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California Cools Off; ISO Assesses Impact

California Cools Off; ISO Assesses Impact

With temperatures dropping considerably out of their triple-digit-heat conditions on Friday, California energy officials began assessing the economic and operating impact of rotating blackouts in numerous San Francisco Bay Area neighborhoods last Wednesday and the curtailment Thursday of 135 large industrial customers in Sacramento and Stockton totaling 300 MW.

The suspected cause of the rolling blackouts prompted California Gov. Gray Davis Friday to direct the state electricity regulatory bodies to investigate "the circumstances, including the reasons for the generation maintenance and transmission problems and related impact on electricity prices," with an Aug. 1 deadline to provide a report with "findings and recommendations." Earlier in the day, expectations surfaced that the state legislature wanted to assess the situation, too, but nothing specific was announced in the midst of the lawmakers' current budget-approval process.

The full statistical story is days, if not weeks, from being written, however, according to the spokespeople with California's nonprofit electric grid operator, the California Independent System Operator (Cal-ISO). The governor wrote state energy regulatory panel president Loretta Lynch and Electricity Oversight Board Chairman Michael Kahn requesting the investigation in a letter released Friday.

"The fact that we only had to ask for curtailment of 100 MW of firm load on a rotating basis for a few hours to protect the integrity of the system and prevent further problems, is pretty good for a load in the Bay Area that runs at about 8,000 MW," said Patrick Dorinson, Cal-ISO's communications director.

"It is worth noting that through May and into early June every Wednesday we had daylong, real-time drills with all of the market participants to walk through similar situations to what the state faced this week. And as a result, things worked very well from a communications standpoint."

Statewide there were some generating units still out of service for planned maintenance as part of routine pre-summer preparations, Dorinson said, but the most troublesome outages were the unplanned ones concentrated in the Bay Area where temperatures were the most extreme. In total, some 800 MW were unavailable at the peak of the heat wave Thursday afternoon.

"Some of the units are due back in the next week; some as early as Sunday (June 18) night," Dorinson said. "So we expect to have some of those units back."

Officials with AES Corp., the giant international power plant developer/operator, said its three plants along the Southern California coast operated pretty much on a routine basis except that they were all full-out simultaneously. Its Huntington Beach, Long Beach and Redondo Beach plants total about 4,000 MW.

"We strive to make the units available, but we only have so much capacity so our goal is to make them all available during the summer months," said Tony Chavez, one of AES's California operations managers. "We'd only take units off if it involves equipment that was going to fail causing the whole unit to be unreliable or unavailable. Really (the heat) didn't change much for us because we had most available units running anyway."

AES's experience would have been much the same even if the heat had been concentrated in the southern half of the state, said Chavez, declining to define precisely how much natural gas his plants have been consuming. California-based officials with Duke Energy Services, which operates plants along the central coast serving parts of northern California, indicated that they had a brief outage caused by a fire at their Moss Landing plant Tuesday, but full operations were restored the following day; other problems affected part of the operations on a much smaller Bay Area plant in Oakland.

"We caught the Moss Landing problem very quickly and worked through the night," said Duke Energy Services' Tom Williams. "The bottom line is the state needs power and it is going to be hotter yet later in the summer, or certainly as hot. We all know that outages happen., but it is going to be an interesting summer because the summer [literally] hasn't really started yet.

"The ISO has been forewarning people for some time, and so have we. Maybe, the state will accelerate its siting process for new generation plants," said Williams, noting that Duke expects to get the go-ahead later this year to build new units at Moss Landing, and later in the summer file a new proposal to completely replace the Morro Bay plant with a two-phase construction timetable.

Voluntary curtailments of electrical use by some medium- to large-size customers was implemented Wednesday in the northern half of California. Cal-ISO issued Stage One Alerts two consecutive afternoons at mid-week as northern California broke some 35-year temperature records. Natural gas loads to in-state power plants were running at their maximum, and a Southern California Gas Co. spokesperson said late Thursday that SoCal's system was operating smoothly all week despite the peak demand from generating plants.

Pacific Gas and Electric Co. began seeking voluntary curtailments among non-firm customers totaling about 200 MW collectively, and then hastily on Wednesday implemented the rolling blackouts at the behest of Cal-ISO. Peak demand was expected to exceed 45,000 MW but never cracked the 44,000-MW barrier, settling in Thursday afternoon at 43,900 MW.

"We had a good day [Tuesday] and burned our 300 MMcf-plus," said a source at the City of Los Angeles Department of Water and Power, the nation's largest municipal utility.ÿ"We have no problem finding gas at market prices.ÿ I think one of the reasons is that SoCalGas is on schedule or maybe ahead of schedule in its storage program.ÿ Some of the gas we are using is to support wholesale electric sales.ÿYesterday was a good day [for wholesale sales into the market] as it was hot in the southwest."

Wednesday, a PG&E set a new one-day peak demand for its system (23,361 MW), exceeding the previous record set in 1998 of 23,128 MW. Earlier in the week, California's other two major individual utilities were reporting demand well below their all-time peaks, and they did not set any new records, although demand was high.

Power prices on the state-chartered California Power Exchange (Cal-PX) also set an all-time record on Thursday in the day-ahead market, jumping to 464.86/mwh, more than $100 over the previous record ($359.94/MWh). Over a calendar year with all of the seasonal variations, peak demand prices average in the range of $30 to $40/MWh.

Richard Nemec, Los Angeles

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