A Locational Analysis of Generation Benefits on Long Island, New York

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Beginning in April of 2004, nine sites owned by Verizon began to participate in the Long Island Real Time Purchasing Pilot Project (LIRTP) as retail choice customers. LIRTP was designed to minimize electricity costs for retail customers who own on-site distributed generation (DG) units in the near-term, and to stabilize overall electricity costs in the long-term. The nine Verizon buildings have two types of DG units: gas turbines with an estimated generation cost of $156/MWh, and diesel units with an estimated cost of $120/MWh.1 Due to total site emission limits, the operable hours of the DG units are limited. To estimate the economic value of running on-site DG units, an analysis of the New York Independent System Operator (NYISO) Locational Based Marginal Price (LBMP) data for Long Island was conducted, mainly covering the summer months from 2000 to 2004. Distributions of LBMP, relationship between LBMP and load, and estimates of profitable operating hours for the units were all analyzed. Since Long Island is a diverse and highly congested area, LBMP varies greatly. Looking at the data statistically offers a zone-wide viewpoint, while using spatial analysis shows the LBMP intrazonal differentiation. LBMP is currently used by NYISO for pricing in the 11 NY control zones. Because geographic information systems (GIS) visualize the distribution of a phenomenon over space, it clarifies where load and generation nodes are located, and where load reduction would be most valuable. This study is based on the assumption that the control zone areas do not fully represent the diversity of pricing, and that intrazonal pricing can be analyzed to determine where and when electricity conservation or injection into the network is most valuable.

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