Cal-ISO issues flex alert amid third heat wave of the summer; West power prices, demand climb

The California Independent System Operator released a Flex Alert late July 8 asking for energy conservation as a third heat wave continued to saturate the West, fueling higher power prices and demand levels.

The California Independent System Operator released a Flex Alert late July 8 asking for energy conservation as a third heat wave continued to saturate the West, fueling higher power prices and demand levels.

The statewide flex alert was issued for 4-9 pm PT July 9 "as a result of higher load, and supply forecasted to be tighter than expected on Friday." The ISO is asking consumers to "voluntarily conserve electricity" and "help ease the strain on the grid during the crucial evening hours when solar energy is diminished or no longer available."

Consumers significantly reduced energy consumption following the flex alerts released in mid-June, enabling grid operators to reduce rotating power outages in the region, the ISO statement said.

In a second news release July 9, the ISO underscored other steps it has taken to prevent such outages and stress on the grid. "On July 1, for example, the ISO solicited bids to secure additional capacity within California and the Western region," according to the release. "The grid operator is also working with business and industry to help them reduce energy use at critical times."

The ISO peakload demand began steadily rising July 6 to peak at 42.65 GW July 9, up 18% week on week and up 12.4% year on year, according to ISO data.

Intensifying heat

Following two June heat waves, dangerous heat returned July 7, resulting in numerous excessive heat warnings, watches and advisories across eight states in Western US.

The weather alerts remain in effect through 9 pm PT July 12, with peak heat expected July 9-12, according the US National Weather Service. "Numerous daily high temperature records could be in jeopardy of being broken, particularly for California and Nevada," the US National Weather Service said in its forecast report July 9. "Highs could approach 115-120 degrees [Fahrenheit] for the lower elevations of Arizona and eastern California this weekend."

As temperatures paced near record highs, fire weather concerns mounted in Nevada, Utah, Idaho and Wyoming. Red flag warnings and fire weather watches were in effect July 9-11 amid low humidity, ongoing dry conditions and over 30 mph wind gusts, according to the US National Weather Service. Elevated fire weather was also forecast in Northern Oregon and Southern Washington, though temperatures trended 20-30 degrees F below levels seen in late June.

Power prices

Pressured by elevated demand and temperatures, power prices in the West surged for July 9-10 delivery, but remained below pricing levels seen during the previous heat wave in late June.

SP15 on-peak day-ahead rose 32.3% on the day to trade in the mid-$90s/MWh for July 9-10 delivery, 211.3% higher than the price a year ago. NP15 on-peak day-ahead also priced in the mid-$90s/MWh, up 40.3% day on day and 226.2% year on year, according to S&P Global Platts data.

In the Northwest, Mid-Columbia on-peak day-ahead climbed 75.1% on the day to the low $120s/MWh for July 9-10 delivery, up 528.2% than the 2020 price a year ago, according to Platts data.

Similarly, in the Southwest, Palo Verde on-peak day-ahead traded in the low $130s/MWh for July 9-10 delivery, spiking 39.2% day on day and 237.3% year on year, Platts data showed.