely with its Market Participants and grid operators to develop a
comprehensive model for electricity storage resources to participate in wholesale Energy,
Ancillary Service, and Capacity Markets.
■■ T he effort will help to harness the potential strengths of storage resources in
support of the state’s existing generation fleet as well as its increasing portfolio of
renewable resources.
■■ The NYISO sees particular value in storage resources’ capability to ramp up and
down rapidly, to both withdraw energy from and inject energy into the system, and to
interconnect storage devices in locations that are advantageous to power grid needs
and economic efficiency.

The NYISO is beginning this market design effort by identifying

the physical and operational characteristics of storage that will shape
its participation in the wholesale market. Given the complexity of
the issues involved, the NYISO expects its market design effort to
be completed by the end of 2018, after which it plans to develop
appropriate tariff revisions and software to implement the new
market design by 2021.
►Hydro Pumped Recognizing the growing potential of storage to support
Storage is the most wholesale power markets and grid reliability, FERC issued a Notice
widely used means of
of Proposed Rulemaking (NOPR) in November 2016 to “remove
storing electricity for use
barriers to the participation of electric storage resources and
by the power system.
Stored water has the
distributed energy resource aggregations in the capacity, energy,
potential to be used during and ancillary service markets operated by regional transmission
off-peak hours or when organizations (RTO) and independent system operators (ISO).”61
demand is higher. Pumped In addition, FERC issued a Notice of Inquiry exploring the potential
storage accounts for 4% of storage to perform as a transmission asset.
of New York’s generating ■■  ERC noted that wholesale markets are governed by participation
F
capacity. While a proven models and rules that reflect the types of resources and technical
and effective resource in
requirements for market services that those resources are eligible
supporting grid reliability,
to provide.
sites conducive to the
development of pumped ■■ As such, the emergence of new technologies with different
storage are expected capabilities necessitates that ISO/RTOs continue to evolve
to be limited. their markets to efficiently integrate the new capabilities such

56 | Power Trends 2017

 Challenges & Opportunities

technologies offer. The NYISO’s historical efforts to integrate storage into its
markets exemplify FERC’s notion of the need for markets to reflect technological
developments and capabilities.
■■ In its initial comments to FERC, the NYISO noted that, “Integration of ESRs (electricity
storage resources) and DER will improve the Commission-regulated wholesale markets
by providing system resiliency, energy security and fuel diversity, while at the same time
having the potential to lower consumer prices and improve market efficiency.”62
The NYISO acknowledged that it continues to work with stakeholders to develop a
more comprehensive participation model that fully integrates energy storage into
wholesale markets, which is the objective that lies at the heart of both the FERC
NOPR as well as the NYISO’s Storage Integration Initiative.63
Solar Power
Much of the power produced by solar is generated either
behind the retail meter on a customer’s premises, or at the
distribution level of interconnection. According to a May 2016 report
from National Renewable Energy Laboratory and Sandia National
Laboratories, solar at the distribution level represented 61% of

“
the nation’s total solar capacity.64 (See page 65 the ‘Integrating
Distributed Energy Resources’ section for more discussion.) In New
Integration of
ESRs (electricity
York State, the percentage experienced to date is much greater.
storage resources)
According to the NYISO’s analysis to support development of the
and DER will improve
2017 Load & Capacity Data Report (the Gold Book), of the roughly
the Commission-
785 MW of installed solar operating in the state, approximately
regulated wholesale
753 MW are installed at the distribution level and not participating
markets by providing
directly in the NYISO’s markets.
system resiliency,
However, interest in grid-scale solar is growing and the NYISO energy security and
is working to enhance its markets accordingly. To integrate grid- fuel diversity, while
scale solar, New York’s wholesale electricity markets have begun to at the same time
adopt design changes similar to wind integration efforts. In 2012, having the potential
provisions of NYISO market rules were adapted to address solar to lower consumer
power as a variable energy resource. prices and improve
There is currently one grid-scale solar project operating in New York:

■■ The Long Island Solar Farm, a 32 MW facility located at the

market efficiency.

— The NYISO’s comments

”
Brookhaven National Laboratory, is the largest solar power to FERC on the Notice Of
plant in the Eastern United States. Proposed Rulemaking
(NOPR)
In 2015, the NYISO initiated a study to evaluate the potential
for growth in solar power resources to determine their impact on grid operations. The effort
developed and tested solar forecasting tools and prepared 15-year forecasts of solar capacity

Power Trends 2017 | 57

Challenges & Opportunities

727
Figure 30:
Existing and 679
Proposed Wind 100 Existing
and Solar Capacity D wind

in New York State UPSTATE

(MW)
Proposed
wind
442 278
20
80 Existing
F
B C solar

A 1,254 1,104 120

203 Proposed
solar
1,339 E
B 518 80
101

20 G DOWNSTATE
for each of the 11 load zones in New York State.65
The results of the NYISO’s study clarify the 90 H 90
likely impacts associated with the rapid I
expansion of solar generation. J K
In March 2016, there were 233 MW of 123
32
solar generating capacity that had applied for
interconnection to the bulk power system via
the NYISO’s interconnection study process. The number and capacity of proposed grid-
connected solar projects has more than tripled since then. As of March 2017, 35 solar projects
representing 881 MW of generating capacity were proposed for interconnection with the
New York bulk electric system.66 Individual projects range in size from
7.5 MW to 98 MW of generating capacity.
The NYISO will need to understand the performance of solar
installations regardless of whether they are interconnected directly to
the bulk power system or to the distribution system. Those tied to the
bulk power system will be integrated in a manner similar to utility-
scale wind installations, where forecasting tools are used to assess the
► 881 MW of generating
capacity, spanning 35
anticipated output of installed projects so that the NYISO can efficiently
projects, were proposed dispatch more conventional generation to meet demand on the system.
for interconnection with At the same time, the NYISO will have to accurately account for
the New York bulk electric the impact of behind-the-meter solar resources on system demand.
system as of March 2017. Beginning in the summer of 2017 the NYISO plans to integrate
Individual projects range in behind-the-meter and grid-connected solar forecasts into its real-time
size from 7.5 MW to 98 MW generator dispatch and commitment processes.
of generating capacity.

58 | Power Trends 2017

 Challenges & Opportunities

■■  hereas grid-connected solar sites provide the NYISO with a direct stream of solar power
W
production, there is no direct stream of data from the approximately 80,000 locations of
behind-the-meter solar installations across the state.
■■ In order to obtain real-time data on these sites, the NYISO has contracted with a firm that
directly monitors the power production for a portion of these sites, and provides it to the
NYISO in real-time.
■■ With this additional information, the NYISO will be able to develop forecasts of both
behind-the-meter and grid-connected solar and continue to efficiently dispatch
conventional generation to fulfill system needs.
■■ As distributed solar resources proliferate, their impact on peak demand and annual
energy usage in New York is expected to nearly triple by 2027. (See page 15 discussion
of Daily & Seasonal Demand Patterns.)

Clean Energy Policy Figure 31: Distributed Solar in New York - Historical and Forecast
State renewable portfolio
3,000
standards contributed
to more than half of all 2,500

renewable electricity growth 2,000

in the United States since
MW

2000, according to an 1,500

April 2016 report from the 1,000

Lawrence Berkeley National
500
Laboratory.67
Expanding the supply of 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
electricity from renewable
resources and enhancing Installed Forecast Installed Impact at 4pm
Capacity Capacity in Late July
energy efficiency are among
the longstanding goals of
New York State’s energy policy. To date, the NYISO’s cooperative efforts with the State
have enabled wholesale market signals to provide a platform for renewable generation
to flourish in New York.
The New York State PSC established a Renewable Portfolio Standard (RPS) in 2004, aimed
at expanding the portion of renewable power consumed by New Yorkers. In 2016, 33,192
GWh of New York’s electricity was produced by renewable resources (hydropower, wind, solar
and other) representing approximately 24% of New York’s electric generation. New York’s
large base of hydropower resources generated 26,314 GWh of electric energy, representing
79% of the renewable power produced in New York in 2016. New York’s wind power
resources generated 3,943 GWh, approximately 12% of the renewable power produced in
the state in 2016.

