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Gov. Gavin Newsom ordered the heads of the California Public Utilities Commission, Independent System Operator and California Energy Commission to immediately determine why they failed to anticipate the mid-August squeeze on electricity resources and the cause of the rolling outages.

In a letter sent early this week, the governor also demanded to know how the agencies will avoid further supply and demand imbalances in the short- and long-terms. Each entity also is to investigate reliability inadequacies within their jurisdictions. Newsom also directed the trio to jointly take a hard look at imports and how to beef up their delivery.

The CPUC, CAISO and CEC chiefs replied that they share responsibility for the Aug. 14 and 15 rolling blackouts. They added that renewable resources are not to blame. “Clean energy and reliable energy are not contradictory goals,” they wrote in an Aug. 19 joint response to the governor.

Some said reliability depended on more gas plants and keeping the Diablo nuclear power plant online beyond 2025, when its federal operating license expires.

CAISO Board Chair Dave Olson said that inflexible nuclear power is ill-suited to the state’s flexible power system that is moving toward decarbonization. He and other agency officials said they remained committed to a clean power system.

The three entities are working together to understand the exact reasons for the recent power disruptions. Their inquiry will include how the organizations forecast hourly demand and set reserve margins. Integrating more wind and solar power will be analyzed too.

CAISO Blindsided

CAISO could not have predicted the events that caused the mid-August outages, including the sudden loss of 1,500 MW and crimps on imports because of the western wide heat wave, the joint agency reply says.

However, it could have and will in the future improve communications and warnings. The letter also states that reliability rules will be modified to make sure resources are available to address “unexpected” grid conditions.

The governor’s letter orders the CPUC to take a hard look at its supply cushion. The CPUC requires planning reserves to be 15% above monthly peak load forecasts in average weather conditions. From this year to 2022, its resource adequacy mandate is set at 3,300 MW.

Steve Berberich, CAISO president and chief executive officer, took the CPUC to task for not requiring a higher supply cushion level by the utilities and community energy as urged by the grid operator. In other words, the CPUC reserve adequacy deficiency and the shortage of contracted imports are responsible for the supply shortages.

California gets up to one fourth of its power from imports from the Pacific Northwest and Arizona in summertime. Recently Oregon and Washington have been supplying up to the capacity of their transmission lines. Arizona was suffering the same heat wave so had no spare power to send to California.

Some have faulted the CAISO for holding onto an 8% reserve margin during the supply emergency. Berberich insisted that was needed to protect the grid in case a major power plant or high voltage line suddenly went down.

The analysis is to include the CPUC’s evaluation of whether its resource adequacy, utility energy procurement and demand response programs are sufficient.

Demand Reduction is an Emergency Resource

Demand reduction advocates warn the state is failing at a tried and true method for matching supply with demand under strained conditions. They point out demand response is down 50% from earlier levels and California can’t transition to a clean grid without it.

The recent outages were “a wakeup call,” Greg Wikler, California Efficiency and Demand Management Council executive director, told Current . “Demand response is an emergency resource.” It helped stabilize the grid during the 2001-02 energy crisis when wholesale power prices went through the roof.

“We want to see a critical examination of why the CPUC and CAISO have a dim view of demand response,” leaving it to whither, Wikler said.

During the supply crunch, 800 MW was shaved off the peak by demand response. But far more could be tapped into during peak periods. According to Mona Tierney-Lloyd, U. S. State Public Policy and Institutional Affairs for Enel North America, 5,000 MW of demand response is within reach.

Newsom has directed the CAISO to review the accuracy of its assumptions about the capacity of solar facilities and other resources that feed into the grid.

Solar energy is getting a bad rap in some circles because it stops producing at sundown while household demand is rising. That fact is obvious and well-understood, is why battery storage is being increasingly added to utility scale and small rooftop photovoltaic systems.

Berberich said earlier this week that as of now, there is 200 MW of installed grid-level storage. But about 12,000 MW is needed. The grid operator agreed recently to ease the way for combined solar-battery facilities into its market.

The CEC was ordered to update its forecasts to include the impacts of climate change. The agency’s forecasts already include the effect of climate change on energy demand. But now it is to apply scientific improvements and increased stakeholder engagement.

The joint agency root cause analysis, to be released “in the coming days,” is to include:

Scrutinizing demand forecasts and how they are applied to forecasts. Assessing the performance of resources supplied to the grid operator by entities both under and outside the jurisdiction of the CPUC. Evaluating whether existing incentives and penalties are sufficient to ensure reliability resources deliver promised supplies. Reviewing the adequacy of payments to the gas fleet to ensure reliability.

Grid monitoring organization such as the Western Electricity Coordinating Council and North America Electric Reliability Corporation will work together on a formal analysis, including why two gas-fired power plants suddenly went offline at a crucial moment. The study will aim to “develop a culture of reliability excellence that promotes aggressive self-critical review and analysis of operations, planning, and critical infrastructure protection processes,” according to WECC. The study will likely take months to complete.

The energy system is complex and affected by multiple factors. That includes unanticipated and sudden power plant and transmission outages. There also are drops in solar energy output because of clouds, and loss of wind during strong heat.

“This week’s events demonstrate the state must do more, and faster, to prevent future outages as we continue to work to transform energy generation in our state,” and fight climate pollution, Newsom said.

The same day, the governor urged that diesel backup generation and other resources be fired up as needed. He waived air quality protections.

— Elizabeth McCarthy

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