DOE Issues Emergency Order to Alleviate California Power Crisis

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The U.S. Department of Energy (DOE) on Sept. 6 took the rare but drastic action of issuing an emergency order under the Federal Power Act (FPA) to authorize the maximum operation of three natural gas-fired facilities on the California Independent System Operator's (CAISO's) grid whose full capability had been stranded by federal air quality and other permits.

The seven-day Section 202(c) emergency order signed by U.S. Assistant Secretary for Electricity Bruce Walker at around 2 p.m. PST on Sunday responded to an urgent request by CAISO made public just three hours before. It allows Units 1-5 at Walnut Creek Energy Park in the City of Industry, Units 5/6 and 7/8 at the El Segundo Energy Center in El Segundo, and Units 1-4 at the Long Beach Generating Station in Long Beach to produce their maximum capacity, which could increase the combined output from the units by as much as an additional 100 MW, to help the embattled grid operator maintain regional reliability.

CAISO said it directed all generators in its balancing authority area to produce their maximum capability"-including allowing some to generate more than their interconnection capacity-during certain times of the day as historic heat storms raged on statewide. But the three gas generators, all which operate as peakers, informed CAISO they could not follow the directive without exceeding National Ambient Air Quality Standards (NAAQS) or other permit limitations. These limitations involve both permit limitations under federal law for nitrogen oxide emissions and ammonia releases as well as a limitations regarding fuel and ammonia throughput," CAISO said.

CAISO estimated the federal air quality and permit limitations had stranded" about 20 MW to 40 MW at El Segundo Energy Center; 15 MW to 25 MW at Walnut Creek Energy Park; and 36 MW at Long Beach Generating Station. NRG Energy completed the El Segundo Units 5-8 in 2013, but it packaged the units in a spinoff of NRG Yield, which became Clearway Energy in 2018. The El Segundo units are located near Los Angeles International Airport and have a total output of 536 MW. Walnut Creek Energy Park is a 500-MW simple cycle peaking facility in Los Angeles County that NRG completed in 2012, but it has also become part of Clearway Energy. The 252-MW Long Beach Generation Station in Long Beach, just south of Los Angeles, is still owned by NRG Energy.

In its urgent request to the DOE, the CAISO noted it does not lightly request the authorization it seeks here. It understands the importance of the environmental permit limits that are at issue." It added: However, in the CAISO's judgment, the loss of power to homes and local businesses in the areas affected by curtailments present a greater risk to public health and safety than the limited departures from those permit limits the CAISO requests here."

Another Heat Wave, Raging Wildfires Intensify California's Power Crisis

California is battling another extreme heat wave that sent temperatures surging to 121F in Los Angeles County on Sunday, but it is also struggling to contain two dozen wildfires across the state (Figure 1). California Governor Gavin Newsom issued a proclamation of a state emergency on Sept. 3, which suspended state and local permitting requirements for power generators during peak demand hours (between 3 p.m. and 10 p.m. PST). However, the state proclamation did not suspend permitting requirements that arise from federal law, CAISO noted on Sunday.

1. Active wildfires in California as of Monday morning, Sept. 7, 2020. Source: CALFIRE

Electric demand forecasts have continued to increase since the issuance of the California Governor's emergency proclamation and the CAISO balancing authority area has lost additional generation supply because of wildfires," it said.

On Sunday afternoon, as it sought the DOE's intervention, the grid operator's peak demand forecast within the California balancing authority area exceeded 49,000 MW. The net peak demand forecast after sundown, when solar resources ceased producing power, was projected to exceed 48,000 MW. Complicating CAISO's predicament was that on Sept. 5, the grid operator lost about 1,600 MW of generation on its system as a result of wildfires forcing transmission out of service, it said.

Already grappling with tight supplies, CAISO on Sunday declared a Stage 2 Emergency just before 6 p.m. PST when a transmission line from Oregon reduced capacity by 900 MW due to the heat," and generation totaling 260 MW tripped offline. At around 8:40 PST, CAISO announced consumer conservation" had helped avoid rotating power outages, but it reminded consumers that continued energy conservation during the statewide heatwave would still be needed on Monday, Sept. 7, when CAISO planned to re-issue a Flex Alert for the period between 3 p.m. and 9 p.m. PST.

Late on Sunday, meanwhile, Gov. Newsom declared a state of emergency in the Fresno, Madera, Mariposa, San Bernardino, and San Diego counties due to wildfires. The crisis grew more intense on Monday as Pacific Gas and Electric (PG&E), a company that emerged from Chapter 11 this July after agreeing to pay $25.5 billion in wildfire lawsuit settlements, warned it would implement widespread Public Safety Power Shutoffs (PSPS). PG&E describes the measure as a last resort" that is necessary to protect public safety from extreme wildfire threats. On Tuesday, Sept. 8, the utility confirmed it had begun PSPS shutoffs to 172,000 customers in 22 California counties.

