California and federal energy officials repeated warnings Thursday that the electricity system in southern California will be put to the test this summer, especially with long range forecasts calling for hotter-than-normal temperatures. And next summer may be even rougher, they say.
While most of the rest of the country should have adequate supplies, ongoing transmission bottlenecks continue to leave some regions of the U.S. vulnerable to blackouts or sharp rate increases. But the southern half of the California “is the worst electricity supply situation in the entire country,” Joseph Kelliher, a member of the Federal Energy Regulatory Commission, told an electricity conference in San Francisco.
FERC Chairman Pat Wood, reflecting on the chaotic blackout days of the California energy crisis in 2000-2001, said: “I thought we would be further along after four years ... It’s a bit disheartening looking again at a potentially tight summer, maybe two.”
Though power supplies should be adequate in the nothern half of the state, a transmission bottlneck that cuts the state in half has left southern California vulnerable. That transmission congestion is costing consumers an estimated $1 billion a year.
Nationwide, demand for electricity is expected to rise by nearly 6 percent this summer, with generating capacity up 7.4 percent, according to the North American Reliability Council, an industry group. So, for most parts of the country, generating capacity is expected to meet demand -– even on the hottest days of summer.
But the availability of electrical power –- and the price you pay for it -- depends heavily on where you live. Despite strong investment in new generating capacity in the past few years, the nation’s power grid is still a patchwork of smaller markets based on regional power lines that were never designed to move electricity coast-to-cast.
“On average, the country has done rather well in terms of building generation capacity,” said Bryan Lee, a FERC spokesman. “The problem is that you need transmissions lines to get that capacity often where its needed.”
Forecasting peak demand during the summer months -– especially on the hottest afternoons when commercial and residential air conditioners kick in all at once -– depends most heavily on predicting the duration and timing of the hottest heat spell in August. And this summer is shaping up as a hot one. Long-range weather forecasters at the National Weather Service think this summer will be hotter than normal in much of the Southeast, Southwest, Texas, California and Alaska – and cooler than normal in the northern plains states.
But federal officials are already warning of higher prices and possible blackouts -- energy officials prefer to call them “controlled outages” -- in some parts of the country.
Energy officials are closely watching the Pacific Northwest, where hydropower supplies more than 60 percent of the region’s electricity. Much drier-than-normal winter weather has left some of the region’s mountain ranges with snow packs of less than half their normal levels. Power officials say they don’t expect the lights to go out this summer. But a drop in hydropower supplies could force utilities to turn to higher-priced power sources. That could mean higher electric rates for a region accustomed to a relatively cheap source of power.
In California, statewide power capacity has been rising since the power meltdown of 2001 sparked a building spree of new power plants -– with some 26 new plants online and another 12 expected by next year. But a major transmission bottleneck –- roughly splitting north and south -– means that plentiful power in the north can’t flow to customers in the south who need it, according to Claudia Chandler, Assistant Executive Director of the California Energy Commission.
California hasn't felt the full impact of the Northwest drought, so it's in-state hyropower supplies won't be hit as hard, said Chandler. But the Golden State will still have to look to electricity imports from Nevada, Arizona, and Baja California in Mexico, to help out, according to Jeff Wright, a FERC energy analyst.
A very hot summer could leave a shortage of about 1,700 megawatts, or electricity for about 1 million homes, in southern California and a statewide shortage of 800 megawatts, according to an forecast from the Independent System Operator, which runs the power grid.
Utilities typically like to keep a surplus generating capacity of at least 7 percent above the peak load on the hottest day of the year. If temperatures are unusually hot this summer, said
Chandler, that surplus capacity in Southern California could drop to 2 percent or less.
“We look for interruptible power if we hit those temperatures because we just can’t get power from the north to the south beyond what we have already,” she said.
And the outlook for summer 2006 is more demand, zero net gain in new generation, and few transmission upgrades to get more imports. Most relief will not come until 2007-2008, the ISO forecast said.
Transmission bottlenecks are shaping up in various parts of the country -– the result of a combination of economic and regulatory hurdles. While power generating companies compete to sell power based on market prices set by supply and demand, most transmission lines are still regulated monopolies with a set rate of return, providing owners little financial incentive to invest in expanding capacity. And if the capacity of those lines doesn’t keep up with demand, pockets of the country can become overloaded.
That’s what’s happened in southwestern Connecticut, where an expanding economy and strong job market has brought steadily rising power demands. Older transmission lines into that part of the state can’t handle the higher voltages of increased demand. But soaring real estate prices in highly developed towns and cities in the region have made it difficult to put in new power lines, according to Joseph McGee, Vice President for Public Policy for the Business Council of Fairfield County.
"The primary issue is these new lines have to be on towers that are 130 feet high,” he said. “So you’re putting these lines through very expensive and very intensely developed property, and there was a lot of opposition.”
The solution, which will allow construction of new lines to begin, was to bury much of the new transmission capacity underground, said McGee.
That still leaves Connecticut vulnerable to blackouts this summer. Grid operators have some 218 megawatts of portable generators standing by for emergencies. And, as in many areas where power grids are stretched, they’ve also set in place programs to cut demand. One offers homeowners the option of installing a switch on their central air conditioning units that can be shut off by the local utility. If hot weather creates a surge in demand, customers may lose the use of their air conditioner, but they’ll avoid a total loss of power.
(Reuters contributed to this report)