NYISO finds New York City peaking power plants still needed for reliability

The New York Independent System Operator's Short-Term Assessment of Reliability for first quarter 2025 found that two units totaling 30.2 MW can retire without reliability concerns, but two New York City power plants totaling about 500 MW will be needed to continue operating beyond May 2025, the grid operator said on April 14.

The report details the findings for the five-year study period of Jan. 15 through Jan. 15, 2030, considering forecasts of peak power demand, planned upgrades to the transmission system, and changes to the power generation fuel mix over the next five years.

The STAR report includes the retirement of the 18.6-MW Shoreham 2 jet engine and the 11.6-MW Madison Wind Power turbine, with the assessment not identifying any generator deactivation reliability needs following the retirement of these units.

In July 2023, NYISO identified a reliability violation beginning in the summer of 2025 and the grid operator said it would retain the Gowanus Gas Turbines Station 2 and 3 and Narrows Generating Station 1 and 2, totaling about 500 MW of capacity. The units can run on oil as a backup fuel.

The violation was mainly driven by a combination of forecasted increases in peak power demand and the assumed unavailability of the power generation units in New York City that have been affected by the Department of Environmental Conservation's "Peaker Rule," according to the report.

The regulations are officially known as Subpart 227-3, Ozone Season Oxides of Nitrogen, or NOx, Emission Limits for Simple Cycle and Regenerative Combustion Turbines.

The 2023 assessment found the New York City zone would be deficient by as much as 446 MW for nine hours on the peak day during expected weather conditions when accounting for forecasted economic growth and policy-driven increases in power demand.

"After accounting for the updated assumptions in this 2025 Quarter 1 STAR, the New York City zone is deficient by 281 MW for a duration of five hours to as much as 461 MW for a duration of seven hours with high demand," NYISO said. The deficiency "may be greater" depending on power system performance.

Solution relies on CHPE transmission line

NYISO determined that temporarily retaining the peaking power generators on the Gowanus 2 and 3 and Narrows 1 and 2 barges is needed for reliability, and that the permanent solution is the 1,250-MW Champlain Hudson Power Express transmission line from Quebec to New York City, which is currently scheduled to come online in spring 2026.

The 339-mile CHPE project involves building a high-voltage direct current line from the Canadian border into the city that would primarily run under the Hudson River and existing rail lines. CHPE is being developed by Transmission Developers, backed by private equity firm Blackstone. The project, which began construction in November 2022, will be supplied with hydropower from provincially owned Hydro-Quebec's reservoir system. A project spokesperson recently confirmed that CHPE is over 60% complete and on target for an operational date of May 2026.

NYISO's designation of the Gowanus 2 and 3 and Narrows 1 and 2 generators allows their continued operation beyond May 2025 until permanent solutions are in place, for an initial period of up to two years until May 1, 2027. There could be an additional two-year extension to May 1, 2029, if reliability needs still exist, as provided by the DEC Peaker Rule, the grid operator said.

Tight New York power supply-demand conditions are expected regardless of whether CHPE comes online on schedule.

"Even with CHPE entering service in summer 2026, the transmission security margin will be narrow and any variation in other assumptions could result in a deficiency. Furthermore, the impact of weather on system performance remains an important reliability risk factor," NYISO said.