What’s Ailing California’s Electric System?

by Cheryl A. LaFleur |September 2, 2020
high voltage signs near electrical facility

High voltage signs are posted on the Department of Water and Power sub station E in the North Hollywood section of Los Angeles on Saturday, Aug. 15, 2020. California ordered rolling power outages for the first time since 2001 as a statewide heat wave strained its electrical system. Photo: AP/Richard Vogel

California made headlines for all the wrong reasons recently with widespread rolling power outages in the middle of a heat wave and a pandemic. These blackouts were not an accident—they were intentionally scheduled by the grid operator, the California Independent System Operator (CAISO), due to a shortage of resources available to keep the lights on.

The California blackouts led to a frenzy of hot takes and finger-pointing based on instant diagnoses of the problems. The situation is like a Rorschach test on which people superimpose their preconceptions about energy. Opponents of renewable energy, including President Donald Trump, blame the outages on California’s use of solar and wind to decarbonize their power supply. Others have jumped to the conclusion that this must be a recurrence of Enron-type market manipulation as in the 2001 energy crisis. Still others have offered silver bullets based on whatever they are selling.

It is important to diagnose the problem correctly so that we don’t administer the wrong medicine. While a full examination should be done, some causes can preliminarily be ruled out. There is no evidence so far that market manipulation was afoot. There is also no evidence that California’s solar and wind generation did not perform as designed. Wholesale markets in other regions of the country are delivering increasing amounts of renewable energy and keeping the lights on.

I think California has four “preexisting conditions” that need to be addressed to avoid this happening again.

1. Lack of clear accountability for having the resources to keep the lights on.

In some regions of the country, electric distribution companies directly invest in power plants under the supervision of state regulators. In others, regional markets use an auction system to buy enough resources to keep the lights on. I personally prefer market structures, but either system can work if it is clear who has the responsibility.

In California, the roles of the CAISO and the state regulators to keep the lights on are quite tangled. CAISO has the job of dispatching power plants but has little authority to ensure they get built. Lining up enough resources is largely under the supervision of state regulators. In other words, the buck stops nowhere. This should be remedied through the actions of the California legislature and the Federal Energy Regulatory Commission, which regulates CAISO.

2. Lack of resources to balance solar and wind power.

California leads the nation in solar generation, and also uses a lot of wind generation. These carbon-free resources help reduce the climate impacts of burning fossil fuels. But unlike conventional power plants, they cannot be turned on and off as needed. By design, their availability depends on the sun and wind at any given moment. They can work well in conjunction with resources that can be turned on as needed, especially in the evening when the sun goes down. These “balancing” resources can be gas-fired plants, pumped water or battery storage, hydroelectric power, or the collective actions of homes and businesses to move their consumption to different times of the day. California does not have enough of these resources. See problem #1—someone needs to be in charge.

3. Closing disfavored resources before opening the new ones.

It is hard to site and build new energy resources, including carbon-free resources, anywhere in the country. Even in regions where there is strong political support for clean energy to fight climate change, it often doesn’t translate to people allowing wind turbines or a high-voltage transmission line to be built anywhere near them.

California has been decisive about what resources it doesn’t want anymore, including many of its gas-fired power plants and its last nuclear power plant. It has been much slower to actually construct resources to take their place. In the past three years, California has closed 5,000 megawatts (MW) of gas generation in anticipation of building 3,000 MW of battery storage that is still on the drawing board. In a heat wave, when every resource is needed, this gap in resources came home to roost.

4. Operating in a silo.

California is a large state, but it is not an island. It is part of a larger region whose resources could help to balance those available in the state, helping both California and the West as a whole. While CAISO and its neighbors have shared resources when they have extra, this does not help when resources are scarce. California would benefit from a regional market that took advantage of different weather, time zones, and resources to keep the lights on at least cost. California legislators have repeatedly considered legislation to change CAISO to allow regional operation, but have preferred in-state control. I believe that decision should be reexamined to take California into the future.

The real cure

When something goes wrong, it is easy to make snap judgments, demonize technologies you don’t like, or suspect foul play. Such false diagnoses about what ails California’s power system only encourage snake oil solutions. Putting in the hard work on big structural issues like the ones I identified is the real cure. California surely does not want to—and should not—back off its climate goals. But it should take a hard look at who is responsible for getting the resources in place to keep the lights on, and then make the tough decisions to do so. Its citizens deserve nothing less.

Cheryl A. LaFleur was a commissioner at the Federal Energy Regulatory Commission from 2010 through 2019, and chaired the commission from 2013-2015 and in 2017. She is currently a distinguished visiting fellow at the Columbia University Center on Global Energy Policy.

