NY PSC, NYISO Say ISO-NE Capacity Market Change Could Spike NY Capacity Prices By $340 Million

A change to the treatment of imports in ISO New England's capacity market could expose an "inefficiency" in the New York ISO capacity market that could raise capacity prices for load by $340 million, the New York ISO and New York PSC warned in separately filed comments at FERC.

Specifically, ISO-NE has pending at FERC tariff changes that would accelerate when imports could participate in the ISO-NE capacity market

The issue for New York is that, under such change, the capacity from the 511 MW Roseton generating facility, in NYISO capacity-constrained G-J Locality, could be imported to ISO-NE as soon as June 1, 2017. Currently, Roseton has a capacity supply obligation in ISO-NE beginning June 2018

NYISO and the PSC explained that NYISO’s existing capacity market rules treat a generator that exports capacity outside of New York (e.g., Roseton) as though it does not exist in the NYCA. "The local reliability benefit that the resource supporting the export provides, however, accrues to the bulk system in NYCA even if the exporting generator is deemed non-existent by the NYISO’s existing capacity market rules," the PSC said

In other words, the NYISO market will clear as if the Roseton unit does not exist. "Under the current market rules, allowing a generator in a NYISO Locality to begin exporting capacity in June 2017 could result in inefficient capacity cost increases in the NYISO’s 2017/2018 Capability Year of as much as $341 million," NYISO said

NYISO and the PSC said that a market fix, to be in place before Roseton's current June 2018 ISO-NE obligation, is being developed to address the inefficiency; however, the ISO-NE's filing to accelerate when imports may qualify to supply capacity creates the potential that the inefficiency will not be corrected before Roseton's exports commence, exposing New York load to higher capacity prices not reflective of actual supply conditions

The PSC and NYISO asked FERC to delay ISO-NE's implementation of accelerated import qualifications, with respect to NYCA localities only, by one year (until October 19, 2017)

Docket No. ER16-2451