San Diego Union-Tribune (Sunday)
CAN WE AVOID REPEAT OF LAST SUMMER?
The final analysis from California’s energy agencies largely underscored what a preliminary report found — that the August blackouts were not caused by one single thing but by a combination of factors
Last summer’s rolling blackouts in California did not last that long, relatively speaking. But the first statewide outages in nearly 20 years drew a quick and pointed response from Gov. Gavin Newsom.
“Let me make this crystal clear: We failed to predict and plan for these shortages and that’s simply unacceptable,” Newsom said at the time, no doubt keenly aware that Gray Davis became a former governor after a string of blackouts helped to trigger a recall effort that cost Davis his job. Newsom ordered the California Energy Commission, the California Public Utilities Commission and the California Independent System Operator to deliver a report explaining what happened and why.
The final root cause analysis landed on Newsom’s desk earlier this month and it largely underscored what a preliminary report in October found — that the pair of blackouts in the early evening hours of Aug.14 and 15 were not caused by one single thing but by a combination of factors.
But the fact that the state’s electricity customers nearly experienced another round of outages just a couple of weeks later — over an extremely hot Labor Day weekend — raised an obvious question: Will California avoid a repeat this summer?
The state’s big three energy entities have different responsibilities when it comes to the electric grid.
The California Energy Commission‘s tasks include adopting long-term demand forecasts for electricity and natural gas every two years.
Among its many jobs, the California Public Utilities Commission lays down requirements for “resource adequacy” — that is, directing the big utilities and state’s other so-called “load-serving entities” to line up sufficient sources of electricity so the grid runs smoothly. operates safely and reliably.
And the California Independent System Operator, known as the CAISO, manages the grid for about 80 percent of the state’s electric customers, plus a small
portion of Nevada. An independent nonprofit, the CAISO also runs a real-time balancing market for utilities in eight states in the West.
In mid-august, a stubborn heat wave settled over California and neighboring states, leading to a sharp increase in electricity demand as millions of Californians — many working from home due to COVID-19 restrictions — turned up their air conditioners.
On Aug. 14 at 6:38 p.m., the CAISO declared a Stage 3 Emergency because the surge in demand resulted in the system operator being unable to maintain the 6 percent minimum in contingency reserves that act as a cushion for the grid. The CAISO said running past the 6 percent minimum risks knocking out the greater western grid should a major power source suddenly go offline or a transmission line bringing in power from a neighboring state suddenly fail.
In a Stage 3 Emergency, the CAISO orders utilities across the state to reduce power load and rolling blackouts occur until required reserve margins are met.
In SDG&E’S service territory, about 59,000 customers lost power for 15 to 60 minutes. The outage for PG&E affected about 300,600 customers for as long as 2 1⁄2 hours while 132,000 Edison customers lost power for just over an hour. All told, the rolling blackout hit about 491,600 customers statewide.
The next day, another round of outages occurred at about the same time. The impact was a bit smaller — 321,000 customers lost power statewide, including 17,000 in SDG&E’S service territory.
For the first time since the California energy crisis of 2000 and 2001, the state had experienced rolling blackouts, also called “rotating outages.”
What went wrong?
Not only did the heat wave cover virtually all of California but it also lingered over neighboring states. Under normal circumstances, California can import additional sources of electricity from places like Arizona, Oregon and Washington. But with the heat affecting the entire West, energy that otherwise might be imported stayed inside those respective states.
In addition, the final report mentioned a major transmission line in the Pacific Northwest was out of service in August, reducing the capability of almost 650 megawatts of power from heading toward California.
The “heat storm” also affected the natural gas fleet, one of the workhorses of California’s grid. Gas plants don’t run as efficiently when the weather is extremely hot.
Plus, on Aug. 14, a natural gas plant in Blythe unexpectedly went offline. A day later, a miscommunication between the CAISO and a plant in Fresno County inadvertently led to a loss of 248 megawatts for a short time.
Throw in a planned outage in June that still hadn’t been remedied in August and natural gas sources came up about 1,000 megawatts short during those two days.
But one of the most significant reasons for the outages relates to when the state’s grid is under the most strain.
In the past, grid operators were most concerned about making sure they had enough resource capacity at the time the system needed the most megawatts of power — what is called “peak demand.” On Aug. 14, for example, peak demand came to 46,802 megawatts at 4:56 p.m.
But the outage didn’t come until nearly two hours later.
California’s energy system during the day has an abundance of renewable energy sources, especially solar. These sources are called intermittent because the electricity solar generates during the day when the sun is out disappears after the sun sets. Similarly, wind production drops when the wind doesn’t blow.
When the sun went down Aug. 14 and 15 and solar production declined, it was still very hot so customers kept running their air conditioners. Demand didn’t drop fast enough to keep pace with the drop in supply, leading the CAISO to institute rotating outages around 7 p.m.
