NYISO Identifies Solution to Solve New York City Reliability Need

RENSSELAER, NY (11/20/2023) (readMedia)-- The New York Independent System Operator (NYISO) today issued its Short-Term Reliability Process Report, which finds that peaker plants scheduled for retirement in May of 2025 must remain in service temporarily to keep the grid reliable in New York City. Peaker plants are relied upon as a last resort when consumer demand is highest.

NYISO's second quarter Short Term Assessment of Reliability, issued on July 14, 2023, found that reliability margins in New York City would be deficient by as much as 446 megawatts starting in May of 2025. The reliability deficiency is being driven by increased demand for electricity, economic activity, and recent generator retirements per emissions requirements set forth by the New York State Department of Environmental Conservation (DEC). Overall, the deficiency improves if the Champlain Hudson Power Express (CHPE) project from Hydro Quebec to New York City enters service in the spring of 2026.

As of May 1, 2023, 1,027 MW of peaker plants have deactivated or limited operation in New York City. An additional 590 MW of peakers are expected to become unavailable beginning May 1, 2025, per DEC emissions requirements, known as the "peaker rule." With the additional peakers unavailable, the bulk power transmission system will not be able to serve the forecasted demand securely and reliably under normal weather conditions. Extreme weather, which is often accompanied by increased demand for electricity, raises the risk of outages.

"The NYISO is committed to a reliable transition of the electric grid to emission free resources," said Emilie Nelson, NYISO's Executive Vice President and Chief Operating Officer. "The electric system supports the health and safety for all New Yorkers and the state's economy. We must also be cognizant of the impacts peaker plants have on surrounding communities. This means running these units only when conditions require and closing them when no longer necessary for reliability."

On August 4, 2023, following the identification of New York City's reliability need, NYISO initiated a process which called for solutions to address the deficiency. Proposed solutions were due to the NYISO on October 3. Throughout the process the NYISO explained that, absent viable or sufficient proposals, a potential outcome could include retaining peaker plants on a temporary basis otherwise scheduled for retirement while permanent solutions are developed. The NYISO received no solutions that could be installed by May 2025, or were sufficient to address the 446 megawatt deficiency.

The NYISO has identified generators on the Gowanus 2 & 3 and Narrows 1 & 2 barges as the temporary solution for New York City's reliability need. Those generators will remain available for two years beyond the original deactivation date of May 1, 2025, per the DEC's peaker rule. The DEC's peaker rule allows the NYISO to temporarily retain peakers as a last resort if no other solutions are viable or sufficient by the time the reliability need is expected.

"The NYISO is working very closely with the DEC, the Public Service Commission and NYSERDA as we address the reliability need in New York City and a reliable transition to renewable resources for the state," said Nelson.

Through the organization's quarterly STAR studies, the NYISO will continue to evaluate the reliability of the electric system and monitor the progress of the Champlain Hudson Power Express transmission project – which is expected to enter service in spring 2026, providing 1,250 megawatts of hydropower from Quebec to the New York City area.

View the NYISO's Short-Term Reliability Process Report online: https://www.nyiso.com/documents/20142/39103148/2023-Q2-Short-Term-Reliability-Process-Report.pdf/

About the New York ISO

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.