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ziadRichard HowardJAMES CARLYLECraig LamascusDuffer Recent comment authors
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Richard McCann
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Unfortunately, this article does exactly what it says NOT to do–jump to a quick diagnoses and offer a pat solution (FERC-directed auctions in this case). In fact, we don’t yet have a complete picture of what went wrong. There’s good evidence that CAISO jumped the gun on ordering blackouts in the first place. And there’s a question of whether California should be planning to avoid outages under such extreme conditions (unprecedented prolonged heat and humidity) given the likely cost. In addition, there was a reasonable solution proposed a year and half ago at the CPUC that the CAISO refused to… Read more »

Craig Lamascus
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Craig Lamascus

“question of whether California should be planning to avoid outages under such extreme conditions”….. why is this a question?

That’s a very subtle way to say “get used to being in the dark and having no AC on hot summer evenings”. Eventually, people will have had enough with advocacy such as yours and chose to listen to people who have a more rational and practical approach to electric power. You know, a policy that at least has the goal of keeping the lights on even during extreme conditions.

ziad
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ziad

why no rely on Hydro pump storage and Offshore wind?

Gene Nelson, Ph.D.
Guest

Nonprofit Intervenor Californians for Green Nuclear Power, Inc. (CGNP)will soon be filing a complaint with FERC to address some of the issues that former Commissioner LaFleur raises in her article. FERC actually can take action to keep the lights on in California. First and foremost, they can order that Diablo Canyon’s voluntary retirement be moved far in the future, even while California’s powerful fossil fuel interests push for Diablo Canyon’s retirement for the purpose of commercial gain.

Richard McCann
Guest

FERC has no jurisdiction over retiring Diablo Canyon. It would take action by both the NRC and the SWRCB to extend Diablo’s license beyond 2025 and that would require PG&E restarting the now cancelled relicensing process. And it was the environmental groups, renewable developersk, ratepayer groups and CCAs that pushed for closing Diablo–the natural gas generators were only a bit player in the proceeding. Mischaracterizing the situation does not help address the problem.

Duffer
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Duffer

You are correct, it is first and foremost PG&E’s decision. Tied to publics environmental consciousness. Looked at that plant on Google recently. It’s a pristine unpopulated part of the coast. Why they built it there was to gain access at a lower cost to the pacific for cooling water. Foolish in the overall scheme of things. Unfortunately, it will be decades before the plant can be dismantled.

Joris van Dorp, MSc
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Joris van Dorp, MSc

You are correct that California needs to be opening a lot more fossil fuel plants if it wants to keep the lights on in the future, but this may not be as easy as it sounds, because many Californians have been led to believe that solar panels and wind turbines *substitute* for fossil fuels. Thats why Californians agreed to have their nuclear power plants shut down early: they were promised that these plants would be replaced by renewables, not fossil fuels.

Jay Dickenson
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Jay Dickenson

I just reread the article. Nowhere does the author contend California “needs to be opening a lot more fossil fuel plants.”

Duffer
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Duffer

The direction CA’s utilities are headed is battery storage and a distributed model for supply, which includes businesses and residences. It’s a completely different paradigm and gas plants are being shut down to meet the states mandates, they are not the solution nor are they necessary.

They are tied to the rolling blackouts, because retiring them implies lower cost for the utility. See my post above for details.

Craig Lamascus
Guest
Craig Lamascus

Q. What’s ailing California’s Electric System?

A. The sun goes down at night.

Aren’t virtually all of the blackouts on hot summer evenings when solar power production goes offline and the load stays high?

Get some power sources that don’t depend on sun or wind. Or get used to sitting in the dark on hot summer nights with no AC.

Duffer
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Duffer

One could write books on this topic. Author makes some excellent points, though all can be debated. In my research into the problem I’d say it’s quite simple, tied a bit to the regulation, but mostly to profits. Most important is the big three: large Investor owned public utilities, PG&E, SCE, and SDGE. They understand the problem well, have the responsibility for supply agreements and know how to solve it. But they are Investor owned, therefore bottom line profit driven. Here are the key points to understand why they have chosen not to build / purchase enough excess capacity. 1)… Read more »

JAMES CARLYLE
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JAMES CARLYLE

As I read this, it assumes for each solution that the State has a functional regulatory group in place to make meaningful decisions. This does not currently exist, as noted. I would address this issue first as a condition to pursuing her other recommendations.

Richard Howard
Guest
Richard Howard

Question: in 2001 California did not pay some of the providers of its electricity. Enron clearly didn’t deserve payment, but at least one other provider clearly did. Do you think that this experience caused out of state providers hold back supplies?