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California Projects 'Adequate' Summer Power with Wary Eye on Temps

As some early spring storms were hitting the parched Pacific Northwest, the California Independent System Operator (CAISO) last week released its official summer electrical assessment, predicting sufficient supplies unless a 1-in-10-year excessive heat situation is encountered, and then the areas in the southern half of the state could turn up about 2,000 MW short in peak-demand situations. In addition to the vulnerability to an extreme hot spell, the southern parts of the state have less tolerance for a string of unplanned plant outages.

The latest assessment by the grid operator comes on top of similar projections from the California Energy Commission (CEC) and the Northwest Power Planning and Conservation Council, both of which are sanguine about summer supplies for different reasons in their respective, but co-dependent regions.

CAISO's 54-page report said its base forecast for loads and resources predicts "adequate capacity to meet 1-in-2 summer 2005 demands, but anticipates critically thin operating margins for the southern sub-region." The state grid operator said if systemwide or subregional shortages occur, "emergency mitigation measures" will be employed to ensure the grid's stability and reliability. The CEC Summer 2005 outlook said essentially the same thing, coming at a time when Pacific Northwest sources predict greatly reduced hydroelectric supplies.

"Renewed and aggressive conservation efforts will be critical for California to avoid potential resource shortages," the CAISO report said, adding that since last summer the state's energy agencies and private-sector utilities have been preparing businesses and residential power customers to participate in various voluntary demand-side response programs.

Under the base case, 1-in-2 years, peak demand never gets any higher than 46,668 MW, and reserve margins no lower than 13.2%, compared with the 1-in-10 case in which the August peak reaches 50,592 MW, and reserve margin drops to 4.4%. In the northern half, the Pacific Gas and Electric Co. territory, even in the 1-in-10-year scenario, the projected reserve margins for that half of the state get no lower than 12.2%, but in the south (Southern California Edison/San Diego Gas and Electric territory), in a 1-in-10 scenario, reserves go negative in August peak demand situations and are only 4.2% and 2.1% in July and September respectively.

Even in the 1-in-2 years scenario, the CAISO forecast predicts a peak demand in August this summer (46,668 MW) exceeding the 2004 summer peak demand of 45,019 MW. A net total of 52,809 MW of generating capacity will be available, according to the base case to meet these new record summer peaks.

The energy commission document that was released the Wednesday before Easter weekend was a more collaborative effort than past reports, involving close coordination with the California Public Utilities Commission and CAISO, the CEC said in the report's introduction. The CEC said its assessment is consistent with projections by the state's three major private-sector utilities -- Pacific Gas and Electric Co., Southern California Edison Co. and San Diego Gas and Electric Co., as well as the nation's large municipal utility, Los Angeles Department of Water and Power (LADWP).

Since 2001, CAISO's report said, there has been about 12,654 MW of capacity added to the grid operator's control areas, but some 3,980 MW of generation has been retired or mothballed. That leaves a net increase in CAISO's control area of 8,674 MW, and of that total over the past five year, the vast majority (6,233 MW) were added in the northern subregion.

And even the smaller amounts of added capacity in the south face what the CAISO reported called "significant congestion issues." During summer 2004, there were several days where more than 1,500 MW of generation was stranded in the SP 26 subregion due to transmission constraints. The congestion constraints limit CAISO ability to bring in supplies as well as to move them around north to south, the report said

In the earlier CEC report, the same level of uncertainty surrounded the report's unequivocal observation that there are "significant" transmission constraints that limit the transport of power from the north to the south, and thus, if there is a one-in-10-years sustained heat wave felt widely throughout the West, the CEC report said there could be shortfalls of power in Southern California. Even so, 1,164 MW of new generation output will come on line by this summer in the southern half of the state, and 802 MW will be added in the north.

The CEC report noted that Southern California should have sufficient power reserves "under normal weather conditions," but the region could dip under the 7% reserve level "if additional actions are not taken." For example, nearly 1,800 MW of demand reduction needs to be put into play in the southern half of the state, the CEC staff concluded, and last week a CPUC administrative law judge recommended delaying until next year implementing utility-created peak-load rates to encourage the shifting of power use to non-peak-demand times.

"While constraints limiting the amount of imported electricity on the transmission system are the primary reason for these regional differences, more generation has been constructed, and has come on line in Northern California compared to Southern California during the last several years while demand growth has been greater in the south," the CEC report said. "Inadequate electricity reserves will become an increasingly greater concern in future years unless additional generation is built, retirements of generating units are delayed, the transmission system improved and additional energy efficiency measures are implemented."

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