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Declaring Emergencies in California: The Realities of ISO Operation

An independent system operator's view on the energy crisis and the realities of maintaining reliability.
Fortnightly Magazine - October 15 2001

Declaring Emergencies in California: The Realities of ISO Operation


An independent system operator's view on the energy crisis and the realities of maintaining reliability.

What is happening to the deregulation of California's electric energy market? It started out as an ideal concept. Energy would be provided to the California consumers at a much lower price, while maintaining a highly efficient system to accommodate generation, transmission and the distribution of energy. How has this dream gone so awry? The answer is that a chain of events have produced a breeding ground for the current absurd and almost farcical situation we are dealing with today. 1

In a variety of forums and through articles appearing in the media and the press, several stakeholders and observers have asserted that the California Independent System Operator (CAISO) prematurely declares Stage 3 Emergency Notices 1 and has called for firm load curtailments (rotating blackouts) while there seemed to be a surplus of resources to meet system demand. It may seem like simple math for observers external to the CAISO to derive such conclusions; however, these assertions are based on incomplete data and erroneous assumptions related to the resource mix in California. In this article, an attempt is made to explain how the system operators at the CAISO calculate available supply and projected demand in order to conclude that energy is needed to ensure that the rest of the demand on the grid can be served in a safe and reliable manner. Let's also consider the resource mix in California and demonstrate through examples that the actual generation capacity in the CAISO system during Stage 3 emergencies and firm load curtailments was well below values necessary to maintain electric grid reliability.

Traditionally in almost all electric utility practices worldwide, the system operator's primary responsibility is to constantly balance supply and demand. When demand exceeds supply and the system operator is not able to continue balancing the system and has no option but to take drastic actions and follow regional and national reliability standards in order to maintain the overall integrity of the grid. If the system operator does not attempt to balance demand with supply, or is unable to do so due to lack of supply, short of any action, the electric system would be in real danger of total disintegration resulting in total blackout. The system operators in every control area follow very similar guidelines in their constant attempt to balance the system. Deregulation of the electric energy system in California has made the system operator's actions public and more transparent than ever. Emergencies had taken place many times prior to deregulation. However, utilities followed different communication protocols, which led to much less public awareness of crises in the electric energy industry.

The California Energy Crisis: Product of deregulation?

Many people ask the question whether the energy crisis would have existed if California had not deregulated its wholesale energy markets. It is abundantly clear with factual evidence throughout this article that California would have had the current energy crisis even if deregulation had not taken place. Regardless