Power Trends 2017 | 59

Challenges & Opportunities

The New York State PSC also established an Energy Efficiency Portfolio Standard
(EEPS) in 2008 with a goal of reducing statewide annual electricity consumption by
26,885 GWh by 2015. This equated to reducing statewide electricity consumption to a level
of 152,352 GWh in 2015, a reduction of 15% from the forecast for 2015 of 179,238 GWh.
Electricity usage in New York totaled 161,572 GWh in 2015, a reduction of 10% from the
EEPS forecast for 2015, but falling short of the EEPS goal.
The Cuomo Administration advanced a series of renewable energy and energy
efficiency measures consistent with goals outlined by the 2015 State Energy Plan.68
The goals to be achieved by 2030 include:

■■ 40% reduction in economy-wide greenhouse gas emissions from 1990 levels.

■■ 50% of energy generation from renewable energy sources (the “50-by-30” goal).
■■ 600 TBtu in annual energy savings, which is estimated to be equivalent to
a 23% decrease in energy consumption levels.

In January 2016, the PSC issued an order authorizing a 10-year, $5 billion Clean Energy
Fund, administered by the New York State Energy Research and Development Authority,
■■ To replace expiring clean energy programs and provide continuity of support for clean
energy goals of the 2015 New York State Energy Plan.
■■ The PSC also stated that the fund is a critical component of the REV plan.69

As previously noted, New York is part of the Regional Greenhouse Gas Initiative (RGGI).
The initiative, which took effect in 2009, uses a market-based emission allowance trading
to achieve the emission reductions. RGGI states agreed to set the cap at 91 million tons of
emissions in 2014, declining by 2.5% year on year through 2020. The cap was planned to
yield an estimated 80-90 million tons of cumulative emission reductions by 2020.70 RGGI
represents a market-based emissions program that can support
emissions reductions in a cost-effective manner that works in
harmony with the NYISO’s wholesale power markets.
The NYISO’s markets are designed for economic efficiency,
driving least-cost solutions to providing reliable grid operations
under varying conditions and levels of demand for energy. That
►The NYISO’s drive for efficiency has produced significant environmental benefits
Markets provide in the form of reduced emissions rates of CO2 , SO2 , and NOX because
incentives for
generators supplying the market have incentives to optimize the
generators to reduce
efficiency of their facilities and minimize fuel costs. This market
their environmental
design has also ensured that renewable resources like wind and
impact and facilitate the
dispatch of renewable
solar are dispatched when they are available because they have
resources like wind no fuel costs and can offer into the market below the costs of
and solar. more traditional generators.

60 | Power Trends 2017

 Challenges & Opportunities

Clean Energy Standard

To convert the State Energy Plan goals into mandated requirements, the PSC issued an
order on August 1, 2016 adopting the Clean Energy Standard and thus charting a course for
the state to achieve the 50-by-30 goal.
The CES will play a significant role in shaping New York’s bulk power system over the
next 15 years, and the NYISO supports the public policy objectives associated with the 50-
by-30 goal. Specifically, the Order codifies the state’s commitment to promoting increases in
renewable generation to achieve the 50-by-30 goal; supporting construction and continued
operation of renewable generation in New York; protecting upstate nuclear facilities from
premature closure; and promoting of the market objectives of REV.71
Under the CES, electric utilities and others serving load in New York State are responsible
for securing a defined percentage of the load they serve from eligible renewable and nuclear
resources. The load serving entities will comply with the CES by either procuring qualifying
credits or making alternative compliance payments.
The credits would include:

■■ Renewable Energy Credits (RECs). Generators of eligible

renewable energy resources will earn one REC for each MWh of
renewable energy generated. Generators will have the option
of selling such RECs directly to load serving entities or through
a centralized procurement process administered by NYSERDA,
which will then allocate the RECs proportionally to load serving
► 70,500 GWh
entities in accordance with their prescribed percentages.
of total renewable energy
■■ Zero Emission Credits (ZECs). In addition to the renewable will need to be generated
energy mandate, the CES requires load serving entities to by 2030 in order to
obtain a certain amount of ZECs from eligible nuclear power acheive the 50-by-30
facilities. These ZECs represent incentive payments the state goal, as determined by
deems necessary to forestall the premature closure of upstate the PSC Order on August
nuclear facilities, the loss of which would “undoubtedly result 1, 2016. The increment
in significantly increased air emissions due to heavier reliance of new renewable energy
on existing fossil-fueled plants or the construction of new generation needed for
gas plants to replace the supplanted energy.”72 The Order compliance by 2030
establishes two-year tranches in which the price of ZECs is will be approximately
administratively determined and adjusted as necessary to 29,200 GWh.
ensure eligible nuclear units remain economically viable
while minimizing added costs to consumers.

In order to achieve the 50-by-30 goal, the PSC Order determined that approximately
70,500 GWh of total renewable energy will need to be generated by 2030.73 A portion of this
obligation will be met with resources already in operation, meaning the increment of new

Power Trends 2017 | 61

Challenges & Opportunities

renewable energy generation needed for compliance by 2030 will be approximately 29,200
GWh on top of current levels of renewable energy production and contracted production that
has yet to be built.74
The Order establishes:

■■ A triennial review process to reevaluate fixed targets on a going-forward basis.

■■ Examines the balance between mandated demand and anticipated supply.
■■ Assess the progress of any voluntary activities in the market that may affect target levels,
possible changes to eligibility rules, and the effect of the CES on fuel diversity.
■■ Any interactions among the CES and RGGI or any federal policies related to greenhouse
gas emissions.75

Separate compliance tiers were adopted to address the wide

range of potentially eligible resources under the CES.
The tiers include:

■■ New Incremental Renewable Generation

■■ Existing Renewable Generation
■■ Existing, Eligible Nuclear Facilities

“ Resources with
the ability to follow
NYSERDA will continue to offer long-term (20 year) contracts for
RECs associated with eligible renewable resources, with revenues
dispatch signals collected from obligated load serving entities and RECs allocated to
to ramp up, ramp each load serving entity according to its obligation.
down or turn off
While the PSC’s adoption of the REC-only procurement
are critical to the
mechanism reflects the value of competitive wholesale markets
reliable operation
in driving efficient market outcomes, the pending influx of new
of the bulk power
renewable resources necessary to achieve compliance with the
transmission
state’s goals will still pose challenges in terms of system operations,
system. New
maintaining market efficiency, and planning for future system needs.
resources that
exhibit these Issues that the NYISO will need to address include:
characteristics ■■  aintaining Resource Adequacy: Reliably integrating 50%
M
will strengthen renewable energy production to the grid by 2030 will affect the
the operation of dynamics of NYISO’s competitive energy and capacity markets. With
the bulk power relatively little load growth anticipated on the system, conventional
transmission generation needed for reliability will likely see declining energy
system…
”
— NYISO comments on
■■
revenues with the entrance of new renewable resources.
Market Design & Grid Operations: A key task in managing the
Clean Energy Standard expansion of renewable resources on the grid will be “to redesign
Order, January 2017 power markets to reflect the new need for flexible supply and

62 | Power Trends 2017

 Challenges & Opportunities

demand.”76 The NYISO will need to enhance its energy, ancillary, and capacity markets in
response to the CES in order to send appropriate market signals needed to sustain the
level of conventional generation necessary to reliably operate the grid. Further, the NYISO
may need to modify or enhance its operational practices and market products to address
new needs that may be triggered by expanded renewable resources, such as needs for
fast-acting resources capable of balancing large variations in renewable energy production.
Developing specific operational and market enhancements, as may be necessary, will be
further informed through ongoing and pending planning activities.
■■ Role of Transmission: As previously discussed, the magnitude of incremental renewable
resources likely to enter the NYISO’s markets will also put pressure on the existing backbone
and underlying transmission system in New York. The PSC has issued orders confirming
the Public Policy Need for the Western Transmission and the AC Public Policy Transmission
Projects based on the rationale that expanding transmission capabilities in these regions
will unbottle NYPA’s hydro resources and increase diversity in supply, including renewable
resources. The NYISO recognizes the need for additional studies to evaluate the adequacy
of the transmission system to integrate the desired levels of renewable resources. Ensuring
adequate transmission is in operation where and when it is
needed will require continued coordination with, and support from,
the PSC through the Public Policy Transmission Planning Process.