Covering this “net demand peak” has now become the most critical part of the day for grid management.
A similar scenario played out over the Labor Day weekend when another heat wave blanketed the state. But the CAISO said rolling blackouts were averted due to a number of measures that included voluntary cutbacks in energy usage by everyday utility customers that dramatically reduced demand on the grid.
The energy crisis in 2000 and 2001 was linked to bad actors such as Enron who gamed the system but the final report said the CAISO’S Department of Market Monitoring in November released a 71-page independent review of system conditions during the 2020 outages and found no evidence of market manipulation.
Although prices did hit the $1,000-per-megawatthour cap on Aug. 15, the Department of Market Monitoring “found no indication that outages were falsely declared at strategic times in order to allow generation owners to profit from higher prices.”
But there were problems on the market side that contributed to the outages.
The CAISO uses dayahead markets to keep energy costs as low as possible. Shortly after the blackouts, CAISO officials discovered a subset in the market’s computerized trading system did not reflect the strain the state’s grid was under.
Most dramatically, a software glitch embedded in what is called the Residual Unit Commitment process indicated that power exports were feasible on Aug. 14 and 15 when they actually were not. That allowed several thousand megawatts of exports to flow out of California to other states during the critical hours of the outages.
The final report said “it is unknown” whether reductions in exports would have prevented the outages but the DMM report said more than 3,000 megawatts of exports cleared the day-ahead market on Aug. 14 and 15.
Within days, the CAISO said it fixed the glitch and when California’s grid came under stress over the Labor Day weekend, the system operator said exports were curtailed, as they should have been in August.
Heading into the summer
“This is an effort we will all be working hard on to get it right for the summer of 2021 and, indeed, going forward,” said Public Utilities Commission president Marybel Batjer during a commission meeting that discussed the final report.
The utilities commission has opened an emergency proceeding to procure additional resources heading into this summer. The commission has already directed SDG&E, PG&E and Southern California Edison to seek contracts for more capacity and has requested proposals to add resources to cover the “net demand peak” for the summers of 2021 and 2022.
There’s also been discussion about increasing the “planning reserve margin” to make sure there are enough resources at the ready during peak times.
The current margin is 15 percent. Officials at the CAISO had called for increasing it to 20 percent from June through October but earlier this month they tweaked it to 17.5 percent, believing the slightly lower number should suffice.
If approved by the utilities commission, the higher margin will mean an increase in resource adequacy requirements for utilities and other load-serving entities, including community choice aggregation programs. Bumping up resource adequacy translates into higher electricity rates for customers.
All this comes as California looks to ramp down the use of fossil fuels to reach its goal of deriving 100 percent of its electricity statewide from carbon-free sources by 2045.
But two weeks after the August blackouts, the State Water Resources Control Board voted to extend the lives of four natural gas plants in the Los Angeles area.
The utilities commission expects to see 2,400 megawatts of additional power from carbon-free energy storage and renewable sources such as solar coming online by August.
But on the other hand, the state’s last operating nuclear power plant — that emits no carbon — goes offline starting in 2024. The 2,240-megawatt Diablo Canyon nuclear power plant near San Luis Obispo by itself accounts for about 8 percent of California’s in-state electricity generation.
Last fall, the heads of the CAISO, the utilities commission and the California Energy commission appeared at a hearing at the state capital and faced questions about whether Californians will have to experience outages this summer and beyond.
“We’re pulling on every lever we have,” Batjer said. “I can’t say that I will pledge to you, I guarantee you, this will not happen again. I’m going to do my damnedest to make sure it doesn’t happen again.”
A different take
Bill Powers of the Protect Our Communities Foundation, a San Diego consumer and environmental group, takes a contrarian position, saying calls to seek out and contract additional resources are misplaced and will just add to customers’ bills.
Powers says there is enough supply already, pointing to the thousands of megawatts of energy exports inadvertently sent from California to other states Aug. 14 and 15.
“They’ve said since then they’ve fixed the software glitch,” Powers said. “OK, if they have really fixed the problem, then that would take care of that,” adding that keeping those exports in-state will boost supply by at least 3,500 megawatts — more than enough to cover the shortfall experienced last summer.
Powers criticized the final report, saying it needed to dig deeper into questions about the performance during the blackouts of some natural gas plants and whether price gouging actually occurred.
In addition, Powers accused the CAISO of being too quick to call a Stage 3 Emergency when contingency reserves dipped under 6 percent. Powers said a 3 percent margin provides enough of a buffer.
“They’re operating their grid under very conservative conditions ... and as a result, they are tripping blackouts when they shouldn’t be,” Powers said.
The California Public Utilities Commission’s proposal to direct SDG&E, PG&E and Edison to contract added capacity and have it in place by this summer is scheduled to be voted upon Feb. 11.