SAN FRANCISCO (Reuters) - California's electricity grid operator has taken the rare step of asking residents and businesses to reduce their power use for a third time this month as a stubborn heat wave taxes the state's stretched system.

After getting past a hot spell last week that threatened to be the power grid's biggest test in five years, California's Independent Grid Operator (CAISO) issued a new "flex" alert for Tuesday, citing higher-than-expected temperatures.

Peak electricity demand for Monday was forecast at 47,489 megawatts, and Tuesday's demand was forecast to peak around 47,500 MW, leaving just 9 percent of unused capacity. If reserves fall to 6-7 percent, the state will issue a stage 1 emergency, an event that last happened in the summer of 2007.

Californians are asked to set their thermostat to 78 degrees Fahrenheit (25.5 Celsius) or higher, turn off unnecessary lights and appliances, and to use major appliances in the morning or late evening.

The warning runs from 11 a.m. to 6 p.m. local time on Tuesday.

While no formal request was issued for Monday, conservation was encouraged.

"Conservation is helpful today, and we see it as critical for tomorrow," said Steven Greenlee, a CAISO spokesman.

Power plants supplying the state were expected to produce about 52,000 MW on Monday and Tuesday after accounting for unplanned outages at a handful of facilities.

Rolling blackouts would occur only if reserves were forecast to fall below 3 percent.

Greenlee called Friday's flex alert a success, with conservation efforts freeing nearly 1,000 MW of electricity.

(Reporting by Rory Carroll; Editing by Dale Hudson)




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