By Scott DiSavino
July 2 (Reuters) - A second day of conservation efforts and slightly lower temperatures helped the California power grid avoid potential problems on Tuesday as a widespread heat wave across the West begins to moderate.
The California Independent System Operator urged customers in the northern part of the state to conserve energy for a second day as residents cranked up air conditioners to escape a heat wave blanketing the region.
The ISO, which operates the grid in most of California and Nevada, pared its forecast for Tuesday's peak demand below 46,000 megawatts and to 46,334 MW for Wednesday as high temperatures across the state begin to moderate. Early ISO forecasts for both days pegged demand above 47,000 MW.
Monday's peak demand was 44,964 MW, significantly below the ISO's early forecast.
"A major factor in the reduced demand was Southern California temperatures coming under forecast," the ISO said in a news release.
In northern California, operators at PG&E Corp.'s 1,122-MW Diablo Canyon 1 nuclear reactor continued to work to restart the unit to boost the region's supply.
Power prices in California markets for Wednesday delivery returned to more normal levels, in the mid-$50s and mid-$60s, after jumping to levels not seen in at least five years.
The ISO has forecast summer demand of 47,213 MW, 738 MW higher than 2012's actual peak of 46,675 MW, as the state's economy improves.
The high temperature in Los Angeles, California's biggest city, was revised to 86 degrees F (30 C) on Tuesday, about 4 degrees above normal for this time of year, but down from 90 degrees. Wednesday's high was pared to 83 degrees from 87, according to AccuWeather.com.
The mercury in San Jose, the biggest city in northern California, was expected to hit 96 degrees on Tuesday, 15 degrees over normal, before sliding to 84 on Wednesday, AccuWeather.com said.
California's all-time record electricity demand was 50,270 MW, set in July 2006 before commercial and industrial usage was reduced during the economic crisis.
The ISO has several options to reduce power usage before it takes the unlikely step of calling for rolling blackouts. But an unexpected shutdown of big power plants or transmission lines could force the grid operator to act, especially with wildfires raging in the West.
The ISO has not called for rolling blackouts since the Western energy crisis in 2000-2001, when market manipulation by energy traders like Enron caused an electricity shortage.
The California ISO issued an alert for northern California on Sunday that is still in effect due to heavy demand for power and the continuing outage of the Diablo Canyon 1 reactor.
Generating resources in California are below par after the permanent closure in June of the 2,150-MW San Onofre nuclear power plant and the unexpected closure last week of Diablo Canyon.
PG&E Corp. is the biggest utility in California, serving about 5.1 million customers in the northern and central parts of the state.
Other big utilities are Southern California Edison, a unit of Edison International, which retired the San Onofre reactors, and San Diego Gas and Electric, a unit of Sempra Energy.
North American reliability coordinators warned in the spring 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.