Together, the NYISO, the PSC and Department of Public Service

staff are diligently planning for the system transformation necessary
to facilitate the growth of clean energy resources in New York.
By leveraging competitive markets, the NYISO believes the state
► 2,500 MW
can pursue its goals in an economically efficient manner, while
maintaining the reliability New Yorkers have come to expect. of installed wind capacity
growth and 1,500 MW of
NYISO Solar Study installed solar capacity
The addition of solar resources alone can alter the load shape will be sufficiently balanced
for which the NYISO must dispatch generation resources to meet by the existing Regulation
consumer demand. At increasing levels of behind-the-meter Service requirements
solar installations, the net load that must be met with centrally according to NYISO’s
dispatched generation during a typical winter day begins to solar integration study.
feature sharper peaks that would require generators to move up
or down more quickly than currently experienced on the system. Notably, at 9,000 MW of
solar installation, the solar resource production begins to decline long before system demand
peaks for the typical winter day, exacerbating the ramping effect. For a typical summer day,
solar represents a better match between the timing of the solar resources’ output and system
peaking conditions, but not a perfect match.
Based on results from the NYISO’s solar preliminary integration study, 77 the NYISO
estimates that existing Regulation Service requirements will be sufficient to balance the

Power Trends 2017 | 63

Challenges & Opportunities

variability of new wind Figure 32: Solar Penetration 9000 3000 Actual
and solar resources up Implications for Net Load - 4500 1500
Typical Winter Day
to the point where solar
29
penetration breeches
27

Net Load (MW /in thousands)

1,500 MW of installed
25
capacity or installed wind
23
capacity grows to exceed
2,500 MW. Beyond these 21

penetration thresholds the 19

study suggests that “minor 17

upward revisions of the 15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
regulation requirements Hour of Day
could be warranted,” notably
Figure 33: Solar Penetration Implications for Net Load -
in the spring, fall, and winter Typical Summer Day
periods. During the summer,
system load and solar 29
27
Net Load (MW /in thousands)

production generally track

each other more closely than 25

during the other seasons, 23

lessening the need to 21
increase Regulation Service 19
requirements. At the highest 17
penetration levels examined 15
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
by the study (9,000 MW Hour of Day
solar, 4,500 MW wind), there
will be additional upward pressure on Regulation Service requirements, but grid operators
should be able to manage such increases within existing market rules and existing system
resources. However, the study notes that it will be important to monitor the system’s
capability to serve its regulation and ramping needs as wind and solar penetration increases
and displaces conventional thermal generation. In particular, the study recommends that
the NYISO periodically assess the potential for storage technologies to mitigate the need
for higher levels of regulation.
Market Design Options for Encouraging Investments in Clean Energy Resources
The effect of historically low natural gas prices on wholesale electricity prices has
caused financial distress for nuclear units and, in many instances, threatened their viability.
To address this, New York State implemented a ZEC program to retain certain nuclear
generators within the state. The NYISO believes the ZEC program is a necessary bridge
to retain nuclear generation until a market-based mechanism for pricing CO2 emissions
can be explored.

64 | Power Trends 2017

 Challenges & Opportunities

It is important to understand that a generating unit that may appear uneconomic based
on its electricity market revenues alone may nevertheless be viable if it could capture the
economic value of its environmental attributes. Current wholesale market designs function
well to send economically efficient market signals needed to maintain reliability, but they do
not value externalities such as the environmental attributes at the heart of the state’s clean
energy policies.
Ideally, public policy should clearly:

■■ Identify the attribute that is valuable or necessary to achieve that policy but not being
priced in the existing electricity markets (e.g., reduced carbon emissions).
■■ This attribute should then be systematically valued and procured through a market
mechanism across the entire generating fleet.
■■ Pricing or procurement that is specific to a unit type or fuel type creates the potential for
harmful distortions in the competitive wholesale electricity market.
■■ At the request of its stakeholders, the NYISO commissioned the Brattle Group (Brattle)
to explore whether New York State environmental policies may be pursued within the
existing wholesale market structure at a reasonable cost to consumers. The NYISO is
in the initial stages of exploring that potential with the Brattle
Group, our market participants, and New York State.
Integrating Distributed Energy Resources
Technological advancements and public policies, particularly REV,
are encouraging greater adoption of DER to meet consumer energy
needs as well as electric system needs. DER offer the potential to make
load more dynamic and responsive to wholesale market price signals,
potentially improving overall system efficiencies. The NYISO generally
considers DER to be behind-the-meter resources, although small ► Distributed
aggregations such as Community Solar may also be considered DER. Energy Resources
Some DER may be net-generators and others net-loads. The NYISO (DER Roadmap)
defines DER as a resource, or a set of resources, typically located on for more information,
an end-use customer’s premises that can provide wholesale market visit www.nyiso.com.
services but are usually operated for the purpose of supplying the
customer’s electric load. DER can consist of curtailable load (demand response), generation,
storage, or various combinations of these resources aggregated into a single entity.
DER are poised to transform New York’s wholesale electricity system by:
■■ Potentially improving system resiliency, energy security, and fuel diversity.
■■ DER can lower consumer prices, improve market efficiency, and allow consumers to take
greater control of their electricity use and costs through a variety of new technologies.

Power Trends 2017 | 65

Challenges & Opportunities

■■ DER can also support environmental goals through the development of new renewable
generation and energy storage technologies, helping the State of New York achieve
its goals under the REV initiative and Clean Energy Standard. The NYISO stands ready
to harness these benefits and build the grid of the future.

In support of its efforts to harness the benefits of DER, the NYISO released a Distributed
Energy Resource Roadmap. The Roadmap offers routes to a future where consumers and
emerging technologies support more optimized grid utilization. It offers the NYISO’s vision of
seamlessly transitioning from a primarily central station-based grid to a diverse bi-directional
grid. However, the Roadmap represents just the first step toward building that grid of the future.
The transition will require careful and extensive planning by the NYISO and its
stakeholders and the NYISO will continue to provide its stakeholders and the public with
independent and impartial information it can trust to guide the evolution of the grid. This
evolution will fundamentally alter the composition of New York’s infrastructure and energy
markets but, throughout
Figure 34: Integrating DER in Wholesale Markets
this transformation the
NYISO will continue to Wholesale service Retail service

DSP
provided to ISO provided to DSP
ensure reliable and economic
electricity to meet the needs
of New York’s consumers. Wholesale Services Retail Services
ESCO
Wholesale Capacity Retail
Roadmap to Energy
AGGREGATOR

service service
New Opportunities direct Regulation Services Service provided direct
to ISO Operating Services through Aggregator to DSP
DER currently have
limited opportunities to Wholesale Retail
Services Services
participate in the NYISO’s
Energy, Ancillary Services, Distributed Energy
Resources
and Capacity markets.
Through the Roadmap, the NYISO’s goal is to develop a series of market enhancements
to more fully integrate DER into these markets in support of five key objectives that, once
achieved, will improve market animation, increase system-wide efficiency, and improve
system reliability and resiliency.
Key objectives:

■■ Integrate DER into Energy, Ancillary Services, and Capacity markets.

■■ Align with the goals of New York State’s REV.
■■ Enhance measurement and verification methodologies.
■■ Align compensation with wholesale service performance.
■■ Focus on wholesale market transactions.

Figure 34, above, depicts how DER may provide services in the wholesale and retail markets
in the future, and the dark blue lines are intended to show the scope of NYISO’s DER initiative.

