California seems as unprepared as ever this week to meet itsenergy needs in the face of a blast of cold weather. The pricestell much of the story. While power prices continued to make gainsyesterday, reaching near $240/MWh during peak hours according tothe California Power Exchange, spot gas prices held ground atrecord levels above $8/MMBtu. Meanwhile, gas and electric utilitiesthroughout the state and the state’s electric grid operator issueda variety of emergency alerts.

Combination utility San Diego Gas & Electric revealed thatit curtailed gas service to many of its large electric generationand industrial customers on Tuesday as temperatures dipped into thelow to mid 40s. “We have very high demand out here,” said SDG&Espokesman Ed Van Herik. “We’ve had a cold snap here. Thetemperatures are very unusual and we’ve had a lot of growth in theregion in the last few years. These are interruptible customersbeing curtailed in 12 blocks; some customers have been curtailedentirely and some have had only a portion of their loadscurtailed.” He said the customers subject to curtailment werechosen by a “random computerized process.”

“Monday we set a new record for natural gas sendout of 613MMcf/d,” said Herik. “We expect our sendout [Wednesday] to exceed600 MMcf. The last record was set Jan. 26, 1999 at 577 MMcf.”

Cold weather also is increasing demand significantly in NorthernCalifornia. PG&E California Gas Transmission issued a customerspecific operational flow order yesterday. System inventory droppedto 3,985 MMcf/d on Tuesday, which was below the normal operatingrange. Systemwide demand has soared this week to more than 3.7Bcf/d, and PG&E has been using more than 1 Bcf/d of storagedeliverability to meet system loads.

To complicate matters, upstream gas pipelines have beenconducting maintenance programs that have reduced gas flowssignificantly this week. Transwestern Pipeline is conductingmaintenance on compressors in the San Juan Basin, reducing gasflows by as much as 400 MMcf/d at times. Ongoing maintenance on itsmainline West of Thoreau segment already is reducing flows by about60 MMcf/d to California.

Maintenance on El Paso Natural Gas’ north mainline has reducedgas flows to California by about 250 MMcf/d, and the south mainlinehas been limited by about 200 MMcf/d because of the rupture thatoccurred on the pipeline in August. The pipeline also has had anunauthorized overpull penalty in effect all week until yesterday.

The cold weather, however, has been only part of the problem.Any gas-fired peaking power available in the state is running fulltilt to compensate for the 12,000 MW of generation that is downbecause of maintenance or forced outages. “Natural gas usage rightnow for power generation is twice as much as on a typical winterday,” Herik said.

Wednesday morning, the California Independent System Operatorcalled an electrical emergency alert for the third day in a row andrevealed that the amount of generation down for maintenance rose to12,000 MW from 11,000 MW the day prior.

“Yes it does sound like a lot [of generation is down] until youbreak it down,” said CAL-ISO spokesman Patrick Dorinson. “About7,000 MW of that is planned and scheduled outages for maintenance,repair, whatever; these units worked very hard this summer. Out ofthat 7,000 MW, about 1,000 MW is delayed in returning to servicefor whatever reason. That brings you down to 6,000 MW and that’svery manageable given the fact that we’re in a lower load period.”

Out of the remaining 5,000 MW that is unscheduled to be out ofservice, roughly 2,000 MW is hydroelectric power that is downbecause there is no water behind the dams. The other 3,000 MW isdown for “all kinds of problems,” said Dorinson. “These units areold. This is not exactly the Cadillac of fleets. During the summerwhen we were running 45,000 MW days on average we were out probably2,500 MW a day in forced outages. Add to that the fact that ournormal imports from the Pacific Northwest, which used to be roughlyaround 7,000 MW this time of year, are down to 4,000 to 4,500 MWbecause they need it; their dams don’t have any water behind themeither. You add all that together and you have a problem. Probablylater on today we are going to have to [issue a stage twoelectrical emergency].”

Another concern going forward, Dorinson said, is the state ofgenerator emissions credits. Because so many power plants wererunning full tilt all summer, many generators are very low onemissions credits. Some may have to shut down their plants as aresult. “I’m sure everybody is talking to the Air Quality board aswe are to try and get some credits extended,” he said.

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