A new class year: the changing nature of power generation in New York state, and how NYISO is accommodating it

The New York Independent System Operator (NYISO) has four distinct missions. We maintain and enhance the reliability of New York’s electric grid while operating open and competitive wholesale electricity markets. And we plan for the power system needs of the future while providing data and analysis pertaining to New York’s power system to policymakers and stakeholders.

The NYISO’s System & Resource Planning department plays a role in achieving each of these four missions.  We constantly undertake forward-looking planning for the purposes of maintaining long-term reliability, reducing congestion on the transmission system, and achieving public policies, all in the interest of efficiency and cost-effectiveness for ratepayers and investors.

This is where our “class year” comes into play. A class year is what we call a list of energy generation projects proposed to interconnect to the New York electric grid in a certain year. There are new projects proposed every year. They can range from a community solar development to efficient replacements of older, gas-fired generators. Every time changes are made to grid generation, we run those projects through a process to determine the impacts of these projects on the transmission system as a whole. In many cases, the owners of these projects are required to pay for improvements to the transmission system in order to accommodate the new power being added to the grid, and the class year determines the allocation of these costs.

We are currently working on the Class Year 2019 Facilities Study, and it is unlike any other class year we have seen during the NYISO’s 20-year history.

This year, we have seen a significant increase in the number of projects seeking interconnection. Right now, more than 85 projects are seeking approval. That compares to 27 projects that participated in Class Year 2017, which was finalized earlier this year.

The types of projects are also changing. The previous class year included changes to a nuclear plant, a new gas-burning facility, a re-powering of a hydro site, and other large generators and controllable transmission, along with some solar, wind and storage projects.

This year, most applicants are clean-energy related. Of the new proposed projects, 38 are solar projects totaling 1,738 MW, 12 are wind projects totaling 3,108 MW, and 26 are energy storage projects totaling 1,069 MW. In all, projects total nearly 9,000 MW of nameplate capacity.

This new class year also represents a time of change for the interconnection process. While every class year ended with a review of “lessons learned” and a chance for improving the process, this class year may see a complete restructuring of the process.

For instance, we have recently proposed new processes for how we deal with certain project upgrades that require additional studies – what we call System Deliverability Upgrades (SDUs). Many new projects, in order to become capacity suppliers, require SDUs.  These SDUs upgrade the transmission system in order for the new generation projects to provide additional capacity to the system.

In many cases, the effort of identifying and engineering the upgrades can take months, and the costs for these upgrades can be in the millions of dollars, or even hundreds of millions of dollars in the case of very large projects. Therefore, developers may reject the cost allocations and drop out of the class year, which may require redoing the study due to a change in the overall impact to the other class year members.

Under our proposed new format, projects facing new SDUs would be removed from the class year process to pursue the required study on their own separate track. This way, the rest of the projects can proceed. If projects that require additional SDU studies complete such studies prior to completion of the current class year, they can rejoin the class year for the decision process. If not, they would be included in a subsequent decision period or subsequent class year.

In another improvement, we would require certain class year analyses earlier in the study process, prior to the start of the class year.  Then, in the class year, we propose to make use of existing studies, when applicable, instead of requiring new ones, which would reduce cost and time.

We are also shortening deadlines for future class years. For instance, we propose requiring notice of class year elections well before the class year start, allowing us to get a head start on the process of study agreements and collecting study data and deposits.  We are also proposing to reduce from 30 to 10 days the amount of time developers have to submit data and return participation agreements to us. Every few days saved brings us closer to a completed class year.

FERC has reviewed and accepted the new rules, effective Feb. 18.

It is our hope that the class year process can be a one-year process, allowing new generation to interconnect into the grid in as efficient a process as possible.

The energy transition is front and center at Enlit Europe (Milan, Italy – October 27-29, 2020), POWERGEN (Orlando Florida USA – December 8-10, 2020) and DISTRIBUTECH (San Diego, California USA, February 9-11, 2021).

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Zach Smith is responsible for the oversight and implementation of system planning and strategic initiatives for the New York State Transmission System. These include ensuring a reliable electric grid for the future, identifying economic opportunities for transmission investment beneficial to ratepayers, and implementation of system upgrades to enable public policies. Mr. Smith also oversees the interconnection process through which renewable resources and other new generation technologies reliably connect to the New York State electric grid. Since joining the NYISO in 2004, Mr. Smith has spearheaded numerous renewable integration and transmission planning initiatives through key positions of increasing responsibility, and he actively represents the NYISO on Interregional Coordination Committees. He earned B.S. and M.S. degrees in Electrical Engineering from Michigan Technological University.

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