California Grid Operator Says Extreme Summer to Cut Reserves

Power reserve margins in Southern California may narrow to 6.2 percent this summer under “extreme” conditions, above the 3 percent cushion at which outages may occur, the state’s grid operator said.

The region’s operating reserve margins may shrink to less than a third of normal during severe heat and other extreme conditions, the California Independent System Operator Corp. said in a report on its website today. Margins in Northern California may narrow to 7.1 percent from 21 percent during such circumstances, the ISO said.

California is facing its second summer without Edison International (EIX)’s 2,200-megawatt San Onofre nuclear power plant, shut since January 2012 because of damaged steam generators. The grid will also be running without generation from two natural gas-fired units in Huntington Beach and on below-normal hydroelectric output. Power use typically peaks in summer when temperatures rise, increasing demand for air conditioning.

“Reliability concerns in specific areas of Southern California are expected to be marginally more challenging,” the ISO said in the report. “If critical high-voltage transmission lines are out of service, due to wildfires or other conditions, deficient voltage levels may occur under peak load conditions that could trigger localized customer outages.”

Highest Level

Southern California electricity for July through September is at the highest level for the season since 2008 on the outlook for a shift to costlier, more volatile fossil fuels.

Snowpack levels measured May 2 were 83 percent below average statewide and 91 percent below normal in Southern California, according to the ISO.

Electricity demand is expected to peak at 47,413 megawatts this summer, 2.3 percent higher than last year’s top level. The all-time high was 50,270 megawatts in 2006.

The ISO expects 51,068 megawatts of power plant capacity to be available on the grid this summer. The operator calculated its reserve margins for “extreme” conditions assuming low power imports from outside the state and a higher probability of unplanned generation outages and more-than-expected demand.

The ISO and utilities in Southern California have been working on transmission projects to shore up grid reliability in the San Diego and south Orange County areas before summer.

Reconfiguration Planned

Edison will install devices at three substations near the San Onofre plant and reconfigure a set of lines from two circuits to four for grid support by June, the report shows.

Condensers being installed at AES Corp. (AES)’s mothballed Huntington Beach Units 3 and 4 will offer voltage support in the area of San Onofre, the report said. That project is expected to be completed by June 26, the ISO said. Air permits for the Huntington Beach units were transferred to another plant in October, cutting the system’s net generating capacity during the 2013 summer peak by about 450 megawatts.

California will also have 3,393 megawatts of new generation by this summer compared with last. The 500.5-megawatt Walnut Creek power plant began operations on March 21, according to the ISO’s assessment.

Edison may decide this year to shut one or both units at the San Onofre plant permanently if the utility isn’t able to resume operations at Unit 2, the company said in a filing with the Securities and Exchange Commission April 30. Edison, based in Rosemead, California, doesn’t expect the Nuclear Regulatory Commission to issue a decision by June 1 on restarting Unit 2, as it requested, the filing showed.

Edison has asked the NRC for permission to restart Unit 2 at reduced capacity to avoid shaking damaged pipes. The other unit at the site, Unit 3, would require more extensive repairs.

Costs for repairs and inspections at San Onofre, 60 miles (97 kilometers) south of Los Angeles, have climbed to $109 million while the price for replacement power since the shutdown through March 31 reached $444 million, Edison said in an investor slide presentation last week.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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