66 | Power Trends 2017

 Challenges & Opportunities

Figure 35: Today’s Electric Grid REL

NG IAB
NI

ILI
PLA

TY
M A R K ET S
Power Power
Plant Plant
One-way flow Transmission Network One-way flow
of electricity of electricity
Distribution Network

Home Commercial Factory School

Building

Figure 36: Tomorrow’s Electric Grid

Energy Supply

Generator Storage Wind Solar Hydro Power Plant

Transmission

REL
NG

SUPPLY DEMAND
IAB
NI
N

ILIT
PLA

Factories
M A R K ET S

Solar
Electric Cars
Commercial
Buildings

Integrated
Distributed Homes
Storage
Resources Schools
Two-way flow of electricity

Power Trends 2017 | 67

Challenges & Opportunities

Although DER can currently participate in limited ways, the NYISO recognizes that market
enhancements to further integrate DER will benefit the system as a whole.
Therefore, the main objective of the DER Roadmap is to identify the key, high-
level concepts for the NYISO to address in integrating existing and emerging DER
technologies. These concepts will be further developed, refined, and implemented,
with stakeholder input through the NYISO’s shared governance process.78
The Roadmap, though focused on wholesale markets, aligns with the Public Service
Commission’s (PSC) REV objectives to complement the retail market enhancements
undertaken by the PSC and utilities. The NYISO intends to treat dispatchable DER comparably
with traditional generators, but recognizes that the capabilities of DER may be different from
traditional generators. For instance, the NYISO recognizes that DER

“ The Roadmap are likely to participate in the NYISO’s wholesale markets on an

offers routes to aggregated basis due to individual resource size and capability.
a future where The market enhancements developed over the next three to five
consumers years will permit DER participation in the NYISO’s Energy, Ancillary
and emerging Services, and Capacity markets with the option of being either
technologies support dispatchable for economics or non-dispatchable for economics.
more optimized The fundamental premise behind the NYISO’s DER Roadmap
grid utilization. It is straightforward:
offers the NYISO’s ■■  ompetitive markets and system operations will benefit from
C
vision of seamlessly access to emerging technologies that can adjust demand on
transitioning from an economic basis in response to price signals from the market.
a primarily central
station-based grid ■■  owever, developing and implementing the market enhancements
H
to a diverse bi- necessary to realize this premise will entail a considerable amount

”
directional grid. of time, effort, and stakeholder engagement.
■■ T he NYISO will use its Roadmap over the next three to five
— NYISO DER
Roadmap release, years as a framework to develop the market design elements,
January 2017 functional requirements, and tariff language necessary to
implement its vision to integrate dispatchable DER.

Technology & Infrastructure

Emerging Technologies
The emergence of DER and the transformation of the historically centralized electric
grid to a more decentralized system cannot take place without advanced technology.
An electricity system that is more distributed places a greater emphasis on data needs
and situational awareness so ISOs and RTOs can continue to meet reliability requirements.
As mass adoption of DER continues, regional information sharing becomes a significant
component of the smarter grid.78

68 | Power Trends 2017

 Challenges & Opportunities

Efforts to integrate emerging technology build on a foundation of upgrading and

modernizing key elements of the grid to enhance the precision with which grid operators
manage the flow of electricity. ISOs have matured beyond the technological framework
that existed at the time of market deregulation in the 1990s. For example, supervisory
control and data acquisition (SCADA) systems have been supplemented with phasor
measurement unit (PMU) data, an advanced tool for grid operations to use to relay
system electric conditions at a rate of up to 60 times per second — 360 times faster than
previously available.
By using data from PMUs, grid operators have a more comprehensive understanding
of what is happening across the system and can more quickly detect potential problems or
help avoid major electric system disturbances like the 2003 blackout, which was triggered
by events on the transmission system in the Midwest that went undetected in New York
until it was too late to take preventative actions. The NYISO, in collaboration with regional
partners, also is working on ways to apply PMU data in real-time situations and continues
to assess how information can improve reliability and performance.
There are more than 2,000 synchrophasors installed throughout the U.S. as part of
the U.S. Department of Energy’s 2013 Smart Grid Investment Grant Project.79 The NYISO’s
control center employs the capabilities of these devices and connects with PMU networks
in New England, the mid-Atlantic, and the Midwest to provide faster and wider situational
awareness of grid conditions throughout the eastern United States.
The concept of “Smart Grid” encompasses technological
solutions intended to enhance the operation of the transmission “ There are
more than 2,000
and distribution systems, and ultimately improve the ability of synchrophasors
electricity consumers to manage their use of power. Efforts to installed
expand smart grid technology build on a foundation of upgrading throughout the
and modernizing key elements of the grid to enhance the precision U.S. The NYISO’s
with which grid operators manage the flow of electricity. control center
employs the
Collaboration with other ISOs and RTOs on emerging technology capabilities of
issues is a significant component of the smarter grid. In March 2017, these devices and
the ISO/RTO Council, which includes the NYISO, issued a white paper connects with other
on emerging technology integration entitled Emerging Technologies:
How ISOs and RTOs Can Create a More Nimble Robust Bulk Electricity
System.80 The white paper focuses on renewable supply integration,
PMU networks.

— From the U.S.

”
improving situational awareness to better understand the potential Department of
of new technologies, and the challenges associated with reliably Energy’s 2013
Smart Grid Investment
operating a grid with increased participation of DER. Grant Project
Grid Security
As the systems that control and monitor the power grid become more advanced and
interconnected, the scope of physical and cyber security concerns expands. Increased

Power Trends 2017 | 69

Challenges & Opportunities

awareness of man-made threats to critical infrastructure and the potential for physical
damage from natural disasters keep security issues in the spotlight.
Mandatory federal reliability standards for owners and operators of the bulk electric
system include Critical Infrastructure Protection (CIP) standards. These standards are
developed by NERC and approved by FERC.
These standards cover a wide range of risk areas:

■■ Identification and classification of cyber assets to physical security

■■ Personnel and training
■■ Event monitoring and communication
■■ Incident response
■■ Protection and isolation of network architecture
■■ Access and change control
■■ System recovery

Though the CIP standards are continuing to mature to cover

various operations, they serve as robust, base-level requirements
for securing our critical infrastructure. 81 CIP standards undergo
continuous updates as the nature and scope of threats change.
NERC’s physical security standard requires users, owners and
operators of bulk power system facilities to conduct a risk assessment
to identify critical facilities and then develop and implement security
“ The NYISO
implements the
plans to protect against and recover from attacks on those facilities.
The NYISO implements the cyber and physical security standards
cyber and physical
as part of a layered, “defense-in-depth” posture that seeks to defend
security standards
its critical infrastructure assets from incursions.
as part of a layered,
“defense-in-depth” The latest version of CIP standards took effect in July 2016 and
posture that seeks uses a layered approach to identify and classify bulk electric system
to defend its critical cyber assets according to their potential impact on electric system
infrastructure assets reliability.82 The NYISO successfully met requirements and passed

”
from incursions. a federal CIP standards audit in 2016.
The NYISO actively participates in the development of standards
— NYISO’s stance on
and remains engaged in enhancing cyber and physical security
the CIP standards
practices to address evolving risks by collaborating with various state
and federal government agencies, other ISOs and RTOs, and other industry entities,
to maintain rigorous cyber security protections.
For instance, on February 1, 2017, the ISO-RTO Council, which includes the NYISO,
participated in a hearing of the U.S. House of Representative’s Committee on Energy and
Commerce’s Subcommittee on Energy. The hearing, titled “The Electricity Sector’s Efforts
to Respond to Cybersecurity Threats” focused in part on steps Independent System

70 | Power Trends 2017

 Challenges & Opportunities

Operators and Regional Transmission Organizations are taking to address cyber and physical
security. Comments noted that the IRC’s members, including the NYISO, “routinely practice
cyber incident response and system recovery to ensure resilience in the wake of a cyberattack.
Drills are routinely conducted on local, state, regional and federal levels, in coordination with
government agencies and industry associations to provide opportunities to improve our ability
to respond and recover with the goal of maintaining the highest possible level of resilience.”
In November 2016, the NYISO participated in the New York State Cybersecurity Exercise
event to test communications and preparations in the face of an attack. Primary participants
included energy sector organizations that operate within New York State, in addition to federal,
state and local governments, and the Electricity Information Sharing Analysis Center (E-ISAC).
In 2017, the NYISO will join participants from organizations across the country in GridEx
IV, as NERC conducts a simulated attack on the U.S. power grid. The GridEx exercise
is designed to enhance the coordination of cyber and physical security resources and
practices within the industry, as well as improve communication with government partners
and other stakeholders.

