CA: Officials bright on summer power

Oakland Tribune ^ | 5/10/06 | Eve Mitchell

[NormsRevenge]

APRIL SHOWERS bring summer power.

That's the upside all of those gloomy, rainy days. Some of that water, collected as Sierra snow pack, will flow into rivers and generate hydropower.

It's one of the factors responsible for this summer's adequate power outlook, state officials say. The positive outlook comes despite the possibility a pair of natural-gas-fired power plants in the East Bay may shut down soon.

Last Thursday, Mirant Corp. gave 90 days notice to state regulators that it may have to shut down a unit at its Antioch plant and another one at its Pittsburg plant if the company is unable to negotiate a long-term contract to sell the plants' electricity.

"This is a notification of a potential closing," said Corry Leigh, spokeswoman for Atlanta-based Mirant. "We are still working to negotiate contracts that would allow us to keep the units in operation."

The two units in question still fire up occasionally but only when market conditions are right for bidding power into the electricity spot market, she said.

Mirant owns three natural gas-fired units at the Pittsburg site. It plans to keep the other two going. Mirant also plans to keep a second unit at the Antioch site operating. A third unit being built at the Antioch site will beturned over to Pacific Gas and Electric Co. as part of a settlement with California officials over alleged overcharges during the 2000-2001 energy crisis.

If the two units do shut down, it's not expected to lead to the kind of rolling blackouts that hit the Bay Area during the energy crisis, when power was in short supply. Still, the loss of the plants could lessen the state's power reserves, or cushion, which is required to be above 7 percent of demand. The two units generate just over 1,000 megawatts of electricity, or enough to power 750,000 homes.

"It is not going to put us into blackouts," said Stephanie McCorkle, spokeswoman for the California Independent System Operator, which manages most of the state's power grid. "However, we would like to see that 1,000 megawatts stay on the grid. That's a significant amount of generation. We are very hopeful we can find a solution for keeping them on the grid."

That solution could come with the help of San Francisco-based PG&E.

"We are actually in confidential negotiations with Mirant for power purchases — not for the purchase of the units but for the purchase of electricity," said utility spokesman Jon Tremayne.

Even if the units do end up shutting down, PG&E has enough power — either through its own hydro dams and other power-producing facilities or through contracts with other power producers — to meet demand.

"We are in good shape for the summer," said Tremayne. "PG&E will have sufficient supply to meet the expected demand. It was a very wet winter and the precipitation we received that was well above normal is positive. A good hydro year is certainly going to cause increased hydro-generation from the hydro facilities."

Reports released last month by the ISO and the California Energy Commission both came to the conclusion that electricity supplies will be adequate this summer.

"Supplies in all regions will be adequate to meet growing electricity demand and the required 7 percent operating reserves under average temperature conditions," the staff of the Energy Commission wrote in a report. It said new facilities built since 2000, transmission improvements, better energy efficiency, and voluntary conservation all have contributed to the improved outlook.

In its report, the ISO noted during the coming summer months, statewide demand for electricity on a typical day is expected to average about 46,000 megawatts. During the summer, when usage is at its highest, up to one third of state's electricity is imported from outside California, McCorkle said.

"There are a lot of variables when you run a grid," said McCorkle. "You may have a higher unplanned outage rate and you may have equipment failures."

Last year, California added about 3,300 megawatts to its power supply through improvements to transmission lines and new power plants. To keep up with economic and population growth, California needs to increase its power supply by about 1,000 megawatts annually.

"We added more megawatts in California than in any other region," said McCorkle. "We are seeing the investment in transmission and generation but we need it to continue just to keep pace with growth."

[bpjam]

We built two new natural gas fired plants on the CA/NV border for their next summer blackouts since they invariably underestimate the size and scope of their problems and the amount of bureaucracy between a free market and people who need electricity.