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Likely '05 Summer Peak Power Shortfalls Dominate CA Energy Action Plan Talks

Likely '05 Summer Peak Power Shortfalls Dominate CA Energy Action Plan Talks

Forget previously discussed concerns about 2006, it's the summer of 2005 that's worrying California state energy officials who gathered to review an update of the state Energy Action Plan last Tuesday. Dominating their discussions were "what-if" questions and proposed contingencies, including everything from mandatory load-reduction programs to accelerated power plant-building and delayed plant closings for older units.

Michael Peevey, president of the California Public Utilities Commission, and his counterpart at the California Energy Commission, Chairman William Keese, oversaw a series of progress reports from their respective staffs, the California Independent System Operator (CAISO) and cabinet officials in Gov. Arnold Schwarzenegger's administration, who are tracking energy policy. The discussion took place at the half-day meeting in San Francisco.

Schwarzenegger's leading energy adviser, Resources Undersecretary Joseph Desmond, summarized 2005 as having a peak-demand challenge in which the state may be caught about 1,700 MW short of its peak-load needs, so the agencies and governor's administration have come up with a combination of conservation and supply-side programs that should be worth up to 2,100 MW to 2,200 MW.

Marci Edwards, the acting CEO of CAISO and the general manager of the City of Anaheim's municipal utility in Southern California, put into perspective the seriousness of the concerns for next summer by going behind the statistics from this past summer. It was noted the state's grid operator set new one-day peak-demand records almost a dozen times under what was characterized as only moderately hot conditions last summer.

First, Edwards said last summer the state experienced an all-time low average capacity for forced (unplanned) generation unit outages at the 300 MW level in the midst of the record peak-demand days, compared with historic summer averages of 1,200 to 1,600 MW. Similarly, regional heat waves throughout the West "dramatically" cut into the imports available to California, cutting off thousands of megawatts.

In the midst of last summer's peak-demand records, CAISO averaged 9,000 MW of imported supplies, Edwards said, noting that was far above historic summer averages.

Energy commission staff reports highlighted the fact that in a "hot" year -- which was not experienced this past summer -- California's reserves in 2005 could drop below the 7% level at which power alerts begin to be declared and voluntary curtailments are implemented.

Peevey indicated he wants the CPUC later this month to issue a request for the state's private-sector utilities to develop rate schedules for larger customers using 200 kW or more of power to obtain more demand-response programs.

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