Concluding Comments
Great Expectations
In New York, the NYISO’s competitive wholesale markets have played a vital role in
adapting the power grid to changes in technology, demand, fuel supply economics, and
public policy — while meeting the most stringent reliability standards — to provide proven
value to New York consumers and the economy of the Empire State.
The NYISO was founded on the belief that active collaboration among power system
stakeholders is essential to the development of effective and equitable solutions.
The NYISO’s system of shared governance, which guides the ongoing transformation
of New York’s bulk power grid operation and wholesale electricity markets, provides
a valuable forum to identify and address the challenges and opportunities facing New
York’s energy future.
In our evolving energy landscape, the value of this collaboration has never been
more important. Collaborating with stakeholders, New York State energy policymakers,
and federal policymakers, the NYISO serves as an independent, authoritative source of
information. At the heart of this collaboration remain core values: the power system exists
to serve customers; and an open, competitive marketplace for wholesale electricity plays
a vital role in the efficient allocation of resources and sustained economic growth.
New York is on the cutting edge of this new energy future. Together, we are
transforming the power grid as it strives to achieve the goals of cleaner energy,
improved efficiency, and robust economic growth. New York’s tale of two grids is an
unfolding story. The NYISO is working to accommodate change while ensuring continuity.
We have great expectations that we can integrate the emerging power trends in a manner
that benefits consumers and supports public policy goals.

Power Trends 2017 | 71

Glossary of Terms
The following glossary offers definitions year (8,760 hours) would produce 8,760 megawatt-
and explanations of phrases used in Power hours (MWh) of electricity. That generator would
have an annual capacity factor of 100%.
Trends 2017, as well as terms generally
used in discussions of electric power Clean Energy Standard: A New York State
systems and energy policy. requirement that 50% of the energy consumed
in the state be generated by eligible renewable
“50/50 and “90/10”: Load forecast scenarios used energy resources by 2030. Often referred to as
in transmission planning analyses to help account the “50-by-30 goal.”
for increases in system peak demand that can occur
in extreme weather. A 50/50 scenario means there Comprehensive Reliability Plan (CRP): A study
is an equal probability of the actual peak load being undertaken by the NYISO that evaluates projects
higher or lower than the forecast value. A 90/10 offered to meet New York’s future electric power
scenario means there is a 90% chance the actual needs, as identified in the Reliability Needs
peak load will below the forecast and a 10% chance Assessment (RNA). The CRP may trigger electric
it will be above the forecast. utilities to pursue regulated solutions to meet
reliability needs if market-based solutions will not
Behind-the-Meter Generation: A generation unit be available to supply needed resources. It is the
that supplies electric energy to an end user on-site second step in NYISO’s reliability planning process.
without connecting to the bulk electric system or
local electric distribution facilities. (An example is a Comprehensive System Planning Process (CSPP):
rooftop solar photovoltaic system that only supplies The NYISO’s ongoing process that evaluates
electricity to the facility on which it is located.) resource adequacy and transmission system
security of the state’s bulk electricity grid over a 10-
Broader Regional Markets (BRM): A set of year period and evaluates solutions to meet those
coordinated changes to the region’s bulk electricity needs. The CSPP contains four major components
markets that will reduce the inefficiencies of — local transmission planning, reliability planning,
moving power between markets. In addition to the economic planning, and public policy transmission
NYISO, the regional initiative involves Ontario’s planning. Each planning cycle begins with the Local
Independent Electricity System Operator, the Transmission Plans of the New York transmission
Midwest Independent Transmission System owners, followed by NYISO’s Reliability Needs
Operator, PJM Interconnection, ISO New England, Assessment (RNA) and Comprehensive Reliability
and Hydro Québec. Plan (CRP). Using the most recent reliability
planning model, economic planning is conducted
Bulk Electric System: The transmission network
through the Congestion Assessment and Resource
over which electricity flows from suppliers to local
Integration Study (CARIS) and projects to meet
distribution systems that serve end users. New
transmission needs driven by federal, state, and
York’s bulk electricity system includes electricity
local laws and regulations are analyzed through the
generating plants, high voltage transmission lines, and
Public Policy Transmission Planning Process.
interconnections with neighboring electric systems
located in the New York Control Area (NYCA).
Congestion Analysis and Resource Integration
Capability Period: Lasting six months, the Summer Study (CARIS): Part of the NYISO’s Comprehensive
Capability Period goes from May 1 through October System Planning Process, CARIS evaluates the
31. The Winter Capability Period runs November 1 economic impact of proposed system changes.
through April 30 of the following year. It consists of congestion studies developed with
market participant input as well as additional
Capacity: Capacity is the maximum electric output studies that individual market participants may
that a generator can produce. It is measured in request and fund. The CARIS is based on the most
megawatts (MW). recently approved CRP.
Capacity Factor: Capacity factor measures actual Day-Ahead Market (DAM): A NYISO-administered
generation as a percentage of potential maximum wholesale electricity market in which electricity,
generation. For example, a generator with a 1 and ancillary services are auctioned and scheduled
megawatt capacity operating at full capacity for a one day prior to use.

72 | Power Trends 2017

 Glossary of Terms

Day-Ahead Demand Response Program (DADRP): centers, and distribution lines that connect
A NYISO demand response program to allow individual customers.
energy users to offer their load reductions into the
day-ahead energy market. The resources are paid Electricity Market: In economic terms, electricity
the same market clearing price per megawatt as is a commodity capable of being bought, sold,
generators. and traded. An electricity market is a system
enabling purchases. The NYISO stewards the
Demand Response (DR) Programs: A series of wholesale electricity markets in New York, enabling
programs designed by the NYISO to maintain the competing generators to offer their output to
reliability of the bulk electricity grid by calling on retailers. These markets include the Day-Ahead
electricity users to reduce consumption, usually in Market (DAM) and others.
capacity shortage situations. The NYISO demand
response programs include Day-Ahead Demand Emergency Demand Response Program (EDRP):
Response Program (DADRP), Demand Side Ancillary A NYISO demand response program designed to
Services Program (DSASP), (Emergency Demand reduce power usage through voluntary electricity
Response Program (EDRP), and Special Case consumption reduction by businesses and large
Resources (SCR). power users. The companies are paid by the NYISO for
reducing energy consumption upon NYISO request.
Demand Side Ancillary Services Program (DSASP):
A NYISO demand response program to allow Energy: Energy is the amount of electricity a
energy users to offer their load reductions into generator produces over a specific period of time.
the ancillary services market to provide operating It is measured in megawatt-hours. For example,
reserves and regulation service. These resources a generating unit with a 1 megawatt capacity
are paid the same ancillary service market clearing operating at full capacity for one hour will produce
price as generators. 1 megawatt-hour of electricity.

Distributed Generation: A small generator, typically Energy Independence and Security Act of 2007: A
10 MW or smaller, attached to the distribution federal energy statute approved in December 2007.
grid. Distributed generation can serve as a primary The stated purposes of the act are “to move the
or backup energy source, and can use various United States toward greater energy independence
technologies, including wind generators, combustion and security, to increase the production of clean
turbines, reciprocating engines, and fuel cells. renewable fuels, to protect consumers, to increase
the efficiency of products, buildings, and vehicles,
Distributed Energy Resource (DER): A broad to promote research on and deploy greenhouse gas
category of resources that includes distributed capture and storage options, and to improve the
generation, energy storage technologies, combined energy performance of the Federal Government, and
heat and power systems, and microgrids. A DER is other purposes.”
generally customer-sited (“behind-the-meter”) to
serve the customer’s power needs, but may in some Energy Policy Act of 2005 (EPAct): An extensive
instances sell excess energy production back to the energy statute approved in August 2005 that
power system. requires the adoption of mandatory electricity
reliability standards and gave the Federal Energy
Eastern Interconnection: The Eastern Regulatory Commission (FERC) the authority
Interconnection is one of the three electric grid to site major transmission lines under certain
networks in North America. It includes electric circumstances in National Interest Electric
systems serving most of the United States and Transmission Corridors (NIETC) identified by the
Canada from the Rocky Mountains to the Atlantic U.S. Department of Energy. The EPAct also made
coast. The other major interconnections are major changes to federal energy law concerning
the Western Interconnection and the Texas wholesale electricity markets, fuels, renewable
Interconnection. resources, electricity reliability, and the energy
infrastructure needs of the nation.
Electric Grid: An interconnected network for
delivering electricity from suppliers to consumers. Federal Energy Policy: A policy established by the
It consists of generators that produce power, Federal government which addresses issues of
transmission lines that carry power to demand energy production, distribution, and consumption.

