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NatGas-Reliant NYISO Expects Adequate Electric Capacity This Winter

New York's electric system, which relies in large part on natural gas, has the capacity to meet demand for electricity and the necessary operating reserves during extreme cold through this winter, according to state's grid operator.

The New York Independent System Operator (NYISO) said it has added "expanded visualization of the natural gas system so grid operators can see more clearly the status of the pipeline system; increased day-ahead reference level flexibility for generators; conducted winter preparedness outreach among market participants; and expanded both the fuel and emissions surveys to enhance reliability.

"New gas infrastructure serving the downstate region also is expected to help improve generators' access to fuel sources."

NYISO anticipates a peak load demand of 24,737 MW for the winter season. That's below last winter's peak, when polar vortex conditions produced a record-setting winter peak load of 25,738 MW (see Daily GPI, Jan. 7). The winter peak forecast is based on average winter weather conditions, with composite statewide temperatures of 15-16 F. If extreme weather produces colder conditions, with temperatures in the 5-6 degree range, peak demand across the state could increase to about 26,300 MW, NYISO said.

"Installed generation capacity in New York state this winter amounts to 39,803 MW," NYISO said. "Net external capacity purchases of 1,078 MW also have been secured for the winter period. When combined with the 843 MW of projected demand response in the Special Case Resources program, which enlists consumers to reduce electricity use during peak conditions, the total capacity resources equal 41,724 MW."

At the height of last winter's frigid weather, NYISO asked the Federal Energy Regulatory Commission to waive the $1,000/Mwh cap on cost-based power generation bids it could accept (see Daily GPI, Jan. 23). Mid-Atlantic grid operator PJM Interconnection filed a similar petition. NYISO and PJM said the waivers were necessary because of the extreme winter weather and the high prices for natural gas. NYISO cited a $120/MMBtu price on Transco Zone 6 NY.

"Last winter, as much of the country dealt with frigid temperatures from polar vortex events, New York's electricity use set a new record winter peak," said NYISO CEO Stephen G. Whitley. "Last winter's record-setting demand, combined with natural gas fuel constraints, led to significant price volatility.

“We continue to work with our regulators and stakeholders on fuel assurance initiatives, operational measures and potential improvements to our market design that will address the growing reliance on natural gas and strengthen grid reliability and market efficiency."

Natural gas supplies much of New York's generating capacity, mostly from dual-fuel units capable of using gas or oil to produce power. That fuel-switching capability helps to mitigate the impact of fuel supply disruptions, the grid operator said.

To the north, New England should have sufficient resources in place this winter to meet consumer demand for electricity, but "insufficient pipeline capacity to meet power generators' demand for natural gas continues to be a particular concern during the winter months," according to the Independent System Operator of New England (see Daily GPI, Nov. 21). The electric power system is the largest consumer of natural gas in New England. The region turned to natural gas to fuel 42.8% of its capacity and 45.1% of its electric energy production in 2013.

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