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NYISO Seeks FERC Waiver To Revise Locational Minimum Requirement For To Avoid Paying Excessive Capacity Costs Of $15M To 20M Per Month
The New York ISO requested from FERC a one-time prospective waiver to “clarify” that the NYISO may revise the Locational Minimum Installed Capacity Requirement (LCR) for Load Zone J (i.e., New York City) for the upcoming 2024-2025 Capability Year (i.e., the period from May 1, 2024, to April 30, 2025), to avoid a potential scenario under which LSEs could pay excessive capacity costs of $20 million per month.
NYISO said that the revision would account for an error in calculating the applicable transmission security limit (TSL) floor value that the NYISO used to initially determine the Load Zone J LCR.
“Making the revision also results in an LCR that is consistent with the tariff-established intent to achieve the reliability objective at the lowest determined cost.”
“The NYISO is seeking the tariff waiver out of an abundance of caution because: (i) it concerns rules that are not expressly stated in the Services Tariff but that are expressly incorporated by reference into it; and (ii) limited time was available to evaluate the TSL floor value error and devise a response.”
NYISO said that if the error is not corrected, the erroneously computed LCR for Load Zone J would have a, “significant impact on market results and prices.”
“For example, if Load Serving Entities (‘LSEs’) purchased the full quantity of their capacity requirements in the ICAP Spot Market Auctions without any bilateral market purchases of other hedging mechanisms, the use of the incorrect LCR for Load Zone J could result in excessive capacity procurement costs of approximately $15-20 million per month for LSEs in Load Zone J.”
NYISO Petition (04/18/2024)
ER24-1800-000 (04/18/2024)
