Q4 2025 STAR Report: New York's Reliability Landscape Heading into 2026

The New York Independent System Operator (NYISO) released its Q4 2025 Short-Term Assessment of Reliability (STAR) report on January 13, 2026, providing critical insights into the state's grid reliability outlook for the next five years. The STAR report is NYISO's quarterly evaluation of the bulk power system's ability to meet reliability standards while accounting for generator retirements, transmission upgrades, and evolving demand patterns. When gaps in reliability are identified, the NYISO is obligated to solicit forsolutions and select the most viable proposal to meet the need. For market participants, policymakers, and energy stakeholders, these assessments serve as an essential roadmap for understanding near-term grid challenges and opportunities. 

The Q4 STAR report, covering October 2025 through October 2030, found no new reliability needs, but it re-asserted reliability needs that were identified in the NYISO's Q3 2025 STAR Report. The Q3 STAR report identified needs in New York City and Long Island. In response to that report, the NYISO issued a solicitation for solutions, which are now under review. While the absence of new deficiencies might appear reassuring on the surface, this snapshot in time reveals a more challenging reality for market participants. New York's energy landscape has reached a critical juncture where investment decisions have become increasingly difficult. 

New York City's Ongoing Reliability Challenge 

The New York City reliability need first identified in the Q3 2025 STAR report continues unchanged in scope and scale. The deficiency centers on the Bulk Power Transmission Facilities (BPTF) and stems primarily from the planned deactivation of the Gowanus and Narrows generators, which together represent 672 MW of nameplate capacity. 

The numbers tell a sobering story. In 2026, New York City faces a projected deficiency of 650 MW during summer peak periods, with an energy requirement of 3,569 MWh over an 8-hour duration. This gap grows progressively worse through the planning horizon: 680 MW in 2027, 790 MW in 2028, 950 MW in 2029, and reaching 1,130 MW by 2030. The energy requirements similarly escalate, climbing to 10,922 MWh over a 13-hour duration by 2030. 

However, there is reason for cautious optimism. The completion of three major infrastructure projects, the Champlain Hudson Power Express (CHPE), Empire Wind offshore wind facility, and the Propel NY Public Policy Transmission Project, promises to substantially improve New York City’s reliability margins. These projects represent critical additions to the city's resource portfolio and transmission capability. 

Yet even with these planned projects entering service on schedule and performing at their design capabilities, small deficiencies would persist in 2029 (68 MW) and 2030 (148 MW). This residual gap underscores a fundamental challenge. New York City's electricity demand continues to grow, gradually eroding margins even as new resources come online. 

The timing and performance of these major infrastructure projects carry inherent uncertainties. Large-scale transmission and generation developments face common risks including permitting delays, supply chain constraints, and construction challenges. Any slippage in the planned in-service dates or underperformance relative to design specifications could significantly impact the reliabilitypicture. 

Long Island's Evolving Reliability Needs 

Long Island's reliability situation has seen some adjustments since the Q3 report, though challenges remain. The Generator Deactivation Reliability Needs continue in the Long Island locality, but with refined scope based on updated assumptions. 

Following publication of the Q3 STAR, NYISO received important updates from the Long Island Power Authority (LIPA) regarding large load projects on Long Island. Certain projects previously included in the expected weather forecast from the Gold Book have been removed from the planning models. These demand forecast adjustments were incorporated into the solution solicitation issued November 10, 2025. 

The Long Island need is driven by the deactivation of two key facilities: the Pinelawn generator (82 MW nameplate) and the Far Rockaway combustion turbines (121 MW nameplate total). The MW deficiencies present a more manageable but still significant challenge - no deficiency in 2026, but 111 MW needed in both 2027 and 2028, growing to 136 MW in 2029 and 189 MW in 2030. 

Additionally, Long Island faces a separate Non-BPTF need driven by the Far Rockaway deactivation, which creates reliability challenges in the local Far Rockaway load pocket. Notably, the Interim Service Provider (ISP) rate for both Pinelawn and Far Rockaway became effective December 25, 2025, providing temporary reliability support while longer-term solutions are evaluated. 

