California braces for power-grid test as heat-wave approaches

Reuters News
Posted: Aug 09, 2012 2:49 PM
California braces for power-grid test as heat-wave approaches

By Rory Carroll

SAN FRANCISCO (Reuters) - California's electricity grid operator issued a rare state-wide alert on Thursday warning users to try and curb power usage in coming days as an approaching heat wave threatens to severely strain its already taxed network.

The unusual power warning presages the biggest test of the most-populous state's electricity grid since 2007, when a state of emergency was declared.

The California Independent System Operation, or CAISO, a not-for-profit corporation charged with operating the majority of the state's high-voltage grid, issued a "flex" alert urging consumers to reduce power usage especially in the afternoons, when air-conditioning dramatically ramps up demand.

CAISO is bracing for the heat wave and struggling to compensate for the loss of the 2,150 Megawatt (MW) San Onofre nuclear power plant. That plant will be offline at least through the end of the summer, following the discovery of a small radiation leak earlier this year.

The CAISO said the situation was exacerbated when a "large unit" or power generator went offline unexpectedly on Thursday. It did not elaborate but said it will reveal more later in the day.

Businesses and homes were urged to curb use, starting Thursday, during the peak consumption hours of 11:00 a.m. to 6 p.m., through Sunday.

California's two major utility companies, Pacific Gas & Electric (PG&E) and Southern California Edison (SCE), asked industrial customers to limit consumption during the hot spell, officials from both firms said.

"We are having above-normal temperatures, especially on the coast," Steven Greenlee, a CAISO spokesman, told Reuters. "We've got higher demand because of the temperatures and, as we had anticipated when San Onofre went offline, supplies are getting tighter."


The current heat wave will be the biggest test of the power grid since 2007, when a "stage 1" emergency was declared after operating electricity reserves fell between 7 and 6 percent.

CAISO has also ordered power-plant owners and transmission operators across the state to limit maintenance activities that might jeopardize equipment availability due to the high electric demands.

Despite the consumption alert, Greenlee said the state is not in danger of blackouts at this point.

"We would take other steps and release another warning before that would take place," he said.

Peak electricity demand for Thursday through Sunday ranges from 43,000 MW to 47,125 MW, CAISO said. The state is capable of producing up to 58,600 MW, according to CAISO.

The all-time peak demand was 50,270 MW, which occurred on July 24, 2006.

California is no stranger to blackouts, having experienced costly power outages in 2000 and 2001. It was later revealed that those blackouts were the result of power market manipulation, not supply-demand fundamentals.

The most recent major outage occurred in September of last year, when a "human error" left nearly 5 million people across parts of California, Arizona and Mexico without power.

CAISO said Thursday's peak demand could reach 47,125 MW, which would surpass last summer's peak demand of 45,545 MW, set in early September. It would also exceed CAISO's forecast for peak power use this summer of 46,342 MW, under normal weather conditions.

California's all-time peak demand hit 50,270 MW on July 24, 2006 amid a heat wave. Since then, the economic recession and moderate weather have cut the state's electric needs.

Power consumption will ease on Friday, but the hot weather will keep demand unusually high through Sunday, CAISO said.

Wholesale electric prices for Friday delivery in Southern California slipped to the mid-$50s per megawatt-hour, down $7 from an 18-month high set on Wednesday.

Next-day power prices at the Palo Verde hub and the Mid-Columbia hub in Pacific Northwest also eased from Wednesday.

(Additional reporting by Eileen O'Grady in Houston; Editing by Dan Grebler)