Nuclear outage, backstop generation among issues facing Calif. ISO

These are busy times for the California Independent System Operator, Cal ISO Vice President Keith Casey told reporters Sept. 21 in Washington, D.C.

For starters, the grid planners are drawing up contingency plans in case one or both of the San Onofre nuclear generating station (SONGs) reactor units are still out of service in the summer of 2013

Then there is the ongoing effort to integrate more renewables into the mix. California has an ambitious 33% green power target by 2020. Also by 2020, the ISO anticipates that 12,000 MW of California’s natural gas generation could be endangered by new government restrictions on “once-through cooling.”

Also, in coming weeks, Cal ISO will be talking more about a new “backstop procurement authority” to prevent premature retirement of key gas-fired power plants.  

For example, the ISO and the California Public Utilities Commission have agreed that the financially-struggling 578-MW Sutter plant owned by Calpine (NYSE: CPN) should be kept open (via contracts with the state’s investor-owned utilities) so it will still be available in a few years to back up new renewable generation.

Finally, there is the plan, which was recently approved by the ISO board, to expand the ISO grid to include a portion of Nevada.

San Onofre outage complicates planning

Casey said he lacked any inside information to share about the fate of the San Onofre 2 and 3 other than what has been made public by Edison International (NYSE: EIX) subsidiary Southern California Edison (SCE) and the Nuclear Regulatory Commission (NRC).

“At the end of the day, we just don’t know,” when or if the units will return to service, Casey said.

The dual-unit plant and its roughly 2,000 MW of generation have been sidelined most of this year because of unusual tube wear.

The NRC has a public meeting scheduled near the San Diego County plant in October and the plant operator, SCE, will soon respond to a “confirmatory action letter” that NRC issued about problems at the plant. At some point after that response, the utility will propose a restart plan for San Onofre 2.

The wear problems are more significant at Unit 3, which is being defueled in anticipation of a longer outage.

This past summer, the ISO pressed Huntington Beach Units 3 and 4 into service for power generation although the two fossil units had been destined for retirement. On Sept. 14, Cal ISO said those same two units in its plans for 2013 are not for generation but for voltage support. They will be used as synchronous condensers to support the grid.

Backstop generation considered a safety net

Casey said the ISO will be working with generators, the California PUC and the Federal Energy Regulatory Commission (FERC) on cost-based plans to keep certain generation around that might be needed in the near future.

This is clearly not the first option, but “we think it’s a necessary safety net,” which could help in the next few years with the changing California market dynamics, Casey said.

Casey stressed that ISO will be working with the PUC on resource adequacy issues. Offhand, Casey said he could not recall any other California power plants being in the same situation currently as Sutter.

The ISO official also said that the organization will be looking to develop as much voltage support as possible in the Los Angeles area.

Casey said that Cal ISO is excited about a recently-announced effort between ISO and NV Energy (NYSE: NVE) to jointly study the potential for new transmission facilities between Nevada and California – as well as sharing renewable energy resources.

The ISO vice president noted that Nevada has much gas-fired generation at its disposal.

On another issue, Casey said he could not comment on FERC’s probe to decide if J.P. Morgan Ventures Energy Corp. submitted misleading information and omitted material facts in communications with FERC, the ISO and the ISO’s Department of Market Monitoring.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.