In the midst of a Stage Two emergency alert by the state gridoperator, California generating plants used every cubic foot ofnatural gas they could squeeze through the state’s pipeline systemto keep the air conditioners humming in response to a statewideheat wave throughout the inland valleys and deserts. The secondstage alert, enacted less than two hours after a Stage One had beencalled, required major utilities to seek voluntary curtailmentsamong some of their largest power users.

A combination of planned and unplanned electric generation unitsout of service and constraints on parts of the natural gasinterstate delivery system from the Southwest caused gas demand andprices to skyrocket, according to sources among the electrical andgas utilities in the state.

At the same time, electrical demand did not quite reach the40,500 MW level forecast by the California Independent SystemOperator (Cal-ISO) before it instituted its Stage One, and then Twoalerts in the early afternoon. The peak was 39,774 MW, far shy ofthe state record set last year (45,884MW), but more troublesomebecause of the extent of major generating units out of service.Predictions for today are for an easing of the heat and acorresponding drop in the predicted peak load to 37,504 MW.

The Cal-ISO issues the second stage alert when operatingreserves dip below the 5% level or are expected to within atwo-hour period. Prices are capped at $750/MW, and for severalhours Monday those caps were reached for ancillary services.(Prices for the California Power Exchange (Cal-PX), however, haveno cap and reached a peak of $862/MW on Monday, but the Cal-ISO isrestricted from accepting bids over the cap, so if there was abuyer it would have to be outside the ISO, a Cal-PX spokespersonsaid.)

“Things are tighter than they normally would be on a hot daylike today,” said a Southern California Edison spokesperson, notingthat Edison peaked at 16,000 MW, still more than 2,000 MW below itsall-time high set last year. “We’re not going to break any recordstoday. What makes it tight are the planned and unplanned outages ofunits. That’s what is keeping everyone on their toes.”

Pacific Gas and Electric, which like Edison and the state’sother major investor-owned electric utility, San Diego Gas andElectric, no longer operates gas-fired generation plants inCalifornia, indicated through a San Francisco-based spokespersonthat its peak electric demand Monday was in the 20-21,000 MW range,well below last year’s record of more than 23,000 megawatts.

The Los Angeles Department of Water and Power (LADWP) wasrunning all of its gas-fired generation units all out, consumingupward of 300 MMcf/d. LADWP’s gas procurement manager reportedprices over the $4/Mcf level for gas supplies.

“It could get as high as $5 later on in a couple of months,” themanager indicated. “We’re not sure what the problem is. Some of itwe think has to do with El Paso Merchant holding all of thatcapacity (1.3 Bcf) and withholding some of it so there is aconstraint on the transmission system rather than just a problemwith availability of gas.

LADWP has had peak gas usage of up to 500 MMcf/d for a singleday, but its peak period average is in the 300 MMcf/d range. LastOctober, which was hot in southern California, the city utilityconsumed 9 Bcf, according to the procurement manager.

Southern California Gas was keeping specific throughput figuresconfidential, only saying through a Los Angeles-based spokerspersonthat “sendout is up as one would expect on a hot day like today,but we see no problem in meeting demand.” Contrastingly, PG&E’sSan Francisco-based spokesperson where the heat wave was morewidespread said Monday’s load for electric generation was 1.1 Bcfin an overall sendout of 2.7 Bcf.

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