Dive Brief:

• The California Independent System Operator (CAISO) is bracing for rolling outages through Wednesday, after a record-breaking heatwave in the Western U.S. strained energy supplies and necessitated power shut-offs that affected hundreds of thousands of customers over the weekend.
• California Gov. Gavin Newsom — who met with CAISO, as well as officials from the California Public Utilities Commission (CPUC) and California Energy Commission (CEC) this weekend about the power shortages — on Monday called for an investigation into the outages over the weekend, as well as agencies’ failure to predict them.
• The situation is the result of “a perfect storm of events,” Seth Hilton, partner at Stoel Rives, said, including the heatwave, insufficient procurement of resources to deal with these situations, changing system needs — in part due to increasing amounts of solar and other flexible resources on the system — and a reduction in imports that CAISO could rely on.

Dive Insight:

The developments over the weekend are not necessarily a surprising result, according to Hilton. CAISO has been warning regulators about potential capacity shortfalls through 2023. The CPUC has responded by ordering 3,300 MW of procurement scheduled to begin coming online in 2021.

“So there’s been some challenges, as there always is, in ensuring that sufficient resources come online, especially when we’re retiring natural gas resources at a fairly rapid rate,” Hilton added. 

The Western part of the U.S. is in the midst of a record-breaking heatwave, with around 56 million people under heat advisories or warnings on Monday, according to the National Weather Service. Forecasts indicate that the record-breaking high temperatures could continue through Tuesday.

On Friday, CAISO declared a Stage 3 electrical emergency — which triggers rotating outages throughout the state — as the heat drove up electricity demand, causing it to dip into its operating reserves. The system operator declared another emergency on Saturday, prompted by increased demand, “the unexpected loss of a 470-megawatt (MW) power plant, and loss of nearly 1,000 MW of wind power.”

In addition, the system operator issued a flex alert on Sunday, warning consumers to be prepared for likely rolling outages during the late afternoons and early evenings through Wednesday, and encouraging them to conserve energy. 

“There is not a sufficient amount of energy to meet the high amounts of demand during the heatwave,” the system operator said.

On Monday night, CAISO announced that no outages were anticipated, although thanks to high temperatures and limited energy supplies, "rotating power outages still are likely over the next two days."

At a meeting on Monday, CAISO President and CEO Steve Berberich said the system operator thought it could cover demand on Friday and Saturday with available resources, but faced problems due to the rapidly diminishing reserve pool in the rest of the West, which it normally draws on.

“We are scouring every corner of our world to find additional load reductions and generation,” Berberich added. 

Part of the issue is the need for broader changes to California’s resource adequacy system, including taking a realistic view on what solar, wind, demand response, storage and fossil fuel resources can deliver, according to Severin Borenstein, a member of the CAISO Board of Governors.

“If we don’t do what we should do, yes, we could see more of these [outages] going forward,” he said at the meeting, adding that none of the necessary changes are likely, however, to take place between now and November. “I think we’re in a bind, something that the CAISO pointed out — has been pointing out — for a long time.”

The CPUC is actively monitoring the conditions that led to the outages, commission President Marybel Batjer said at a Monday meeting.

“With several more days of record high temperatures forecasted, and the added challenge of the ongoing COVID-19 pandemic, we must do everything we can to support efforts to ensure the reliable operation of our electric grid,” Batjer added. 

Meanwhile, Newsom wants regulators to investigate why the weekend’s outages took place, and raised concerns about insufficient warnings of the outages, noting in a letter that he was not informed of them until moments before the blackouts were deployed. 

At a briefing Monday, Newsom said that with California’s desire to shut down fossil fuel plants and transition “from the old to the new” comes the need to recognize that there have been gaps in reliability. 

“We cannot sacrifice reliability as we move forward in this transition,” Newsom said.

Regulators can help mitigate the impact of future outages by executing agreements with other power-producing facilities in other states, and purchasing additional energy production capabilities, Pablo Diaz, founder and CEO of Direct Solar of America, said in an email. But these agreements take time to structure and execute, and “the likelihood of it occurring prior to next week is minimal at best,” Diaz added.