NYISO Issues 2014-2018 Strategic Plan

RENSSELAER, NY (12/19/2013)(readMedia)-- Grid resilience, the ability of the electric system to withstand turbulent conditions, is a cornerstone of the New York Independent System Operator (NYISO) 2014-2018 Strategic Plan. The plan provides a multi-year blueprint addressing the dynamic challenges that face New York state's power grid and electricity markets.

"Significantly increasing reliance on natural gas to fuel power generation, a growing proliferation of distributed energy resources that turn end users of electricity into energy suppliers and aging electric system infrastructure are a few examples of trends that, if not properly planned for, could impact the reliability of our electric system," said NYISO Board Chair Robert Hiney.

The five-year plan, approved by the NYISO board of directors, incorporates long-term strategic objectives, financial discipline and operational priorities based on the board's review of the financial and regulatory outlook, economic and environmental factors affecting market participants and the ability of competitive wholesale electricity markets to strengthen electric grid reliability, bolster grid resilience and achieve energy policy priorities.

"There are significant and rapid changes emerging from abundant natural gas supplies, improvements in the economics and performance of distributed energy resources and strong public policy support for updating an aging infrastructure.

These are significant shifts for a system that has operated according to a centralized model based on ever-growing demand for more than a century. The NYISO's Strategic Plan lays out the initiatives we are undertaking to address these trends in order to maintain reliability and enhance market efficiency," Chairman Hiney noted.

Central to the NYISO's strategy is a vision of using market design to set appropriate price signals for continued reliability, complemented by a robust, long-term planning process that acknowledges these changing trends and the potential impact of public policy goals for infrastructure investment.

The regional nature of natural gas markets and infrastructure is leading the NYISO to improve visibility and awareness of developments in the gas infrastructure that may impact power generation. The NYISO's Strategic Plan incorporates initiatives intended to increase regional coordination with neighboring electric grid operators and gas pipeline operators as well as implement market design enhancements to address "fuel assurance" concerns related to pipeline capacity constraints that could otherwise impact generation capacity during times of high demand for natural gas.

Distributed energy resources, which operate closer to the end user on the distribution system, can have implications for high-voltage, bulk system operations and wholesale market pricing. The NYISO is assessing the nature of these distributed energy resources to see how markets may best accommodate deployment and properly compensate any such resources to the extent they are capable of participating in wholesale markets.

The NYISO's strategic objectives include maintaining its role as a leader in grid reliability, a leader in market design and performance, excellence in execution in all aspects of its work, maintaining robust planning processes, fostering technological innovation and serving as an authoritative source of information for policymakers, market participants and consumers. The NYISO plans to pursue these objectives by:

• Developing a comprehensive assessment and vision of distributed energy resources in New York's wholesale electricity markets and enhancing demand-response markets to support that vision.
• Assessing the relationship of capacity markets and generator retirements to preserve reliability and market efficiency as older, less-efficient generators seek to exit the market.
• Collaboratively addressing regional gas delivery constraints for power generation and developing enhanced market designs to address fuel assurance.
• Implementing Broader Regional Markets initiatives designed to enhance regional market efficiencies by optimizing the economic flow of electricity across borders through improved coordination of market rules and the increased flow of real-time data on system conditions.
• Deploying smart grid technologies to fully implement interregional communications and developing new applications to leverage the value of new phasor measurement unit network's enhanced data capabilities.
• Coordinating planning processes that facilitate transmission investments in support of reliability, economic efficiency and public policy activities.

For more information, please see the 2014-2018 Strategic Plan, which is available on the NYISO website, www.nyiso.com.