NYISO Files Criteria and Considerations for New Capacity Zones Email This Story January
The New York ISO and New York Transmission Owners have asked FERC to approve several
"criteria and considerations" for identifying a possible need for new capacity zones,
and for triggering a requirement to further evaluate such potential zones (ER04-449
The filing does not include tariff language, but NYISO and the TOs are seeking FERC
approval for core features of their proposed approach, to be followed by specific
tariff language in a subsequent filing.
The proposed criteria and considerations would only address the creation of new capacity
zones, and would not govern the possible elimination of existing, or newly created,
Under the proposal, NYISO would first examine two "threshold" criteria in determining
whether a load zone warrants further examination as a capacity zone. "The threshold
criteria are intended to provide a relatively streamlined initial 'pass/fail' test,"
NYISO said. If a load zone met the threshold criteria for further study, then NYISO
would proceed to a more rigorous analysis of whether the new capacity zone is warranted.
Any new capacity zone would ultimately need to be proposed to FERC along with new
and revised tariff provisions. The proposed process could only result in the creation
of a new capacity zone with the same boundaries as one or more of the eleven existing
NYCA Load Zones. "Partitioning the existing Load Zones for purposes of developing
a new Capacity zone would not be practicable or desirable due to the linkages between
the various Capacity and Energy market obligations of Installed Capacity Suppliers,"
The two initial criteria under the NYISO's examination would be a "Highway Capacity
Deliverability" test and a "Reliability Criterion."
Under the Highway Capacity Deliverability criteria, the NYISO would evaluate whether
the available Tie Capacity Margin on each Highway Interface was at least equal to
the size (in MW) of the NYCA "new entrant" peaking unit used to formulate the then-effective
Under the "Reliability Criterion" threshold, the NYISO would analyze, for each potential
new capacity zone, whether the absence of the largest generator, coupled with an
N-1-1 loss of transmission into or generation in the proposed zone, would create
a resource deficiency condition (i.e., imports and generation less than peak load).
If the two threshold tests suggest the potential for a new capacity zone, NYISO would
select an independent consultant to perform specific studies and assessments focusing
on net cost of new entry differences, consumer impacts, and market power in the potential
zone, to determine if a new capacity zone is needed.
The net cost of new entry would be determined along with Indicative Demand Curves
for each potential new capacity zone. A net cost of new entry for a particular potential
zone that is substantially lower than any adjacent zone examined, or another zone
in which the candidate zone is nested, would militate against creating a new capacity
zone, since price signals from a new capacity zone would not provide any stronger
signal for new entry over the currently existing capacity zone Demand Curves.