California braces for power-grid test amid heat wave

SAN FRANCISCO Thu Aug 9, 2012 6:23pm EDT

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SAN FRANCISCO (Reuters) - California's electricity grid operator issued a rare statewide alert on Thursday warning residents to curb power usage in coming days as a heat wave threatens to strain its already taxed network.

The California Independent System Operation, or CAISO, a not-for-profit corporation charged with operating the majority of the state's high-voltage grid, issued a "flex" alert urging consumers to reduce power usage especially in the afternoon, when air-conditioning dramatically ramps up demand.

A ridge of high pressure, which brought above-normal heat to the Midwest earlier this summer, is now sitting over the Four Corners region, pushing high temperatures into the upper 80s and low 90s Fahrenheit (32 Celsius) across much of California, about 5 to 10 degrees above normal, according to AccuWeather.com.

CAISO is bracing for the heat wave and struggling to compensate for the loss of the 2,150-megawatt (MW) San Onofre nuclear power plant. That plant will be offline at least through the end of the summer, following a small radiation leak.

The CAISO warned earlier that San Onofre's prolonged outage increased the possibility of rolling blackouts in Southern California, particularly in the event of extreme weather or additional generation problems.

The electric alert may serve as a reality check for state leaders and grid officials who are struggling to deal with increasing demands for more carbon-free electricity over the next few years.

California's plan to dramatically increase reliance on renewable power sources, such as solar and wind, while shutting a number of ocean-side plants that supply power around the clock will challenge power grid operators to keep the lights on.

The grid operator said Thursday's situation was exacerbated when a large power plant went offline unexpectedly.

Businesses and homes were urged to curb use during the peak consumption hours of 11:00 a.m. to 6 p.m., through Sunday.

California's two major utility companies, Pacific Gas & Electric (PG&E) and Southern California Edison (SCE), asked industrial customers to limit consumption during the hot spell, officials from both firms said.

"We are having above-normal temperatures, especially on the coast," Steven Greenlee, a CAISO spokesman, told Reuters. "We've got higher demand because of the temperatures and, as we had anticipated when San Onofre went offline, supplies are getting tighter."

EMERGENCY

The current heat wave will be the biggest test of the power grid since 2007, when a "stage 1" emergency was declared after operating electricity reserves fell between 7 and 6 percent.

CAISO has also ordered power-plant owners and transmission operators across the state to limit maintenance activities that might jeopardize equipment availability due to the high electric demands.

Despite the consumption alert, Greenlee said the state is not in danger of blackouts at this point.

"We would take other steps and release another warning before that would take place," he said.

Peak electricity demand ranges from nearly 47,000 MW Thursday, then trending downward to 43,000 MW by Monday as the above-normal temperatures abate. The state is capable of producing up to 58,600 MW, according to CAISO.

California is no stranger to blackouts, having experienced costly power outages in 2000 and 2001. It was later revealed that those blackouts were the result of power market manipulation, not supply-demand fundamentals.

The most recent major outage occurred in September of last year, when "human error" left nearly 5 million people across parts of California, Arizona and Mexico without power.

CAISO said Thursday's peak demand could reach 47,125 MW, which would surpass last summer's peak demand of 45,545 MW, set in early September. It would also exceed CAISO's forecast for peak power use this summer of 46,342 MW, under normal weather conditions.

California's all-time peak demand hit 50,270 MW on July 24, 2006 amid a heat wave. Since then, the economic recession and moderate weather have cut the state's electric needs.

Wholesale electric prices for Friday delivery in Southern California slipped to the mid-$50s per megawatt-hour, down $7 from an 18-month high set Wednesday.

Next-day power prices at the Palo Verde hub and the Mid-Columbia hub in Pacific Northwest also eased from Wednesday.

(Additional reporting by Eileen O'Grady in Houston; Editing by Dan Grebler and David Gregorio)

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