Citing record-breaking heat waves and worsening drought, CAISO on Thursday said it would exercise its rarely used power to call for additional capacity this summer to avert shortfalls and rolling blackouts.

“Summer has barely begun, and we have already had repeated extreme heat events creating dangerous conditions and shattering records across the country,” the ISO, California Public Utilities Commission (CPUC) and California Energy Commission (CEC) said in a joint statement.

CAISO had issued a resource deficiency warning in June after two generators tripped offline in a brutal heat wave, and the Pacific Northwest experienced extraordinary heat earlier this week. Portland, Ore., hit an all-time high of 116 degrees Fahrenheit, while Seattle reached 108 F.

“As a result of these unprecedented climate change-driven heat events, which are occurring throughout the West in combination with drought conditions that reduce hydroelectric capacity, California is using all available tools to increase electricity reliability this summer,” it said. “As part of this effort, the ISO has decided to exercise its authority to procure additional capacity again this year.”

“The ISO’s action is supported by a request by the CPUC and CEC and is taken out of an abundance of caution to ensure electric reliability and preserve the public health and safety of all Californians.”

The last time CAISO used its capacity procurement mechanism was during last summer’s severe Western heat waves, which caused the ISO to order load shedding with rotating outages in August and to declare energy emergencies in September.

Since then, the ISO and CPUC have taken steps to prepare for this summer. The CPUC ordered the state’s three large investor-owned utilities to procure thousands of megawatts of additional capacity, while the ISO instituted market rule changes meant to reduce transmission constraints and other problems that contributed to the August blackouts. (See CPUC, CAISO Take Major Steps for Summer Reliability.)

A huge increase in battery storage was expected to help cope with evening peak demand during heat waves, but some of the expected resources have failed to materialize, CPUC President Marybel Batjer and CEC Chair David Hochschild said in a letter to CAISO CEO Elliot Mainzer that requested additional procurement.

The state’s summer resource adequacy program “had relied on incremental resources coming online for the summer months,” it said. “The CPUC recently received notice that several will be delayed by one to several months, and in some cases will push online dates past the summer window.”

Last summer’s shortfalls occurred during the evening net peak, after solar power ramps down but air-conditioning demand remains high. CAISO and the CPUC hoped hundreds of megawatts of new lithium-ion batteries to store solar and wind power would cover that evening peak, but it may not be enough, Thursday’s action acknowledged.

During a recent CPUC meeting, Batjer said that batteries being shipped from overseas were delayed in transit.

In an email Thursday, CPUC spokesperson Terrie Prosper said that 3,160 MW of new resources, mostly batteries or solar paired with batteries, were anticipated to be online by August 1st. Currently, at least 2,705 MW will be online, and that number will likely increase, she said.

“According to project developers, some of these delays have been COVID-related (e.g., workforce slowdowns), while some have been due to supply-chain issues, including shipping incidents overseas,” Prosper wrote.

Hydropower, one of the state’s main summer resources, is quickly dissipating after an extremely dry winter with early snowmelt. Lake Oroville and Lake Shasta, major hydroelectric generating reservoirs in Northern California, are at 32% and 38% of capacity, respectively, the California Department of Water Resources reported Wednesday. Such low levels could lead to a halt in generation.

The drought has reduced hydropower capacity by 1,000 MW, the CPUC and CEC said.

In addition, demand response programs ordered by the CPUC have not been as effective as anticipated, the letter said.

“The aforementioned events have resulted in a material difference from what the CPUC assumed for the resource adequacy program in establishing requirements for summer 2021 and caused a material change in system conditions,” Batjer and Hochschild wrote. “While the CPUC, CEC and CAISO are collectively working on a number of strategies to address reliability concerns under extreme conditions, these changed circumstances require every tool that is available to the state to be deployed to ensure reliability this summer.

“Accordingly, the CPUC and CEC jointly request the CAISO to use its tariff-based authority to procure additional resources. We specifically ask that the CAISO procure capacity pursuant to its tariff authority for July and August 2021. We also request the CAISO to consider procurement for the September 2021 resource adequacy compliance month if conditions do not improve.”

CAISO’s tariff defines an event triggering use of its capacity procurement mechanism (CPM) as a “substantial event, or a combination of events, that is determined by the ISO to either result in a material difference from what was assumed in the resource adequacy program for purposes of determining the resource adequacy capacity requirements, or produce a material change in system conditions or in CAISO Controlled Grid operations, that causes, or threatens to cause, a failure to meet reliability criteria,” the ISO said in a message Thursday.

CPM Details

CAISO issued a market notice Thursday asking scheduling coordinators with non-resource adequacy capacity willing and able to receive a CPM designation to submit a Customer Inquiry, Dispute and Information (CIDI) ticket as soon as possible — and preferably by July 7.

The ISO is targeting capacity that is at least available during the net-peak hours of 4 p.m. to 9 p.m. Imports must be deliverable to the ISO at a delivery intertie and supported by firm transmission rights — or a reasonable equivalent — to the intertie.

“In addition to submitting a CIDI ticket, parties with capacity available to meet this significant event should also submit offers to the intra-monthly [competitive solicitation procurement] for August, September, and October,” the notice said.

Interested suppliers are asked to submit their tickets with the subject line “Summer 2021 CPM Significant Event” and include the following details:

• resource IDs;
• volume of megawatts available for the CPM;
• dates the capacity is available to serve as CPM capacity;
• whether the supplier is likely to accept a 60-day designation extension if it were offered;
• whether the supplier intends to seek compensation above the soft offer cap through a cost showing approved by FERC.

CAISO has scheduled a stakeholder call for Friday at 10 a.m. to discuss the CPM action.