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California Girds For Summer Power Outages Due to Gas Storage Closure

With the closure of a major natural gas storage field, Southern California faces potential gas curtailments leading to perhaps as many as 14 days of rolling power outages this summer, a draft report from state energy officials said Tuesday.

The draft assumes normal summer peak load weather conditions and natural gas/power infrastructure operating conditions, along with an assumption that Southern California Gas Co.'s (SoCalGas) 86 Bcf Aliso Canyon underground gas storage field will remain closed to injections for an unforeseen period as all of its 114 storage wells are thoroughly tested (see Daily GPIMarch 29).

Potential regulatory, cost and energy system operational effects on both the gas and power sides are expected, but state officials have no estimates at this time of what those added costs, regulatory and operational changes might be. The state's draft plan outlines 18 measures to be taken, including calls for voluntary customer energy saving actions, to reduce the possibility of curtailments at a time when 60% of the gas used typically is for peaking generation plants.

California Energy Commission (CEC) Chairman Robert Weisenmiller emphasized the draft nature of the proposal at this stage, and that comments will be accepted from stakeholders and the general public through April 22. In terms of potential added cost, Weisenmiller said the CEC knows at this point that potential gas futures prices are tracking higher for next winter.

The draft action plan and accompanying technical assessment acknowledge the significant role played by natural gas storage for summer power generation as outlined under a joint effort by the CEC, California Public Utilities Commission (CPUC), California Independent System Operator (CAISO) and the Los Angeles Department of Water and Power (LADWP).  A public workshop on the draft proposal will be held on Friday in the Woodland HIlls section of Los Angeles.

California state energy officials on Tuesday outlined the draft plan as a contingency effort for dealing with possible gas curtailments and resulting power outages during peak load periods this summer, and in the winter and summer of 2017, too, if necessary. While officials were pressed during a news conference on when Aliso Canyon might reopen, they refused to speculate. SoCalGas has said it will take at least several months, if not longer, to complete all of the well integrity tests.

"Aliso Canyon plays an essential role in maintaining both natural gas and electric reliability in the [Southern California] area, and as a result, the facility's limited current operations create a distinct possibility of electricity service interruptions in the coming summer months," the joint draft document said. CPUC President Michael Picker said SoCalGas had been ordered to reserve at least 15 Bcf of supplies in Aliso, but those volumes will have to be managed very carefully for use only to prevent outages.

State officials said the Aliso Canyon facility has been a mainstay of the gas and power systems in the region for decades. It has never been constrained at the levels it is currently. Last month one of Picker's CPUC colleagues underscored the possibility of gas curtailments and power outages in an ongoing proceeding at the commission (see Daily GPIMarch 15).

Picker said the draft contingency plans are aimed at both summer and winter gas demand situations with the 18 proposed steps covering five basic areas: reducing electricity and gas during peak demand periods of the day; changing use of natural gas by major industrial users; closer gas-electric operational coordination so gas is "used where and when it is needed;” LADWP changing its hedging and dispatching practices to husband its use of gas-fired generation; and "prudently using" the remaining 15 Bcf of Aliso Canyon reserves.

"None of these measures will be easy, and they will take a lot of efforts to implement," Picker said. "And they may not absolutely eliminate the need for gas curtailments leading to power outages."

Southern California has up to 3.8 Bcf/d of gas pipeline capacity, and the concerns in preventing curtailments is avoiding major mismatches between pipeline supplies coming into the state and power demands on a hot summer day. "The mismatch could come from outages on either the gas or power systems, weather changes from coastal fog, so basically it covers all the unanticipated things that we are concerned about for the summer," Weisenmiller said.

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