Power prices in the U.S. West soared to record highs for a second day during a brutal heat wave as California utilities urged consumers to keep conserving energy to avoid more rotating outages with demand expected to hit an all-time high on Tuesday.
On Friday and Saturday, the California ISO, which operates the grid for most of the state, ordered utilities to start rotating outages that left more than 400,000 homes and businesses sweltering for about an hour each as air conditioning demand outstripped available generation resources.
On Monday, the ISO told utilities to prepare for more rotating outages but never issued the order because the weather moderated and consumers voluntarily cut their power use enough to reduce the strain on the grid.
The last time the ISO told utilities to impose rotating outages before this weekend was in 2001 when several energy companies manipulated the power market to cause prices to spike and electric supplies to run artificially short.
Rotating outages this weekend affected around 220,000 PG&E Corp <PCG.N> customers, over 130,000 customers of Edison International’s <EIX.N> Southern California Edison and over 58,000 customers of Sempra Energy’s <SRE.N> San Diego Gas & Electric.
Meteorologists at AccuWeather forecast high temperatures would reach the 90s Fahrenheit (35 Celsius) in some of the biggest cities in California through the middle of the week. That is more than 10 degrees F higher than normal for this time of year.
The ISO forecast demand would reach 50,527 megawatts (MW) on Tuesday, which would top the grid’s all-time high of 50,270 MW set in 2006, before sliding to 48,802 MW on Wednesday.
Power prices for Tuesday averaged record highs of $1,311 per megawatt hour (MWh) at the Palo Verde <EL-PK-PLVD-SNL> hub in Arizona and $698 in SP-15 <EL-PK-SP15-SNL> in Southern California, according to Refinitiv data going back to 2010.
(Reporting by Scott DiSavino; Editing by Steve Orlofsky)