The supply of both water and electricity in California is tightening, according to Barry Moline, the executive director of California Municipal Utilities Association. While it is not yet a dire situation, consumers should take note of their usage, he said.
According to Moline, some of the strain is a result of the limited use of Aliso Canyon Natural Gas Storage Facility, a Southern California Gas Company well that leaked in 2015. “Southern California has three gas pipelines that supply it,” Moline said. “If there’s any kind of interruption in those pipelines, or if it’s extremely hot for a long period of time across the entire western part of the country, the gas demand will be high and Southern California deliveries could be limited. That’s an extreme situation, but we are reducing our reliability by [limiting the use of] Aliso.” According to Melissa Bailey of Southern California Gas Company, the Aliso Canyon facility is now only used as a last resort.
Moline said the increased use of solar panels means power plants don’t need to produce as much natural gas during the day. But in the evening the demand for electricity jolts the plants into a high gear more quickly. “The biggest stressor is the timeframe between 4 p.m. and 7 p.m., when all the power plants come on at once,” Moline commented. “The power plants have to ramp up very quickly during that timeframe.”
According to Moline, this could lead to a strain on the system. The California Independent Services Operator (ISO) may issue a warning for consumers to shut off energy-using equipment or try to use it at a different time of day. California ISO maintains accessibility to the state’s power grid.
As for the state’s water supply, Moline described it as “a little bit low, but sufficient.” He added that, “We’re not in a drought, but we’re moving in that direction.” He advised consumers to keep an eye on consumption and use water as efficiently as possible. “We’re not going to get much rain until the fall,” Moline predicted. “The issue of supply when it comes to water is going to be defined by what happens next winter.”
But while an individual household might conserve water, Moline said the cost to maintain the infrastructure will remain about the same. “If you use less water, part of your bill might be lower, but the part that’s paying for the infrastructure and pipes and the supply and delivery, that stays the same,” he said.
Moline said another long-term strategy to reduce energy consumption is to install more electric vehicle charging stations across the state. “Most people charge their cars at home in the evening. What we’re trying to do is get stations at the workplace so people charge them during the day and use up solar energy.”
Director, Long Beach Energy Resources Department
Oil production in Long Beach has remained stable because of increased drilling activity countering the natural decline of the oil field. Wilmington crude oil prices are currently around the $70 per barrel mark, much stronger than the average of $45 per barrel last year.
The increase in oil price has afforded the ability to utilize two full-time drilling rigs. Our current projection is to drill 53 new wells over the next year. That is an increase of approximately 20 wells that were drilled last year. We are also taking care of our long-term idle wells by increasing resources to well abandonment. For the department to see more of an increase in activity, oil prices would need to increase to about $80 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) output reductions have helped to stabilize prices, but OPEC has recently suggested they may begin reversing the reductions.
For natural gas, prices have remained low, despite forecasts for an increase during the winter months. According to Henry Hub Natural Gas Futures, the industry baseline for natural gas pricing, natural gas is selling for $3 per 1,000 cubic feet for 2018.
We saw a 12% decrease in usage for gas this past winter compared to the winter of 2016 – 2017, however that was offset by a 12% increase in the core commodity charge as SoCalGas Citygate prices reached record highs due to infrastructure constraints and unplanned maintenance events. The City of Long Beach is a wholesale customer of SoCalGas and is impacted any time core commodity costs increase. Overall, our core customer’s gas bills were comparable to last winter’s bills. Natural gas prices for 2018 should remain relatively flat throughout the summer and into the fall and winter months.
Project Director, Alamitos Energy Center (AES) Southland
Although we may have lost a portion of our manufacturing base, our appetite for electricity has not been satiated. Electricity consumption in California remained relatively flat in the timeframe from 2006 through 2016; however, the landscape changed dramatically. This change is driven by programs making renewable energy economically competitive, combined with our environmental sensitivity which is driving the retirement of legacy generation. With this, we have limited the flywheel, which historically provided stability to our generation network and made generation available at times of maximum consumption.
The Alamitos Energy Center (AEC) project brings resiliency to the power generation system in a slightly different way; the 640MW Combined Cycle Gas Turbine (CCGT) project is a highly efficient technology with the capability to come up and down as called upon. This is supplemented by a 100MW Battery Energy Storage System which provides significant storage of renewable generation which may be made available at periods of low consumption.
Construction at the AEC is progressing according to plan. With one year having passed since site mobilization, the CCGT project construction is approximately 25 percent complete. In July the project is taking delivery of the last large components and the next year will see peak activity levels as the equipment is set on foundation and connected. Design activities for the Battery Energy Storage System are in progress and construction is slated to start at the end of Q2 next year.
General Manager, Long Beach Water Department
While the winter had been very dry in California, late season rain and snow in March and April helped improve the state’s water supply situation. Water storage is in good position after last year’s heavy rains; however, the statewide snow pack accumulation for the year is only 15% of normal, as warm temperatures brought more rain than snow in the Northern Sierra mountains.
As Californians realize, the efficient use of water needs to be embraced as a normal way of life year in and year out, regardless of occasional wet years. Recently, Governor Brown signed important legislation that will help the state better prepare for climate change and droughts by establishing statewide water efficiency standards which must be in place by 2022.
Part of this legislation is establishing an indoor, per person water use goal of 55 gallons per day by 2022, with that target decreasing over time to 50 gallons beginning in 2030. Importantly, this standard will not actually be applied per person but rather to each individual water agency, such as Long Beach Water, as an overall target. Each agency will have the flexibility to determine how best to meet this overall standard.
For Long Beach, this target is readily achievable by our residents, and Long Beach Water will be implementing programs to assist our customers to improve upon the efficient use of indoor water. Working together, Long Beach will continue to be the gold standard in California in terms of the responsible usage of water.
President/Contractor, Solar Source
The solar industry is experiencing strong growth, and commercial solar installations have increased exponentially in the last six months. The primary driver for this latest upswing in solar installations is a result of the fast approaching enrollment cap for the solar friendly SCE rate tariff “Option R.” The “R” stands for renewable. As of June 6, 2018, there are 41.25 megawatts remaining of the originally allocated 400 MW.
In order to be eligible for this rate tariff, solar must be installed and have permission to operate by SCE prior to the enrollment cap being reached. Commercial SCE customers with billing classifications TOU-GS-2, TOU-GS-3 & TOU-8 are eligible for this special tariff.
By lowering demand charges, Option R-eligible businesses are able to reduce their energy bills 10% to 20%. In combination with solar energy generation, customers utilizing Option R can see returns on investment in as few as 3 years. Option R has been a successful industry catalyst by rewarding business for going solar.
Although the “Option R” solar friendly rate tariff will sunset this year, there is still time for interested businesses to take advantage of this tariff. We expect a continued growth in commercial solar the second half of this year. As long as the solar industry can continue to offer renewable energy to building owners at a lower price than the utility, we see continued expansion.