SoCalGas curtails natgas for power generators in California heat wave

(Reuters) - Southern California Gas (SoCalGas) told its electric-generator customers to expect less natural gas supplies to fuel their plants on Wednesday as they consume more of the fuel than usual to keep air conditioners humming during a brutal heat wave.

FILE PHOTO: Power lines are seen at sunset near Lost Hills, California April 20, 2015. REUTERS/Lucy Nicholson

But that curtailment notice does not mean the gas utility will actually cut supplies to gas-fired power plants, which are currently generating about half of the state’s electricity, according to the California Independent System Operator (ISO), which manages much of the state’s power grid.

“SoCalGas requested the California ISO voluntarily reduce generation levels,” said Steven Greenlee, a spokesman for the ISO. “The ISO is unable to reduce generation levels ... without risking electric system reliability.”

Greenlee said SoCalGas will follow the Aliso Canyon Withdrawal Protocol, which includes the option to tap into gas supplies in its Aliso Canyon storage facility.

SoCalGas can only use Aliso Canyon as an “asset of last resort” after all other alternatives have been exhausted. The state has limited use of Aliso Canyon following a massive leak at the facility between October 2015-February 2016.

Even though the ISO reduced its forecast for peak power demand on Wednesday due in part to customer conservation efforts and slightly cooler than expected weather, the grid operator urged customers to keep conserving energy to relieve stress on the grid.

The ISO said preliminary estimates show that voluntary conservation on Tuesday possibly reduced demand by up to 500 megawatts (MW), enough to power roughly half a million homes.

The ISO reduced its peak demand forecast for Wednesday to 47,058 MW from 49,489 MW earlier in the day, falling well short of the grid’s all-time high of 50,270 MW in July 2006.

SoCalGas, which supplies gas to over 21 million consumers in the southern part of the state, projected gas demand would rise from 3.0 billion cubic feet per day (bcfd) on Tuesday to 3.2 bcfd on Wednesday before easing to 3.1 bcfd on Thursday, while receipts of the fuel via pipelines were only expected to total about 2.6 bcfd.

One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.

SoCalGas is a unit of Sempra Energy. Other big utilities in California include units of Edison International and PG&E Corp.

High temperatures in Los Angeles are only expected to reach 89 degrees Fahrenheit (32 Celsius) on Wednesday, down from an earlier forecast of 98 degrees, according to AccuWeather. The normal high in the city is 84 degrees at this time of year.

Power prices for Wednesday soared to their highest on record at Palo Verde in Arizona and SP-15 in Southern California, according to data from S&P Global’s SNL going back to 2010.

Reporting by Scott DiSavino; editing by Jonathan Oatis and Tom Brown