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The New York ISO's Approach to Grid Reliability

February 25, 2021

Reliability has been and will continue to be job one for the NYISO.


We operate under the strictest reliability standards in the country with oversight and collaboration from FERC, NERC, NPCC, the NYS Reliability Council and the NYSPSC.

The NYISO is an independent organization. This independence provides the strong foundation from which we make decisions. Any recommendation is always based solely on facts, data, information and in-depth analysis, free of influence from outside financial interests or politics.

Our governance process, where market changes are reviewed and debated, is open, transparent and includes participation from every corner of the industry.

Consumer, climate justice and environmental interests are represented. State and federal government entities also participate, including FERC, NYS DPS, NYSERDA, the NYS Utility Intervention Unit, the NYPA, LIPA, and NYC.

The NYISO-administered capacity market has a 20 year history of ensuring reliability.

The capacity market serves a vital role in New York State by ensuring the amount of electricity necessary to serve customers under the most stressful conditions is readily available. The capacity market provides incentives for performance but also includes severe penalties for failure.

One critical element of the capacity market is the NYS reserve margin, developed annually by the NYSRC, with input from the NYISO, and subject to final approval from FERC and the NYS PSC. The reserve margin ensures a sufficient amount of capacity is available to the grid under the most extreme weather conditions. Re-evaluating the reserve margin annually allows for adjustments to reflect changes in demand, supply, and transmission capability.

We continue to be actively involved in discussions regarding capacity market reform at the state level. We will also engage in these discussions with the FERC as called for at the February 18, 2021 session.

At its core the NYISO-administered capacity market is a reliability construct. At the same time that we are deeply involved in the transition toward the grid of the future, reliability will not be sacrificed.

The NYISO is committed to reaching the renewable investment and decarbonization goals as mandated under the CLCPA. Important market design changes have recently been approved or are under development by the NYISO that will support the state’s pursuit of the CLCPA goals.

System planning is critical to long-term reliability. The NYISO recently completed a climate study to plan for the effects of extreme weather on the bulk power system.

The NYISO also conducted a fuel security study in 2019 that evaluated impacts on resource availability and system reliability under prolonged and extreme winter weather conditions. The study provided critical insight into reliability performance that has proven valuable. We are committed to re-evaluating these conditions again in the future.

For more about how we are addressing a zero-emissions grid with market-based solutions, visit the 2040 Power Grid webpage .

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.