Subject: RE: NYPA study-Winter Locational ICAP requirements
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Mon, 23 Apr 2001 09:17:00 -0700 (PDT)

"Mark Younger" <[email-masked]> writes to the NYISO_TECH_EXCHANGE 
Discussion List:

How do you get from an initial estimate of "75% and 92% of the summer peak
load ... for NYC and LI, respectively" to "having an ICAP requirement for
summer and winter seasons based on the LSE's peak load for the respective
season would send the proper ICAP price signal."   The summer and winter
ICAP requirements are based upon the summer peak load.  Basing the winter
ICAP requirement on the winter peak load would be a substantial change in
the ICAP market.  If we are going to consider a change in this direction
then we also have to apply most of the annual deficiency rate to the summer
period.

-----Original Message-----
From: [email-masked]
[mailto:[email-masked]] On Behalf Of Palazzo,
William
Sent: Monday, April 23, 2001 3:42 PM
To: [email-masked]'
Subject: NYPA study-Winter Locational ICAP requirements

<< File: NYPA_LR_wint.PDF >>  << File: TRAN_SYS_001129.PDF >>   At NYPA's
request ISO staff conducted a limited analysis of
the winter locational ICAP requirements for Long Island and New York City
areas.  While such ICAP requirements have historically been set as a single
number for the entire year, it is NYPA's belief that this holdover from the
old way of doing business must be re-examined.  It is NYPA's belief that
most if not all of the contribution to loss of load risk occurs in the
summer months.  As such, some reduction in winter ICAP requirements should
be possible with no impact on the Loss of Load criterion of one day in ten
years.

NYPA requested that the ISO start with the database that resulted in the
locational requirements of 80% and 98% for New York City and Long Island,
respectively.   At NYPA's request the ISO modeled winter ratings on the
transmission interfaces into NYC and LI and determined how much the 80% and
98% could be reduced in the winter before any impact on the statewide Loss
Of Load  occurred.  The report indicates that winter requirements of 75% and
92% of the summer peak load resulted for NYC and LI, respectively.

While this in no way reflects an exhaustive analysis of winter locational
requirements, the results from this study suggest that some reduction in the
winter  requirement may be warranted and a consideration of seasonal
requirements should be incorporated in future ICAP requirement studies.
NYPA believes that having an ICAP requirement for summer and winter seasons
based on the LSE's peak load for the respective season would send the proper
ICAP price signal.

NYPA is sharing the study results in the attached report in an effort to
begin a dialog which we hope will lead to a broader examination of
locational requirements when the issue is revisited again next year.  We
would appreciate hearing the views of other market participants.

<<NYPA_LR_wint.PDF>>  <<TRAN_SYS_001129.PDF>>