A new study urges ISO New England Inc. to continuously monitor generator unit availability to price and demand in order to ensure adequate market signals are in place to encourage sufficient generator availability during peak load periods. The same study, unveiled last Friday, also recommends that the ISO devote future monitoring efforts to the performance of new combined-cycle units, some of which have experienced poor availability.

The study, conducted by energy consultant Merrill Energy LLC of Schenectady, NY, for ISO New England, offers a descriptive statistical analysis of the historical availability of New England’s power plants. ISO New England initiated the study last August to determine the causes for an increase in total generating capacity outages during the early part of 2000. The study looks at availability by types of generators, by year, and performance during peak demand periods. Data was analyzed from several sources, including the NEPOOL automated billing system, ISO New England’s market information system and the North American Electric Reliability Council’s generation availability data system.

Overall, the study found that the average availability of New England’s power plants improved slightly from 1995 through December 2000 and is highest during the months when demand is the highest. In other words, availability in the region now tracks more closely to seasonal demands for energy. The study also found that after a dip in availability from 1995 to 1997, it rose again between 1998 and 2000 to slightly higher levels than in 1995. According to Merrill Energy’s findings, this decline and increase are due primarily to the extended outages of the three Millstone Point nuclear units, which occurred from 1996 through 1998. Since these units have significant generating capacity and their outages were for extended time periods, they dominate the availability statistics, the study notes.

The study determined that average availability of all New England generating units, excluding the Millstone Point units, was about 4% higher in the 1996-1998 timeframe than it was in 1995. From 1999 through 2000, the availability of these units returned to approximately 1995 levels. Except for nuclear units, the decrease in availability in the 1999-2000 timeframe was common to all classes of New England’s generating units.

The most significant contributors to the decline in non-nuclear availability in 1999 through 2000 were seven new combined-cycle units that came on-line in that time period. These new units had a lower availability rate than the older combined cycle plants due to rapid integration of new power plant technology. This technology is now in the debugging phase, but in the meantime, lower availability of these power plants has resulted. Meanwhile, the study notes that fossil steam units had record-breaking availability levels, with less maintenance, in 1997-1998 to compensate for the nuclear units that were off-line for extended periods from 1996 through 1998. As a result, the fossil units experienced above normal outages in the following years.

The study did not analyze generator unit availability in the context of an examination of market power. A separate study, commissioned by the Massachusetts Attorney General and the Maine Public Utilities Commission, in collaboration with ISO New England, is currently planned and intended to determine the extent, if any, of market power by comparing marginal costs of energy production and wholesale clearing prices. That report is due late this year.

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