Utility Seeks to Cut Natural Gas Use
San Diego Gas & Electric has asked regulators for permission to cut natural gas supplies to San Diego’s two big electricity plants when necessary because the power plants are guzzling so much fuel that they are threatening natural gas supplies for the utility’s smaller customers.
In an advice letter filed Aug. 1 with the California Public Utilities Commission, SDG&E; contends that the electricity grid’s reliability would not be threatened because the power plants can easily switch to another fuel such as oil to make electricity, while most small customers cannot switch.
But the new operators of the power plants, which SDG&E; sold in 1999 as part of the restructuring of the state’s electricity industry, intend to protest the proposal, arguing that an interruption would be most likely to occur during peak usage on a hot summer afternoon and would interfere with plant operations for at least a short time when the state needs every possible electron available.
V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, said he is “shocked that this has been allowed to happen.”
“This can’t be something that wasn’t foreseen,” said White, who is also a member of the board of the California Independent System Operator, which runs the electricity grid for 75% of the state.
“From an air-quality standpoint, it’s a disaster,” he said, noting that oil spews more pollutants than gas. SDG&E;’s request raises ominous supply issues for the winter as well, when gas usage for heating peaks.
SDG&E;, the utility arm of San Diego-based Sempra Energy, said the two power plants it once owned, the Encina plant in Carlsbad and the South Bay plant in Chula Vista, are using “unprecedented” amounts of natural gas to make electricity that is selling at record prices in a newly competitive market.
The plants are starting up earlier in the day and running later at night, which interferes with SDG&E;’s ability to “pack” natural gas into the transmission lines for delivery later in the day when demand is high. SDG&E; has no natural gas storage.
As a result, SDG&E;’s “noncore” business customers “are far more likely to be curtailed this summer than they have been at any time during the past 10 years,” the utility said. Residential customers are considered “core” customers, and would be last in line for interruptions.
“Under these circumstances, SDG&E; believes that it is fair and reasonable for its small noncore customers to be protected for the next few months from potential curtailments created by power plants pursuing high market prices,” the utility said.
The power plant operators fear that such a curtailment would probably come when the plants are running at full power to supply the electron-short electricity grid, said Tom Williams, spokesman for Duke Energy Corp., which operates the South Bay plant for the Port Authority of San Diego. Duke and the owner of the second plant, a joint venture between Dynegy Inc. and NRG Energy Inc., intend to file a protest together, he said.
The plants have the ability to switch to oil to make electricity, but the units must be brought down to half-power for an hour or two, Williams said.
“That’s not a good thing at 4 o’clock on a hot day,” he said. What’s more, pollution would increase, he said.
SDG&E; asked for expedited review of the advice letter with approval as early as today, but a PUC spokeswoman said any protest would draw out the process and usually would require a hearing by the body’s five commissioners.
California’s electricity grid Monday got a brief respite from the heavy demand seen last week. Power plant and transmission line operators remained under a “no touch” order, meaning only emergency repairs can be made because of projected power shortfalls. But with demand peaking at less than 38,750 megawatts and no plant failures, no power emergencies were declared Monday.
