2017 Project Prioritization & Budgeting Process

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1 2017 Project Prioritization & Budgeting Process Ryan Smith Senior Manager Budget & Priorities Working Group June 24, 2016 Krey Corporate Center New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY

2 2017 Project Prioritization Process Phase Identification Prioritization Evaluation Recommendation Description This phase involves developing the list of project candidates taking into consideration regulatory obligations, strategic initiatives, State of the Market recommendations, necessary infrastructure enhancements, product plans, stakeholder feedback, etc. The phase involves the NYISO and stakeholder scoring of projects. The NYISO scores projects using objective criteria that reflects strategic alignment, expected outcomes, risks, and ability to execute. Stakeholders score projects based on their organizational priorities via a survey mechanism. This phase involves performing a feasibility assessment based on detailed cost and labor estimates, dependencies, priority scores, and stakeholder feedback. This phase involves proposing a feasible set of project deliverables and related budget requirements. The proposal is refined as needed based on stakeholder feedback New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 2

3 2017 Project Prioritization Timeline I D May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov /1 5/8 5/15 5/22 5/29 6/5 6/12 6/19 6/26 7/3 7/10 7/17 7/24 7/31 8/7 8/14 8/21 8/28 9/4 9/11 9/18 9/25 10/2 10/9 10/16 10/23 10/30 11/6 11/13 11/20 Identification 5/6 BPWG Review process & timeline Prioritization 6/3 BPWG Initial list of project candidates & descriptions 6/24 BPWG Stakeholder advocacy & project identification deadline 6/28 Scoring survey distributed 7/12 BPWG Review costs & benefits, feedback 7/19 Deadline for completing scoring survey Evaluation 7/27 BPWG Review NYISO priority scores, stakeholder scores, feedback 8/11 BPWG Review initial project budget recommendation Recommendation 8/31 BPWG Review revised project budget recommendation 9/12 BPWG Initial NYISO budget review 9/28 MC BPWG Chair presents NYISO budget proposal 10/7 BPWG Follow-up NYISO budget review Overall NYISO Budget 10/26 MC Stakeholders vote on NYISO budget proposal 11/14 BOD BOD approval decision on NYISO budget proposal New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 3

4 Strategic Initiatives & FERC Orders RMR Cost Recovery Demand Curve Reset Demand Curve Reset Annual Update NAESB Public Key Infrastructure EMS / BMS System Upgrade Integration of Distributed Energy Resources Integration of Public Policy FERC Order / Tariff Compliance NYISO Strategic Initiative New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 4

5 Stakeholder Feedback Feedback on Capacity Products Request to classify Elimination of Capacity Zones as a Continuing project; there was support for this request and no opposition among the stakeholders present at the 6/3 BPWG meeting. Request to consider the rules for the creation of capacity zones in conjunction with the Elimination of Capacity Zones; there was both support and opposition to this request among the stakeholders present at the 6/3 BPWG meeting. Request to update the Demand Curve Reset project description to clarify why this is mandatory. Question if Modeling Zone K as Export Constrained is part of LCR or does the NYISO think it will be resolved in 2016? NYISO Response The NYISO has classified this as a Continuing project as requested. The NYISO intends to consider the rules for the creation of capacity zones in conjunction with the Elimination of Capacity Zones. While these issues will be considered together they may be acted upon independently. The project description has been updated for clarification. The project description has been updated for clarification. This project was first discussed as a market design concept in the Fall of 2014 then again in the Winter/Spring of 2015 and most recently in January It has received no traction from stakeholders. Therefore, the NYISO intends to consider it as an aspect of the LCR Optimization process recognizing that a robust solution resulting from the LCR project could address the export constrained zone issues New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 5

6 Stakeholder Feedback Feedback on Capacity Products Request to classify the Incremental External CRIS Rights project as a Continuing project as this has been discussed for 5 years and has been deemed market design complete; there was support for this request and no opposition among the stakeholders present at the 6/3 BPWG meeting. Request to update the Automated ICAP Import Rights project description to clarify the objective. Request to update the Treatment of Capacity Exports from Localities project description to clarify its relationship with the Alternative Methods for Determining LCRs project. NYISO Response This project was not prioritized for 2016 and only reached a Market Concept Proposal in Therefore, this is not being classified as a Continuing project. This project description has been updated to clarify that the fax process would be eliminated. The project description has been updated to acknowledge the relationship between these projects New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 6

