State’s grid issues energy alerts, triggering new price caps
SACRAMENTO, Calif. (AP) – California’s electric grid operator triggered price caps in 11 Western states Monday when it issued an energy alert for the first time since federal regulators imposed the cost ceilings two weeks ago.
Unexpectedly high temperatures across much of California and the Southwest brought higher energy use that required the California Independent System Operator to declare a Stage 2 alert for about three hours, meaning electricity reserves fell below 5 percent. The ISO maintained a Stage 1 alert into the evening, meaning reserves were below 7 percent.
Unless an emergency happens, the ISO said rolling blackouts remained unlikely. Still, it asked consumers to conserve, especially during afternoon and early evening peak use periods.
”Even if things are OK outside California, if there’s a Stage 1 (or higher) in California they all get” the caps, said Mike Wilczek, a senior western power market reporter for Platts, the energy market information division of The McGraw-Hill Companies.
The Federal Energy Regulatory Commission’s June 19 order expanded price restrictions it imposed in April on wholesale electricity sales in California during peak demand periods when blackouts were threatened.
The restrictions now cover power transactions 24 hours a day, seven days a week throughout 10 Western states along with in addition to California. It also closed several loopholes that allowed power generators to circumvent the April order. The price cap is pegged to the cost of production at the least efficient electricity generating plant in the region.
The 10 states other than California covered by the order are all participants in the Western power grid: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
ISO spokeswoman Stephanie McCorkle said the state won’t know the baseline price until the energy alert ends, probably Tuesday. Electricity had been trading at nearly $92 per megawatt hour before the cap took effect, Wilczek said.
”It’s going to be an interesting week,” said ISO spokesman Gregg Fishman.
Temperatures were about 5 percent higher than forecast, and the state was using about 2,000 more megawatts than predicted, said McCorkle. That’s enough electricity to power about 1.5 million homes.
The Desert Southwest was seeing triple digit temperatures, meaning the region had less electricity to share.
Imported electricity into California dropped from about 4,000 megawatts Sunday to about 3,300 megawatts Monday, she said. In addition, California lost about 1,500 megawatts when a plan went off-line in Southern California over the weekend. A megawatt is enough power for about 750 homes.
The high temperatures were expected to continue through most of the week, but electricity use was expected to fall Wednesday for Independence Day. However, energy use could climb higher than normal on Thursday as office buildings were cooled after being shut down for the holiday, Fishman said.
On the Net: Track the state’s blackout warnings on the Web at http://www.caiso.com/SystemStatus.html.
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