Cal-ISO extends flex alert to a second day as extreme heat blasts the region

The California Independent System Operator extended its statewide Flex Alert 18 asking consumers to conserve electricity during the evening to reduce stress on the power grid as extreme heat hits the region, driving up demand and prices.

The flex alert, in effect for 6-9 pm PT June 18, is a voluntary call to conserve electricity during anticipated energy supply shortages to avoid power outages, such as the Aug. 14-15, 2000 rotating outages that were the first since 2001. The first flex alert of the season was for 5-10 pm PT June 17.

"The ISO is continuing to monitor weather and grid conditions and will have additional announcements as information becomes available," an ISO statement said. "Precise hours for a flex alert depend on hourly demand and supply forecasts and can change as conditions warrant."

The ISO forecast peakload around 41.389 GW June 18. Peakload reached 41.081 GW June 17, a more than eight-month high, but 4% lower than the forecast, according to ISO data. Peakload averaged 38.62 GW June 15-18, a jump of 40% week on week. The all-time peakload record is 50.27 GW reached July 24, 2006.

Excessive heat warnings and heat advisories remain in effect across much of California, Nevada, Arizona and Utah, according to the US National Weather Service. Temperatures are expected to once again reach record-breaking highs across much of the region, with several records likely to fall on June 18-19.

"Under such conditions, evening is the most difficult time of the day for grid operations, especially in persistent hot weather when evening temperatures stay warm, because demand for electricity remains high as solar energy diminishes," an ISO statement said.

During past flex alerts, consumers cut back electricity use and helped California avoid or limit power outages that can, if conditions persist or worsen, become necessary when demand for electricity outstrips capacity. In August and September 2020, consumers reduced electricity by 1 GW to 3 GW during flex alerts.

The ISO already declared restricted maintenance operations from noon to 10 pm daily over June 15-18, which requires generators and transmission operators to postpone any planned outages for routine equipment maintenance, ensuring all grid assets are available for use.

Climbing prices

Wholesale power prices have eased after spiking earlier in the week.

SP15 on-peak day-ahead locational marginal prices slipped 37% day on day to $81.71/MWh for June 18 delivery, according to ISO data. SP15 jumped to $129.59/MWh June 17, the highest level since the nationwide February winter storm.

NP15 on-peak day-ahead LMP dropped 39% on the day to $82.44 for June 18 delivery, after climbing to $134.26/MWh for June 17, the highest level since the February storm.

In the Northwest, Mid-C on-peak day-ahead reached $238.60/MWh June 17, a three-year high, according to S&P Global Platts pricing data.

Likewise, Palo Verde on-peak day-ahead sank 91% day on day to $142/MWh for June 18-19 delivery, down from $1,575/MWh, the highest level since reaching a record high of $1,643.25/MWh on Aug. 19, 2020, according to Platts pricing data.

Power forwards

Power forwards were more moderate after reaching package highs.

SP15 on-peak July slipped 16% from the package high of $160.05/MWh on June 10, to the mid-$130s/MWh by June 17, which is still 255% higher than where the 2020 package was a year ago, according to Platts data. Likewise, the SP15 August package slipped from a package high of $175.50/MWh on June 5 to the mid-$150s/MWh for June 17, which is still 251% higher than its 2020 counterpart a year ago.

In the Southwest, Palo Verde on-peak July was in the low-$250s/MWh June 17, 436% higher than the 2020 package a year ago, even as the 2021 package slipped 6% from the package high of $267.80/MWh reached on June 10, according to Platts data. The August package was in the low-$240s/MWh, 350% higher than its 2020 counterpart a year ago but down 8% from the package high of $262.85/MWh reached May 13.

Likewise, Mid-C on-peak July reached a package high of $162.05/MWh June 16, 427% higher than the 2020 package last year, as the August package reached a high of $200/MWh on June 16, 391% higher than its 2020 counterpart a year ago.