Conditions Mirror Load-Shed Events Just Weeks Ago

CAISO's updated load forecast for Monday-Labor Day-is 46,107 MW. After sundown, when solar production is near zero," CAISO still expects load to hover around 44,699 MW. CAISO expects only 42,861 MW of generating capacity will be available, though it noted wind forecasts will still be highly variable at this time." It warned: [C]onditions in California are shaping up to be similar to August 14 and 15 circumstances."

The grid operator was forced shed load on Aug. 14 and Aug. 15, when, amid triple-digit temperatures, it escalated its electrical emergency to Stage 3. The rolling outages, which were the state's first since an energy crisis in 2001, drew the ire of Gov. Newsom, who demanded an investigation into their causes.

In a joint letter to the governor on Aug. 19, the heads of CAISO, the California Public Utilities Commission (CPUC), and the California Energy Commission (CEC) said the incident stemmed from a combination of high system demand, unanticipated loss of supply, and low net import availability due to hot temperatures throughout the West, which created untenable system conditions."

The entities said they are working jointly on a deep dive" into how the state will ensure sufficient electric supply," and where reliability rules can be modified to ensure reliability resources can be available to address unexpected grid conditions. However, they pointed to a few glaring issues that need immediate attention. We know that capacity shortfalls played a major role in the CAISO's ability to maintain reliable service on the grid. A major focus of our review will need to be on the joint organizations' process of determining the needed capacity," they said.

Another factor that contributed heavily to the Aug. 14 and Aug. 15 incidents is that California heavily relies on imports to meet the ramp in energy needs in the late afternoon and evening hours during the summer. But while some of these import resources bid into CAISO's energy markets, they are not secured by long-term contracts.

This poses a risk if import resources become unavailable when there are West-wide shortages due to an extreme heat event, such as the one we are currently experiencing," CAISO, the CPUC, and the CEC told the governor. The CAISO has observed that during the current heat wave, energy supporting imports from other Western utilities have been significantly constrained during the late afternoon and evening hours, as those other utilities must plan to meet their own demand and have limited ability to export supplies to California."

Other critical aspects of the entities' review will focus on how forecasts and planning will account for climate change and more heat storms and volatile imports, which could mean California's changing electricity system may need larger reserves." Today, the CPUC sets resource adequacy procurement requirements on a 1-in-2 peak forecast (an average year forecast) developed by the CEC based on methodology agreed upon by the three main bodies. To account for contingencies such as outages, import variability, load forecast error, and reserve requirements, the program currently requires utilities to procure a 15% planning reserve margin above the monthly peak load forecast.

How the entities will ultimately act is being closely watched by public and private industry. Though California has pioneered some of the nation's most ambitious renewable portfolio standards-and it currently requires all the state's electricity to come from carbon-free resources by 2045-for some, its current predicament serves a cautionary tale that illustrates the pitfalls of balancing intermittent power. For others, it bolsters an argument that a high-renewables scenario is still untenable without a diverse power portfolio that includes storage.

The DOE, for example, said in a statement late on Sunday that it determined the current situation in California constitutes a grid reliability emergency" that demands immediate federal intervention." But, While [Energy Secretary Dan Brouillette] has offered this emergency assistance to California in this time of crisis, he also encourages state policymakers to evaluate why the grid is not able to handle extreme stress, which could be alleviated with the support of greater baseload power generation and natural gas supply," said DOE spokesperson Shaylyn Hynes.

The call for more baseload power was echoed by the nation's coal power trade group, America's Power. The blackouts Californians have been forced to contend with show what happens when electricity supplies are neither diverse nor resilient," said Michelle Bloodworth, president and CEO of America's Power. The current situation in California was caused, in large part, by misguided and politically correct policies that promoted wind and solar power in place of coal, natural gas, and nuclear power without thinking through the possible consequences of those policies."

California Water Board Grants OTC Compliance Reprieves to Nine Gas Units, Two Nuclear Units

But California has already begun attending to some system inadequacies, specifically as they apply to the looming retirements of several generators that have said they cannot economically comply with the State Water Resources Control Board's 2010-adopted stringent technology-based once-through cooling (OTC) policy.

While the OTC policy requires 19 power facilities to either reduce the velocity of ocean water intake flows or reduce impacts by other comparable means by December 2020, it has prompted many facilities to cease once-through cooling operations or seek permanent shutdown. But owing to growing grid reliability issues first identified in March 2019, the state water board in January this year convened a multi-agency statewide advisory committee to address the reliability impact. On Sept. 1, four members of the state water board voted unanimously to adopt the advisory committee's recommendations to amend the policy and grant compliance reprieves to nine aging natural gas units and two nuclear units.

AES Corp.'s Alamitos Units 3, 4, and 5; Huntington Beach Unit 2; and GenOn's Ormond Beach Units 1 and 2 got three-year extensions, allowing them to operate until December 2023. (AES Corp.'s joint refurbishment of Alamitos and Huntington Beach, notably, won POWER's 2020 Reinvention Award.) AES's Redondo Beach facility received a one-year extension, allowing operation until December 2021. During the Sept. 1 meeting, the board also approved amending the OTC compliance dates for Diablo Canyon Nuclear Power Plant's Unit 1 by two months to November 2024, and Unit 2 by 8 months to August 2025. The revisions match the expiration date of each unit's Nuclear Regulatory Commission operating license.