Power Trends 2017 | 73

Glossary of Terms

Energy policy may include legislation, international generation and demand-side resources needed to
treaties, subsidies and incentives for investment, minimize the probability of an involuntary loss of
guidelines for energy conservation, taxation, or firm electric load on the bulk electricity grid. The
other public policy techniques. state’s bulk electricity grid is designed to meet
a LOLE that is not greater than one occurrence
Federal Energy Regulatory Commission (FERC): of an involuntary load disconnection in 10 years
The federal regulatory agency that approves the (expressed mathematically as 0.1 days per year).
NYISO’s tariffs and regulates its operation of the
bulk electricity grid, wholesale power markets, and Market-Based Solutions: Investor-proposed
planning and interconnection processes. projects that are driven by market needs to meet
future reliability requirements of the bulk electricity
Gigawatt (GW): A unit of power equal to one grid as outlined in the Reliability Needs Assessment
billion watts. (RNA). Those solutions can include generation,
transmission, and demand response programs.
Gigawatt-Hour (GWh): A gigawatt-hour is equal to one
Market-based solutions are preferred by the NYISO’s
gigawatt of energy used continuously for one hour.
planning process. The NYISO is responsible for
Installed Capacity (ICAP): A qualifying generator or evaluating all solutions to determine if they will meet
load facility that can supply and/or reduce demand the identified reliability needs in a timely manner.
as directed by the NYISO.
Megawatt (MW): A measure of electricity that is
Installed Reserve Margin (IRM): The amount of the equivalent of 1 million watts. It is generally
installed electric generation capacity above 100% of estimated that a megawatt provides enough
the forecasted peak electricity consumption that is electricity to supply the power needs of 800 to
required to meet New York State Reliability Council 1,000 homes.
(NYSRC) and Northeast Power Coordinating Council
(NPCC) resource adequacy criteria. Megawatt-Hour (MWh): A megawatt-hour is equal
to one megawatt of energy used continuously for
Interconnection Queue: A queue of merchant one hour.
transmission and generation projects that have
submitted an Interconnection Request to the NYISO New York Independent System Operator (NYISO):
to be interconnected to the state’s electric system. All Formed in 1997 and commencing operations in
projects must undergo three studies — a Feasibility 1999, the NYISO is a not-for-profit organization
Study (unless parties agree to forgo it), a System that manages New York’s bulk electricity grid,
Reliability Impact Study (SRIS), and a Facilities Study administers the state’s competitive wholesale
— before interconnecting to the grid. electricity markets, provides system and resource
planning for the state’s bulk power system, and
Load: A consumer of energy, or the amount of energy works to advance the technology serving the
consumed. Load can also be referred to as demand. power system. The organization is governed by an
independent Board of Directors and a governance
Load Serving Entity: An entity, such as an investor- structure made up of committees, with market
owned utility, public power authority, municipal participants and stakeholders as members.
electric system or electric cooperative that supplies
energy, capacity and/or ancillary services to retail New York Control Area (NYCA): The area under the
electricity customers. electrical control of the NYISO. It includes the entire
state of New York, divided into 11 load zones.
Locational Installed Capacity Requirement: A
portion of the statewide installed capacity that New York Power Pool (NYPP): Established in
must be physically located within a locality to meet 1966 in response to the Northeast Blackout of
reliability standards. Locational Installed Capacity 1965, a voluntary collaboration of the state’s six
Requirements have been established for the New investor-owned utilities plus New York’s two power
York City (NYISO Zone J), Long Island (NYISO Zone authorities, created to coordinate the operations of
K), and lower Hudson Valley (NYISO Zones G-J) the New York State power grid. The NYISO assumed
capacity zones. this responsibility in 1999.

Loss of Load Expectation (LOLE): The amount of Peak Load: The maximum instantaneous power

74 | Power Trends 2017

 Glossary of Terms

demand averaged over an interval of time and Reliability Needs Assessment (RNA): A report that
measured in megawatt hours (MWh). Peak load, also evaluates resource adequacy and transmission
known as peak demand, is usually measured hourly. system security over a 10-year planning horizon,
and identifies future needs of the New York
Phasor Measurement Units (PMUs): These devices electricity grid. It is the first step in the NYISO’s
provide near instantaneous measurement and reliability planning process.
observation of bulk power system phase angles
at strategic locations across the system. PMUs Renewable Energy Credit (REC): A tax credit
are enhancing the NYISO’s (and transmission offered by a local or federal taxation authority as
owners’) awareness of the system’s status and its an incentive for the installation and operation of
vulnerabilities in real time. renewable energy systems. One REC equates to one
MWh of energy generated from eligible renewable
Public Policy Transmission Planning: Part of the energy resources. RECs are used to measure
NYISO’s Comprehensive System Planning Process, compliance with the renewable energy goals of the
public policy transmission planning consists of state’s Clean Energy Standard.
two steps: (1) identification of transmission needs
driven by Public Policy Requirements that should be Resource Adequacy: The ability of the electric
evaluated by the NYISO; and (2) requests for specific system to supply electrical demand and energy
proposed transmission solutions to address those requirements at all times, taking into account
needs, and the evaluation of those specific solutions. scheduled and unscheduled outages of system
The New York State Public Service Commission elements. A system is considered adequate of the
identifies transmission needs driven by Public Policy probability of having sufficient resources to meet
Requirements and warranting evaluation, and the expected demand is greater than the minimum
NYISO requests and evaluates specific proposed standards to avoid a blackout.
transmission solutions to address such needs.
Special Case Resources (SCR): A NYISO demand
Regional Greenhouse Gas Initiative (RGGI): The response program designed to reduce power usage
first market-based regulatory program in the United by businesses and large power users qualified to
States to reduce greenhouse gas emissions. RGGI is a participate in the NYISO’s installed capacity (ICAP)
cooperative effort among the states of Connecticut, market. Companies that sign up as SCRs are paid
Delaware, Maine, Maryland, Massachusetts, New in advance for agreeing to cut power upon NYISO
Hampshire, New York, Rhode Island, and Vermont. request during periods of system stress.
Regulated Backstop Solutions: Proposals required Thermal Line Limits: The maximum amount of
of certain Transmission Owners to meet reliability electrical energy that can flow on a transmission
needs as outlined in the Reliability Needs Assessment. line without overheating the line.
Those solutions can include generation, transmission,
or demand response. Non-Transmission Owner Transfer Capability: The amount of electricity that
developers may also submit regulated solutions. can flow on a transmission line at any given instant,
The NYISO may call for a gap solution if neither respecting facility rating and reliability rules.
market-based nor regulated backstop solutions meet
reliability needs in a timely manner. To the extent Transmission Constraints: Limitations on the ability
possible, the gap solution should be temporary and of a transmission facility to transfer electricity.
strive to ensure that market-based solutions will not
be economically harmed. The NYISO is responsible Transmission Security: The ability of the electric
for evaluating all solutions to determine if they will system to withstand disturbances, such as electric
meet identified reliability needs in a timely manner. short-circuits or unanticipated loss of system elements.

Reforming the Energy Vision (REV): The energy Zero-Emission Credit: A tax credit offered by a local
modernization initiative proposed by New York or federal taxation authority as an incentive for the
Governor Andrew M. Cuomo. The New York operation of an eligible zero-emission facility. In
State Public Service Commission commenced the New York, one ZEC equates to one MWh of energy
Proceeding on Motion of the Commission in Regard to generated from eligible nuclear generator. ZECs are
Reforming the Energy Vision (Case 14-M-0101) used to measure compliance with the obligations
in April 2014. under the State’s Clean Energy Standard.

Power Trends 2017 | 75

Endnotes
1
National Academy of Engineering “A Century of Innovation: Twenty Engineering Achievements That Transformed Our
Lives.” http://www.greatachievements.org/.

2
National Academy of Sciences.

3
“New renewable, gas combined-cycle plants keep average fleet age at 29 years.” SNL Energy. Jan. 27, 2017.

4
STARS Technical Working Group. “New York’s State Transmission Assessment and Reliability Study Phase II Study
Report.” Apr. 30, 2012. http://www.nyiso.com/public/webdocs/markets_operations/services/planning/Documents_
and_Resources/Special_Studies/STARS/Phase_2_Final_Report_4_30_2012.pdf

5
U.S. Energy Information Administration. “Annual Energy Outlook 2015: With Projections to 2040.” April 2015. https://
www.eia.gov/outlooks/aeo/pdf/0383(2015).pdf

6
In 2016, for example, demand on the grid exceeded 30,000 MW for only 33 hours, or just 0.38 % of the total hours for the
year.

