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NYISO Sets the Record Straight on Carbon Pricing Project

August 14, 2018

Reliability and Efficient Markets in New York is NYISO Mission.

As New York’s independent grid operator, we read with concern the recent Daily Caller article “NY’s Grid Operator Is About To Make Electricity Even More Expensive.”  The article makes a number of claims that are incorrect.

For your readers that may not be familiar, the New York Independent System Operator (NYISO) is an independent, non-partisan, not-for-profit organization responsible for three critical functions: operating the New York State bulk electric system, administering competitive wholesale energy markets, and planning for future system needs. The NYISO’s first priority is maintaining the reliability of New York’s electric grid, while strictly adhering to numerous reliability standards.

Most concerning, the article states that New York “struggled to meet the needs of citizens during 2017s brutal winter.” In fact, the opposite was true. During the most challenging period of the winter, the NYISO reported publicly that New York had sufficient resources available to meet demand, and those resources did perform as needed to maintain bulk electric system reliability.

Next, the article’s headline is misleading. In 2017, a large cross-section of market participants urged the NYISO to address out-of-market-subsidies and state policies for renewable energy investment. With support from market participants, the NYISO launched an initiative to explore whether the social cost of carbon dioxide (carbon) emissions should be included as a component in determining wholesale electric prices. The NYISO believes that a market-based approach to a carbon price could provide a lower cost option to help achieve current state policy goals – potentially saving consumers money.

From the outset, the NYISO has stated that if a market-based approach to a carbon price proves significantly more expensive than current state policies, the NYISO will abandon the effort. So far, studies show an opportunity for cost reduction. More analysis is being conducted, however, which will be released in September and discussed in our open, transparent stakeholder process.

Public policy objectives and the growth of renewable generation are changing the nature of traditional electric market design. Grid operators, too, must adjust – market participants, consumers and policy makers are counting on us. We believe leveraging the power of electric markets to achieve public policy goals and integrate new technologies is good for consumers, investors and the environment.

We are an independent, 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.