Winter storm hits California, utilities work to restore electric power to customers

Houston — California electric utilities were working Jan. 28 to restore power to customers after one of the strongest winter storms in years hit the region, pushing up power demand and wholesale power prices, following a summer season that brought multiple power outages from heatwaves and wildfire conditions.

In the Pacific Gas & Electric territory, about 575,000 customers lost power from the storm, while roughly 106,000 Sacramento Municipal Utility District customers were impacted, according to the utilities. Around 75% of impacted PG&E customers had power restored by late Jan. 27, while SMUD was working to restore power to the 12,000 remaining impacted customers by early Jan. 28.

Winter storm warnings and winter weather advisories blanket the region, along with blizzard warnings for parts of the Sierra Nevada where gusty winds will accompany the heavy snow, according to the US National Weather Service. The heavy precipitation is anticipated to diminish by Friday.

It is yet to be seen how snowfall from this winter storm will translate into hydro production in the coming months once runoff starts. However, the Shasta Dam water supply forecast for April-July is at 77% of normal, according to the California Nevada River Forecast Center.

The dramatic weather pattern changes caused volatile wind-powered generation output in the Bonneville Power Administration footprint at around 300 MW Jan. 25, which spiked to 7.915 GW Jan. 26 and then climbed 30% day on day to 10.3 GW Jan. 27, according to BPA data.

Similarly, in the California Independent System Operator footprint wind generation in recent days ranged from 7.3% of the total fuel mix to 14.9%, while solar-power generation ranged from 6.5% to 11.7%, according to grid operator data.

Load and price impacts

Cal-ISO peakload reached 29.163 GW Jan. 25, the highest January level in two years.

NP15 on-peak day-ahead locational marginal prices reached as high as $41.95/MWh Jan. 27, the highest level in two years, as prices averaged $34.74/MWh so far in January, 8.2% higher than the year-ago average, according to ISO data.

Northwest power prices jumped roughly $3 early in the week.

Spot gas at PG&E City-Gate rose 20 cents from a week ago to $3.560/MMBtu Jan. 28 and are averaging 19% higher year on year so far in January, according to S&P Global Platts pricing data.

In power forwards, NP15 on-peak February is trading in the upper $30s/MWh on the Intercontinental Exchange. The February package has averaged about $38.75/MWh so far this month, 6% higher than where its 2020 counterpart averaged a year ago before rolling off the curve in the low $30s/MWh, according to S&P Global Platts data.

In gas forwards, PG&E February is averaging $3.591/MMBtu, 20% higher than where the 2020 contract averaged a year ago.

The six- to 10-day outlook shows a greater probability for below-normal temperatures and a below-normal to normal probability for precipitation, according to NWS.

Summer outages

The state experienced the other weather extreme this summer with a historic, nearly weeklong heatwave that led Cal-ISO to declare a Stage 3 emergency, triggering rotating power outages for the first time since 2001. The outages took place Aug. 14-15 to maintain grid stability after two gas plants and 1,000 MW of wind generation across the state was lost and unable to serve load, the ISO has said.

In the following days, the SP15 on-peak day-ahead LMP set a record high of $697.91/MWh Aug. 18 when peakload hit around 47 GW, a nearly three-year high, according to ISO data.

More targeted outages took place when California utilities initiated Public Safety Power Shutoffs.

In 2012, the California Public Utilities Commission gave electric utilities authority to shut off electric power in order to protect public safety through a PSPS with the intent to prevent fires where strong winds, heat events and related conditions are present. Electric utility infrastructure has historically been responsible for less than 10% of reported wildfires; however, fires attributed to power lines comprise roughly half of the most destructive fires in California history, according to the CPUC.