California needs to ensure that power plants are getting enough
water amid the worst drought in a century to avoid grid failures.
The California Energy Commission, the state Public Utilities
Commission and grid operator California Independent System
Operator Corp. said in a joint letter that water curtailments that
cut the state’s generating capacity would threaten grid reliability
and have “substantial potential for serious public health and
safety impacts.’’ The agencies asked the state Water Resources
Control Board to ensure plants are getting the water they need.
The worst drought on record is already testing California’s power
grid by shrinking hydropower supplies and sparking a record
number of wildfires that have taken down transmission lines in
Southern California. The California ISO estimated last month that
as much as 1,150 megawatts of gas-fired generation is at risk of
shutting because of water supply curtailments.

The agencies recommended “a mechanism allowing for swift
response in the event of an actual or threatened emergency to
California’s electricity grid or supplies,’’ according to the letter,
which was signed yesterday and e-mailed to Bloomberg July 1.
While curtailments have so far had a “very minimal’’ impact on
the state’s natural gas-fired power plants, water is essential for
cooling their operations, the California Energy Commission said in an e-mailed statement. The agency said it’s working with electricityproducers on license amendments that would allow themto use alternative sources of water.
The state water board is considering emergency regulations
to establish a quicker and more effective way of imposing water
curtailments. All comments on the proposed rules will be “carefully
weighed and considered’’ before the agency decides, Kathie
Smith, spokeswoman for the water board, said by e-mail.
As of April 29, precipitation across California was 56 percent of
normal, and the state’s reservoir storage was 63 percent of average,
the California ISO said in a May 9 report. The shortage may
shrink hydroelectric generation by as much as 1,669 megawatts
when demand peaks this year, according to the grid operator.

Wildfires in May took out several high-voltage transmission
lines operated by Sempra Energy’s San Diego Gas & Electric
Co. utility. The region is already vulnerable to grid failures following
the shutdown of Edison International’s San Onofre nuclear
power plant. In Northern California, PG&E Corp.’s Pacific Gas
and Electric Co., which operates the largest investor-owned
hydroelectric system in the U.S., said it was catching water at the
beginning of this year to use when demand peaks.

This article is taken from Bloomberg Brief Municipal Market.
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