New York—The New York Independent System Operator and its stakeholders are considering ways to address potential discrepancies between calculations that go into determining resource adequacy metrics and transmission security limits as part of a broader look at capacity market efficiency.
Resource adequacy is a probabilistic determination of the quantity of capacity needed to meet a one in 10-year loss of load probability, and the assumptions are controlled though the New York State Reliability Council process, according to a presentation given during the meeting.
Transmission security is a "deterministic look" at the generation and transmission resources needed to avoid thermal, voltage, and stability issues in accordance with rules developed by the North American Electric Reliability Corporation, Northeast Power Coordinating Council and NYSRC, the presentation said.
NERC, NPCC and NYSRC rules governing transmission security requirements have not changed substantively since 1999, the grid operator said.
The NYISO capacity market's primary objective is to ensure sufficient capacity exists to satisfy both resource adequacy and transmission security requirements, according to the presentation.
The NYISO introduced the concept of the "Capacity Optimizer" in 2017 as a way to minimize costs while still ensuring sufficient capacity to meet reliability and the Transmission Security Limit, or TSL, was introduced into the optimizer as a floor to maintain sufficient resources in the installed capacity localities to meet installed capacity locality transmission security requirements, NYISO said.
Transmission Security Limits act as hard limits when establishing the locational capacity requirements for each locality, according to the 2021 TSL report prepared by the NYISO.
Stakeholder feedbackOne stakeholder pointed out that TSL limits do not recognize external ties with neighboring independent system operators if they are not backed by capacity and said that could disincentivize such interconnections that allow neighboring systems to send power to the NYISO when available.
NYISO staff responded that to the extent available the grid operator would schedule capacity or energy on those ties to meet normal transfer criteria but without controls that energy might not be available when needed.
If ties to external areas are not capacity backed it's "more of a wild card" if that assistance would be available during a time of need, NYSIO staff said, but added that part of discussion will continue.
Another stakeholder said there needs to be consistency between the view of the need for capacity in the NYISO markets and the need for capacity in planning studies. The NYISO addressed this by putting the TSL requirement into the installed reserve margin and local capacity requirement modeling which ensured it got into the markets, but if that were to change, allowing some expectation of non-capacity backed tie assistance in the reserve margin modeling then the change should also be made in the planning analysis.
"It's fundamentally untenable to have a market that gives a signal that we need X megawatts of capacity to meet reliability and then turn around and have planning processes that say more than X is needed," the stakeholder said.
The issue of having studies come up with two different results needs to be addressed, said another stakeholder, who suggested the TSL could be done as the last step of the capacity optimizer process. That approach could lead to procuring more capacity than under the existing approach, but that would not make it wrong and could be okay as an interim solution, the market participant said.
NYISO staff responded that could be an option and that the grid operator is thinking about improvements to the capacity market requirement setting process. A high-level plan for addressing capacity market concerns including the TSL issue will come out in the next couple of weeks, the NYISO said.
