The grid operator’s price cap for spot-market electricity was hit July 13 as a heat wave persisted throughout the state. The price of electricity was $399/MWh at 4:40 p.m., dropping to the mid-$60s/MWh at 5 o’clock in the evening and rising again to $399/MWh at 6:00 p.m. The price of electricity is capped at $400/MWh. Reserves hit their nadir between 4:00 and 5:00 p.m., falling to 5.6 percent. The California Independent System Operator strives for a 7 percent supply reserve. The state was importing more than 12,000 MW during peak hours. While the system appeared strained and the price peaked, no blackouts were required to avoid a system crash. The grid operator called a “power watch” Thursday morning to last through the weekend. Load is forecast to be 46,217 MW on Friday, July 14 – topping the last record peak demand of 45,431 MW set July 20, 2005. Electricity use on July 13 exceeded the forecast. The load on Thursday was projected at 44,315 MW but reached 44,655 MW. An unknown at press time is how current wildfires will affect the ability to route electricity through the grid. Governor Arnold Schwarzenegger declared a state of emergency in San Bernardino County July 13 because of wildfires. Fires often curtail the use of transmission lines as they need to be shut down if directly threatened or reduce their current because of high temperatures. Southern California Edison did not implement its demand-response program during the afternoon, according to utility spokesperson Gil Alexander. Demand-response programs call for businesses to reduce consumption. It was unclear at press time whether the other two utilities had instituted their demand-response programs. In exchange for lower rates, businesses sign up for utility programs that require them to reduce use in times of system stress. The California Energy Commission predicts that there’s a 95.6 percent probability that there will be no Stage 3 alerts (blackouts expected) in the state if demand-response programs are used, and combined with programs that allow some large users to have their electricity “interrupted.” The commission predicts that without those programs, there is a 57 percent possibility of entering a Stage 1 alert (a call for conservation) with reserves dropping below the 7 percent level. Early this year, the wholesale price cap increased from $250/MWh to $400/MWh. The change was largely due to fears that the cost of natural gas to fuel many power plants would remain at unprecedented levels. Gas prices have since dropped to last year’s summer averages.