Cal-ISO reinstates restricted maintenance operations due to wildfire threats

Houston — The California Independent System Operator has reinstated restricted maintenance operations for Aug. 24 and 25 due to weather uncertainty and fire threats to the grid as firefighters battle thousands of acres of wildfires across the state.

The restricted maintenance operations notice is in effect from 6 am PT Aug. 24 through 10 pm Aug. 25 and requires generators and transmission operators to postpone any planned outages for routine equipment maintenance, ensuring all grid assets are available for use. The ISO was previously on restricted maintenance operations from Aug. 14-21 due to a heatwave that caused rotating power outages Aug. 14 and 15 in order to maintain grid stability.

"Market participants are cautioned to avoid actions which may jeopardize generator and/or transmission availability," according to the ISO notice.

There was no threat to the bulk energy system as of Aug. 24, said Cal-ISO Spokeswoman Anne Gonzales, adding the ISO is closely monitoring the situation and remains in contact with fire watch team across the state.

CAL FIRE battling hundreds of wildfires across state

California is dealing with more than two dozen major wildfires and lightning complexes across the state, including the LNU Lightning Complex fire spanning 350,030 acres and the SCU Lightning Complex fire spanning 347,196 acres as of Aug. 24, according to the California Department of Forestry and Fire Protection (CAL FIRE).

"In anticipation of the upcoming weather patterns, crews continue to perform firing operations to burn away vegetation in an attempt to slow down and stop the spread of the wildfires," according to CAL FIRE regarding firefighters who worked aggressively Aug. 22 to strengthen containment lines.

Since the lightning siege that started Aug. 15, there have been nearly 12,000 lightning strikes, according to CAL FIRE. During this time-period, there have been more than 615 new wildfires, which have burned more than 1.1 million acres. All current active wildfires, across all jurisdictions, have burned nearly 1.3 million acres across California.

Power outages can result due to weather and vegetation conditions that may be conducive to ignition or due to proximity to an existing fire, said Morris Greenberg, S&P Global Platts senior manager of North American power analytics. However, impacts are difficult to predict in advance. Distribution and transmission facilities may be affected.

"Outages of higher voltage lines are more likely to have an impact on the bulk power transmission system and markets," Greenberg said. "This year has already been very active in terms of the number of fires and affected acreage. This is surprising given the dry winter that should have suppressed vegetation growth. Transmission and resource adequacy planning will increasingly account for fire-related outages."

Compared to 2019, California has experienced a significant increase in the number of wildfires and acres burned, according to CAL FIRE.

"An astonishing 2,700 more wildfires have occurred this year than last, with an additional 1.4 million acres burned during the same time-period," according to CAL FIRE.

Red flag warning in effect across region

The US National Weather Service has issued a red flag warning for lightning with very little to no rain. A red flag warning means that critical fire weather conditions are either occurring now or will shortly, according to the NWS. A combination of strong winds, low relative humidity and warm temperatures can contribute to extreme fire behavior.

Lightning from dry thunderstorms will have the potential to start new fires and may produce gusty winds, according to the NWS red flag warning.

The weather forecast for the upcoming days continues to be warm and dry, according to CAL FIRE. Remnants of Hurricane Genevieve will bring thunderstorms through Aug. 25.

"The winds will generally be light, however erratic gusty winds of up to 65 mph may occur," according to CAL FIRE. "This dry lightning will likely hamper efforts to contain the current fires and may spark new fires."

Little reaction from power prices

Prices do not seem to be reacting to the current situation.

SP15 on-peak day-ahead for Aug. 25 delivery traded in the mid-$60s/MWh on the Intercontinental Exchange, a drop of about $10 day on day, with on-peak balance-of-the-week bid at $55/MWh and offered at $100/MWh, compared to the previous settlement of nearly $70/MWh.

Likewise, NP15 on-peak day-ahead for Aug. 25 delivery was bid at $45/MWh and offered at $56/MWh on ICE, compared to the previous settlement of $55/MWh, while on-peak bal-week was bid at $35/MWh and offered at $85/MWh, compared to the previous settlement of nearly $54/MWh.

SP15 on-peak day-ahead locational marginal prices have averaged $109.41/MWh so far this month, a jump of 210% year on year, after hitting a record high of $697.91/MWh for Aug. 18 delivery, according to ISO data. NP15 on-peak day-ahead LMP has averaged $63.83/MWh so far this month, up 88% year on year.