DOE Uses Section 202(c) Emergency Authority Sparingly-but It Has Issued Two Actions Over the Past Two Weeks

The DOE's Sept. 6-issued federal emergency order for CAISO, which will apply only between the hours of 2 p.m. and 10 p.m. PST, is set to expire on Sept. 13.

Yet, it is notable because it is only the 10th issued by the DOE since 2000 under emergency authority granted to it by the FPA. The authority essentially allows the DOE to require the temporary interconnection of facilities and to direct power plants to continue operating in order to maintain the reliability of the electric grid during an emergency."

However, just two weeks ago, on Aug. 27, the DOE issued another 202(c) emergency order authorizing and directing CenterPoint Energy Houston Electric (CEHE) to operate an existing, permanent tie-line to assist in Hurricane Laura-related power restoration to Texas-based Entergy Texas, and electric cooperatives and municipal customers. The order responded to a proactive measure filed by CEHE on Aug. 26, the day before the monster Category 4 hurricane barreled inland near the Texas-Louisiana border, decimating large swathes of infrastructure (Figure 2).

2. Entergy Texas shared an image of a transmission line damaged by Hurricane Laura. Six of nine major transmission lines that deliver power into the Entergy Texas region from Louisiana were damaged. Courtesy: Entergy Texas

That order, which expires on Oct. 12, allows CEHE to temporarily connect, at transmission and distribution levels such as 12.5 kV, 13.2 kV, 25 kV, 34.5 kV, 69 kV, 138 kV, and 230 kV to the system of Entergy so that CEHE and Entergy may provide emergency assistance to each other if necessary to restore electric service. It also allows CEHE to use an existing, permanent 138-kV tie-line located between Dayton, Texas, and Crosby, Texas, to accomplish the interconnection.

As of Monday morning, all customers in Texas had power restored, but four of the nine major transmission lines that deliver power into the Entergy Texas region from Louisiana remained out of service as a result of significant storm damage to multiple structures and spans of conductor," a spokesperson told POWER on Sept. 7. A good number of the transmission structures within these lines were damaged beyond repair and require complete replacement," Entergy Texas said. While these transmission structures are being repaired, Entergy Texas' engineering and operations groups are working closely, along with our reliability coordinator MISO [Midcontinent Independent System Operator], to ensure the safe and stable operation of the electric grid."

Before the two Section 202(c) orders this year, two were issued in 2017, and only six were issued between 2000 and 2015:

• On June 16, 2017, a 202(c) emergency order was issued authorizing Dominion Energy Virginia to operate Yorktown Units 1 and 2 only as needed and as determined by PJM that generation from those units was needed in order to address reliability needs. Dominion was legally barred from operating the Yorktown units beginning in April due to the Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) rule, which limits emissions of mercury and toxic acidic gases from power plants. The units previously had special permission to remain on standby to mitigate the risk of blackouts in the region.
• On April 14, 2017, an order was issued authorizing Grand River Dam Authority (GRDA), a state-owned utility in Oklahoma, to operate its Unit No. 1 at the Grand River Energy Center (GREC) as needed to provide dynamic reactive power support in the GRDA service area until replacement generation capacity at GREC became available (the replacement unit was a POWER Top Plant in 2017). As POWER reported, that order was the DOE's first to keep open a power plant that had been slated for shutdown under the MATS rule in a bid to secure electric reliability.
• On Sept. 14, 2008, the DOE issued an order in response to Hurricane Ike to allow CenterPoint Energy to temporarily connect electricity lines to restore power to Entergy Gulf States Inc., as well as electric cooperatives and municipal customers within the state of Texas.
• On September 28, 2005, the DOE issued an order in response to the massive devastation caused by Hurricane Rita, which further exacerbated the dire condition caused by Hurricane Katrina.
• On Aug. 24, 2005, in response to a decision by Mirant Corp. to cease generation of electricity at its Potomac River Generating Station, the District of Columbia Public Service Commission requested that the Secretary of Energy issue an emergency order requiring the operation of the facility in order to ensure compliance with reliability standards for the central D.C. area.
• On Aug. 14, 2003, in response to a blackout on that day in the Northeast and Upper Midwest, as well as portion of Canada, the DOE issued an order directing New York Independent System Operator and ISO New England to require Cross-Sound Cable Co. to operate the Cross-Sound Cable and related facilities.
• On Aug. 16, 2002, due to concerns regarding the availability of electricity on Long Island in the state of New York, the DOE issued an order directing Cross-Sound Cable Co. to operate the Cross-Sound Cable from Connecticut to Long Island and related facilities.
• The DOE's first-ever Section 202(c) order was issued on Dec. 14, 2000, in response to the California energy crisis. The order required a group of power generators to provide power to CAISO if it was unable to acquire adequate supply in the market. That order was also unique in that, though it expired on Dec. 21, 2000, a new order with the same terms was issued on Jan. 11, 2001, which was extended to Feb. 7, 2001.

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

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