California warns of imminent power outages without conservation

FILE PHOTO: Power lines are shown as California consumers prepare for more possible outages following weekend outages to reduce system strain during a brutal heat wave amid the outbreak of coronavirus disease (COVID-19) in Carlsbad, California, U.S., August 17, 2020. REUTERS/Mike Blake

(Reuters) - California’s grid operator on Tuesday said energy conservation by individuals and businesses had averted rolling blackouts in the state a day earlier and that those efforts would be crucial again as a brutal heat wave pushes demand higher.

As of early afternoon, the state was projecting a shortfall of about 2,700 megawatts beginning around 4:00 p.m. local time and lasting until about 10:00 p.m., California Independent System Operator (CAISO) Chief Executive Steve Berberich told reporters on a conference call. That is roughly equivalent to the amount of power needed by 2 million homes.

Utility PG&E Corp PCG.N told customers that rotating power outages were likely to occur on Tuesday afternoon and evening lasting about two hours.

State officials have been scrambling to justify weekend outages that left over 400,000 homes and businesses sweltering for about an hour each. The state had not experienced rolling blackouts since 2001.

On Monday, the grid operator warned of a deficit that could have resulted in rotating outages to more than 3 million homes. Those were avoided, however, as Californians responded to calls to conserve. CAISO worked with the governor’s office to seek help from refineries, ports and industry to reduce power demand, Berberich said.

Power supplies are also benefitting from an increase in electricity imported from other Western states. Governor Gavin Newsom’s decision to allow industries to run backup generators provided more help, along with the addition of power plant capacity by the Los Angeles Department of Water and Power, Berberich said.

Power prices in the U.S. West soared to record highs for a second day on Tuesday, averaging $1,311 per megawatt hour (MWh) at the Palo Verde EL-PK-PLVD-SNL hub in Arizona and $698 in SP-15 EL-PK-SP15-SNL in Southern California, according to Refinitiv data going back to 2010.

The Intercontinental Exchange said prices for Wednesday averaged $1,640/MWh at Palo Verde and $511 at SP-15.

Reporting by Scott DiSavino and Nichola Groom, additional reporting by Sumita Layek; Editing by Steve Orlofsky, Alistair Bell and Tom Brown