The Cost Of Electricity
The various components of wholesale electricity prices include energy costs as measured by Locational Based Marginal Price (LBMP), and other charges such as NYPA Transmission Adjustment Charge (NTAC), Reserve, Regulation, NYISO Cost of Operation, Uplift, Voltage Support and Black Start.
Components of Wholesale Electricity
- Locational Based Marginal Price (LBMP): equal to the cost of energy production cost plus the transportation (losses and congestion) cost
- NYPA Transmission Adjustment Charge (NTAC): flat per MW charge to compensate the New York Power Authority for transmission system operation and maintenance
- Reserve: market-based payment to generators providing short-term (10 and 30 minute) reserve power
- Regulation: market-based payment to generators helping to maintain frequency in real-time
- NYISO Cost of Operation: flat per MW fee to cover the cost of operating the NYISO
- Uplift: charge for resources that must be committed outside of market mechanism
- Voltage Support: flat per MVAr payment to generators with the ability to maintain voltage
- Black-Start: cost-based payment to generators with the ability to restart after a black-out
