Extreme cold, with both gas heating customers and electric powercustomers pulling on gas supplies, pushed demand on Pacific Gas& Electric’s gas system from 3 Bcf/d to 4.5 Bcf/d Monday,sending the California ISO into an emergency alert situation andforcing the cut-off of some interruptible power contracts.

The California Independent System Operator declared a Stage TwoEmergency Monday morning forcing PG&E to curtail 400 MW ofpower flowing on interruptible transmission on its electric system.The ISO said operating reserves of power fell below 5% because agas supply shortage left generators without fuel.

“We have somewhat coincident peak with the electric side goingon,” noted Mike O’Donnel, director of gas system operations atPG&E. “I’ve seen it in the past. When we get extremely cold, Ithink you see some electric space heating and they take off on youa bit. So we went into an [emergency flow order on Monday].

“Going into the day, we had an estimated demand on the electricside that exceeded their supply and we were concerned about that.”

Core usage also was expected to reach near peak dayrequirements. Temperatures at 34 degrees Monday and Tuesday were 12degrees below normal. “Prior to [Monday] we were running about 3Bcf/d, which is about normal for winter load; then all of a suddenwe’re forecasting 4.5 Bcf/d. “Our southern path, what we call ourBaja Path (line 300), was running at capacity (1.2 Bcf/d). Ournorthern path, with Canadian gas coming in, was running at about1.4 Bcf/d, with the upstream line limiting capacity to about 1.8Bcf/d, so we had 400 MMcf/d of room there. We were also forecastingfull utilization of storage. We were seeing demand higher than wehad supply coming in.”

Pacific Gas & Electric was forced to curtail 172 MMcf/d ofgas flowing on IT on Monday and 151 MMcf/d on Tuesday. At 4.5 Bcf/dMonday, gas sendout on PG&E’s system was 40% higher than at thesame time last year. The situation prompted PG&E to issue azero tolerance emergency flow order Monday with steep $50/Dthpenalties for noncompliance and another operational flow orderTuesday with a 5% tolerance and $25/Dth penalties fornoncompliance. The utility urged customers to keep a close watch ontheir usage and on the well-below-normal temperatures.

“We’re seeing most of the western U.S. in an extremely coldweather situation that is very unseasonable. The mean temperatureon our system usually is at about 46 degrees, and we’re trying tosupply a load that is at 34 degrees right now. That’s extreme. Wedesigned our system to meet 29 degrees and that is only meetingcore load, so all of the industrial and large commercial load isoff.” Meanwhile, power load was soaring.

A large burn for PG&E’s remaining fossil plants would beabout 500 MMcf/d, and the company probably would have reached thatlevel had it been able to find the supply. On Monday, PG&E wasable to secure only 330 MMcf/d of gas. “They bought all the gasthey could find,” said PG&E’s Mike Katz, manager of theutility’s power generation portfolio. “If we would have had moregas we would have sold more electricity into the energy market.”

“What the ISO led us to believe was that they had a gas demand[for power generation] of about 700 MMcf/d on our system, whichincludes PG&E’s power plants and what used to be PG&E’spower plants. We saw supplies coming in of about 550 MMcf/d to meetthat demand,” said O’Donnel.

“What we saw was that people who were out trying to purchase gaswere not able to get gas into our system.” The likely reason wasthat buyers throughout the entire Pacific Northwest were scramblingto find gas for space heating needs.

For some reason, however, power generators had less troublesecuring supplies on Tuesday. “We bought pretty much everything wecould get and we were able to buy more than on Monday,” said Katz.”We might have seen more Northwest demand on Monday, I don’t know.”

Once the ISO was able to line up out-of-state power reservesTuesday, it lifted its emergency notice. PG&E was able to keepits power customers whole Tuesday.

Meanwhile gas industry officials back in Washington questionedthe ISO’s conclusion that the problem lay with inadequate gasdeliveries. This is “merely a suspicion” at this point, but “Ithink that [the ISO] may be trying to scapegoat the natural gasindustry because there may be insufficient transmission capacity”to serve the state’s electricity market, said one gas producer.

The ISO conceded “additional problems were created bycongestion” on California’s transmission lines as the southwesternstates, which were not suffering from the Arctic cold, attempted tosend surplus electricity north via California to the Northwestwhere power was deficient.

In addition, PG&E noted one unit at its 2,100 MW DiabloCanyon nuclear power plant was off line, cutting power from theplant in half.

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