POLITICO's Marie J. French: 

A new coalition backed primarily by renewable generators and developers hopes to push Gov. Andrew Cuomo's administration to back a price on carbon in the electric market.

EET&D – Gauging from recent press releases we’ve seen on NYISO, it looks like you’ve been quite busy.

RD – That’s correct, although it’s probably more accurate to say “even more than usual.” The changes taking place on the grid today are unprecedented in our 20-year history and re­flect changes taking place around the nation and the world, as we see the continued impact of climate change and a va­riety of new energy innovations. When I was hired in 2000, at the end of a six-hour interview, our first CEO, Bill Mueller, called me into his office and said, “Rich, we really want you to join the New York ISO. We have no idea what your title is going to be, and I can’t even tell you what you’re going to work on, but I guarantee that you will have fun.” He hasn’t stopped being right, and especially now – this is the most exciting time to be in the energy industry.

EET&D – Talk about how NYISO got to where you are today.

RD – As I mentioned, we’ve been in existence for nearly 20 years, since we began operation in December of 1999. But our history dates back to the creation of the New York Power Pool in 1965, after a blackout in the Northeast that affected 30 million people. The Power Pool managed the transmission of power across the state from 1965 to 1999, but the utilities still controlled generation. In 1999, follow­ing years of discussion and planning by the state govern­ment to introduce competition into the energy sector, the utilities divested themselves of generation, and the NYISO was formed to operate the grid and administer those mar­kets independently from any commercial interests.

New York State, the 11th-largest economy in the world, recently enacted the US’ most aggressive climate change legislation. By 2040, according to the new law, the state must get all of its electricity from zero-emission sources.

How does a state of 19.8 million citizens, which in 2018 generated more than 40% of its energy from fossil fuels, reach zero emissions in only two decades? A carbon-pricing proposal from the New York Independent System Operator (NYISO) can play a significant role - as new research by the Analysis Group has concluded.

Policy makers and regulators around the country are trying to figure out how to rapidly decarbonize the electricity sector. There are debates about what renewable goals states should have, by when, what should count as clean energy, and how much energy efficiency states should invest in. 

The cost to comply with New York's landmark carbon legislation is an "astounding number" that was so high that it was left it out of the final analysis for fear it would be a distraction, according to the report's author. Regardless, they say, placing a price on carbon will cut the cost. "If New York doesn't put a price on carbon, it is missing out [on] an opportunity to have its markets really harnessed and pushing for the goal," Sue Tierney, Analysis Group senior advisor and co-author of the ISO's carbon pricing analysis, told Utility Dive.

Charging power generators a carbon price could help New York meet its goal of 100% emissions-free electricity by 2040, according to a study released Oct. 3.

Introducing a carbon-pricing mechanism into the state’s wholesale electricity market would send a price signal to investors, entrepreneurs, and project developers, spurring more clean energy projects and innovation, according to an Analysis Group report compiled for New York’s grid operator.

The state’s new climate law requiring aggressive decarbonization of the electric sector and the rest of the economy strengthens the case for carbon pricing in the electric market, a new analysis by a Boston-based consulting firm argues.

The Analysis Group’s review of a proposal to add a cost for carbon emissions from generators into the wholesale electricity price was released Thursday morning and is set to be discussed at a New York Independent System Operator committee meeting. The report focuses primarily on the implications of the state’s new goals and how carbon pricing would support them.