He argued that the NYISO failed to show that such capability is needed given that a less expensive natural gas-only unit connected directly to an interstate pipeline could be sufficient. In a partial dissent, Chairman Richard Glick took aim at the decision to allow the NYISO to continue to include dual-fuel capability in the cost assumptions for the peaking facility used to establish the demand curve for the G-J locality. The agency also approved the financial parameters proposed by the NYISO, including a proposed ROE of 13% and 6.7% cost of debt for the proxy facility. For instance, it agreed that the NYISO should continue to model dual-fuel capability and the use of SCR technology for the hypothetical peaking facility used in establishing the G-J locality demand curve. However, the commission signed off on the rest of the proposal. "We believe that NYISO’s basis for proposing the use of a 17-year amortization period is speculative and may result in unnecessarily high net estimates," the order stated. The April 9 FERC order mostly accepted the proposal but directed the grid operator to submit a compliance filing to retain a 20-year amortization period for the new peaking plant instead of switching to a new 17-year period as proposed. FERC in late January found the NYISO's proposal deficient and requested clarifications, which the grid operator subsequently provided. 29, noting that it needed to begin preparing in February for the 2021 summer capability period ICAP auctions. The NYISO asked the commission to act on the filing by Jan. It would maintain the use of a gas-only peaking plant without selective catalytic reduction, or SCR, emissions control technology for the ICAP demand curve for the NYCA, while demand curves for the G-J locality, New York City and Long Island would continue to use dual-fuel peaking plants with SCR technology. The grid operator also sought to change the assumed locations of the peaking plants for the New York Control Area, or NYCA, and G-J locality demand curves. The proposal used the H class frame turbine as the peaking plant for use in establishing ICAP demand curves, replacing the F class frame turbine approved during the last demand curve reset for 2017-2021.
NYISO ICAP ISO
The New York ISO in November 2020 proposed new ICAP demand curves (ER21-502) for the 2021-2022 capability year and parameters for the updates to take place annually for the following three capability years. The difference between the two reflects the revenue the proxy resource would need to receive from the capacity market to obtain sufficient revenues to support market entry.
In setting the curve, the grid operator looks at the gross cost of new entry - the embedded cost of a hypothetical new peaking plant - and the likely energy and ancillary services revenues the plant would earn from participating in the NYISO's markets. The NYISO establishes new demand curves every four years to help determine the amount of installed capacity, or ICAP, the state's load-serving entities need to acquire to maintain system reliability, as well as to help set auction prices. While the demand curve calculations are technical, they play an important role in setting the amount of capacity to be procured in upcoming auctions and the price of that capacity. The Federal Energy Regulatory Commission late April 9 approved updated capacity market demand curves for the New York ISO but not without contention as four of the agency's five members issued partial dissents.
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