The NY Energy Market
In the state of NY, the energy markets started to be liberalized since 1998, and were entirely put in place by 2002. With this deregulation of the energy markets, customers can now choose their energy supplier, and benefit from competitive rates.
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Deregulated retail electricity and gas
Previously, in the United States, energy utility companies were monopolistic. This means that consumers could not choose where they got their electricity from. The price of electricity and gas was determined by the state's Public service commission. Today, many IPPs (Independent Power Producers) produce electricity competitively, and the price of electricity and gas are decided by the law of supply and demand. This has created Wholesale energy markets, as well as Over-the-counter transactions. Also, many customers from the large NY utility companies can now purchase electricity and gas from various retail ESCOs (Energy Service Company), at a competitive price. To find out more about this, go to our Suppliers page. To find out more about the history of the energy markets deregulation, go to our page New York's Electricity and Gas Market Deregulation: How Did it Happen?
NYISO - wholesale electricity trading platform
A wholesale market is where the IPPs (Independent power producers), other power generating companies, power traders, suppliers, large customers and other entities can buy or sell electricity publicly. Their activity can be monitored by the US Energy Regulatory Agency: FERC. There are several of these trading platforms in the US, and the one located in the state of New York is NYISO (New York Independent System Operator). To find out more about what a wholesale market is, and about the other wholesale markets in the US, visit our What is a wholesale electricity market?. To find out the difference between retail and wholesale electricity, read our What is the difference between wholesale and retail electricity? page.
Over the counter electricity trading
Over-the-counter (OTC) transactions are an exchange of electricity for payment between two consenting parties. Like wholesale electricity transactions, they are also usually deregulated, but contrarily to wholesale electricity, OTC transactions are anonymous and are cannot be monitored by market authorities.
New York State grid renewal
Following the deregulation of the energy markets, the manner in which electricity was produced has changed. Distributed energy, the concept of having smaller electricity sources (such as solar panels and wind farms) closer to the areas of demand, has changed the requirements of the grid.
The electricity grid is made of the Transmission network and the Distribution network. The transmission grid is for the transport of large amounts of electricity, whereas the distribution grid is for local electricity transport. For more information, you can go to the Difference between transmission and distribution page.
Today, due to the increase in distributed energy, the distribution grid is constrained, and needs reform. There has been a reform for the modernization of the electricity grid, for better system reliability: this initiative was proposed in 2014 by New York State's Department of Public Service, and is called "Reforming the Energy Vision (REV)". For more information, read our article: New York State's Electricity Market Reform.