Our stakeholders recently approved changes to market rules which, if accepted by the Federal Energy Regulatory Commission, will help us meet New York’s zero-emissions mandates by supporting new investments in energy resources.

The proposal was created to make it easier for clean-energy resources such as solar or wind to take part in the competitive, wholesale markets that serve the New York grid. The project was overwhelmingly supported by stakeholders, following months of discussion on how to reconcile capacity market rules with the state’s Climate Leadership and Community Protection Act.

Why is this change important, how did it come about, and how will it help bring us to a zero-emissions grid by 2040? Vice President for External Affairs and Corporate Communications Kevin Lanahan recently interviewed two of the primary authors of the proposal, also known as Comprehensive Mitigation Reform, for our latest Power Trends podcast. He spoke to Director of Market Design Mike DeSocio, and Manager of Capacity Market Design Zach T. Smith.

“What we’re really focused on is making sure resources that are participating in the wholesale, competitive markets are treated fairly and can compete on a level playing field,” said DeSocio. 

DeSocio explained further: buyer-side mitigation (BSM) rules were created to make sure that no single resource could have an unfair competitive advantage over another, including out-of-market payments. But many new wind and solar resources entering the market receive government subsidies because of their clean-energy attributes. Without reform, current BSM rules could limit how these clean energy resources could compete in the wholesale markets. The concern was that existing rules could make electricity more expensive and limit new investment in clean energy.  

Our new reforms, if approved by federal regulators, will make sure this doesn’t happen. 

“It took a lot of work to get there,” DeSocio noted. “But we ended up with a proposal that balances all the various needs.” 

Another important component of these reforms is what is known as resource capacity accreditation, explained Smith. Accreditation values the contribution each resource has toward reliability. Battery storage, for instance, will be more important in the future because it can provide the flexible power, we’ll need to offset clean energy when the wind stops blowing or the sun doesn’t shine. 

 “Our proposal,” Smith says, “will reflect that increase in value of these resources as the system changes.”

By adding this value, capacity accreditation will help maintain the right investment signals for new resource developers, he said. 

For more on the market changes that will help bring New York to a clean-energy future, listen now.

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

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