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As another emergency step related to summer peak electricdemand, San Diego Gas & Electric asked state regulators lastweek for some relief on its natural gas transmission system byallowing the intermittent switching to oil of two major naturalgas-fired power plants serving SDG&E customers.
The utility cited “unprecedented gas usage” on its pipelinesystem. Merchant owners of the two generating plants, as expected,are not thrilled with the idea and have filed in opposition to theproposal.
SDG&E’s 80 largest interruptible gas customers are morelikely to be curtailed in the coming weeks than “any time in thelast 10 years,” the utility told regulators. It maintains thecurrent stresses on the gas system are almost entirely due to thehigh power plant loads. SDG&E’s two merchant electricgeneration customers use about 220 MMcf/d on a typical July day,compared to a average daily system load for the utility of 560-590MMcf/d.
For a temporary period of less than 90 days, SDG&E isproposing to switch to plants operated by Duke Energy and acombination of Dynegy/NRG Energy companies to interruptible fromfirm natural gas service as a means of allowing them at peak-demandtimes to switch to oil. Environmental and renewable energyadvocates labeled the proposal Monday as a “disaster” from an airquality standpoint, and a spokesperson for the California PublicUtilities Commission noted that any opposition to the proposal willmean it cannot be handled this week as the utility is requesting.
“Due to unprecedented power plant demand on its gas system,SDG&E is currently being forced into near-curtailmentsituations on a regular basis,” the utility said in its Aug. 1advice letter to the CPUC. “SDG&E believes that over the next90 days this situation (for gas) may get even worse, astemperatures and electric demand rise throughout the state.
“Because SDG&E does not have any on-system storage, it mustrely on compression to ‘pack’ the system at low-demand times(usually the middle of the night), in order to meet system demandat high-demand times (such as peak electric demand times).”
When SDG&E owned and operated the two gas-fired power plantsit did so on a interruptible gas service basis, the utility toldthe CPUC. The South Bay generating plant south of San Diego that isoperated under a lease, with an option to buy, by Duke has 10-13days worth of oil stored in three remaining tanks; three other oilstorage tanks have been removed as part of Duke’s clean-up andmodernization of the site it eventually plans to own, according toDuke’s California-based spokesperson Tom Williams, who added thateven 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 mustoperate at half-capacity for one to two hours.
“We have not burned fuel oil at the plant commercially since weclosed on the lease in April 1999,” Williams said. “We have done soa couple of times to test the equipment.ÿ This is required as partof our must run contract with the Cal-ISO (independent systemoperator). We do not view burning fuel oil as a part of the normaloperations of the plant — but rather as a last resort.”
Duke suggested that perhaps SDG&E’s recent natural gastransmission pipeline upgrades to serve Mexican markets south ofthe international border in northern Baja are contributing to theproblem. SDG&E spokespeople confirmed that 60-75 MMcf/d of gasis flowing to Mexico to fuel electric generation plants in northernBaja.
SDG&E’s CPUC filing did note that because of “highelectricity market prices and increased electricity demand south ofthe border,” it is experiencing “unprecedented gas usage on itssystem” this summer.
“Electricity price spikes are driving gas demand, makingforecasting gas load and planning gas operations extremelydifficult for SDG&E,” the CPUC request said. “Power plants thatin the past cycled only during peak hours are now starting soonerand running later in the evening, thereby exhausting line pack andrunning the system closer to its limits.”
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