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Published: 8/12/2012 - Updated: 1 year ago

Power firms not sweating it

Area utilities get through heat with no interruptions

BY JON CHAVEZ
BLADE BUSINESS WRITER
The sun sets on Toledo Edison's Bay Shore power station in Oregon. The sun sets on Toledo Edison's Bay Shore power station in Oregon.
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Last week the National Oceanic Atmospheric Administration made it official -- July was the hottest month ever since, well, records in the United States have been kept.

Toledoans experienced the fifth-warmest July on record and faced three 100-degree days.

Yet despite the record heat and residents cranking up air conditioners to keep cool, at no time last month was there ever a point where demand for electricity even came close to exceeding supply in Ohio or the Midwest.

Experts say that's because of increased supply and decreased demand.

A decade ago, intensely hot days could prompt FirstEnergy Corp. and other utilities to issue pleas to conserve or cut power usage, or invoke contract clauses that let them cut power to big users like steel or auto plants. But the threat of heat-related black-outs, brown-outs, and other strains on the electrical grid system have become greatly reduced.

"We haven't had those kind of problems this year or even in previous summers," said Paula Dupont-Kidd, a spokesman for PJM Interconnection, a Valley Forge, Pa., firm that manages the electrical grid in all or part of Ohio, including all of FirstEnergy's territory, Michigan, and 11 other states. "A lot of that has to do with the fact that we do have a robust capacity market that ensures we have enough capacity," Ms. Dupont-Kidd said.

On July 17 and 18, the grid operator did tell its member utilities to generate an additional 1,604 megawatt hours and 2,098 megawatt hours, respectively, in response to requests for added power from 12 utilities, including FirstEnergy's Penelec, Met-Ed, and Jersey Central Power & Light subsidiaries.

But such events are a normal part of business for any grid operator.

"That's pretty much as dramatic as it has gotten for us," Ms. Dupont-Kidd said.

In fact, the only problem -- if it could be called that -- encountered by PJM during July's record heat was it underestimated the overall peak power demand. In May it predicted that the highest demand would reach was 153,780 megawatt hours. Power usage peaked at 155,100 megawatt hours on July 17 at 5 p.m.

However, because PJM's member companies collectively can generate 185,600 megawatts of power, and PJM estimated its reserve margins this summer at 27.1 percent of its total capacity, the missed forecast was a nonissue.

"There are fairly healthy [power] reserve margins in most of the electricity systems in the country. The two places we were worried about heading into summer, California and Texas, have experienced problems," said Tyson Brown, a statistician with the Energy Information Administration.

"In the central part of the country there's been healthy capacity built over the last few years and [the Midwest] is not having large demand growth," Mr. Brown said.

According to the EIA, a total of 162 new electric power plants in 36 states were brought online in the first six months of 2011.

Three of the top 10 states to add power in that period were Kentucky, Virginia, and Pennsylvania, which added 2,030 megawatts of capacity to existing assets overseen by PJM.

One big reason that electricity in Ohio and the Midwest is more reliable is that a decade ago utilities in the geographic footprint controlled by PJM invested heavily in power plants that use natural gas.

When natural gas prices rose significantly in the early 2000s, most of those plants were used sparingly, if at all.

But now, with natural gas supplies abundant and priced at historic lows, utilities are supplementing and in some cases replacing coal-fired generators with natural gas units.

In its most recent report, the EIA noted that the Midwest had a larger relative increase in natural gas generation than any other region, an increase of 93 percent, or 152,000 megawatt hours.

"There's a big overhang of capacity built in late '90s and early 2000s that's fueled by natural gas and now that's being used more. That's why there's a lot of extra capacity," Mr. Brown said.

Demand slows

Another big reason electricity is more reliable is slowing demand.

"Businesses have slowed down due to the economy. There's not that challenge anymore to make sure people have enough power," said Mark Durbin, a spokesman for FirstEnergy, the parent firm of Toledo Edison. Mr. Durbin said that despite the record heat in July the utility, which can generate a combined 23,000 megawatts, never came close to its all-time record peak demand of 13,804 megawatt hours on Aug. 1, 2006.

One megawatt hour of electricity provides power to about 330 households for one hour.

"We've never reached that point this summer where we've have to ask customers to [conserve power]," Mr. Durbin said.

The FirstEnergy spokesman said the utility still sees demand for power increasing over the long term. "But when you look at the slow economy the last few years, it's not in that time frame," he said.

"The total load from residential, commercial, and industrial customers, each of those has less demand now, which has meant that we've not had [a tight] situation this year. Peak times during the day were very manageable," Mr. Durbin said.

"At the end of the day usually there's that one big time, when people get home from work and their house has been cooped up all day and it's hot. At that time people will turn their air conditioning on and it would create peak demand," Mr. Durbin said. "But in this particular situation, it just hasn't played out that way."

Smaller utilities OK

The situation has been just as manageable for small municipal electric utilities.

"Although there were peak usages during the hot weather that were higher than the normal amount, there really wasn't any problem," said Steve Casebere, director of utilities for the city of Bryan in Williams County. "I think the reason is we have not fully recovered from the economy. Demand is not at the previous levels we were at prior to 2008."

Bryan has its own power plant that can generate 5.4 megawatts of power when peak demand requires it to augment the power the city gets from other sources.

"We generated more power this year than we have in past years," Mr. Casebere said.

"The only time we felt insecure this summer is with storms. We are blessed that we didn't get hit hard, but we were sending our crews to other places that did get hit hard," the utilities director said.

Mr. Brown said that while the Energy Information Administration estimates that most areas of the nation have ample power supplies through the next three years, the supply will remain tight in California and Texas.

California's problems stem partly from the loss this summer of the 2,200-megawatt San Onofre nuclear plant near San Diego. The plant has been shut down for refueling and replacement of critical parts.

"They need to have local capacity to keep their transmission system online. So they have brought on natural gas-fired plants and opened up a new transmission line, but things there are still tight there," Mr. Brown said.

On Thursday, California's electric grid operator issued a statewide alert warning customers to try to curb power usage in coming days in advance of an approaching heat wave.

"In Texas, they had a fairly tight reserve margin last summer in August," Mr. Brown said.

"They had the hottest August on record in Texas last summer and they had [to stop power to certain industrial customers] but no blackouts," he said.

Texas is seeing its demand for power growing, but there is not a lot of new capacity being built there, Mr. Brown said.

"Texas has brought back some units into service and they do have some new capacity additions, mostly natural gas. They also have a lot of renewable units they've added, such as wind. But the problem with wind is it's not always there," he said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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