The Path Forward: Solution Assessment Underway 

The NYISO's structured approach to addressing these reliability needs is now entering a critical phase. Following the November 10, 2025 solution solicitation for both New York City and Long Island needs, the NYISO received proposed solutions on January 9, 2026. The evaluation process is currently underway. 

The NYISO will assess these proposals individually and in combination to determine the most effective approach to meeting the identified needs. A Short-Term Reliability Process Report will follow, detailing the selected solution or combination of solutions along with a reasoned explanation of the selection criteria and decision rationale. 

This process is designed with an important principle: Reliability Must Run (RMR) agreements with generators should be a last resort. The NYISO prioritizes market-based solutions including new generation, transmission upgrades, demand response, energy storage, or hybrid approaches over administrative contracts. If proposed solutions prove insufficient or unviable either individually or in combination, interim measures must bridge the gap to maintain grid reliability. 

Broader Context: Navigating Uncertainty 

The Q4 STAR report arrives amid significant uncertainty in New York's energy landscape. On December 22, 2025, the Bureau of Ocean Energy Management (BOEM) issued orders suspending all ongoing activities for both the Empire Wind and Sunrise Wind offshore wind projects, though both have since secured preliminary injunctions allowing construction to resume. The NYISO continues monitoringthese developments closely, as offshore wind represents a critical component of the state's clean energy and reliability strategy. 

Beyond offshore wind, the grid faces mounting complexity from multiple directions. The thermal generation fleet continues aging, with many facilities facing retirement decisions driven by economics, environmental compliance, and operational considerations. Meanwhile, demand patterns are becoming increasingly volatile, influenced by electrification of transportation and buildings, large industrial load additions, and weather extremes. 

Major renewable energy and transmission projects carry development timelines spanning multiple years, with completion subject to numerous external factors. The gap between planning assumptions and on-the-ground reality can significantly impact reliability outcomes. 

The NYISO's 2025-2034 Comprehensive Reliability Plan, issued in November 2025, provides additional context for understanding these longer-term challenges. The ten-year outlook highlights the need for sustained attention to resource adequacy, transmission infrastructure, and operational flexibility as New York's energy system continues its transformation. 

What This Means for the Market 

The Q4 STAR report captures New York's energy market at a particularly challenging moment. While the challenges are known and quantified, what happens next matters enormously for market participants trying to make investment decisions. 

The current environment presents obstacles to new resource development including lengthy permitting processes, interconnection delays, supply chain uncertainties, and policy complexity. Meanwhile, aging thermal generators face mounting pressure from environmental compliance requirements and economic headwinds, making retirement decisions comparatively straightforward. 

This imbalance creates a market dynamic that's effectively frozen. Investors require stability and clear signals to commit capital to new projects, yet the current landscape offers neither. The NYISO finds itself attempting to balance multiple competing priorities -maintaining reliability, accommodating state policy objectives, and preserving market neutrality. This effort to be everything to everyone has introduced layers of complexity that obscure rather than clarify investment opportunities. 

The coming months will prove critical as NYISO completes its evaluation of proposed solutions for New York City and Long Island. The selected approaches will shape investment patterns and operational strategies across these constrained localities. Yet the broader question remains: how can New York create market conditions that attract the sustained investment needed for long-term grid transformation? 

The path forward requires clarity and focus. Market participants need transparent signals, simplified rules, and a regulatory framework that prioritizes reliability and affordability above all else. The current approach of layering policy accommodations onto market structures while attempting to maintain neutrality risks creating complexity that could ultimately undermine market function entirely. Without clearer direction, New York's energy markets may struggle to deliver the resources the state needs. 

For now, market participants should watch carefully for the upcoming Short-Term Reliability Process Report and continue monitoringSTAR assessments as assumptions evolve and projects progress. The real work ahead extends beyond quarterly reliability assessments to fundamental questions about market design, regulatory clarity, and the conditions necessary for confident investment in New York's energy future. 

Looking Ahead  

 The Q1 2026 STAR report, expected April 15, will reflect developments that occurred after the Q4 assessment, including the Danskammer deactivation notice (532 MW in the Lower Hudson Valley, effective August 2026). The report may also provide updated assumptions regarding the Empire Wind and Sunrise Wind offshore wind projects, which faced BOEM suspension orders in late December 2025 but have since secured preliminary injunctions allowing construction to resume. 

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.