By Michael Brooks
FERC last week accepted NYISO’s proposed Tariff revisions allowing large behind-the-meter resources in New York to participate in the ISO’s energy and capacity markets (ER16-1213). The new rules became effective Thursday.
“We recognize the potential benefits of reducing obstacles to using excess capacity of behind-the-meter resources to support New York’s grid,” the commission said. “NYISO’s proposal advances this goal, as behind-the-meter resources that meet NYISO’s eligibility requirements will be permitted to bid energy and capacity in a comparable way to other suppliers and receive payments if they are dispatched. Their participation should improve the competitiveness, efficiency and reliability of those markets.”
Under the changes, behind-the-meter generators must be at least 2 MW, serve a load of at least 1 MW and be capable of exporting at least 1 MW to the New York grid. The new rules include calculations for determining a resource’s available installed capacity (ICAP). The ISO would also apply all of its current market power mitigation rules to BTM resources.
NYISO also proposed a new eligibility requirement for resources seeking to qualify as an ICAP supplier to guard against the possibility behind-the-meter resources would not be subject to the ISO’s interconnection procedures. For existing resources subject to the new requirement, there will be a 60-day transition period in which they may sell capacity without having to enter a class year study.
Currently, two generators serving load behind the meter are allowed to participate in NYISO’s markets. The ISO would work with these generators so they can qualify as BTM resources under the new rules, it told FERC.
Stakeholders generally supported NYISO’s proposal but several protested specific aspects of the ISO’s proposal.
The New York Public Service Commission told FERC that market power mitigation was unnecessary for distributed generation, arguing that it is too small in scale to pose a threat. FERC dismissed the regulators’ comment, saying the PSC “has not provided any support for its assertion.”
The Independent Power Producers of New York protested the transition period, arguing that NYISO had not identified to which resources the period would apply. IPPNY said that allowing resources to sell capacity without being subject to a class year study could threaten reliability.
FERC dismissed these arguments as well. “We find that the concerns raised by IPPNY regarding reliability are unsupported,” it said. “Reliability concerns will be reasonably mitigated by the limited duration of the transition period and the requirement that any grandfathered projects must have completed all required interconnection studies and have an effective interconnection agreement by May 19, 2016.”