7
SNL Energy. Jan. 27, 2017.

8
“U.S. electric generating capacity increase in 2016 was largest net change since 2011.” Today in Energy. U.S. Energy
Information Administration. Feb. 27, 2017. https://www.eia.gov/todayinenergy/detail.php?id=30112

9
Net capacity figures based on data for respective Summer Capability Periods (May 1- Oct. 31).

10
Federal Energy Regulatory Commission. “Order Instituting Section 206 Proceeding and Directing Filing to Establish
Reliability Must Run Tariff Provisions, New York Independent System Operator, Inc.” Docket No. EL15-37-000. Issued
Feb. 19, 2015.

11
A circuit-mile is one mile of one circuit of transmission line. For example, two 100-mile lines total 200 circuit-miles. One
100-mile double-circuit transmission line would also total 200 circuit-miles.

12
The Federal Energy Regulatory Commission defines demand response as changes in electric usage by end-use customers
from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive
payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is
jeopardized.

13
Federal Energy Regulatory Commission. “2016 Assessment of Demand Response and Advanced Metering.” Staff
Report. December 2016. https://www.ferc.gov/legal/staff-reports/2016/DR-AM-Report2016.pdf

14
New York Independent System Operator. “NYISO 2016 Annual Report on Demand Response Programs.” January 2017.
http://www.nyiso.com/public/webdocs/markets_operations/market_data/demand_response/Demand_Response/
Reports_to_FERC/2017/NYISO%202016%20Annual%20Report%20on%20Demand%20Response%20Programs_
Final.pdf

15
New York State. “Governor Cuomo Announces 10th Proposal of the 2017 State of the State: Closure of the Indian
Point Nuclear Power Plant by 2021.” Jan. 9, 2017. https://www.governor.ny.gov/news/governor-cuomo-announces-
10th-proposal-2017-state-state-closure-indian-point-nuclear-power

16
New York Independent System Operator. “2016 Reliability Needs Assessment.” Oct. 18, 2016. http://www.nyiso.com/
public/webdocs/media_room/press_releases/2016/Child_2016_RNA/2016RNA_Final_Oct18_2016.pdf

17
New York State Public Service Commission. “Order adopting installed reserve margin for the New York control
area for the 2017-2018 capability year.” Feb. 22, 2017. http://documents.dps.ny.gov/public/Common/ViewDoc.
aspx?DocRefId=%7BFD8912DB-E999-4620-B71D-14F369B0A1D9%7D

“Wholesale power prices in 2016 fell, reflecting lower natural gas prices.” Today in Energy. U.S. Energy Information
18

Administration. Jan. 11, 2017. https://www.eia.gov/todayinenergy/detail.php?id=29512

19
North American Electric Reliability Corporation. “Short-Term Special Assessment: Operational Risk Assessment with

76 | Power Trends 2017

 Endnotes

High Penetration of Natural Gas-Fired Generation.” May 2016. http://www.nerc.com/pa/RAPA/ra/Reliability%20

Assessments%20DL/NERC%20Short-Term%20Special%20Assessment%20Gas%20Electric_Final.pdf

20
FERC Dockets: CP14-529, CP14-479, CP15-115, CP15-138, CP16-17, CP13-499, CP13-83

21
City of New York. “Local Laws of The City of New York For the Year 2015, No. 38.” Apr. 16, 2015. https://www1.nyc.
gov/assets/buildings/local_laws/ll38of2015.pdf

22
City of New York Committee proceedings. “Phasing out the use of fuel oil grade no. 4.” File # 1465-2017.

23
Levitan and Associates. “Fuel Assurance & Pipeline Adequacy Study.” September 2013. http://www.nyiso.com/
public/webdocs/markets_operations/committees/bic_egcwg/meeting_materials/2013-10-23/Levitan%20
Pipeline%20Congestion%20and%20Adequacy%20Report%20Sep13%20-%20Final%20CEII%20Redacted.pdf

24
“Moody’s: Fall in natural gas prices may lead to large-scale plant retirements.” SNL Energy. Apr. 8, 2016.

25
World Nuclear Association. “Nuclear Power in the USA.” March 2017. http://www.world-nuclear.org/information-
library/country-profiles/countries-t-z/usa-nuclear-power.aspx

26
U.S. Energy Information Administration. “FAQ: What is U.S. electricity generation by energy source?” Apr. 1, 2016.
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3

27
Nuclear Energy Institute. “Nuclear by the Numbers.” February 2017. https://www.nei.org/CorporateSite/media/
filefolder/Policy/Wall%20Street/Nuclear_by_the_Numbers.pdf?ext=.pdf

28
New York State Public Service Commission. “Order Adopting a Clean Energy Standard.” Case No. 15-E-0302. Aug. 1,
2016.

29
Entergy Corporation. “Entergy Intends to Refuel Pilgrim in 2017; Cease Operations on May 31, 2019.” Apr. 14 2016.

30
Edison Electric Institute. “Transmission Projects: At a Glance.” December 2016.

31
The Brattle Group. “The Benefits of Electric Transmission: Identifying and Analyzing the Value of Investments.” July
2013.

32
The Brattle Group. “Toward More Effective Transmission Planning: Addressing the Costs and Risks of an Insufficiently
Flexible Electricity Grid.” April 2015.

33
Southwest Power Pool. “The Value of Transmission.” January 2016. Pgs 5, 20-21.

34
New York State Public Service Commission. “Order Providing Clarification (Case No. 15-E-0302)” Nov. 17, 2016.

35
Cuomo, Andrew M. “2017 State of the State Address.” January 2017.

NYSERDA. “Blueprint for the New York State Offshore Wind Master Plan.” 2016. https://www.nyserda.ny.gov/-/
36

media/Files/Publications/Research/Biomass-Solar-Wind/New-York-State-Offshore-Wind-Blueprint.pdf

37
New York State Public Service Commission. “PSC Invokes Public Policy Planning Process for Transmission Lines.” July
16, 2015.

38
New York Independent System Operator. “Western New York Public Policy Transmission Need Viability & Sufficiency
Assessment.” May 31, 2016. http://www.nyiso.com/public/webdocs/markets_operations/services/planning/
Planning_Studies/Public_Policy_Documents/Western_NY/NYISO_WesternNY_PPTN_VSA_2016-05-31.pdf

39
New York State Public Service Commission. “Order Addressing Public Policy Transmission Need for Western New
York.” Case No. 14-E-0454. Oct. 13, 2016.

40
New York State Public Service Commission. “PSC Votes to Advance Transmission System Upgrades for Further
Review.” Dec. 17, 2015.

Power Trends 2017 | 77

Endnotes

41
New York Independent System Operator. “AC Transmission Public Policy Transmission Need Viability & Sufficiency
Assessment.” Oct. 27, 2016. http://www.nyiso.com/public/webdocs/markets_operations/committees/bic_espwg/
meeting_materials/2016-09-26/NYISO_AC_Transmission_PPTN_VSA_Draft_Report.pdf

New York State Public Service Commission. “Order Addressing Public Policy Transmission Need for AC Transmission
42

Upgrades.” Case Nos. 12-T-0502, et al. Jan. 24, 2017.

43
New York State Public Service Commission. Case No. 14-E-0454.

44
STARS Technical Working Group.

45
New York State Public Service Commission. “Proceeding on Motion of the Commission to Examine Alternating
Current Transmission Upgrades.” Case 12-T-0502. Nov. 30, 2012.

46
New York Independent System Operator. “2015 Congestion Assessment and Resource Integration Study (CARIS)
Phase 1 Report.” November 2015. http://www.nyiso.com/public/webdocs/markets_operations/services/planning/
Planning_Studies/Economic_Planning_Studies_(CARIS)/CARIS_Final_Reports/2015_CARIS_Report_FINAL.pdf

47
Empire State Connector. http://www.empirestateconnector.com/

48
Champlain Hudson Power Express. http://www.chpexpress.com/

49
New York Independent System Operator, et al. “2015 Northeastern Coordinated System Plan.” April 11, 2016. http://
www.nyiso.com/public/webdocs/markets_operations/services/planning/ipsac/2015_Northeastern_Coordinated_
System_Plan.pdf

50
Eastern Interconnection Planning Collaborative. http://www.eipconline.com/

51
Clinton White House Archives. “Fact Sheet on Electricity Restructuring; White House Initiative on Global Climate
Change.” Oct. 22, 1997.

