California Summer of Heat, Power and Fire Woes Arrives Early

(Bloomberg) -- California is getting an early taste of the summer that state officials have been dreading all year.

A heat wave spanning much of the western U.S. has brought triple-digit temperatures to parts of the state, sending power demand soaring and threatening blackouts once again. Trees, grass and brush left parched by a nearly rain-free winter are catching flame.

The drought stretching from West Texas to the California coast and north to the Canadian border is already putting power grids to the test as hydro generation dries up just as homes blast their air conditioners. The heat is expected to crest Thursday and Friday, with the temperature in Sacramento forecast to hit around 110 degrees Fahrenheit (43 Celsius).

California’s power grid managers asked residents to cut their electricity use Thursday evening as solar power plant output begins to fade. They want to avoid rolling blackouts, like those that struck California during an historic heatwave last August. The hope is that voluntary conservation should be able to offset a possible shortfall of about 300 megawatts.

“We’re here today with our first sense of potential supply shortfalls for tomorrow. At this point they’re looking rather modest, but we have to stay ahead of them,” Elliot Mainzer, chief executive officer of the California Independent System Operator, which runs most of the state’s grid, said late Wednesday. “We will be doing everything we can across the next 24 hours to keep the lights on.”

Last year’s rolling blackouts were the first to hit California in two decades, and state officials spent the winter and spring working to prevent a repeat.

They delayed the planned retirement of several old, gas-fired power plants along the coast and tweaked electricity market rules to encourage more imports during periods of high demand. In addition, power companies are installing large-scale batteries capable of storing solar power during the day and feeding it back onto the grid for about four hours in the evening. By August, enough batteries will be installed to supply 1,700 megawatts of electricity, although most of those are not yet operational. On Wednesday, for example, batteries supplied about 600 megawatts of electricity to the California grid during early evening, according to CAISO data.

Nonetheless, traders betting that the intensifying heat will lead to electricity shortages across the western U.S. have driven a key spread between power prices in Arizona and those in the Los Angeles area to the widest ever. Electricity regularly travels between Southern California, the Pacific Northwest and the Southwest, depending on regional needs. But the blown-out spread reflects an increasingly uncomfortable truth: Climate change has brought about such extreme weather for all three regions that, at times, there isn’t enough power to go around.

“It’s going to be a tight summer,” said Scott Miller, executive director of the Western Power Trading Forum.

California officials have been bracing for a difficult season. The usual winter rains that the region depends on every year for moisture never came. And the ensuing drought couldn’t have come at a worse time for Governor Gavin Newsom, who faces a likely recall election this fall. He’s trying to avoid a repeat of last year’s devastating fire season and the heat-triggered blackouts that briefly plunged more than a million Californians into the dark as they were stuck at home by the coronavirus pandemic.

“My mind is immediately focused on issues of energy security, immediately focused on issues of wildfire season,” Newsom said Wednesday at a press conference announcing a new vaccine incentive giveaway.

Texas endured a similar test of its electricity system this week. The same heat gripping California struck the Lone Star State first, arriving four months after a brutal cold snap knocked power plants offline, triggered massive blackouts and killed at least 150 people. As electricity demand rose with temperatures this week, many power plants unexpectedly shut down, limiting supplies. The number of plants online, however, rose Wednesday, easing the possibility of blackouts.

Although California and Texas -- America’s two most populous and prosperous states -- have garnered most attention, the heat wave and the problems it highlights stretch across the western U.S. Outside of Texas, states there have grown dependent on importing power from one another when demand is high, but that has become increasingly difficult as extreme temperatures blanket the entire region.

Nearly 75 record highs could break or be tied across the West and central Great Plains Thursday, mainly in the Southwest and valleys of California, said Bob Oravec, a senior branch forecaster with the U.S. Weather Prediction Center. The heat also may push into the Pacific Northwest, with Portland, Oregon, reaching 98 degrees on Monday, Oravec said.

Texas supplies tightened in recent days after plants with as much as 12.2 gigawatts of generating capacity, enough to run about 2.4 million homes, unexpectedly shut down for repairs. That fell to 10.6 gigawatts Tuesday. About two-thirds of those out of service were natural gas, coal and nuclear plants. The rest were wind and solar, the grid operator said.

The system had 4.3 gigawatts of power reserves as of 10:20 a.m. local time on Thursday. Managers of the Texas electrical grid said they would call the first stage of a grid emergency should reserves fall below 2.3 gigawatts and would start rolling blackouts if reserves fell below 1 gigawatt.

But it’s still early to say what the summer will bring.

“We’re optimistic that if we stay really focused and people lean in with us, we can minimize the probability of rotating outages,” Mainzer said.

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