Capacity Market

The Capacity Market

The NYISO must ensure that sufficient resources are available to meet projected load on a long-term basis. In order to facilitate this, the NYISO administers a capacity market. This market matches buyers and sellers of capacity using the clearing price methodology.

Given the constrained nature of the transmission system, the capacity market has locational features, which reflect system reliability requirements that mandate loads in New York City and Long Island to buy a certain percentage of their capacity from suppliers in those areas.

The NYISO’s capacity market also allows for the participation of demand response resources.

Key Energy Terms

Locational Capacity

Because of the constrained nature of the transmission system, the New York State Reliability Council (NYSRC) requires that certain percentages of New York City and Long Island capacity be physically located in those areas.

Demand Response (DR)

The NYISO supports a number of programs designed to encourage reductions in usage based on economic or reliability signals.