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California Power Reserves Don't Eliminate Risk From Limited Gas Storage

A positive outlook for summer electricity supplies for California does not eliminate risks in the southern half of the state due to the shut-in Aliso Canyon gas storage facility in Los Angeles.

"Southern California still faces potential rotating power outages from gas supply limitations [see Daily GPI, April 5] while the rest of the state has healthy reserves that will support power demand under the most extreme conditions we studied," said a spokesperson for the California Independent System Operator (CAISO).

CAISO and other state energy agencies completed an Aliso Canyon Risk Assessment Technical Report before the summer power outlook (see Daily GPIMay 19), concluding the closure of the storage field means Southern California faces potential gas curtailments leading to perhaps as many as 14 days of rolling power outages this summer.

“The natural gas issues override the [robust] reserve projections and Southern California still faces a serious risk for rotating power outages," said the CAISO spokesperson, citing the conditions outlined by the joint agency report, which calls for closer electric-natural gas grid coordination in the state (see Daily GPIMay 12).

From the grid operator's perspective, the adequacy of peak power supply-demand balances for the summer, which is projected to have a maximum peak load only slightly higher than last summer, is separate entirely from the real risks surrounding the potential for gas curtailments.

"CAISO manages the dispatch of several generators in the CAISO balancing area dependent on gas from the Southern California Gas Co. system [including Aliso Canyon] that are directly or indirectly impacted by the [86 Bcf capacity storage field's] operational constraints," said the grid operator's "2016 Summer Loads and Resources Assessment."

The summer assessment noted that CAISO has installed some operating changes for its dispatches of power this summer that will "better coordinate with the constrained gas system and minimize to the extent possible the impact of further challenges to gas and electric system reliability." CAISO said that the added measures on operating the power grid "help ensure that the limitations of the constrained gas system are reflected in the [grid operator's day-to-day] market processes."

As part of the multi-state agency risk assessment of the 3,600-acre Aliso Canyon facility's closure, 17 gas-fired power plants in the Southern California area totaling 9,500 MW were identified as being "most directly affected" by the storage field's reduced capabilities.

"If no gas can be withdrawn from Aliso Canyon during the coming summer months, a significant risk exists of gas curtailments during up to 16 days this summer, [and] these curtailments could interrupt service and affect millions of electric customers during as many as 14 days."

"The natural gas issues facing Southern California this summer will require deft management, particularly during hot days when power plants fired by natural gas are needed to meet peak demand," said CAISO CEO Steve Berberich. "CAISO has moved quickly to put into place new mechanisms to reduce the impact of gas curtailments on electric reliability."

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