Dive Brief:

• The New York Independent System Operator reported Monday that it expects electricity supplies will be sufficient to meet peak demand this winter of 23,893 MW based on expected winter temperatures, nearly 3% higher than last winter’s actual peak demand of 23,235 MW.
• The grid operator’s extreme winter weather scenario shows that peak demand could increase to as much as 26,086 MW, higher than its previous all-time winter peak. Even so, it expects electricity supplies will be sufficient to meet demand with a projected surplus of 1,650 MW, it said.
• NYISO repeated its earlier warning that it expects a sharp rise in wholesale electricity prices, and in consumer bills, this winter due to lingering impacts of the pandemic and Russia’s invasion of Ukraine.

Dive Insight:

NYISO said it expects capacity available in New York this winter of 43,184 MW, including imports from neighboring regions, to be sufficient to meet forecasted peak winter conditions. 

New York’s electric grid is a summer peaking system, but meeting reliability criteria in the winter is a “little bit more challenging so we pay a lot more attention nowadays to winter readiness,” President and CEO Rich Dewey said at a news briefing.

“Even though the loads are lighter, some of the elements associated with the assurety of fuel procurement as well as seasonal operating conditions introduce some interesting challenges,” he said.

After analyzing system conditions for the winter, the key finding from six scenarios is “sufficient supply to meet forecast demand,” with the lowest projected margin of about 1,600 MW, said Aaron Markham, vice president of operations.

“However, as we have been highlighting for over a year, national and international economic conditions are contributing to a spike in consumer bills,” he said.

The U.S. Energy Information Administration projected that the price of natural gas delivered to electric generators would average $8.81/MMBtu this summer, up from $3.93/MMBtu in 2021. Actual prices were less, but still higher than last year. Prices averaged $7.28/MMBtu, down from $7.70/MMBtu in June and $8.14/MMBtu in May, the EIA said. It’s projecting similar price levels for natural gas through 2022.

New York’s all-time winter peak demand was set in January 2014, during polar vortex conditions that pushed demand to 25,738 MW. The extremely cold weather did not cause any bulk power system reliability problems, NYISO said in a Nov. 28 news release. It has since improved its market design to support greater fuel security for generation and “took steps to improve situational awareness of natural gas system conditions and generator fuel inventories” it said.

Markham said NYISO is monitoring fuel supplies for the winter but, does “not see any concerns” as generators replenish supplies. 

Dewey said NYISO changed procedures a few years ago to require generators in New York to report fuel inventory levels weekly “and we check in more frequently when it’s extreme cold weather so that our grid operators have a good line of sight.”

The grid operator cited reports by the EIA that oil inventories regionally and in the U.S. are "below historical values.” Seasonal and weekly fuel surveys indicate oil and dual-fuel generation have sufficient start-of-winter oil inventories but are lower than past years’ inventories, it said. 

The Federal Energy Regulatory Commission reported in October that ISO-New England has adequate power supplies for normal winter weather, but it could face shortfalls in a long cold stretch because of its limited ability to import natural gas.

NYISO warned of a sharp rise in wholesale electricity prices. Dewey said NYISO anticipates rising demand driven by the electrification of the transportation and building sectors.

“Those levels are still pretty modest as compared to what we anticipate happening over the next 10 years or so,” he said.

NYISO reported in November 2021 that in all but the most extreme scenarios, New York expects to have sufficient capacity reserves for the coldest months. Following blackouts in Texas and the Southwest the previous winter, the grid operator now includes “once in a century” scenarios in risk assessments.

Experts have said the more cautious approach is now common across the U.S.

The Electric Reliability Council of Texas and Midcontinent Independent System Operator regions also face winter-time power supply risks, but the two regions have acted since Winter Storm Uri in February 2021 to better prepare for tough winter conditions, FERC staff said.