Genuine price signals about the underlying cost of consumer energy usage are an important part of energy efficiency. With those signals, consumers can adapt to save high-cost energy, while making...
Squeezing Scarcity From Abundance
California's pursuit of a centralized administrative solution in reliability hinders everyday operational issues.
approximately 1,000 MW to its outage figures to be conservative. 16 Since outages are the reason for operating reserves, this assumption was not out of line with California's operating reserve margin of 7 percent.
Overall, the statewide CEC analysis matched the WECC analysis.
The 15.7 percent planning reserve was sufficient to meet two major contingencies:
- 6.86 percent higher load forecast during hot weather; and
- 6.39 percent forced outage level.
The CEC study also addressed the ISO control area. 17 Over time, the control area effectively has shrunk to serving only the sum of the control areas of the three investor-owned utilities, excluding the municipals-especially L.A. and Sacramento-and the Western Area Power Administration (See Figure 2) .
The CEC's view of the Cal-ISO actually was more positive than its view for the state as a whole. The CEC predicted that the planning reserve margin for Cal-ISO alone in August was 18.7 percent. 18 As noted before, such a planning reserve should prove adequate for meeting a higher than normal hot weather load contingency-7.2 percent-and forced outages of 6 percent. The forecasts that forced outages would be lower for the ISO than the other areas of California were surprising, given historical experience, but the differential was not so extreme as to be significant. 19
The problem turned out not to be the level of California reserves, or even the level of reserves at the ISO, but the reserves for Southern California. In the language of the ISO, SP-15 is the trouble area. The next CEC table addresses the southern part of the state (See Figure 3) .20
While the overall level of reserves appeared rosy, line 6, the "Zonal Transmission Limitation," was a significant problem. The level of planning reserves fell to 12.7 percent with this restriction included. Obviously, 12.7 percent was not an appropriate level of reserves with the assumption of a 7.6 percent hot weather load increase and possible forced outages of 6 percent.
The "Zonal Transmission Limitation" reflects transmission problems for power in NP-15 and Mexico entering SP-15. As such, normal planning standards would identify the level of imports and not derate the total resources. This assumption has been taken from the California ISO (see Endnote 2) .
Cal-ISO's own report also addressed the situation in SP-15, but its unique terminology and approaches are inconsistent with those used elsewhere, and made it difficult to interpret the ISO's calculations without careful review. The SP-15 analysis is contained in Attachment A to the report. 21
The system peak analysis at the ISO resembled that of the CEC, but was even more idiosyncratic. The ISO listed total generation at 24,956 MW for August. In spite of industry practice that identifies only useful capacity at system peak, the ISO then itemized generation outages and derations from lines 12 through 18. Its analysis mixed planned outages and derates with forced outages. Since derates and scheduled outages are known beforehand, industry practice identifies these separately. The actual operating reserve is designed to protect the system against forced outages, so this would be treated as an issue