POWER May 2017 - 38

POWER MARKETS
New York's Ambitious Transitions:
Who Wins? Who Loses? Who
Knows?
New York's electricity system and markets face a blizzard of changes, driven by
policy, politics, and economic forces. The New York Independent System
Operator and the New York State Energy Research and Development Authority
are two key-and sometimes competing-players trying to make
sense and order of the policy storm.
Kennedy Maize
R
ubik's Cube. The game of Twister.
Electricity Tetris. A jigsaw puzzle
in which all of the pieces may not fit
and some may be missing. Those items are
all about as difficult to solve as New York's
power conundrum. The Empire State faces a
blizzard of market structure, policy, and generation
changes-all taking place at once-
in its electricity sector.
The central policy issue is powerful Gov.
Andrew Cuomo's revolutionary " Reforming
the Energy Vision, " widely known among
New York's acronym-addicted energy mavens
as REV. Following the chaos of Hurricane
Sandy in 2012, Cuomo set about
creating a political response to change the
way the state would look at and build its electrical
supply and grid during the 21st century.
Among the institutions involved are the
New York Independent System Operator
(NYISO), Cuomo's New York State Energy
Research and Development Authority (NYSERDA),
the state's Public Service Commission
(PSC), New York's six investor-owned
utilities, the state-owned New York Power
Authority (the largest state-owned electric
utility in the U.S., created by Gov. Franklin
Delano Roosevelt in 1931 and a model for
the federal Tennessee Valley Authority), the
state's nonutility generators, and the Federal
Energy Regulatory Commission (FERC) in
Washington, D.C. Whom did we miss?
Winds of Change at NYISO
NYISO, which runs the transmission grid and
the competitive wholesale electricity market,
and NYSERDA are the central forces trying
to create order out of what so far appears to
be a chaotic situation. It's not clear that they
see the future in exactly the same way, but
they will have to work out the relationship if
REV is to live.
The conservative online news service The
38
Daily Caller earlier this year reported that
NYISO was critical of Cuomo's REV plan to
boost renewable energy to the tune of $360
million, while NYSERDA chief Richard
Kauffman, a former Goldman Sachs partner
widely described as Cuomo's " energy czar, "
said NYISO was " held captive " by special
interests, lacking " understanding into the imperative
to address climate change. "
NYISO's core mission is grid reliability, a
consideration at the heart of all of the swirling
events in New York. All the somewhat incoherent
policy directives and market changes
will have to come together at NYISO in order
for the emerging electricity system to work.
" NYISO is right at the forefront of the
changes taking place in the industry. We are
addressing emerging public policy goals, including
the move to low carbon output and a
strong shift in New York to distributed energy
resources (DERs), " NYISO President and
CEO Bradley Jones, told POWER in March.
" Our markets have a proven track record of
adapting to change, and I am confident they
will serve as an effective platform for continued
progress. "
" The NYISO's first, and primary, function
is to reliably operate New York's bulk
electric system in accordance with mandatory
national, regional, and state reliability
requirements and standards, " Jones told the
state legislature in February. NYISO, said
Jones, also must run the wholesale competitive
markets, " enabling generators and other
resources to sell power to utilities and other
parties who, in turn, supply it to New York
consumers. " Third, NYISO is a major system
planner for the state's bulk electric system.
Jones joined NYISO in the fall of 2015,
replacing Stephen Whitley, who retired after
heading up the ISO since 2008. Jones
came from the Electric Reliability Council
of Texas, where he was a key manager, and
www.powermag.com
1. New York Independent System
Operator (NYISO) President and
CEO Bradley Jones. Courtesy: NYISO
before that, from Luminant, a Texas competitive
generator.
Multiple Drivers at NYSERDA
Meanwhile, NYSERDA is pushing to transform
the grid from its traditional one-way
highway for central station generation sent
across high-voltage transmission lines to local
distribution lines and into retail consumers'
homes and businesses. The REV vision
is instead a two-way street, with power flowing
from wholesale markets into a system
where distributed resources (solar, combined
heat and power, on-site generation, energy
efficiency, demand response, and so forth)
can both serve local load and send power
back onto the grid.
NYSERDA's Kauffman recently wrote
that the goal of REV " is to change regulatory
and financial structures to build a 21st century
grid. For too long we've been rebuilding
the old, central-station production system,
POWER | May 2017
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POWER May 2017

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