In the aftermath of a month-long leak at SoCalGas’ storage, California is taking urgent measures to cap the gas use in the power sector. Looking ahead to the autumn and winter season, the State Energy Commission, CPUC and the California ISO evaluate the option of importing LNG.
To mitigate the risk and magnitude of natural gas curtailments and electricity service interruptions for the upcoming winter, a ‘Winter Action Plan’ has been drafted that calls on the California ISO should impose a ceiling (i.e., operations limit) on the electric generator gas burn for very cold days.
“Fixing the gas burn in advance of cold days is a form of uneconomic dispatch,” the report states, but stresses the practical effect of such emergency measures. “Effectively, it curtails some of the electric generation load in advance and increases the probability that SoCalGas will not have to curtail further.”
Need to curtail gas use
The California ISO and LADWP took the maximum servable gas demand of 4.5 Bcf as determined by SoCalGas and measured the impact of that shortfall on power generation. If capabilities to import electricity from neighbouring states remain unimpaired, California utilities “should be able to move generation around enough to absorb the 0.7 Bcf gas curtailment,” the report states.
Peak power demand is critical in California; yet during the winter, electricity balancing authorities need just some 22 mmcfd of gas every day to support minimum generation requirements, e.g. support transmission line imports or to respond to local contingencies or to maintain minimum voltage levels.
In all, analysts forecast that even with SoCalGas able to meet only a 4.5 Bcf per day demand instead of its 5.2 Bcf 1‐in‐10 year design day planning criteria, the California ISO and LADWP, under most conditions, can replace the lost generation from resources not served by SoCalGas.
Option of buying LNG via Mexico
Propping up gas storage with spot LNG purchases is being evaluated as an emergency option. At the Summer Action Plan workshop, stakeholders discussed the potential of purchasing LNG and have it delivered into the SDGE system from Sempra’s Costa Azul regas terminal in Mexico, using the Otay Mesa receipt point.
Located just south of the US-Mexican border in Baja California, the Costa Azul regasification terminal has a capacity of up to 7.6 mtpa; it has one berth, capable to handle ships up to Q-Max.
Sempra has indicated interest but expressed concern that “affiliate rules” create an impediment to doing this – the Energy Commission and CPUC are on the case to sort out issues. “Additional gas supply of 200 mmcfd on a day when curtailments are forecast could be a substantial mitigant to the total load requiring curtailment,” the report states.
Urge to step up gas production
Some stakeholders had criticised the Summer Action Plan for assuming only 60 mmcd of California natural gas production was available – yet the report’s authors said this would be consistent with Envoy operating data.
Though more gas production would help fill Line 85, and reduce gas withdrawal from Aliso Canyon, analyst doubt it would be operationally feasible and economical for Californian producers to step up gas output. In the San Joaquin Valley most natural gas is produces as ‘associated gas’ –a byproduct from crude oil wells – which is then captured and fed into the SoCalGas system. The Energy Commission said it is contacting all producers to ask what, if anything, they can do to increase deliveries.
In the interim, a protocol has been created to specify if and when some of the 15 Bcf of gas stored at Aliso Canyon needed to be withdrawn. A public workshop will be held on August 26, with stakeholder comments used for updating the Winter Action Plan.