July 25, 2018 / 10:42 PM / 3 months ago

UPDATE 2-SoCalGas curtails natgas for power generators in California heat wave

 (Recasts with SoCalGas curtailment, new quotes from California ISO and latest power and
gas demand forecasts)
    By Scott DiSavino
    July 25 (Reuters) - Southern California Gas (SoCalGas) told its electric-generator
customers to expect less natural gas supplies to fuel their plants on Wednesday as they
consume more of the fuel than usual to keep air conditioners humming during a brutal heat
wave.
    But that curtailment notice does not mean the gas utility will actually cut supplies
to gas-fired power plants, which are currently generating about half of the state's
electricity, according to the California Independent System Operator (ISO), which manages
much of the state's power grid.
    "SoCalGas requested the California ISO voluntarily reduce generation levels," said
Steven Greenlee, a spokesman for the ISO. "The ISO is unable to reduce generation levels
... without risking electric system reliability."
    Greenlee said SoCalGas will follow the Aliso Canyon Withdrawal Protocol, which
includes the option to tap into gas supplies in its Aliso Canyon storage facility.
    SoCalGas can only use Aliso Canyon as an "asset of last resort" after all other
alternatives have been exhausted. The state has limited use of Aliso Canyon following a
massive leak at the facility between October 2015-February 2016.
    Even though the ISO reduced its forecast for peak power demand on Wednesday due in
part to customer conservation efforts and slightly cooler than expected weather, the grid
operator urged customers to keep conserving energy to relieve stress on the grid.

    The ISO said preliminary estimates show that voluntary conservation on Tuesday
possibly reduced demand by up to 500 megawatts (MW), enough to power roughly half a
million homes.
    The ISO reduced its peak demand forecast for Wednesday to 47,058 MW from 49,489 MW
earlier in the day, falling well short of the grid's all-time high of 50,270 MW in July
2006.
    SoCalGas, which supplies gas to over 21 million consumers in the southern part of the
state, projected gas demand would rise from 3.0 billion cubic feet per day (bcfd) on
Tuesday to 3.2 bcfd on Wednesday before easing to 3.1 bcfd on Thursday, while receipts of
the fuel via pipelines were only expected to total about 2.6 bcfd.
    One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.
    SoCalGas is a unit of Sempra Energy. Other big utilities in California
include units of Edison International and PG&E Corp.
    High temperatures in Los Angeles are only expected to reach 89 degrees Fahrenheit (32
Celsius) on Wednesday, down from an earlier forecast of 98 degrees, according to
AccuWeather. The normal high in the city is 84 degrees at this time of year.
    Power prices for Wednesday soared to their highest on record at Palo Verde
EL-PK-PLVD-SNL in Arizona and SP-15 EL-PK-SP15-SNL in Southern California, according
to data from S&P Global's SNL going back to 2010.

 Power and Natural Gas Prices                                                            
                                          Trade date                                     
 Hub                  Unit             July 24  July 23  Year-to-d  Calendar   Five-year
                                                         ate 2018     2017    (2013-2017)
                                                                                average
 Mid Columbia power   Megawatt-hour    200.00   230.00     24.50     26.25       30.33
 EL-PK-MIDC-SNL                                                             
 Palo Verde power     Megawatt-hour    291.00   175.75     32.63     32.94       33.15
 EL-PK-PLVD-SNL                                                             
 SP-15 power          Megawatt-hour    301.25    83.00     35.16     39.32       41.11
 EL-PK-SP15-SNL                                                             
 SoCal Citygate gas   Million British   19.50    38.84     4.14       3.48       3.51
 NG-SCL-CGT-SNL     thermal units                                           
 
    
 (Reporting by Scott DiSavino; editing by Jonathan Oatis and Tom Brown)
  
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