New York City: high capacity prices, many demand-side energy management options

April 10, 2019

When it comes to capacity prices in New York state, the story changes depending on the geographic region.

Capacity prices are historically low right now in upstate New York but increase through the Lower Hudson Valley toward New York City, due to transmission constraints.

The announced retirement of Indian Point nuclear facility scheduled for 2020 and 2021 leaves New York with 2,000 MW to be replaced just outside of New York City.

NYISO points to new natural gas generation and other renewable generation scheduled to come online as reasons for Indian Point’s retirement. Still, capacity prices in New York City heading into Summer 2019 are comparatively high compared with the rest of the state.

Where there are high capacity prices, there are opportunities to earn revenue for wisely using energy.

Many of these opportunities exist at both the utility and NYISO level.

Con Ed’s Demand Management Program (DMP)

Con Ed provides financial incentives for organizations that help the grid lower its peak demand on New York’s hottest days.

The DMP is a rebate-based program that rewards Con Edison and New York Power Authority (NYPA) customers in New York City and Westchester for installing energy-saving technologies, thereby permanently reducing their overall demand.

Eligible projects include:

Demand Response in New York

In 2016, several New York Utilities began offering two new demand response programs in conjunction with the REV:

  1. Commercial System Relief Program (CSRP)
  2. Distribution Load Relief Program (DLRP)

ConEd has been offering CSRP and DLRP since 2009/2010. The programs will continue to run in 2019.

NYISO’s Special Case Resource (SCR) program, the longest running demand response program in NY, will also run in 2019 along with NYISO’s economic programs: the Day-Ahead Demand Response Program (DADRP) and the Demand-Side Ancillary Services Program (DSASP)

Currently, there are 17 demand response programs being offered to commercial and Industrial organizations in New York. That number may change in 2019/20 as several New York Utilities consider removing DLRP or CSRP.

Natural Gas Demand Response

Con Ed is poised to continue leading New York utilities’ push for demand response.

Building on its 20-year experience administering DR programs, the utility is exploring ways to use natural gas demand response as a “non-pipe solution” to alleviate potential grid stress brought on by growing natural gas demand and pipeline constraints into New York City.

Con Ed’s natural gas DR program is currently in pilot phase. If successful, expect other New York utilities adopt it into similar programs of their own where gas pipeline constraints exist.

Non-Wires Solutions

Non-wires solutions (NWS) are investments in the electric utility system that can defer or replace altogether the need for specific transmission and/or distribution projects.

NWS help to provide a cost-effective reduction of transmission congestion or distribution system constraints at times of peak demand.

New York is looking to implement several non-wires solutions, including fast-acting demand response with dispatch notices as short as five minutes and curtailment durations that last as long as 12 hours.

Organizations wishing to participate in such programs will likely need to accommodate the short dispatch notice with technology that facilitates automated DR.


This post was excerpted from the 2019 State of Demand-Side Energy Management in North America, a market-by-market analysis of the issues and trends the experts at CPower feel organizations like yours need to know to make better decisions about your energy use and spend.

CPower has taken the pain out of painstaking detail, leaving a comprehensive but easy-to-understand bed of insights and ideas to help you make sense of demand-side energy’s quickly-evolving landscape.

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Peter Dotson-Westphalen

Peter Dotson-Westphalen is CPower’s Market Development Director for ERCOT. When he’s not studying energy markets or keeping customers informed PDW can usually be found playing his bass or watching live music.

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Peter Dotson-Westphalen

Peter Dotson-Westphalen is CPower’s Market Development Director for ERCOT. When he’s not studying energy markets or keeping customers informed PDW can usually be found playing his bass or watching live music.