PG&E warns customers of potential power outages on gusty winds, red flag warnings

Pacific Gas and Electric is telling customers to be prepared for potential power outages as strong winds are forecast across the region, several feet of snow expected in the Pacific Northwest and power prices are on the rise.

Wind advisories and high wind watches are in effect across the Western US with the potential for sustained winds up to 50 mph through the evening of April 12 with wind gusts up to 70 mph, according to the US National Weather Service. The storm system spans from California to Texas.

"Damaging winds could blow down trees and power lines," according to the weather service. "Widespread power outages are possible."

Utilities can initiate public safety power shutoffs, which is a measure of last resort where electricity is shut off proactively during extreme and dangerous weather conditions when energized electrical lines could be damaged and ignite a fast-moving wildfire.

"With red flag warnings and gusty winds forecasted this weekend and early in the week, customers are advised to prepare for potential outages," PG&E said in a tweet.

There have been 1,039 fires in California that have burned 6,249 acres so far in 2022, which is 67% more fires than the five-year average, according to the California Department of Forestry and Fire Protection.

Power price impact

The California Independent System Operator forecast wind generation up to about 3.3 GW April 11, 3.4 GW April 12, 3.1 GW April 13 and 14, 3 GW April 15 and 3.3 GW April 16. For comparison, wind-powered generation has averaged about 3.3 GW daily so far this month, roughly 3% higher than the same period a year ago, according to CAISO data.

Southwest Power Pool forecast wind as high as 26.9 GW April 12, as the Electric Reliability Council of Texas forecast wind as high as 26 GW April 12.

The market reacted to the forecast, driving up prices on uncertainty.

NP15 on-peak day-ahead traded in the upper $60s/MWh on the Intercontinental Exchange for April 12 delivery, up 23% day on day, with on-peak balance of the week bid at $53/MWh and offered at $90/MWh. SP15 on-peak day-ahead traded in the upper $40s/MWh, up 7.5% day on day as on-peak balance of the week was bid at $45/MWh and offered at $53/MWh on ICE.

Further north, Mid-C on-peak day-ahead traded in the upper $70s/MWh on ICE for April 12 delivery, up 4% day on day, with on-peak balance of the week bid at $73/MWh and offered at $79.50/MWh on ICE.

COB on-peak day-ahead reached a year-to-date high of $77.25/MWh April 11, according to S&P Global Commodity Insights pricing data.

In ERCOT, North Hub on-peak day-ahead was bid at $66/MWh and offered at $70/MWh for April 12 delivery on ICE, as on-peak balance of the week traded in the mid-$80s/MWh.

Natural gas dynamics

Similar to power prices, spot gas prices jumped across the PG&E service territory April 11 trading for next-day flows, boosted by higher demand and more competition for molecules among different regions in the West.

PG&E city-gate spot gas gained 48.50 cents to $7.415/MMBtu, preliminary settlement data from S&P Global shows, which will be the location's highest price year to date if it holds to final settlement.

PG&E on-system demand soared 650 MMcf/d to 2.07 Bcf April 11, up 40% from the month-to-date average of 1.47 Bcf/d.

Simultaneously, elevated gas demand in the Rockies, Pacific Northwest and Southern California likely also contributed to the higher spot gas prices, especially in light of pipeline maintenance and repair projects limiting inflows into the West from western Canada and the Permian.

TC Energy's Gas Transmission Northwest pipeline is undergoing system inspection and maintenance work on Athol Station 5 that limit flows past Kingsgate to 2.39 Bcf/d April 11-12 and to 2.6 for April 13-26. Kingsgate is one of the two main cross-border receipt locations for Canadian gas to enter the Pacific Northwest.

For Permian inflows, repair work on El Paso Natural Gas pipeline system's Line 2000 is ongoing, following a pipeline rupture near Coolidge, Arizona, in mid-August 2021.

Weather forecast

"A deep area of low pressure will move into the Pacific Northwest today, bringing with it a substantial plume of Pacific moisture," according to the weather service. "A few feet of snow will blanket the Oregon Cascades as well."

That's good news for the hydro outlook as the snowpack will help build reservoirs levels during the snowmelt season. Hydro supplies have been impacted by the ongoing drought.

"Dry conditions beneath this low-pressure system will exacerbate an ongoing extreme drought over the Southwest and Southern/Central Plains," according to the weather service. "This, combined with high winds and warmer than normal temperatures, will contribute to a Critical Risk of Fire Weather through midweek."

There is an extreme risk of fires for parts of the Texas/Oklahoma panhandle and into southern Kansas on Tuesday due to the potential for 30-40 mph sustained winds, over 50 mph gusts and unusually warm/dry conditions, according to the weather service. A dangerous fire weather outbreak is possible as a result.