California avoided rolling blackouts for two decades. What went wrong on the grid?

Elva Mankin

For nearly two decades, California skated past one heat wave after another without having to resort to deliberate rolling blackouts — including one horrible stretch that killed 140 people in 2006. The state’s electricity winning streak ran out Friday night. For more than three hours, amid 100-degree weather in much […]

For nearly two decades, California skated past one heat wave after another without having to resort to deliberate rolling blackouts — including one horrible stretch that killed 140 people in 2006.

The state’s electricity winning streak ran out Friday night.

For more than three hours, amid 100-degree weather in much of the state, hundreds of thousands of Californians were subjected to one-hour blackouts designed to keep the electricity grid from completely melting down. It marked the first rolling blackouts in California since the 2001 energy crisis, when the state was victimized by rogue energy traders from Enron Corp. and other companies that withheld power to jack up prices.

This time it was a matter of too much hot weather overwhelming the system, according to the California Independent System Operator, which runs the grid.

“The biggest factor was the heat,” said ISO spokeswoman Anne Gonzales.

Yet as hot as it was Friday, the demand for electricity peaked at just 46,800 megawatts — a few thousand megawatts shy of the record 50,270 in July 2006, when Californians were literally dying in the heat but blackouts were avoided.

What was the difference Friday? Gonzales said the grid was hampered in part because two big power plants couldn’t deliver any juice, including one that “tripped offline” unexpectedly late in the day.

However, some experts say California also is feeling the effects of dramatic changes in the way it produces electricity. Notably, the state relies a lot more heavily these days on solar power, a resource that is in ample supply during the day naturally fades as the sun goes down. Friday’s blackouts began shortly after 6:30 p.m., as solar supplies were disappearing.

While solar has grown in importance over the years, mainstay energy sources like natural gas-fired plants — which can run any time — account for a smaller portion of the state’s electricity supply as older plants have been mothballed.

“We have a lot less fossil fuel generation than we had in 2006, said Severin Borenstein, an ISO board member and UC Berkeley energy economist.

PG&E Corp. warned customers Saturday afternoon that another round of blackouts was possible “based on current power usage forecasts” from the ISO. The grid operator responded on social media it was “expected to cover electrical demand with no stage emergencies planned at this time.”

For its part, the ISO issued a “grid alert” urging conservation and for help from suppliers. But Gonzales said the ISO believed the state could get through the weekend without further blackouts. Monday and Tuesday, when temperatures will climb toward 110 degrees, could prove more difficult.

Blackouts, Enron and California’s troubled grid

When rolling blackouts struck in 2001, it didn’t become clear until later that the real culprits were crooked energy traders who found holes in California’s newly-deregulated electricity system.

Deregulation forced the big utilities — investor-owned PG&E, Southern California Edison and San Diego Gas and Electric — to sell off their gas-fired plants, leaving them at the mercy of the market. California imposed price caps on electricity generated within the state’s borders but would pay anything for imports. So traders devised a scheme called “megawatt laundering,” in which they bought power in state, moved it out of state, and then brought it back to California, where they could command top dollar.

Other times, they simply used brute force, shutting off their plants until the price got high enough to their liking.

The result was billions of dollars in higher costs, eventually passed on to ratepayers of the big utilities, and three days of blackouts. The state finally got control of the market by agreeing to purchase gobs of power itself.

Since then, the ISO has overhauled its market mechanisms to weed out abuse. It also imposed new rules on PG&E and others, requiring them to line up 15% more power ahead of time than they think they’ll need.

Yet Loretta Lynch, who was president of the state Public Utilities Commission during the crisis, said she thinks some of the gamesmanship has returned.

She said the ISO’s market mechanisms still enable power suppliers to withhold energy. Similarly, federal regulators in late 2016 allowed a crucial rule — instituted during the energy crisis — to lapse. That rule essentially required most power suppliers to make electricity available to the ISO grid during crunch times, and its expiration has left the grid vulnerable ever since, Lynch said.

“The sons of Enron have been planning for this,” Lynch said. “Welcome to 20 years ago — it’s just a start.”

Lynch said it’s noteworthy that utilities that don’t belong to the ISO — such as SMUD, the Sacramento Municipal Utility District — didn’t have blackouts Friday.

What is the California ISO, and why were there no outages in Sacramento?

Gonzales, the ISO spokeswoman, said, “We ordered all generators to stay online throughout the extreme heat event” and benefited from about 800 megawatts of power rushing into the system from other sources late in the day — a development that kept the blackouts from being more widespread.

As for accusations of power being deliberately withheld, she said: “I understand it’s interesting to speculate, but the real reason for the energy shortfall is high heat and people naturally wanting to stay cool.”

Can California store more of its solar power?

Some experts believe they have the solution to California’s problem: If solar energy dissipates when night falls, why not store it up for use when it’s needed?

Large-scale battery storage exists but hasn’t yet been widely deployed. Brad Heavner, of the California Solar & Storage Association, said California has about 400 megawatts’ worth of storage installed around the state.

He acknowledged that isn’t enough.

“There aren’t enough batteries out there that could have changed the picture of (Friday’s) blackout,” he said.

But Rick Brown, chairman of a Bay Area advisory company called TerraVerde Energy, said he thinks California is ready to embrace storage technology in a big way. In particular, he said the massive blackouts imposed by PG&E Corp. last October, designed to reduce wildfire risks, are “finally getting people to wake up” to the technology’s promise.

Solar energy was practically nonexistent in the early 2000s in California. In 2018, it accounted for about 11% of the state’s electricity, according to the California Energy Commission. In summer months, solar can generate 25% or more of the state’s power.

State law says solar and other renewables must make up 60% of the California electricity supply by 2030 and 100% by 2045. The solar industry is backing a bill known as Assembly Bill 1001, which would help school districts install storage facilities on their campuses.

“We’ve done a remarkable job of meeting our power needs in the middle of the day, from the sun,” said Heavner said. “We need more batteries.”

California wrestles with aging power plants

Michelle Stickel was recalling how her elderly mother and her sister rode out the blackout at their home in El Dorado Hills, when the air conditioning conked out during stifling conditions.

“They just went out back to a cold hot tub,” Stickel said.

Scott Walker of El Dorado Hills was worried about his dog handling the heat. He’s set up a generator to ride out the heat wave — even as he tries to wrap his mind around the idea of surviving a blackout during a global pandemic.

“I’m just waiting for zombies or meteors of something,” he said. “It’s a lot.”

The idea of rolling blackouts seemed almost unthinkable a few years ago. Some critics, including Lynch, told the Los Angeles Times in 2017 that California had more supply than it needed and had spent too much money on power plants. (Lynch said Saturday she stands by that criticism.)

But by 2019 the state was beginning to consider the possibility that it wouldn’t have enough energy. State energy officials pushed back against a plan to retire 11 gas-fired plants in Southern California, arguing that the mothballing could lead to power shortages.

The coastal plants have been particularly controversial because they pollute the air — some are a half-century old — and they pull water from the ocean to cool themselves down. The State Water Resources Control Board had demanded they be closed in late 2020 because they were harming fish and sea lions. But the ISO and the Public Utilities Commission stepped in, saying the plants were needed to keep the lights on.

The issue is still pending before the state water board, which is scheduled to decide Sept. 1 whether to give the plants more time, said board spokesman George Kostyrko.

Environmentalists have been urging the water board to shut the plants down, citing climate change and water pollution concerns. But Borenstein, the ISO board member, said California needs the electricity.

“We need to phase out fossil fuels but we need to do it in a way that maintains reliability,” he said.

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