BOX 5-1

Reliability Criteria

System operators generally use two main criteria for ensuring reliability: reserve margin and loss-of-load expectation (LOLE). “Reserve margin” is simply the difference between the generating capacity available to serve an area and the expected peak demand divided by the peak demand. It is measured in percent. NYISO plans for the NYCA to keep a reserve margin of at least 18 percent.

LOLE is more complicated but more meaningful. It measures the predicted frequency, in days per year, that the bulk power system will not meet the expected demand for electricity in one or more zones in New York State, even if only for a short time. Equipment failures in the power system (i.e., generators and the high-voltage transmission grid together) can force part of the load on the bulk power transmission system to be involuntarily disconnected. LOLE does not include the more frequent cause of blackouts for customers that are associated with failures of the local distribution system due, for example, to falling tree limbs and ice storms.

The North American Electric Reliability Council recommends a reliability standard of LOLE less than 0.1, and this standard has been adopted for the region by the Northeast Power Coordinating Council, and in turn by the New York State Reliability Council. In other words, there must be sufficient generation and transmission capability in the system that a failure to serve load somewhere in the bulk power system would be expected not more than on 1 day in 10 years. The LOLE criterion is central to the discussion of reliability in this chapter. See also Chapter 1 for a discussion of reliability.

TABLE 5-1 NYISO Base Case Peak Load and Known New York Control Area (NYCA) Resources






Peak load (MW)





Resources (MW)





Reserve margina (%)





Reserve marginb (%)





aFor the calculation of reserve margin and loss-of-load expectation (LOLE), NYISO adjusted installed NYCA generating capacity downward for contracted sale of hydropower outside the NYCA and for wind power (because wind cannot be counted on during peak demand). “Resources” include the adjusted NYCA generating capacity plus Special Case Resources (SCRs, 975 MW) and Unforced Delivery Rights (UDRs, 990 MW). SCRs are agreements between NYISO and large electricity consumers (e.g., industrial companies) that will reduce load at NYISO’s order. This is one of the emergency steps available to NYISO to avert outages. UDR corresponds to the two high-voltage direct current (HVDC) cables into Long Island, the Cross Sound Cable from New England (330 MW), and the Neptune Cable from New Jersey (660 MW scheduled for 2007). It is power that is expected to be available and is thus included by NYISO for planning purposes.

bReserve margin without the 1,965 MW of SCR and UDR, as plotted in Figure 4-1 in Chapter 4 of this report. Assumptions on allowable resources make a large difference in the calculated reliability.

SOURCE: NYISO (2005b, p. 39).

2,250 MW would be needed. All of these projections are based on Indian Point remaining in service (NYISO, 2005a).

NYISO has solicited proposed market-based or regulated solutions from participants and stakeholders in the NYCA market. The solicitations provide that “Proposed solutions may take the form of large generating projects, small generation projects including distributed generation, demandside programs, transmission projects, market rule changes, operating procedure changes, and other actions and projects that meet the identified reliability needs (NYISO, 2005c).”

Figure 5-1 shows projected NYCA LOLEs for the Base Case and the thermal constraint case (the top and bottom lines). It also shows two other analyses: if load increases faster than expected, and if power is constrained from flowing from upstate New York through New England and back to southeast New York. Both these assumptions adversely affect reliability to a significant extent compared to the thermal constraint case. All the analyses show that LOLE will violate the criteria limit of 0.1 in the 2008-2010 time frame.


The committee adopted a Reference Case (with Indian Point still operating), similar to the NYISO Sensitivity Case with thermal transmission limits controlling.1 The Reference Case includes two assumptions that differ from the NYISO case: (1) it includes constraints on the flow of power from upstate New York through New England and back to southeast New York, an assumption that NYISO did not apply in its final RNA/CRPP for the thermal sensitivity case; and (2) it used actual, though inactive, proposals for generating stations for additional capacity to meet demand, rather than NYISO’s standard 250 MW plants located wherever they were needed. The committee used these as illustrative capacity additions to demonstrate the changes required to meet or exceed the LOLE requirements for balancing the electrical system. While there is no assurance that these projects will be built, presumably the developers would not have proceeded as far as they did without a reasonable expectation that the sites were viable, that fuel and transmission access would be available, and that all permits would be attainable (several have been permitted under Article X).2 In addition, one generic plant was included, with 580 MW. Other options could be selected along with alternative timing, but the


The committee believes that the essential corrections to reactive power would most likely be made in a timely manner, and that thermal transmission constraints would ultimately dictate system reliability and thus the additional compensatory resources required.


The committee does not endorse any of these projects, nor did it analyze the financial viability of any of them; they are simply assumed to be in the generating fleet when needed in the reliability calculation. None of them is under construction. Several of them have been, or may be, canceled, although other generating companies might acquire the sites and reactivate the projects.

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