NYISO Releases Q1 2026 STAR and Q3 2025 Short-Term Reliability Process Report

On April 15, 2026, the NYISO released two companion documents that together define the current state of New York's short-term reliability picture: the 2026 Q1 Short-Term Assessment of Reliability (STAR) and the Short-Term Reliability Process Report summarizing the evaluation and selection of solutions to address generator deactivation reliability needs identified in the 2025 Q3 STAR. Read together, these reports close out one chapter of the short-term reliability process while opening another. Solutions are now in place for the needs first identified last fall, a new near-term need has emerged in the Lower Hudson Valley, and the structural gap between aging supply and growing demand continues to widen. 

Here is what the reports say and what they mean for generators and market participants in the NYISO. 

Q3 2025 STAR Need: Solutions Selected for New York City and Long Island 

The solution selection report brings the November 10, 2025 solicitation process to a close. The NYISO solicited solutions for Near-Term Reliability Needs in Zone J and Zone K after no viable transmission or operational alternatives were identified in consultation with Con Edison and LIPA. 

New York City (Zone J) 

The only viable market-based solution received for Zone J was Alpha Generation’s proposal to retain the existing Gowanus and Narrows barges. On April 15, 2026, the NYISO submitted a letter to the DEC formally designating these units for continued operation through May 1, 2029, the maximum extension allowed under the Peaker Rule. Alpha Generation has officially rescinded its generator deactivation notices accordingly as of April 16, 2026. 

Retaining the barges is necessary but not sufficient. Under a barges-only scenario, Zone J would still face a deficiency of up to 187 MW over a four-hour period at the non-coincident summer 2026 peak. Addressing that remaining gap will require emergency operating procedures until CHPE and other planned projects demonstratetheir capabilities. CHPE, a 1,250 MW HVDC project connecting Hydro Quebec to the Astoria Annex substation in Zone J, has completed construction and is targeted for service by summer 2026. The NYISO will be monitoring its progress closely throughout the quarterly STAR process. As of today, CHPE has elected to not participate in the June 2026 capacity market. 

Con Edison's proposed permanent transmission solution, approximately 16 miles of 345 kV underground cable, was not viable for the identified need given a projected completion date of 2035. Alpha Generation also submitted a conceptual proposal to repower the Gowanus site with three hydrogen-capable barges totaling 819 MW nameplate, with an earliest in-service date of mid-2031 and significant permitting and financing hurdles remaining. The NYISO found the concept compelling and explicitly encouraged developers and state agencies to establish pathways for these types of resources, noting that dispatchable repowering solutions would be critical to maintaining reliability beyond the short-term horizon. 

Long Island (Zone K) 

No market-based solutions were submitted for the Long Island Need. The NYISO selected the PSEG-LI/LIPA regulated generation package as the only viable solution for the bulk system need. That package includes water injection upgrades at Shoreham 1, Shoreham 2, and Glenwood GT 3 (targeted in service by May 1, 2027), plus the retention of Far Rockaway 1 and 2 through a LIPA capacity purchase agreement. The State Comptroller approved that agreement on March 20, 2026, and Hull St. Energy rescinded its’ deactivation notices for Far Rockaway GT1 and GT2 effective May 1, 2026. 

For the non-BPTF need in the Far Rockaway load pocket, the solution is the Far Rockaway 2 unit combined with local transmission upgrades that went into service in December 2025, including the Belmont 33 kV to 69 kV conversion and two new 69 kV circuits. 

Pinelawn Power 1 will not receive an offer of an RMR agreement from the NYISO. Its Interim Service Provider (ISP) agreement terminates May 15, 2026, after which the unit may deactivate. Even with the full solution set in place, Long Island will carry less than 100 MW of margin until Propel NY enters service in summer 2030. 

New Near-Term Need: Lower Hudson Valley and Danskammer 

The Q1 2026 STAR introduces a new into the short-term reliability process. Danskammer units 1 through 4, with a combined nameplate of 572 MW, have proposed retirement with an effective date of August 1, 2026. The evaluation of Danskammer elevates the Lower Hudson Valley deficiency from a secondary consequence of the Zone J need into a standalone Near-Term Reliability Need beginning in summer 2027. 

The magnitude of the Lower Hudson Valley deficiency grows from 17 to 27 MW in summer 2027 to between 202 and 639 MW over 3 to 6 hours by summer 2030. The extension of the Gowanus and Narrows barges addresses the 2027 and 2028 deficiencies, but 2029 and 2030 deficiencies persist. It is worth noting that retaining Danskammer would not help Zone J, as the units sit outside of Zone J and do not contribute to the New York City transmission security margin. 

As a result of this finding, Danskammer 1 through 4 cannot deactivate before August 1, 2026. If planned projects have not entered service by that date and demonstrated their capabilities, Danskammer may be required to remain in service through January 15, 2027, the end of the 365-day notice period. An ISP rate would apply starting August 1, 2026 if the units are needed. Should the 2029 and 2030 deficiencies remain unresolved, the NYISO has indicated it may execute an RMR agreement with Danskammer as a last resort. 

