CAISO to Extend Contract for Oil-fired Units in Bid to Ensure Reliability

Three 55-MW oil-fired units at Dynegy's Oakland plant in renewables-heavy California will be needed through 2018 to ensure reliability in a region served by the California Independent System Operator (CAISO), the grid entity has deemed.

CAISO's board of governors on September 19 extended a "reliability must-run" (RMR) contract for the three Oakland units. An RMR contract is essentially a backstop that keeps on hand generation capacity that hasn't been picked up by a utility contract, but is required to satisfy local reliability criteria, "especially during heat waves, while the price is administratively set," CAISO said.

"Where a reliability must-run contract augments a resource adequacy contract, Management will ensure that any fixed-cost recovery will compensate the unit owner only for the incremental costs of providing reliability must-run services. This will guarantee the owner is not paid twice for its capacity."

CAISO CEO Stephen Berberich told the board in a September 19 memo that the entity's region had experienced very high system loads over the past month owing to significant heat waves. The system was also afflicted by multiple fires, which had caused two 230-kV lines, a 115-kV, and a 60-kV line to relay. (The events, notably, also forced the Los Angeles Department of Water and Power to evacuate their main control room, though they returned the next day.)

CAISO has added massive amounts of renewables to its grid and is experiencing ever-higher peaks from solar and wind. The most recent solar peak of 9,914 MW occurred on June 17, 2017, while the most recent wind generation peak of 4,985 MW was set on May 16, 2017.

Based on real-time operations data for 2015 and 2016, CAISO's analysis shows, however, that the Oakland sub-area needs additional capacity of between 56 MW and 98 MW for a "1-in-3" year heat wave event. CAISO noted that the Dynegy RMR is subject to a resource adequacy showing at the California Public Utilities Commission.

Contract May Be Nixed for Huntington Beach Synchronous Condensers

CAISO also recommended a number of black start unit and dual fuel agreement unit contract extensions. However, it also sought to terminate an RMR contract for AES Corp.'s Huntington Beach synchronous condensers 3 and 4.

AES and Siemens in 2013 converted the plant's Units 3 and 4 steam turbine generators to synchronous condensers, which are a mode of power compensation that use flywheels, to offer voltage support that became necessary after two units at the San Onofre Nuclear Generating Station (SONGS) were shut down and later retired (for more, see: "AES Uses Synchronous Condensers for Grid Balancing" in POWER's March 2014 issue). On September 19, CAISO said the units weren't needed anymore because synchronous condensers in Santiago and San Luis Rey had been added to the grid.

AES, which is building a 1.2-GW combined cycle gas plant equipped with 100 MW of battery-based energy storage-and has procured a 20-year contract for that power with Southern California Edison-hopes that the plant being built by Kiewit Power Constructors will be completed as expected in 2020 to replace about 474-MW of existing gas capacity at Huntington Beach (and 3.4-GW of other gas capacity in California) that is slated to be retired by 2020.

Rule to Model Power Plant Losses

In related news, CAISO's board on September 19 also approved a rule enhancement that allows the grid operator's systems to automatically model the potential loss of power plants to improve market efficiency and readiness. The rule, which needs approval from federal regulators, is significant because, to date, grid models have only considered potential transmission outages-not power plants unexpectedly going offline.

It has meant that "generator outages must be managed through manual intervention," CAISO noted. Generators have plans in place to automatically disconnect their units or shed load to prevent system overloads in the event of an unexpected transmission line outage, it explained. The rule "will mean that grid operators can rely on enhanced modeling to automatically monitor potential generator issues that could result in electrical flows exceeding operating standards," it said.

-Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)

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