PJM Interconnection and the New York Independent System Operator (NYISO) began jointly managing transmission limits that occur near the “seams” between their regions. The coordination between the two markets will increase the efficiency and lower the costs of electric transmission congestion management.
Congestion occurs when limits on transmission lines restrict the amount of power that can flow. In response, grid operators typically increase or decrease output from generators. The joint coordination allows the most cost effective generator— whether in New York or PJM— to be adjusted to address the constraint.
The benefits of market-to-market coordination between NYISO and PJM include:
· Lower overall congestion costs for consumers
· More consistent prices across the two wholesale electricity markets because prices at the borders between them are expected to come together more closely
· Greater reliability because a broader pool of resources is available
In October 2012 NYISO and PJM announced a long-term approach to optimize the flow of electricity across their common border and reduce threats to reliability that also includes:
· Coordinating planning processes to facilitate efficient transmission investments
· Deploying smart grid technologies that maintain system balance through the use of robust data, communications and automated systems
· Developing a shared understanding of regional natural gas delivery constraints for power generation
The New York Independent System Operator (NYISO) is a not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system and advancing the technological infrastructure of the electric system serving the Empire State.