Southern California has plenty of extra transmission capacity for both natural gas and electricity, but the region still faces potential rolling power blackouts during extended heat spells this summer, officials told a California Senate energy committee hearing in Sacramento Wednesday.
In deconstructing their conclusion that the current closure of Southern California Gas Co.'s (SoCalGas) Aliso Canyon underground gas storage field could cause electricity shortages, the officials said that 80% of the gas used in the greater Los Angeles Basin in the summer goes to generate power, and the intricate delivery system for providing that gas has been knocked off kilter by the historically unprecedented unavailability of gas from Aliso.
Without the 86 Bcf capacity storage facility to smooth out the day-to-day vagaries of supply-demand in the regional gas system, both electric and gas dispatchers will fight an increasingly tough battle as the region heats up, particularly in the inland valleys between June and October. Ultimately, hourly and daily mismatches in gas supply-demand will make the storage field's absence a source of heightened risk for power users this summer.
Representatives from the California Energy Commission (CEC), California Public Utilities Commission (CPUC) and California Independent System Operator (CAISO) described different parts of the puzzle dealing with supply-demand differences, pressure variations, and peak day supplies from Aliso Canyon as a last-resort measure to avoid blackouts.
The three points of risk from the CAISO's standpoint are: less flowing gas than demand due to miscalculations in either or both; unanticipated electric generation or gas infrastructure outages; and mismatches and outages together that cause ramping problems for generation plants. This was outlined by Mark Rothleder, CAISO vice president for market quality and renewables.
In analyzing historic data for four summer and winter days on the SoCalGas system, Rothleder said the state agencies determined there is no capacity problem, but there are huge differences between forecasted demand and gas supplies scheduled into the system creating supply/demand mismatches that prompt gas curtailments, which in turn cause power generation problems.
Even though the SoCalGas system has up to 5.7 Bcf/d of capacity, only about 3.5 Bcf/d of that total is used regularly. "On a daily basis customers don't bring into the system enough gas to meet daily requirements, and they are not required to," said Catherine Elder, a CEC consultant and natural gas expert. "The amounts of gas scheduled into the system on a daily basis and the different amounts actually used create a problem without Aliso Canyon.”
The state's analysis pinpointed 16 summer days when the gas system could face curtailments, and on the electric side, 14 days of potential rolling blackouts. Both the gas and electric systems can withstand those conditions by localizing the gas curtailments and shifting power sources to bring in more generation from outside the Southern California region, said Rothleder. Last Wednesday, CAISO asked federal regulators to OK changes in its rules "to better coordinate the electric and gas systems."
Rodger Schwecke, SoCalGas vice president for transmission and storage, said the Sempra Energy gas-only utility has been coordinating much more closely with electrics in recent months and years as the state moves toward a goal of 50% renewables in its power system by 2040. "We've worked with the electric utilities and CAISO to understand how their needs will be changing," Schwecke said.
He said SoCalGas is committed to being more flexible in operating its natural gas transmission and distribution systems to be able to meet those changing needs. "Even with Aliso operating, we had gas curtailments last summer, but there was no electricity reliability issue because we worked with CAISO to see which plants could still operate, so we were sure areas that we curtailed would not affect electric reliability,” he said.
Sen. Ben Hueso, chair of the Energy, Utilities and Communications Committee, asked Schwecke if despite the recent four-month storage well leak that drove thousands of nearby residents from their homes, the storage facility "can work.” He said that it can and that SoCalGas is continuing to work in that direction.
"We have a safety review process of 114 storage wells that can validate that they are safe, and we think they can come back to operation once we verify the ones that are safe."
If and when Aliso Canyon resumes operations, Schwecke and others indicated that there will be cost and operating impacts on the gas and electric operators. For example, the prolonged leak revealed that SoCalGas had been using both the tubing designed to withdraw supplies and the larger well casing surrounding it to withdraw gas as a means of increasing the volumes that could be taken out on a daily basis. That will not be permitted under stepped-up rules and regulations, so Schwecke said Aliso's nameplate daily withdrawal capability of 600 MMcf/d will be reduced, although he didn't say by how much.
Michael Webster, head of power systems at the Los Angeles Department of Water and Power (LADWP), outlined changes the nation's largest municipal utility is making to lessen the risks caused by the Aliso closure. Those measures have effectively shifted costs of SoCalGas to the city's electric utility, he said.
"We have stopped any physical natural gas hedging to give us more flexibility for the summer, so we're not making those commitments on a forward basis, and second, we've stopped economic dispatch, so if there is a gas curtailment we can use our other resources," Webster said. "We're also stopping our [wholesale] forward sales around the western United States to avoid putting an added burden on our basin power plants.
"Those are added costs that LADWP ratepayers will have to bear as we shift costs from [the gas utility] to us."
The state analysis also showed that historically Aliso Canyon storage supplies have been used almost daily in the [November through March) period (134 of 151 days), and 60 days during the summer.
The analysis also dissected the current 15 Bcf of supplies that are available in Aliso for emergency use. Of that total, a minimum of 5 Bcf is needed to create enough pressure in the storage reservoir to withdraw 600 MMcf/d.
If a number of storage wells eventually are taken out of service following testing, there will be fewer storage wells from which to withdraw gas, and thus, the minimum supplies needed will increase and the amount of daily withdrawal capacity will shrink, said Ed Randolph, energy division director at the CPUC.