NYISO COMPREHENSIVE PLANNING PROCESS for RELIABILITY NEEDS

Transcription

1 NYISO COMPREHENSIVE PLANNING PROCESS for RELIABILITY NEEDS By Garry Brown Vice President Strategic Development New York Independent System Operator September 29, 2004 Montreal, Quebec

2 Background NYISO has historically performed short-term planning analyses (1-3 year) in conformance with NERC, NPCC and NYSRC requirements Since Order 888 FERC has deemed that a broad regional planning process is an essential function for ISO/RTOs NYISO s Board supports a strong planning role In Early 2003, as part of its Strategic Planning efforts, NYISO approached its Stakeholders to begin the development of a comprehensive planning process for New York Wide stakeholder support for moving ahead 2

3 Stakeholder Response In June 2003, the Electric System Planning Working Group ( ESPWG ) was formed Reports to both the Business Issues Committee and Operating Committee of the NYISO ESWPG s initial function was to work with NYISO Staff to develop a comprehensive planning process for the NYISO Role was later expanded by the OC to include an ongoing responsibility to provide input and review of the planning process itself Consensus to employ a phased process which would address reliability needs first 3

4 NYISO Planning Process Phase I: Initial Planning Process Approved by OC on Sept 10, 2003 Identifies reliability needs only: 10-year planning horizon Reports on historic congestion First draft report issued June 2004: under committee review Phase II: Comprehensive Planning Process Builds on Initial Planning Process Establishes a formal planning process for the NYISO which initially addresses reliability needs NYISO Objective: To ensure that upgrades will be built when needed for reliability Approved by the NYISO Management Committee on July 7, 2004 with a 68% vote 4

5 Stakeholder Process Electric System Planning Working Group (ESPWG) brings together business and technical interests NYISO Comprehensive Reliability Planning Process is the result of more than a year s intensive efforts A compromise was forged to meet the interests of many diverse groups Generators and Marketers, LSE s & consumers, TO s, Public Power and Environmental, regulatory authorities & NYISO Resulting in the establishment of a comprehensive planning process for New York that ensures reliability needs will be met 5

6 Annual Needs Assessment NYISO Staff will perform a needs assessment over a 10-year planning horizon based upon existing reliability criteria Scenario analysis will be employed to test the robustness of the base case assumptions Needs Assessment will identify violations of reliability criteria, but will not identify specific facilities to meet the identified needs Provision for MP input & review of Needs Assessment Provision for coordination with adjacent regions The final approved Needs Assessment will be widely distributed 6

7 Request for Solutions Following issuance of its Needs Assessment, the NYISO will provide an appropriate time period for the development of market-based & regulated responses Process is open to all resources NOT a formal RFP process When a reliability need is first identified by the NYISO: TOs have obligation to prepare a regulated backstop proposal Such proposals are not limited to transmission Development time for the regulated backstop provides the benchmark for the lead time for non-to alternate proposals 7

8 Request For Solutions (Cont d) Market-based proposals are prepared in parallel with regulated backstop proposals All resources eligible: generation, merchant transmission, demand response Non-TO s may submit alternative regulated proposals to the NYDPS for consideration Such proposals which satisfy the DPS may be submitted to the NYISO for evaluation 8

9 NYISO Evaluation Process NYISO to evaluate proposals to determine if they will meet the identified reliability needs Regulated backstop proposals by TOs will establish the lead time for non-to proposals If Market based proposals are judged sufficient to meet the identified needs in a timely manner, the Comprehensive Reliability Plan ( CRP ) will so state NYISO will not select from among the market-based responses NYISO will monitor status of market projects to ensure needs will be met as part of its annual update process 9

10 NYISO Evaluation Process (Cont d) If Market proposals are judged insufficient, NYISO will indicate that a regulated solution is needed in the CRP NYISO will evaluate non-to regulated alternatives to determine whether they will meet the identified need, and will report its evaluation in the CRP If market-based proposals are not forthcoming NYISO and its Independent Market Advisor will investigate whether that is due to market failure in one of its markets If so, NYISO and its IMA will examine appropriate modifications to its market rules with MPs. 10

11 Review and Approval Process NYISO staff issues draft plan including recommended transmission upgrades, or other regulatory solution, if needed for reliability NYISO Staff draft plan circulated for stakeholder review and comment NYISO staff makes revisions as appropriate Final draft plan sent to the appropriate stakeholder committees for review and vote NYISO staff makes revisions as appropriate Final draft plan sent to Board for approval Provision for remand to Management Committee NYISO Board to have final approval of CRP CRP provided to regulatory agencies for their consideration 11

12 Gap Solutions for Reliability Needs If neither market proposals nor regulated proposals can satisfy the need in a timely manner, the NYISO may seek a Gap solution Provision for NYISO to seek a gap solution outside of the normal Planning Process if there is an imminent threat to reliability TOs assume the obligation to immediately propose a gap solution for consideration by the NYISO and DPS To the extent possible, the gap solution should be temporary and strive to ensure that market based solutions will not be economically harmed A permanent regulated solution, if appropriate, may proceed in parallel with gap measures 12

13 Cost Allocation and Cost Recovery Cost Allocation for Regulated Projects Based upon a beneficiaries pay principle Specific methodology to be developed by NYISO/ESPWG Near-term reliability needs are not anticipated based upon Phase I needs assessment Cost Recovery for Regulated Projects Transmission solutions TOs to file for recovery with FERC Recovery through a separate rate schedule under the NYISO Tariff Non-transmission solutions In accordance with NYS Public Service Law 13

14 NYISO-TO Agreement Defines TO rights and obligations with respect to the Comprehensive Reliability Planning Process Similar provisions to those recently approved for RTO-NE TOs assume obligation to provide backstop regulated solutions If NYISO determines that there are no viable market-based solutions which will meet identified Reliability Needs Subject to cost recovery, permitting and other conditions Supplements existing NYISO/TO Agreement Not subject to OC/MC approval Will be filed for FERC approval Filed concurrently with NYISO Tariff Filing 14

15 Role of the NYS PSC Reviews and screens regulated alternatives proposed by non-tos Reviews and screens gap solutions Adjudicates disputes relating to reliability determinations in final Needs Assessment and in CRP Reviews TOs backstop solution when NYISO determines action is necessary to ensure reliability PSC has final authority with respect to solution ultimately implemented 15

16 NYISO Reliability Planning Process INITIAL PHASE NYISO Performs Needs Assessment for Reliability Publicize Needs Assessment NYISO Issues Request for Solutions Market Responses Generation DSM Merchant Transmission Regulated Responses Transmission May consider alternatives TO & non-to proposals NYISO Evaluates Market Responses and Regulated Responses To Ensure They Will Meet the Identified Reliability Needs NYISO Formulates Comprehensive Reliability Plan Board Approval of Plan No viable/timely mkt or reg solution to an identified need Gap Solutions by TOs COMPREHENSIVE PHASE Board Approval of Plan