1 min read

Webinar Recording: Earning Energy Revenue to Fund Efficiency & Compliance Projects in New York Feb 2024

By 5 on February 2, 2024

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Topics: Markets NYISO Videos Education
2 min read

NY's Peaking Plant Problem

By 5 on November 28, 2023

In 2019, the New York State Department of Environmental Conservation (DEC) adopted a regulation to limit nitrogen oxide (NOx) emissions from simple-cycle combustion turbines. Combustion turbines known as “peakers” typically operate to maintain bulk power system reliability during the most stressful operating conditions, such as periods of peak electricity demand. Pursuant to the Peaker Rule, 1,500 MW of peakers were to shut down by 2025 to comply with the emissions requirements. Around 1,000 MWs of peakers retired by May 2023 and another 590 MWs were scheduled for retirement by May 2025. 

On November 21, 2023, the NYISO determined that the peaker retirements scheduled for 2025 had to be postponed. The NYISO concluded that retirement of the peaker plants could cause a shortfall in generation for New York City on a 95˚ day in 2024 and 2025. Figure 1 shows that in those years, the Reserve Margin (the difference between the forecasted amounts of supply and demand) is especially tight. The NYISO’s solution is to keep four barge-mounted peakers running until the later of May 2027 or the date on which the Champlain Hudson Power Express (CHPE) line is completed. CHPE, a 1,250 MW transmission line being developed by an affiliate of Blackstone, will bring power from Canada into New York City. The CHPE line is scheduled for completion in the spring of 2026. 

From a market perspective, one might assume the addition of 508 MW of capacity from these barge generators added to summer reserves would lower forward capacity prices for the summer of 2025, but that does not appear to be the case. It is likely that the market was assuming the NYISO would take these steps to account for a possible capacity shortfall. That and the additional market risk still present in the demand curve reset and capacity accreditation changes that are planned for roll-out in May 2025 means the market has not really seen any material change in forward capacity or energy prices for the summer of 2025. 

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Topics: Markets NYISO
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Webinar Recording: Upstate New York Regulatory & Energy Market Discussion, October 2023

By 5 on October 26, 2023

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Topics: Markets NYISO Videos Education
14 min read

September 2023 - Energy Market Letter

By Jon Moore on September 18, 2023

On behalf of the team at 5, I am pleased to forward our September market letter. If you had any doubts that the energy transition is happening, recent events in Texas and New York confirm that the answer is yes. As discussed below, these states have very different approaches to energy regulation, and both have struggled to incorporate intermittent resources in the energy mix. For clients in Texas, New York, or any other deregulated market, planning for the challenges of the energy transition, including increased regulatory risk, should be a key component of your energy management strategy.

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Topics: Markets Natural Gas NYISO ERCOT Sustainability Newsletters Education Renewables
4 min read

Choosing the Best Term Length for Your Electricity Contract

By 5 on September 18, 2023

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Topics: Markets PJM NYISO ERCOT
1 min read

Webinar Recording: Downstate New York Regulatory & Energy Market Discussion, August 2023

By 5 on August 30, 2023

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Topics: Markets NYISO Videos Education

Webinar Recording: Upstate New York Regulatory & Energy Market Discussion, July 2023

By 5 on August 1, 2023

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Topics: Markets NYISO Videos Education
4 min read

New York: a Capacity Problem with no Solution

By 5 on July 18, 2023

Many are surprised to learn that there are several cost components that are added together to establish the rate in cents per kilowatt-hour in an electricity supply contract. Those components are summarized in Figure 1, which shows that the two largest are energy and capacity. It’s important to note that both energy and capacity are market-based, which means that the price of both is based on the forces of supply and demand. And while it may not be obvious, regulations and legislation can have a significant effect on the forces of supply and demand and thus the power markets. Between April 2018 and May 2019, the price of energy in New York City increased nearly 40% largely driven by a carbon tax proposed by the NYISO. Doubts around implementing that carbon tax caused prices to dramatically fall to just fourteen months later. This is an example of how regulatory forces can move market prices. Today, regulations in New York State are causing a dramatic increase in the price of capacity, the second largest cost component in a retail electricity supply price (See Figure 1). 

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Topics: Markets NYISO
4 min read

Mid-Summer Market Update: ERCOT, PJM & NYISO

By 5 on July 17, 2023

Given that we are halfway through July, we thought it would be appropriate to provide an update on how major power markets have performed as they relate to each ISO’s coincident peak demand management program.

So far, both weather and demand on the PJM and NYISO grids have been mild compared to recent summers and average summer temperatures. The mean temperature, compared to the average over the last thirty, fourteen, and seven days for the period ending July 13, is shown in Figures 1, 2, and 3 below. These charts show that summer has not really arrived in the middle of the country and that temperatures in the Northeast are only 2º to 3º F above the average.

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Topics: Markets PJM NYISO ERCOT Demand Response Resiliency
3 min read

Coincidental Peak 2023 Alerts

By 5 on May 22, 2023

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Topics: Markets PJM NYISO ERCOT Demand Response Resiliency