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FERC Approves NYISO’s Proposal to Establish a New Capacity Zone

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In an Order (Docket No. ER13-1380-000) issued on August 13, 2013, the Federal Energy Regulatory Commission (FERC) approved the New York Independent System Operator's (NYISO's) proposed revisions (filed April 30, 2013) to its Market Administration and Control Area Services Tariff and its Open Access Transmission Tariff (OATT) to establish and recognize a new capacity zone that would encompass NYISO Load Zones G, H, I, and J (the G-J Locality in downstate NY).

First, let’s define what NYISO is. Independent system operators (ISOs) and regional transmission organizations (RTOs), such as the New York Independent System Operator (NYISO), are organizations in their respective regions that manage the reliability of the bulk electricity grid (i.e. manage flow of electricity from power plants over transmission lines) and administer and monitor open and competitive wholesale energy markets.

Now, back to the new capacity zone. This new zone, which will be implemented on May 1, 2014, is expected be called the Lower Hudson Valley Capacity Zone (LHV). According to the Order, NYISO conducted a study that examined and considered the transmission system, capacity market, and economic consequences of its proposal to create this new zone and concluded that establishing and implementing the new LHV capacity zone for Load Zones G-J is appropriate.

Currently NYISO is split into three capacity zones, one of which includes consumers in Load Zone J (New York City), one that includes consumers in Load Zone K (Long Island), and the other, which serves "rest of state" (or ROS) and includes consumers in Load Zones A-I.

If you have any questions about this announcement, please contact your Direct Energy Business representative.

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