52
MJ Bradley & Associates. “A Pioneering Approach to Carbon Markets: How the Northeast States Redefined Cap and
Trade for the Benefit of Consumers.” February 2017.

53
Cuomo, Andrew. “2017 State of the State Address.”

54
Cuomo, Andrew. “2017 State of the State Address.”

55
Cuomo, Andrew. “2017 State of the State Address.”

56
New York Independent System Operator. “Clean Power Plan Assessment.” December 2016. http://www.nyiso.com/
public/webdocs/markets_operations/services/planning/Documents_and_Resources/Special_Studies/Special_Studies_
Documents/Clean_Power_Plan_Assessment-Final_Report-December_2016.pdf

57
ESAI Power, Inc. “Northeast Power Markets Emissions Watch.” February 2016.

58
New York State Energy Plan. https://energyplan.ny.gov/

59
Bureau of Ocean Energy Management. “Announcement of Area Identification: Commercial Wind Energy Leasing on
the Outer Continental Shelf Offshore New York.” Mar. 16, 2016.

60
New York Independent System Operator. “Energy Storage Integration: Market Concepts.” Nov. 29, 2016. http://www.
nyiso.com/public/webdocs/markets_operations/committees/bic_miwg/meeting_materials/2016-11-29/agenda%20
5%20Energy%20Storage%20Integration%20112916.pdf

61
FERC. “Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent
System Operators.” Nov. 17, 2016.

78 | Power Trends 2017

 Endnotes

62
New York Independent System Operator. “Electric Storage Participation in Markets Operated by Regional
Transmission Organizations and Independent System Operators: Comments of the New York Independent System
Operator, Inc.” Feb. 13, 2017.

63
NYISO. “Electric Storage Participation in Markets.”

64
National Renewable Energy Laboratory; Sandia National Laboratories. “On the Path to SunShot: Emerging Issues and
Challenges in Integrating Solar with the Distribution System.” May 2016.

65
New York Independent System Operator. “Solar Impact on Grid Operations: An Initial Assessment.” June 30, 2016.
http://www.nyiso.com/public/webdocs/markets_operations/services/planning/Documents_and_Resources/Special_
Studies/Special_Studies_Documents/Solar%20Integration%20Study%20Report%20Final%20063016.pdf

66
New York Independent System Operator. “Draft Report of NYISO 2015-2016 Solar Integration Study.” June 7, 2016.

67
Lawrence Berkeley National Laboratory. “U.S. Renewables Portfolio Standards: 2016 Annual Status Report.” April
2016.

68
New York State Energy Planning Board. “The Energy to Lead: 2015 New York State Energy Plan.” July 2015.

69
New York State Public Service Commission.” Order Authorizing the Clean Energy Fund Framework.” Issued and
effective Jan. 21, 2016.

70
Regional Greenhouse Gas Iinitiative, Inc. “RGGI States Propose Lowering Regional CO2 Emissions Cap 45%,
Implementing a more flexible cost-control mechanism.” Feb. 7, 2013.

71
New York State Public Service Commission. “Order Adopting Clean Energy Standard. Pg. 1.

72
New York State Public Service Commission. “Order Adopting Clean Energy Standard. Pg. 19.

73
New York State Public Service Commission. “Order Adopting Clean Energy Standard. Pg. 84.

74
New York State Public Service Commission. “Order Adopting Clean Energy Standard. Pg. 85.

75
New York State Public Service Commission. “Order Adopting Clean Energy Standard. Pgs. 117-118.

76
“Clean Energy’s Dirty Secret: Wind and Solar Power are Disrupting Electricity Systems.” The Economist. February 25,
2017. Pg. 11 http://www.economist.com/news/leaders/21717371-thats-no-reason-governments-stop-supporting-
them-wind-and-solar-power-are-disrupting

77
New York Independent System Operator. “Solar Integration Study: Draft Report.” June 2016. http://www.nyiso.
com/public/webdocs/markets_operations/committees/bic_espwg/meeting_materials/2016-06-07/Solar%20
Integration%20Study%20Report%20Draft%20060716%20ESPWG.pdf

78
ISO/RTO Council. “Emerging Technologies: How ISOs and RTOs can create a more nimble, robust bulk electricity
system.” March 2017. http://www.isorto.org/Documents/NewsReleases/PUBLIC_IRC_Emerging_Technologies_Report.
pdf

79
U.S. Department of Energy. “Recovery Act: Smart Grid Investment Grant Program.” https://energy.gov/oe/
information-center/recovery-act-smart-grid-investment-grant-sgig-program

80
ISO/RTO Council. “Emerging Technologies.”

81
U.S. House of Representatives Energy and Commerce Committee. “The Electricity Sector’s Efforts to Respond to
PT17v05182017

Cybersecurity Threats.” Feb. 1, 2017. Testimony by Barbara Sugg, Vice President of Information Technology and Chief
Security Officer, Southwest Power Pool, Inc.

82
North American Electric Reliability Corporation. “CIP Standards.” http://www.nerc.com/pa/Stand/Pages/
CIPStandards.aspx

Power Trends 2017 | 79

NYISO In Brief

The New York Independent System Operator (NYISO) is a not-for-profit corporation

responsible for maintaining the safe, reliable flow of power throughout the Empire State.
The mission of the NYISO, in collaboration with its stakeholders, is to serve the public interest
and provide benefit to consumers by:

■■ Maintaining and enhancing regional reliability

■■ Operating open, fair, and competitive wholesale electricity markets
■■ Planning the power system for the future
■■ Providing factual information to policymakers, stakeholders
and investors in the power system
The NYISO manages the efficient flow of power on more than 11,000 circuit-miles
of electric transmission lines on a continuous basis, 24 hours-a-day, 365 days-a-year —
in compliance with the most rigorous reliability requirements in the nation.
As the administrator of the wholesale electricity markets, the NYISO conducts auctions
that match the power demands of electric utilities and energy service companies with
suppliers offering to sell power resources. The NYISO’s markets trade an average of $7.5
billion in electricity and related products annually.
The NYISO’s comprehensive planning process assesses New York’s electricity needs and
evaluates the ability of proposed power options to meet those needs. This planning process
involves stakeholders, regulators, public officials, consumer representatives, and energy
experts who provide vital information and input from a variety of viewpoints.

80 | Power Trends 2017

 The NYISO is governed by a 10-member, independent Board of Directors and a
committee structure composed of diverse stakeholder representatives. It is subject to the
oversight of the Federal Energy Regulatory Commission (FERC) and regulated in certain
aspects by the New York State Public Service Commission (NYSPSC). NYISO operations are
also overseen by electric system reliability regulators, including the North American Electric
Reliability Corporation (NERC), Northeast Power Coordinating Council (NPCC), and the New
York State Reliability Council (NYSRC).
The members of the NYISO’s Board of Directors have backgrounds in electricity systems,
finance, information technology, communications, and public service. The members
of the Board, as well as all employees, have no business, financial, operating, or other
direct relationship to any market participant. The NYISO does not own power plants or
transmission lines.
The NYISO’s independence means that its actions and decisions are not based on profit
motives, but on how best to enhance the reliability and efficiency of the power system,
and safeguard the transparency and fairness of the markets. The NYISO is committed to
transparency and trust in how it carries out its duties, in the information it provides, and in
its role as the impartial broker of the state’s wholesale electricity markets.
Power Trends is the NYISO’s annual analysis of factors influencing New York State’s
power grid and wholesale electricity markets. Begun in 2001 as Power Alert, the report
provides a yearly review of key developments and emerging issues.
 NEW YORK
INDEPENDENT
SYSTEM OPERATOR

10 Krey Boulevard, Rensselaer, New York 12144

518.356.6000 ■ www.nyiso.com

Follow us:

twitter.com/NewYorkISO

linkedin.com/company/nyiso