New York ISO White Paper - November, 2008
Transmission Expansion in New York State
SUMMARY: The bulk electric transmission system is often referred to as the interstate highway system for competitive wholesale electric markets. The infrastructure that exists today plays a vital role in the restructured electric industry in the northeast as well as other regions of the country. The transmission system that will be needed in future is essential to the continued operation of efficient and reliable wholesale power markets. As such, transmission planning and investment has been of paramount concern for the Federal Energy Regulatory Commission (FERC).
This white paper presents a review of the NYISO planning and market mechanisms designed to facilitate investment in transmission infrastructure within the New York Control Area (NYCA). The paper also evaluates the factors at play in the neighboring control areas where a significant number of transmission expansion projects are currently being developed. The reliability planning processes in PJM and ISO New England (ISO- NE) have a large role in these transmission investments and are discussed in detail. The cost allocation and cost recovery mechanisms in place also have a significant role in facilitating the current level of transmission buildout occurring in the two control areas. The NYISO’s Comprehensive Reliability Planning Process (CRPP) is a unique "all- source" process that is significantly different from the other regions’ planning processes. Its cost allocation/cost recovery mechanisms are also rooted in the NYISO’s "beneficiary pays" principle.
The paper also discusses the role New York State policy makers and regulators may play in transmission investment and expansion decisions. Several New York State policies currently in place increase regulatory uncertainty for developers of transmission projects. Some policies and objectives such as renewable energy targets and fuel diversity concerns would likely benefit from transmission expansion. Others, such as carbon emission limits, may offset the need for additional transmission. Finally, the paper considers opportunities to increase transmission investment in New York to support system reliability and meet state goals, following the NYISO’s beneficiary pays principle.