Introducing the NYISO Electricity Capacity Market

The NYISO ICAP Market consists of three auctions: The Capability Period Auction, the Monthly Auction, and the Spot Auction.

• Spot auction: This is a mandatory auction where LSEs can procure their capacity requirements and offer to sell in the upcoming obligation month only. The spot auction is based on demand and supply dynamics which serve as investment price signals. The capacity clearing prices are established based on sloped ICAP Demand Curves. Spot auctions are run two to four days prior to the start of each month.
• Monthly auction: This auction is voluntary and covers for any obligation month in the Capability Period. Auctions are held at least 15 days prior to the start of each month.
• Capability¹ Period Auction: It is also known as the “Strip Auction”. It allows LSEs to procure Unforced Capacity² (UCAP )for six-month terms at a single price.

The capacity procured from all three markets can be delivered to fulfill the NYISO ICAP requirements, while the spot auction sets the monthly price to be paid for capacity by the consumer.

The NYISO capacity market plays a critical role in ensuring resource adequacy while the energy and ancillary markets provide operational reliability for the lowest cost possible for consumers.

1. May-October for the Summer Capability Period and November-April for the Winter Capability Period

2. UCAP represents the percentage of ICAP available after discounting the outage rate.

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