U.S. West power prices soar to all-time highs again in heat wave

(Reuters) – Power prices for Wednesday in some U.S. Western markets rose to all-time highs for a second day in a row as consumers kept their air conditioners cranked up to escape a brutal heat wave blanketing much of the region.

In California, the state’s power grid operator urged customers to conserve energy to reduce the risk of rotating power outages and other emergency measures, resulting from lower electricity imports, tight gas supplies in Southern California and high wildfire risk.

Southern California Gas (SoCalGas), which supplies gas to over 21 million consumers in the southern part of the state, issued a curtailment watch this week, notifying customers to be prepared to reduce gas use if needed, as power generators burn more fuel than usual to keep air conditioners humming.

SoCalGas projected gas demand would rise from 3.0 billion cubic feet per day (bcfd) on Tuesday to 3.1 bcfd on Wednesday and Thursday before easing to 2.7 bcfd on Friday, while receipts of the fuel via pipelines were only expected to total 2.7 bcfd.

That means the utility will have to tap storage fields to make up the difference.

One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.

SoCalGas is a unit of Sempra Energy. Other big utilities in California include units of Edison International and PG&E Corp.

High temperatures in Los Angeles will mostly continue to top 90 Fahrenheit (32 Celsius) through Friday, with the mercury expected to reach 98 on Wednesday, according to AccuWeather. The normal high in the city is 84 at this time of year.

The California Independent System Operator (ISO), the power grid operator, forecast use would peak at 49,489 MW on Wednesday before sliding to 47,888 MW on Thursday. That falls short of the grid’s all-time high of 50,270 MW in July 2006, in part because of the state’s efficiency and home solar programs.

One megawatt can usually power about 1,000 U.S. homes, but many fewer during a heat wave.

High temperatures in Phoenix, meanwhile, will continue top 110 through Friday, according to AccuWeather. That is hot even for the desert city, where the mercury has hit the triple digits every day since the end of May and the normal high at this time of year is 106.

Power prices for Wednesday soared to their highest on record at Palo Verde in Arizona and SP-15 in Southern California, according to data from S&P Global’s SNL going back to 2010.

Reporting by Scott DiSavino



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