7 Stakeholder Feedback Feedback on Demand Response Request to add Limited Resource Performance Obligations: Evaluate Minimum Performance Obligation for Capacity Resources project. Request to classify the above as a Continuing project because there was an agreement to consider it along with another demand side project and then it got pushed aside during the uncertainty on demand side programs. Requests to clarify the scope of the Distributed Energy Resource Program Design project including clarifying how the scope of work is split with the other projects including Minimum Performance Obligations for Capacity Resources, State of Charge Management for Energy Storage, and Energy Storage Integration & Optimization NYISO Response This project has been added as requested. This is not being classified as a Continuing project due to the fact that the market design is not complete for this project and stakeholder priorities need to be reassessed after a long period of significant uncertainty on demand side programs. The NYISO has updated these project descriptions to clarify the scope of each of the projects as requested New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 7

8 Stakeholder Feedback Feedback on Energy Market Products Request to add Changes to Selkirk Market Modeling project. Request to update the Offer Cap Enhancements for FERC project description to clarify if required by FERC. Request to update the Scarcity Pricing Tariff Revision project description to clarify that this will be an implementation. NYISO Response This project has been added as requested. The project description reflects that this is in preparation of potential changes to offer cap rules due to FERC action. This project description has been updated to reflect that this includes pursuing resolution of the issue New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 8

9 Stakeholder Feedback Feedback on Energy Market Products Request to add Startup Cost Compensation project. Request to update the Reinstitute Bid Guarantees project description. Request to add Enable Fractional MW Load Bidding project. Feedback on Planning Products Request to add a project to evaluate and identify process improvements for the interconnection process. NYISO Response This project has been added as requested. This project description has been updated as requested. This project has been added as requested. NYISO Response The NYISO has committed to stakeholders to have a robust discussion of comprehensive interconnection queue reforms in TPAS during Q3 and Q4 of These concerns can be more effectively addressed as part of that process New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 9

10 Stakeholder Feedback Feedback on Process Request to identify which projects are being held up due to the EMS/BMS Upgrade project prior to the survey. Request for improved consistency in the level of detail across project descriptions. Request to set aside a percent of market design resources in reserve to address topics that come up during the year. Request to provide a clean and redline version of the project candidate description file for the June 24 th BPWG meeting. Request to reach out to members on newly submitted projects prior to adding them to the 2017 project candidate descriptions document. NYISO Response The NYISO will identify project dependencies in the July 12 th BPWG meeting materials. These will be posted and discussed prior to the July 19 th deadline for the stakeholder scoring survey. Various project descriptions have been updated with a focus on those that stakeholders have specifically identified as in need of clarification. The redline version of the 2017 project candidate descriptions document identifies changes since the last BPWG meeting. The NYISO is concerned that planned underutilization of staff under the pretense that something may come up is inefficient. Rather, we have the ability to reprioritize work as more pressing needs become apparent. The NYISO has posted clean and redline versions of the 2017 project candidate descriptions document as requested. The NYISO has reached out to members on newly submitted projects as requested New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 10

11 2017 Project Candidates Business Intelligence Products Enterprise Information Management Data Integration Phase III [CONTINUING] Stakeholder Services Suite Phase 2 NAESB PKI Phase 2 [MANDATORY] Key Topics Tracking for Public Website Public Website Refresh Public Website Calendar Mobile Applications etariff Webviewer Enhancements Secure Communications New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 11

12 2017 Project Candidates Capacity Market Products ICAP AMS Redesign & Test Improvements Phase 1 RMR Cost Recovery Phase II [MANDATORY] GADS Reporting Modifications to GADS Reporting Software for IIFO Automate ICAP Import Rights Demand Curve Reset [MANDATORY] Demand Curve Annual Updates [MANDATORY] Elimination of Capacity Zones (Localities) (SOM) [CONTINUING] Alternative Methods for Determining LCRs (SOM) Incremental Enhancement to BSM Forecasts of ICAP Prices (SOM) Performance Assurance Incremental External CRIS Rights New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 12

13 2017 Project Candidates Capacity Market Products (continued) Capacity Transfer Rights for Internal Transmission Upgrades (SOM) BSM to Address Other Price Suppression Actions (SOM) Treatment of Capacity Exports from Localities (SOM) Economically Allocate Import Rights Software Modifications Related to HQ Cedars Interface Software Modifications for Exports from Localities New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 13

14 2017 Project Candidates Demand Response Business Objects Enhancements for DRIS Data Distributed Energy Resource Program Design [CONTINUING] NYISO Pilot Framework Granular Pricing & Market Price Delivery Meter Data Policy State of Charge Management for Energy Storage Limited Resource Performance Obligations: Evaluate Minimum Performance Obligation for Capacity Resources Energy Market Products ConEd/PSEG Wheel (SOM) [CONTINUING] Outage Analysis Tool Fuel Assurance Constrained Fuel Supply Bidding (SOM) ACD Dataset Reporting New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 14

