California ISO issues flex alert, calls for voluntary electricity conservation in heat wave

The California Independent System Operator has issued a statewide "flex alert" for voluntary electricity conservation Aug. 17 with record-breaking temperatures expected, as restricted maintenance operations remain in effect.

The flex alert is from 4-9 pm PT Aug. 17 "due to predicted high temperatures pushing up energy demand and tightening available power supplies," according to an Aug. 16 CAISO statement.

"With above-normal temperatures in the forecast across much of the state tomorrow, the power grid operator is expecting an increase in electricity demand, primarily from air conditioning use, and is calling for voluntary conservation steps to help balance supply and demand," CAISO said in the statement. "Consumers are urged to conserve electricity, especially during the late afternoon and early evening, when the grid is most stressed due to higher demand and less solar energy."

Record-breaking temperatures

There is an excessive heat watch and heat advisory over parts of the West through Aug. 19, the US National Weather Service said Aug. 17.

"Upper-level ridging will build into California and the Northwest, allowing temperatures to rise into the mid-to-upper hundreds over parts of California, prompting an excessive heat watch and heat advisories over the Sacramento and San Joaquin Valleys through Friday," according to the weather service's Weather Prediction Center. "As the upper-level ridging builds over the Northwest, temperatures climb into the upper nineties to low hundreds over the interior Northwest, prompting excessive heat watch and heat advisories over the region into Friday."

Record-breaking relatively high low temperatures will contribute to areas not cooling off overnight, which will also contribute to the effects of heat, according to the weather service's Weather Prediction Center.

Due to the increase in cooling demand from the rising temperatures, CAISO forecast peakload to reach 44.395 GW Aug. 17 with a capacity around 53.2 GW. Peakload so far this month has averaged 40.073 GW, an increase of 2% year on year, according to CAISO data. Peakload reached 45.06 GW Aug. 16, a 23-month high.

Market impacts

Ahead of this week, CAISO declared restricted maintenance operations from noon to 10 pm each day from Aug. 15 through Aug. 18 in anticipation of high loads and high temperatures, causing power and gas spot prices to climb to 11-month highs.

In the spot market, NP15 on-peak day-ahead locational marginal prices reached $148.114/MWh Aug. 17, an 11-month high, as SP15 on-peak day-ahead LMP was $147.04/MWh for Aug. 17 after reaching an 11-month high of $149.97/MWh Aug. 16, according to CAISO data.

By comparison, NP15 on-peak day-ahead LMPs have averaged about $101.50/MWh so far this month, 59% higher than a year ago, while SP15 on-peak day-ahead LMPs have averaged roughly $115.75/MWh so far this month, 83.5% higher year on year, according to CAISO data.

In power forwards, SP15 on-peak August rolled off the curve at $118/MWh, 16% below where the August 2021 package ended, as NP15 on-peak August rolled off at $113.10/MWh, 12% lower, according to S&P Global Commodity Insights data.

A flex alert is issued by the ISO when the electricity grid is under stress because of generation or transmission outages, or from persistent hot temperatures. CAISO said that reducing energy use during aflex alert can help stabilize the power grid during a time of tight supply conditions, and prevent further emergency measures, including power outages.