Aug. 26 (Bloomberg) -- Wholesale electricity gained in California as the capacity of transmission lines that carry low-cost hydropower in Northern California was reduced while the state battled wildfires.
The San Francisco Public Utilities Commission shut transmission lines from two of its three plants, which account for 69 percent of its power needs, because of the Rim Fire, said Harlan Kelly Jr., general manager for the commission. The California Independent System Operator Inc., which manages the main state grid, said imports from the Pacific Northwest were also reduced in response to the fire.
“They are going to have to get their power from somewhere else and it’s going to be a little more expensive than hydro,” said Kyle Cooper, director of research with IAF Advisors in Houston. “It’s not a huge spike. If L.A. temperatures had been close to 100 at the same time hydro was dropping off, you would probably see a much more significant price response.”
Spot power for Northern California’s NP15 hub, which includes deliveries to San Francisco, rose $11.56, or 36 percent, to average $43.64 a megawatt-hour during the hour ended at 1 p.m. local time from the same time on Aug. 23, according to grid data compiled by Genscape Inc. The SP15 hub, serving Los Angeles and San Diego, gained $10.59, or 30 percent, to $45.31.
Demand across the California ISO grid was 35,049 megawatts at 12:25 p.m. versus the average of 34,609 megawatts during the hour ended at 1 p.m. on Aug. 23, according to data from the grid operator. The high temperature in San Francisco today may be 70 degrees Fahrenheit (21 Celsius), 1 above normal, while Los Angeles will be 3 above average at 88 degrees, said AccuWeather Inc. in State College, Pennsylvania.
The Rim Fire in Yosemite National Park that began on Aug. 17 has burned 148,000 acres and was two miles away from the Hetch Hetchy Reservoir that supplies water to San Francisco, Kelly said in a phone interview from the nearby town of Moccasin. Transmission lines from the Holm and Kirkwood hydroelectric power plants were shut, reducing the city’s ability to produce power to 50 megawatts of its 160-megawatt supply needs, he said.
The commission has spent more than $600,000 since Aug. 19 to purchase electricity from the open market, while some supplies are being met through an agreement with PG&E Corp., he said.
Transmission lines have been shut as firefighters dump water on the blaze, Kelly said.
“They don’t want to put water on hot lines, so we de-energize them,” Kelly said. “We are probably going to have to continue purchasing power for a while until we complete our full assessment of our transmission lines once the fire is put out and there is no longer any danger.”
Capacity on the Pacific Intertie, a transmission line that imports power from the Northwest, was also reduced because of the fire, Stephanie McCorkle, a spokeswoman for the California ISO in Folsom, said in an e-mail.
The 3,200 megawatt-high-voltage interstate line was cut by 1,400 megawatts, or 44 percent, to 1,800 megawatts on Aug. 24 after operating at 2,900 megawatts the previous week, California ISO data show.
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