NYISO Overhauls Interconnection Process: What Developers Need to Know

The New York Independent System Operator (NYISO) interconnection process is undergoing a series of notable changes that could significantly shape developer strategy in both the ongoing 2024 Cluster and the upcoming 2026 Cluster. Recent deliverability study results, proposed methodology updates, and planned process enhancements collectively signal a shift toward a more streamlined and economically balanced framework.

$2.2 Billion in Upgrades Identified in 2024 Cluster

NYISO approved its 2024 Cluster Deliverability Study Report on March 30, identifying 22 new System Deliverability Upgrades (SDUs) totaling approximately $2.2 billion. These upgrades span key capacity regions, including Rest of State (ROS), Lower Hudson Valley (LHV), New York City (NYC), and Long Island (LI), with the majority tied to highway interface constraints in ROS and LHV. 

However, the headline figure may not tell the full story. Proposed changes to the deliverability study methodology, if approved and implemented, could dramatically reduce SDU costs in ROS and LHV from roughly $1.17 billion to just $1.2 million. This major shift removes most of the SDUs for ROS and LHV, materially improving project economics and increasing the likelihood of developers retaining full Capacity Resource Interconnection Service (CRIS) in these regions. 

In contrast, projects in NYC and LI are still expected to face tighter deliverability constraints, with many developers likely opting to accept only deliverable megawatts due to higher upgrade costs. 

Developers face an imminent decision deadline of April 10 to determine whether to proceed with studying the identified upgrades or accept deliverable capacity.  

Methodology Changes Aim to Better Reflect System Realities

NYISO is concurrently evaluating updates to its deliverability study methodology to better align with current grid conditions and the growing volume of interconnection requests. 

Key proposed changes include: 

• Adopting more realistic, levelized dispatch assumptions across NYCA 
• Revising how energy storage UCAP derates are calculated, shifting to a cumulative capacity value approach 
• Modifying the Highway Deliverability Test to reflect downstream load requirements rather than exporting all excess generation 
• Introducing LOLE-based thresholds into the Other Interface No Harm Test for key internal interfaces 

Early indications suggest these changes could have a favorable impact on project viability, particularly by reducing unnecessary system upgrade costs and improving capacity revenue outlooks. 

A Streamlined Process and Tighter Timelines: 2026 Cluster Changes 

Looking ahead, NYISO is preparing a series of process enhancements for the 2026 Cluster, driven by lessons learned from the current cycle and stakeholder feedback. 

NYISO is expected to file these changes in April or May, with implementation targeted ahead of the 2026 Cluster opening. 

The Rising Importance of Strategy and Execution 

Developers prospecting for the 2026 Cluster should be aware that the landscape will look different than in prior years. The application window is expected to be 45 days, notably shorter than the 75-day window offered in the 2024 Cluster. This compresses the timeline for submitting and curing initial application validation deficiencies and places a higher premium on application quality and preparation, particularly given the planned changes to study methodology and physical infeasibility determinations.

Model testing created significant withdrawal risk for several projects in the 2024 Cluster, and that dynamic is unlikely to ease. 

How EPE is Helping Developers Navigate NYISO

EPE supported more than 60 projects representing over 20% of NYISO’s 2024 Cluster and achieved zero involuntary withdrawals due to application deficiency. EPE also supported teams that had not originally retained our services when they were faced with withdrawal notices. All these additional engagements resulted in these projects being ultimately reinstated and remaining in the cluster. This reflects the depth of expertise our team brings to NYISO interconnection work. Developers beginning to prospect for the 2026 Cluster are encouraged to engage EPE's interconnection team early. 

While uncertainties remain – particularly around the approval and timing of methodology changes – the direction of NYISO’s reforms points toward a more efficient and transparent interconnection framework. For developers, staying ahead of these changes isn’t just a competitive advantage – it’s a prerequisite for protecting project viability.

EPE’s interconnection team has the experience and market depth to help developers navigate NYISO’s reforms and future cluster cycles. Contact our team using the form below to get the conversation started.