The Broader Reliability Picture 

Both reports are candid about where the system is headed, and the trajectory warrants attention. In the April 16th NYISO Operating Committee meeting, Zach Smith, VP of Planning at the NYISO, shared with stakeholders that the projected reliability margins that the NYISO is reporting on indicates the grid is becoming less operable over time and the projections demonstrate that small deviations from planned assumptions such as delays in projects and higher than expected demand, or generator outages could materially affect reliability outcomes in both the nearer and longer term. 

Using draft 2026 Gold Book demand forecasts, the statewide system margin goes deficient starting in summer 2027 until planned projects demonstrate their capabilities. Even assuming all planned projects enter service on time, the statewide margin becomes deficient again as early as 2030 and worsens steadily through 2036 as demand grows and aging fossil generation reaches end of life. Winter reliability now presents comparable risks to summer, with the 2025 to 2026 winter operating season having already pushed the system near its operational limits due to extreme cold combined with non-firm fuel supply constraints. 

Several structural forces are driving this trajectory. 

Aging generation. Roughly 25% of New York's total generating capacity consists of fossil fuel plants that have been in operation for more than 50 years. The 2025 to 2034 Comprehensive Reliability Plan projects approximately 3,000 MW of that capacity as likely unavailable by 2034, with about 60% of that exposure concentrated in Zone J. The NYISO has proposed incorporating aging generation risk directly into the 2026 RNA methodology to better capture this dynamic in long-term planning. 

Demand growth. While the 2026 Gold Book modestly reduces near-term demand forecasts relative to 2025 projections, the long-term trajectory remains sharply upward. Electrification policy, building decarbonization, and a surge in data center and semiconductor manufacturing load requests are adding demand at a pace that outstrips the development of new supply. Large loads can interconnect quickly. The generation, transmission, and storage needed to serve them cannot. 

Import unreliability. During the June 2025 heatwave, neighboring systems curtailed scheduled imports to New York as they prioritized their own demand. PJM, Ontario, Quebec, and ISO New England are all projecting tighter reliability margins over the same planning horizon, making emergency import assistanceincreasingly unavailable precisely when New York is most likely to need it. 

Project execution risk. The reliability picture is heavily dependent on a small number of large projects executing on schedule. Both Empire Wind and Sunrise Wind are currently subject to U.S. Bureau of Ocean Energy Management (BOEM) suspension orders, with preliminary injunctions in place as of January and February 2026respectively. The NYISO is monitoring both projects. Any delays to CHPE, Empire Wind, Sunrise Wind, or Propel NY would meaningfully worsen margins across the affected localities. The 2025 to 2034 CRP found that without new dispatchable generation, the use of emergency actions is expected to triple over the next ten years. 

What This Means for Generators 

For capacity resources operating in Zone J and Zone K, the solution selection confirms the near-term retention framework. The Gowanus and Narrows barges are designated through May 2029, and the Long Island generation package is targeted in service by May 2027. Margins in both localities remain tight, particularly in the window between now and CHPE demonstrating its summer 2026 capability. 

For generators considering deactivation anywhere in the Lower Hudson Valley, the Danskammer situation is a useful reminder that the NYISO's Short-Term Reliability Process can and will delay retirements when a need is identified, and the threshold for triggering a Near-Term Reliability Need in the Lower Hudson Valley is now lower given the persistent Zone J deficiency backdrop. 

More broadly, the reliability margin projections in these reports represent a meaningful long-term market signal. A system increasingly reliant on emergency actions, with shrinking margins and accelerating supply attrition from aging generation, will require new dispatchable resources. The NYISO has made that conclusion explicit, and the 2026 RNA, with preliminary results expected in July and a final report by year-end, will formalize the assessment over the full ten-year horizon. 

Luminary will continue to monitor CHPE's in-service progress, developments in the Empire Wind and Sunrise Wind BOEM litigation, and the Q2 2026 STAR process. Contact our team with questions about how these findings affect your position in NYISO markets. 

About Luminary Energy 

Luminary Energy provides independent analysis and strategic insights on energy markets across NYISO and ISO New England. Our team specializes in translating complex market dynamics, regulatory developments, and reliability assessments into actionable intelligence for market participants, policymakers, and industry stakeholders.  

We help clients navigate the evolving landscape of wholesale electricity markets with focused expertise in resource adequacy, capacity markets, transmission planning, renewable integration, and energy policy. Whether you need to understand how reliability needs impact market opportunities, assess the implications of regulatory changes, or develop informed strategies for market participation, Luminary Energy delivers the clarity and depth of analysis you need.  

To learn more about Luminary Energy’s services or to connect with a member of our team, contact us at contact@luminary.energy.