Generators and demand-response providers are reaping rewards in forward capacity auctions, causing suppliers to go shopping for the most lucrative markets. Now the Midwest ISO is trying to catch...
The trouble with treating grid projects as market players in New York’s capacity auction.
New York City, according to Sir Peter Hall’s epic 1998 survey, Cities in Civilization , is the “apotheosis of the modern.” Hall cites New York City’s unique geography as compelling technological fixes, and thus New York engineers invented the air brake (Westinghouse), the telephone (Bell), the electric light (Edison), the fountain pen (Waterman), the adding machine (Burroughs) and the linotype (Mergenthaler). Over time, cities age and sometimes ossify, as seen in Detroit. Cities have to reinvent themselves, and that reinvention includes their basic infrastructure: they have to renew roads, bridges, power lines, and water systems.
Superstorm Sandy’s high winds and severe flooding revealed the fragility of New York City’s electricity infrastructure. Sandy was only the latest chapter in a prolonged review of the electric transmission system that has been underway since the Northeast Blackout of August 14, 2003. For more than a decade, the challenge has been where and how to invest intelligently in transmission. In the New York metro area, the challenge has been met in different ways by the different regulatory and political processes that govern transmission. Since 2003, in the New York City and Long Island area, only two major transmission projects – the Neptune and Hudson High Voltage Direct Current (HVDC) systems – have been commissioned and built. Connecticut, part of the New England power grid, has invested $1.9 billion in transmission projects. New Jersey, part of the mid-Atlantic power grid, has also added modestly to the expansion and renovation of its metro area transmission grid.
These references to different transmission grids highlight something distinctive about the New York metro area: New York is the only mega-city whose broader metro area is largely located, not only in other states, but also in other power pools. Seen from the “tri-state” perspective, the New York metro area’s transmission grid is defined by three completely different planning processes that determine what transmission must be built to keep the metro area’s lights on: in Connecticut, the process is administered by the Independent System Operator of New England (ISO-NE). New Jersey’s power grid is administered by the PJM RTO. New York City and Long Island’s transmission systems are administered by the New York Independent System Operator (NYISO).