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NYISO expects slightly lower power demand this winter, cites slightly warmer forecast

Highlights

Peak demand of 24,123 MW expected

All-time winter demand peak was 25,738 MW in 2014

New York — The New York Independent System Operator anticipates power demand this winter will be slightly lower than last winter, with peak consumption of 24,123 MW expected, compared with last winter's peak of 24,728 MW, it said Thursday.

"Cold weather conditions over the past few winters have allowed the NYISO, the state and generators to improve coordination in order to maintain reliability," Wes Yeomans, the grid operator's vice president of operations, said in a statement.

"This year's peak demand forecast is slightly lower than last winter and we anticipate having adequate supply throughout the 2019-20 winter," Yeomans said.

Peak demand last winter reached 24,728 MW on January 21, the third day of a four-day cold weather event, NYISO said. New York's all-time winter demand peak was set in 2014, during multi-day polar vortex conditions that pushed demand to 25,738 MW.

In six of the last 15 years, the NYISO footprint has seen a peak load of 25,000 MW or more, Yeomans said during a conference call with reporters.

He added that last winter there were only two cold snaps that lasted for two or three days, noting these were not difficult to survive from a reliability perspective.

However, the winter before that, New York had a 13- to 14-day cold snap from late December into early January "and that's where we have to pay attention to burn rates at oil facilities and replacement rates to ensure they can keep up with the burn rate," Yeomans said.

Q3 POWER PRICES FALL

The highest recent winter power price spike corresponded with the polar vortex conditions in 2014, when daily average day-ahead prices in the New York City zone reached about $450/MWh, according to a NYISO presentation.

The next most significant recent power price spike occurred during the extended cold snap in January 2018, when average day-ahead prices in New York City topped $200/MWh.

Average all-in power prices in the third quarter of 2019 fell in all areas of the grid operator's footprint and ranged from $22/MWh in the North Zone to $57/MWh in New York City, down 14% to 42% compared with the same period last year, according to Potomac Economics' quarterly power market report. Potomac is the NYISO's independent market monitor.

HIGHER WINTER GAS PRICES

Overall, S&P Global Platts Analytics' outlook for the coming winter's electricity prices in downstate New York is higher than last winter's, driven primarily by expectations of higher gas prices in New York, Kieran Kemmerer, a power market analyst with S&P Global Platts Analytics, said.

NYISO does not forecast power prices, but most long-term outlooks for this winter show it being slightly warmer than last, Yeomans said on the conference call. But that does not mean much in terms of reliability because even an above-average temperature winter could have five, six or 10 days that are "brutally cold," he said.

Resource capacity, including generation, imports and demand response, is expected to total 43,346 MW this winter, according to the statement.

Installed generation capacity amounts to 41,815 MW and imports of 679 MW are expected to be available for the winter period.

"Projected demand response resources, which enlist consumers to reduce electricity use during peak conditions, equal 853 MW" and the NYISO is forecasting a capacity margin of between 9,299 MW to 10,900 MW depending on specific conditions, according to the grid operator's statement.

-- Jared Anderson, jared.anderson@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com

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