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CA ISO, Utilities Take Action on Shortages

CA ISO, Utilities Take Action on Shortages

Acknowledging that a combination of unexpected generator outages and sustained hot weather could create the threat of power outages this summer, the California Independent System Operator (Cal-ISO) launched a new alert system for gaining enough voluntary conservation by businesses and mass consumers to ride out the peak-demand periods. Calling it "Power Watch 2000," Cal-ISO President/CEO Terry Winter said he anticipates that both short- and long-term the state can use market-based programs to address potential shortfalls.

During an emergency drill and press briefing at the Cal-ISO northern California headquarters, Winter said the state's nonprofit, state-chartered electric grid operator is assuming natural gas supplies will be adequate to take care of any peak demands. The major part of the 38,000 MW of peaking power generated in-state is gas-fired, while another 8,000 to 10,000 MW are imported, coming mostly from hydro, coal and nuclear sources.

"Natural gas availability in the summer has not been a problem in California and we don't anticipate any problem, so it has not been factored into our calculations," Winter said.

The Cal-ISO basically is sticking with its same forecasts for weather and generation loads. Winter said he hopes the planning and preparation the state does for the summer peaks turns out to be a "nonevent" much like its work on potential Y2K problems, noting that the same widespread "team approach" is being applied.

According to current Cal-ISO calculations, if a shortfall does arise, it could be in the magnitude of 1,000 MW. In response, the state's voluntary pilot auction program already turned up 500 MW that large users would voluntarily curtail, and Winter said they would try to gain the other 500 MW from additional voluntary conservation. In addition, state investor-owned electric utilities have been authorized by the California Public Utilities Commission to offer to pay large customers to curtail several hundred megawatts if needed.

This summer and longer term, Winter said the Cal-ISO hopes the market-based solutions can do the job. He said the market has to be allowed "to send the right price signals so adequate new generating capacity is built," and there needs to be incentives for loads to be curtailed voluntarily. At this point, Winter thinks the 12,000 MW of new generation that have been proposed in California are adequate, although all of that capacity is unlikely to get built.

Winter attributes the threat of shortfalls to general economic and population growth throughout the western U.S. and not to deregulation or an inability of California to get sufficient new generation on line. He cited growth in Nevada over the past 10 years of 51% in the overall electrical demand, and in the Pacific Northwest, 31% over the same period. That affects how much potential power California can import, he said.

Richard Nemec, Los Angeles

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