Global economic factors continue to drive up the cost of energy in New York - The Jewish Voice
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Friday, January 27, 2023

Global economic factors continue to drive up the cost of energy in New York

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he New York Independent System Operator (NYISO) today reported that electricity supplies in New York State are expected to be sufficient this winter to meet forecasted peak demand conditions, with a total of 43,184 megawatts (MW) of supply available, including imports from neighboring regions.

“The New York State bulk electric system is well positioned to meet this winter’s forecasted demand and maintain reliability throughout the season,” said Aaron Markham, Vice President of Operations for the New York ISO. “However, as we have been highlighting for over a year, national and international economic conditions are contributing to a spike in consumer bills.”

“The NYISO operates the grid to meet reliability rules that are among the strictest in the nation. We are working closely with the New York utilities, regional partners, and generators to manage adequate fuel supplies and to maintain reliability throughout the winter,” said Rich Dewey, President and CEO of the New York ISO.

Winter Demand Forecast

The NYISO forecasts that peak demand for winter 2022-23 will reach 23,893 MW, based on expected winter temperatures. The forecast represents an increase of 658 MW over last winter’s actual peak demand of 23,235 MW, reached on January 11, 2022. In addition to analyzing expected temperatures, the NYISO runs scenarios of more extreme cold weather that would increase demand for electricity. The NYISO’s extreme winter weather scenario shows that peak demand could increase to as much as 26,086 MW and when coupled with expected availability of natural gas for power generation would result in a projected surplus of 1,620 MW.

New York’s all-time winter peak was set in January 2014, during multi-day polar vortex conditions that pushed demand to 25,738 MW. While the polar vortex of 2014 did not cause any bulk power system reliability issues, the NYISO enhanced 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. This combination of actions proved valuable in reliably meeting demand throughout the more recent severe cold snaps experienced in New York State.

Winter 2022-23 Preparedness

The NYISO’s annual winter preparedness procedures include detailed surveys sent to generators across the state. Those surveys help our operators better understand the capabilities of the generation fleet as we enter the winter season.

Key takeaways from the 2022-23 winter season surveys include:

  • The US Energy Information Administration (EIA) indicates oil inventories both regionally and throughout the United States are below historical values. NYISO is monitoring regional energy supplies.
  • Seasonal and weekly fuel surveys indicate oil and dual-fuel generation have sufficient start-of-winter oil inventories (but lower than past years’ inventories).
  • NYISO has surveyed most generating stations to discuss the past winter and preparations for the upcoming winter, including dual-fuel operation, cold-weather preventative maintenance, fuel procurement arrangements, and fuel switching capabilities.
  • A communications protocol is in place with New York State agencies to improve the speed and efficiency of generator requests to state agencies for emissions waivers if needed for reliability.

High Prices Expected

The NYISO is warning of a sharp rise in wholesale electricity prices expected this winter due to several economic and geopolitical factors that continue to impact the cost of natural gas used in the production of electricity.

As part of its effort to prepare consumers and policymakers for this winter, the NYISO released an updated white paper in September that explores the cost drivers behind commodity increases of the past year and predicts further commodity cost increases this winter.

The NYISO’s report, Impact of National & Global Conditions on Electricity Prices in New York, sources and incorporates material from the EIA, the New York State Public Service Commission, the U.S. Department of Labor as well as Power Trends, the NYISO’s annual state of the grid report. The white paper is designed to serve and educate consumers, the media, and market participants, and will be updated as conditions and data change.

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