California's power grid operator on Monday issued a rare plea for customers in the north of the state to conserve energy over the next couple days as a heat wave blanketing the region is expected to peak just as the work week begins.
As consumers cranked up their air conditioners to escape the brutal heat, power prices in California markets jumped to at least five-year highs.
The California ISO, which operates the grid in most of California and parts of Nevada, issued a so-called flex alert for northern California due to heavy demand for power and the continuing outage of the state's biggest power unit, a nuclear reactor at Diablo Canyon.
Generating resources in California are below par after the permanent closure in June of the San Onofre nuclear power plant and the unexpected closure last week of PG&E Corp's 1,122-megawatt (MW) Diablo Canyon 1 reactor.
The Diablo Canyon reactor remains down Monday, but PG&E said it completed work on the unit and were testing the reactor. The company could not say when the reactor would return to service. Electricity traders estimated it would return in the next day or two.
North American reliability coordinators in the spring had warned that California could face "operational challenges" from the shutdown of San Onofre, and that a prolonged heat wave could force utilities to use rolling blackouts in the San Diego and Los Angeles areas to keep the grid reliable.
The California ISO said it has not called for rolling blackouts since the Western energy crisis in 2000-2001, when market manipulation by energy traders like Enron caused a shortage of electricity. The state however has suffered blackouts since then due to equipment failures, high winds or storms.
Although the grid forecast peak demand to be well below the all-time highs set in 2006, record-setting temperatures in parts of the state will present one of the grid's biggest tests in years. The California ISO has issued one flex alert already this year and only two in each of the previous two years.
PG&E is the biggest utility in California, serving about 5.1 million customers in the northern and central part of the state.
Power traders said this heat wave was hitting northern California harder than the southern part of the state because of the Diablo Canyon reactor outage.
The peak demand forecast for Monday is about 46,000 megawatts (MW) and 47,400 MW on Tuesday, the ISO said.
That is still below the state's all-time peak demand of 50,270 MW set in July 2006 before the economic crisis reduced the usage of electricity, primarily by commercial and industrial companies.
One megawatt can usually power about 800 homes, but much less during heat waves due to heavy air conditioning usage.
Next-day power prices for Tuesday jumped about 50 percent to the upper $100s per megawatt hour in northern California and gained about 35 percent to the mid $100s in southern California. The five-year average price in southern California is about $46.
SECOND FLEX ALERT OF 2013
This is the second flex alert the ISO has declared this year. The first one in April was a conservation request for the Silicon Valley area due to an act of vandalism.
The ISO told all of its power company members to restrict maintenance operations so their generating plants and transmission lines are ready for service during the heat wave and urged consumers to watch the ISO website for updates.
For consumers, the ISO wants homes and businesses to turn off any unnecessary lights, postpone using appliances until after 6 p.m. Pacific Time and turn air conditioning thermostats up to 78 degrees F (25.6 degrees C).
"Although we did not have a lot of issues over the last few days due to the heat, conservation is something we promote constantly," said David Song of Southern California Edison, which serves about 4.9 million customers in southern California.
"Conservation is so important during a heat wave because it gives the transmission equipment and power plants a chance to rest," Song said, noting, "Equipment tends to operate better if it gets some relief."
Southern California Edison, the second biggest utility in California, is a unit of Edison International and is the company that retired San Onofre.
Temperatures in Los Angeles, the biggest city in the Golden State, will reach 89 degrees F on Monday, which is about 7 degrees over normal for this time of year, and 92 degrees F on Tuesday before easing to 89 degrees on Wednesday, according to Accuweather.com.
The mercury in San Jose, the biggest city in northern California, will also reach 95 F degrees on Monday, rising to 96 F on Tuesday before sliding to 92 F on Wednesday and 88 F on Thursday, AccuWeather.com said.
San Diego Gas and Electric Co, a unit of Sempra Energy that serves the San Diego area, on Monday activated its so called Capacity Bidding Program, which is a demand response program for customers.
(Additional reporting by Eileen O'Grady in Houston and Eileen Houlihan in New York; editing by Sofina Mirza-Reid and Gary Crosse)