SDG&E Asks For Power Plants Switch to Oil
In another emergency step to alleviate summer peak electric
demand, San Diego Gas & Electric asked state regulators last
week for some relief on its natural gas transmission system by
allowing the intermittent switching to oil of two major natural
gas-fired power plants serving SDG&E customers.
The utility cited "unprecedented gas usage" on its pipeline
system. Merchant owners of the two generating plants, as expected,
are not thrilled with the idea and have filed in opposition to the
SDG&E's 80 largest interruptible gas customers are more
likely to be curtailed in the coming weeks than "any time in the
last 10 years," the utility told regulators. It maintains the
current stresses on the gas system are almost entirely due to the
high power plant loads. SDG&E's two merchant electric
generation customers use about 220 MMcf/d on a typical July day,
compared to a average daily system load for the utility of 560-590
For a temporary period of less than 90 days, SDG&E is
proposing to switch to plants operated by Duke Energy and a
combination of Dynegy/NRG Energy companies to interruptible from
firm natural gas service as a means of allowing them at peak-demand
times to switch to oil. Environmental and renewable energy
advocates labeled the proposal last Monday as a "disaster" from an
air quality standpoint, and a spokesperson for the California
Public Utilities Commission noted that any opposition to the
proposal will mean it cannot be handled this week as the utility is
"Due to unprecedented power plant demand on its gas system,
SDG&E is currently being forced into near-curtailment
situations on a regular basis," the utility said in its Aug. 1
advice letter to the CPUC. "SDG&E believes that over the next
90 days this situation (for gas) may get even worse, as
temperatures and electric demand rise throughout the state.
"Because SDG&E does not have any on-system storage, it must
rely on compression to 'pack' the system at low-demand times
(usually the middle of the night), in order to meet system demand
at high-demand times (such as peak electric demand times)."
When SDG&E owned and operated the two gas-fired power plants
it did so on a interruptible gas service basis, the utility told
the CPUC. The South Bay generating plant south of San Diego that is
operated under a lease, with an option to buy, by Duke has 10-13
days worth of oil stored in three remaining tanks; three other oil
storage tanks have been removed as part of Duke's clean-up and
modernization of the site it eventually plans to own, according to
Duke's California-based spokesperson Tom Williams, who added that
even with the oil on-site, electric reliability can be "threatened"
in the switching process back and forth between fuels.
Williams said that in making the switch, generation units must
operate at half-capacity for one to two hours.
"We have not burned fuel oil at the plant commercially since we
closed on the lease in April 1999," Williams said. "We have done so
a couple of times to test the equipment. This is required as part
of our must run contract with the Cal-ISO (independent system
operator). We do not view burning fuel oil as a part of the normal
operations of the plant --- but rather as a last resort."
Duke suggested that perhaps SDG&E's recent natural gas
transmission pipeline upgrades to serve Mexican markets south of
the international border in northern Baja are contributing to the
problem. SDG&E spokespeople confirmed that 60-75 MMcf/d of gas
is flowing to Mexico to fuel electric generation plants in northern
SDG&E's CPUC filing did note that because of "high
electricity market prices and increased electricity demand south of
the border," it is experiencing "unprecedented gas usage on its
system" this summer.
"Electricity price spikes are driving gas demand, making
forecasting gas load and planning gas operations extremely
difficult for SDG&E," the CPUC request said. "Power plants that
in the past cycled only during peak hours are now starting sooner
and running later in the evening, thereby exhausting line pack and
running the system closer to its limits."
Richard Nemec, Los Angeles