Report
June 15, 2009
Cost-Benefit Analysis of Replacing the NYISO’s Existing ICAP Market with a Forward Capacity Market
Prepared for the New York Independent System Operator
The Brattle Group was retained by the New York Independent System Operator (NYISO) to evaluate the costs and benefits of replacing the existing Installed Capacity (ICAP) market with a new forward capacity market (FCM). The Brattle Group’s evaluation considers the NYISO’s proposed FCM design in which the full resource adequacy requirement is procured four years in advance, followed by several reconfiguration auctions and, finally, a spot auction with a sloped demand curve. It also considers alternative design variations to evaluate the inclusion of demand curves and a multi-year price lock-in option.