15 2017 Project Candidates Energy Market Products (continued) Integration of OFO Status into SUEDE Energy Storage Integration & Optimization Quarterly Congestion Reporting Linked Virtual Buy Sell Transactions [FUTURE] Targeted Virtual Trading [FUTURE] Long Island PAR Optimization & Financial Rights (SOM) Hybrid GT Pricing Improvements (SOM) [CONTINUING] RTC RTD Forward Horizon Coordination Improvements (SOM) Enhanced PAR Modeling (SOM) [FUTURE] Review of RACT Compliance Plans (SOM) Fuel Limited Reserves (SOM) [FUTURE] 5 Minute Transaction Scheduling New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 15

16 2017 Project Candidates Energy Market Products (continued) 15 Minute Transaction Scheduling HQ Cedars [FUTURE] 15 Minute Transaction Scheduling IESO [FUTURE] Model 100+kV Transmission Constraints (SOM) Transmission as Reserves (SOM) [FUTURE] Graduated Transmission Demand Curves (SOM) Improve DAM GT Scheduling (SOM) [FUTURE] Scarcity Pricing Tariff Revision Offer Cap Enhancements for FERC Ontario Pricing Reinstitute Import Guarantees Eliminate Fees for CTS Transactions with PJM (SOM) Changes to Selkirk Market Modeling New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 16

17 2017 Project Candidates Energy Products (continued) Fractional MW Load Bidding Startup Cost Compensation Enterprise Products Storage Infrastructure Redesign Phase III [CONTINUING] Database Platform Upgrades Phase II Telephony System Upgrade [CONTINUING] Application Platform Upgrade Phase IV [CONTINUING] Identity and Access Management (IAM) 2017 Marketplace and Webforms Technology Upgrade Software AG Upgrade Backup Enhancements Application Testing Improvements Enterprise Job Scheduling Upgrade New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 17

18 2017 Project Candidates Finance Products North Subzone Redistricting [CONTINUING] Rate Schedule 1 Technology Automation [CONTINUING] Day Ahead Margin Assurance Payment (DAMAP) Enhancements [CONTINUING] Settlements Sub Accounts Transmission Service Charges Rate Update [CONTINUING] Transactions Modifications & Confirmation Tool Settlement at Sub hourly Metering Study CMS/ ConInvoice Data Integration CMS Projected True up Exposure Study Expense Reports Automation Financial Reporting Tools Contract Management New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 18

19 2017 Project Candidates Operations & Reliability Products EPG PMU Simulator PMU Enhancements Smart Grid Visualization TOA Platform Upgrade Phase II [CONTINUING] EMS/BMS System Upgrade [CONTINUING] 2017 Reference Level Software Enhancements Gas Balancing Position Reporting FERC Funded Rerun Phase 4 [CONTINUING] SUEDE Front End Toolset Planning Products Solar Forecasting Initiatives [CONTINUING] New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 19

20 2017 Project Candidates TCC Products TCC Balance of Period (TCC AMS, TCC AVS & CMS) [CONTINUING] On Peak/Off Peak TCCs [FUTURE] New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 20

21 Stakeholder Scoring Survey Registered shared governance organizations including non-voting participants and affiliates will have an opportunity to score projects Each organization may provide one survey response with 100 points available to assign to projects based on their priorities There will be an opportunity to provide written comments to supplement scoring and identify small projects not selected in previous years New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 21

22 Stakeholder Scoring Survey Surveys will be sent to the primary MC representative (unless written notification is provided in advance to use a different contact) Surveys will come from Member Relations to avoid being caught in SPAM filters Surveys will be distributed by end of day June 28 th Surveys must be submitted by July 19 th New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 22

24 Next Steps Stakeholder scoring surveys will be distributed by end of day on June 28 th We will review costs, benefits, and dependencies at the July 12 th BPWG meeting The deadline to submit stakeholder scoring surveys is July 19 th We will review NYISO priority scores and stakeholder scoring at the July 27 th BPWG meeting New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 24

25 The Mission of the New York Independent System Operator, in collaboration with its stakeholders, is to serve the public interest and provide benefit to consumers by: Maintaining and enhancing regional reliability Operating open, fair and competitive wholesale electricity markets Planning the power system for the future Providing factual information to policy makers, stakeholders and investors in the power system New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 25

Scarcity Pricing Informational FERC Filing

Scarcity Pricing Informational FERC Filing Dr. Nicole Bouchez Principal Economist, Market Design New York Independent System Operator Market Issues Working Group (MIWG) October 8, 2013 FERC Requirement