As electric restructuring spreads around the nation and the world, the idea of a "PoolCo" spot market (pool) gains credence. Pools already exist in England, Australia, Norway, Alberta, and...
Squeezing Scarcity From Abundance
California's pursuit of a centralized administrative solution in reliability hinders everyday operational issues.
and the Arizona New Mexico sub region had 7,074 MW. 25
The constraint was not generation capacity, but it may have concerned transmission capacity. Neither report addressed whether the lines into SP-15 were a limiting factor in meeting the summer peak. The reference to the low hydroelectric conditions in the Pacific Northwest implied that both agencies believed that the problem lay in generation and not transmission.
The ISO report contained a short table that summarized transmission capability for the summer (see Table 5) .26
The CEC import assumptions listed imports along the DC intertie from Oregon as only 2,000 MW-1,100 MW less than capacity. Total imports from the Southwest were only 2,900 MW, compared with 14,500 MW of capacity. 27
Nothing in either report indicated an engineering impediment to additional capacity imports.
The problem, as noted earlier, is ideological. Both reports, rightly, feared that additional capacity might not be available on a day's notice. Such a scenario was quite possible. The ISO control area is unique in the WECC for its determination to provide capacity on a daily basis. Other systems make prudent advance provisions for reliability. As a general rule, reserves must be contracted for—not merely assumed.
Last-minute purchases pose significant problems for neighboring systems. Fuel-limited resources in particular require advanced planning and notice. The hydroelectric resources in the Pacific Northwest need to allocate scarce water to the highest value tasks-only one of which is energy production.
The engineering studies behind the construction of the nearly 8,000 MW interties between Oregon and California were based on the principle of harnessing regional diversity-the ability of the dams to store energy by reducing releases by the import of thermal energy in the spring and winter and the release of water during the summer. While not costless, this is a very efficient arrangement to optimize operations across regions with different peaking seasons and generation technologies. Unfortunately, this level of optimization is not easily accomplished on the basis of a daily capacity market-and even less on the basis of emergency "out of market" purchases from the larger regional markets.
- California Energy Action Plan, CPUC, March 23, 2005; 2005 Summer Operations Assessment, Cal-ISO, March 23, 2005; and Summer 2005 Electricity Supply and Demand Outlook, March 2005, CEC.
- WECC 10-Year Coordinated Plan Summary, September 2004, Table 7, p. 28.
- California's "1-in-2" forecast is an odd concept for reliability planning since it describes the average, rather than the worst, case. In everyday terms it represents a level of reliability that could fail half the time.
- A good reference work on the standards for the western U.S. and Canada is in the Nov. 24, 2004, WECC Power Supply Assessment. See in particular Attachment 1, WECC Power Supply Assessment, Nov. 24, 2004, pp. 2-35.
- The western U.S. and Canada, plus a small portion of northern Mexico, belong to the Western Energy Coordination Council, the body responsible for reliability planning for the region.
- The California ISO is a unique institution with a board appointed by the governor, but largely exempt from open-meeting and open-document rules.
- In reality, the California