California Might Still Face Rolling Blackouts As Power Strain Continues

California was able to dodge rotating power outages on Monday as the state’s grid operator canceled an Energy Emergency Alert Notice 2 (EEA 2) for 6:30 p.m. to 9 p.m. But the state’s energy strain has yet to peak.

The state’s electricity demand surged to a new five-year record on Monday with an estimated 48,000 megawatts. But, the power demand forecast for Tuesday is even higher at 51,000 megawatts as schools and businesses return from the Labor Day weekend while the heatwave brings temperatures soaring to triple-digits. 

The state’s grid operators, California Independent System Operator, known as Caiso, estimate that Tuesday’s power consumption could go up to an all-time high. Caiso is anticipating supply deficits of 2,000 to 4,000 megawatts — an amount equal to the output of several large power plants.

Caiso has issued an Energy Emergency Alert Watch (EEA Watch) for Tuesday from 5 p.m. to 9 p.m. The notice for Monday, an EEA 2, is the last notice before rolling blackouts are imminent, it means that all of Caiso’s available resources are in use. An EEA Watch alert is not as critical, but it could still be upgraded.

In a video bulletin, Elliot Mainzer, CEO of Caiso, called for two to three times as much conservation across the state to maintain the grid’s stability.

It will be difficult for Californians to conserve energy as temperatures rise past 110 degrees Fahrenheit. The heat wave has been long and intense. The National Weather Service said that Sacramento’s airport reached a September record high of 114F, while Stockton went up to 112F on Monday. Bob Aravec, a senior branch forecaster with the US Weather Prediction Center, sees the heat going up to 115F on Tuesday.

The longer the heat wave continues, the higher the risk for the power grid to break down. Current conditions have also brought wholesale power prices surging to $2,000 per megawatt-hour.

Information for this briefing was found via Bloomberg, Caiso, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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