UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
State Policies and Wholesale MarketsDocket No. AD17-11-000
Operated by ISO New England Inc., New York Independent System Operator, Inc., and
PJM Interconnection, L.L.C.
POST-TECHNICAL CONFERENCE COMMENTS
OF THE NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.
In accordance with the Commission’s May 23, 2017 Notice Inviting Post-Technical Conference Comments (“Notice”) in this proceeding, the New York Independent System
Operator, Inc. (“NYISO”) respectfully submits its post-technical conference comments. The NYISO appreciates the opportunity to work with the Commission and FERC Staff through the technical conference and the submission of written comments.
New York State is a national leader on environmental quality initiatives. The Regional
Greenhouse Gas Initiative (“RGGI”), and New York’s Clean Energy Standard (“CES”) and
Reforming Energy Vision are shaping the future emissions profiles of New York State’s electric
generation and the mix of resources used to produce power. Competitive wholesale electricity
markets administered by the NYISO and overseen by the Commission have complemented
environmental regulations, public policy initiatives and efforts to expand renewable power
resources that serve consumers since the inception of wholesale markets in New York in 1999.
For example, the NYISO has contributed to New York’s leadership in renewable generation
development through market design advancements and the deployment of sophisticated
forecasting systems. In 2009, the NYISO became the first grid operator to fully integrate wind
generation resources into its economic dispatch system. The NYISO is currently working to develop a solar forecasting system that is expected to go live later this year.
I. New York State Public Service Commission’s Clean Energy Standard
The New York State Public Service Commission’s (“PSC’s”) CES supports New York State’s goal of having 50% of all energy consumed in the State supplied by renewable resources by the year 2030 (referred to as “50x30”).
NYISO previously commented to the PSC and continues to recommend, among other
things, that CES initiatives be structured to be compatible with competitive markets to provide
the most economically efficient solutions and avoid adverse unintended outcomes. The NYISO
intends to work with its stakeholders, the New York State Department of Public Service (“DPS”)
and the PSC to explore market mechanisms that support the State’s 50x30 goal. The NYISO
also supported the need for a program to retain existing zero-emission nuclear generation as a
bridge until a market-based mechanism to address State policy objectives can be explored.
II. NYISO’s Consideration of Pricing Carbon in the Markets
The wholesale energy markets were designed, among other things, to drive the efficiency
of the generating fleet through the introduction of competitive forces, and they have been a very
successful means to accomplish that goal. The NYISO markets have successfully captured
approximately $7 billion of fuel efficiency since their introduction in 1999.
While current wholesale market designs function well to send economically efficient market signals to maintain reliability, the markets do not value externalities such as
environmental attributes. These attributes are at the heart of certain state policies. ISO/RTO
markets are not currently designed to value environmental attributes, but potentially could be
modified to capture and monetize the value of those attributes. Ultimately, the NYISO is
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looking for a model which will meet the goals of reliability, cost efficiency, and low carbon
output while striking the appropriate balance between state and federal jurisdictions.
The NYISO is working in collaboration with the Brattle Group, NYISO stakeholders, and
DPS to examine the feasibility of modifying NYISO’s market design to complement New York
State’s ambitious environmental policies. The DPS and NYISO have engaged in a productive
dialogue since the May technical conference. NYISO anticipates releasing the Brattle Group’s
preliminary findings in the near future for further discussion with the DPS and our market
participants to consider approaches for potentially integrating the price of carbon into the
wholesale markets.
The ultimate goal of this ongoing effort is to harmonize the CES objectives with the NYISO wholesale markets.
III.Regional Flexibility
When considering potential actions that the Commission may take to address various
questions and concerns raised in the technical conference, the NYISO encourages the
Commission to continue to provide individual ISOs and RTOs flexibility to develop market
designs and pricing rules that appropriately reflect their individual situations and pertinent state-
specific public policies. Each ISO/RTO employs different market designs, relies on a different
mix of resources and implements its markets in different states. The characteristics and
interaction of each ISO’s/RTO’s markets and state policies should inform the decision of if, how,
or when to address the interplay between state policy goals and the wholesale markets. The
Commission and the ISOs/RTOs should also recognize that, while solutions need not be uniform,
ISO/RTO solutions must be compatible with neighboring regions and markets.
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IV.Conclusion
The NYISO respectfully submits these post-technical conference comments for the Commission’s consideration.
Respectfully submitted,
/s/ James H. Sweeney
James H. Sweeney, Senior Attorney
New York Independent System Operator, Inc.
10 Krey Boulevard
Rensselaer, NY 12144
Phone: (518) 256-7659
jsweeney@nyiso.com
June 22, 2017
cc:Michael Bardee
Nicole Buell
Anna Cochrane
Kurt Longo
David Morenoff
Daniel Nowak
Larry Parkinson
J. Arnold Quinn
Douglas Roe
Kathleen Schnorf
Jamie Simler
Gary Will
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CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in this proceeding in accordance
with the requirements of Rule 2010 of the Rules of Practice and Procedure, 18 C.F.R. §
385.2010.
Dated at Rensselaer, NY this 22nd day of June 2017.
By:/s/ John C. Cutting
John C. Cutting
New York Independent System Operator, Inc.
10 Krey Blvd.
Rensselaer, NY 12144 (518) 356-7521
