Threat of summer blackouts greatest in Texas, Calif. — report

Source: Gabriel Nelson, E&E reporter • Posted: Thursday, May 31, 2012

If it gets hot enough for long enough, Texas and Southern California may not have the electricity to avoid outages this summer, the overseers of the nation’s power grid warned in a forecast today.

Most parts of the country should make it through the summer without a problem, says the annual report by the North American Electric Reliability Corp., a quasi-public body that supervises the regional authorities that run the U.S. electric grid.

Electricity use is still being suppressed by the slowly recovering economy, and many areas have more than enough to deal with the spikes in demand that occur on hot days, when people clamor for the comfort of air conditioning.

But in Texas, where the intricacies of a deregulated market for electricity have made it especially hard to catch up with the needs of a fast-growing population, the numbers do not add up.

NERC is predicting that demand in Texas will peak at about 66,195 megawatts, 1,110 MW more than the group predicted last year. But the 2011 predictions underestimated how much electricity the Lone Star State would need, and the grid run by the Electric Reliability Council of Texas (ERCOT) has lost 10 MW of peak power generating capacity since then.

John Moura, the reliability assessment manager at NERC, said the “million-dollar question” is what will happen if Texas sees a repeat of Aug. 3, 2011, when a prolonged heat wave led to a state record for electricity demand. If power lines go down, the wind stops blowing or drought forces a power plant to stop sucking up water to cool its equipment, the state could be in trouble.

“Depending on how many units they have out at the same time, it will be the crux of a reliability issue,” Moura said.

Other areas are handling their rising demand. The nearby Southwest Power Pool, which includes northern Texas and all of Oklahoma and Kansas, has added 1,950 MW since last summer as a buttress against outages.

But the ERCOT region has had a harder time securing new sources of electricity. The Texas Public Utility Commission is thinking about changing its “scarcity pricing” rules — effectively raising a cap on power prices to make it worth investing.

And this spring, ERCOT hired a consulting firm to figure out how the state might prod investors in that direction. The authority says that report is due Friday.

In the meantime, Texas has a few options for the summer. It has about 1,500 MW of demand response resources, where customers get paid to use less power. The state could ask the public to use less electricity to avoid blackouts, which could lower use by about 300 MW more. And if all else fails, it could resort to rolling blackouts, like the ones it put in place in February 2011 when freezing weather shut down dozens of power plants.

The other major trouble spot is Southern California, where the San Onofre Nuclear Generating Station has gone down for repairs and taken away one of the largest sources of electricity. It’s not expected to return by July, when the region’s electricity demand usually peaks, though NERC says a large coal-burning boiler at Utah’s Intermountain Power Plant should come back in service next week and pick up some of the slack.

Summertime margins are also getting tighter in New York, where a number of old power plants have been shut down since last year and power demand is back on the rise. That part of the country should be fine, Moura said.

“A decrease in capacity and an increase in peak demand normally is a flag,” he said. “You see that discrepancy and you ask yourself what their issue is. The good news about that is they have sufficient reserves already built in and they’re projecting a 17