Emergency Plans Needed for the Power Grid in the Age of Gas

The massive, multi-month gas leak in California’s underground Aliso Canyon storage facility has major implications for millions of California’s electricity users, with state regulators warning of up to 14 days of planned electricity blackouts this summer.

In the new age of gas, are electricity systems prepared to manage catastrophic supply disruptions?

The Aliso Canyon reservoir had been used for decades as a holding facility for natural gas, where the commodity could be stockpiled over time for use when power plants and heating customers need it.  As a result of the leak that occurred from October 23, 2015 through February 18, 2016 from  a breach in the injection well casing, the facility is now depleted to a fifth of its capacity and is offline pending safety investigations.

Of course, the Aliso Canyon leak is an extreme example of a supply interruption, one of the worst gas leaks in U.S. history.  But, it highlights a concern about low probability, high impact disruptions that grid operators should pay attention to and develop plans to manage.  For example, imagine the widespread and devastating impacts of a pipeline failure in the Northeast or Mid-Atlantic – perhaps through terrorist attack or operational/mechanical failure – especially during the winter or summer peak energy demand periods.

Fuel supplies to natural-gas fired electric power generators would be disrupted or cut off completely, causing a cascade of problems for electric grid operators.  Power prices would skyrocket and reliability could be compromised. Customers that need gas to heat their homes, businesses and factories could also be negatively impacted.  And these impacts could be prolonged, depending on the time it takes to resolve the fuel supply disruption and the ability for other power generators to fill in the gaps.

These concerns are especially relevant as the power sector becomes more dependent on natural gas. After surpassing coal on a monthly basis in April 2015, the U.S. EIA predicts that for the first time on an annual basis natural gas is expected to surpass coal as the dominate fuel used in U.S. electric power generation.  True to trend, the Los Angeles Department of Power and Water (LADWP) supplies half its power from gas-fired generators, which rely predominately on Aliso-stored gas to enable power plants to meet consumer demand.

California regulators were forced to reactively deal with a catastrophic fuel supply disruption. On April 5, after months of deliberation and intense coordination, state and local energy agencies released a draft report finding that without use of the Aliso-stored gas, the state’s electricity consumers could face up to 14 summer days of intentionally interrupted service.  The report outlined implementation of 18 measures aimed at reducing (not eliminating) the likelihood of these blackouts.  The recommendations included tariff changes, operational coordination and flexibility strategies, encouraging reduced customer usage of gas and electricity, and even trying to access the remaining gas in the Aliso Canyon facility. Some of the recommendations have costs impacts and require approvals from the U.S. Federal Energy Regulatory Commission before they can take effect.

The bottom line is as electric grid operators around the country watch their system fuel mix increasingly lean on gas they should also consider proactively developing plans to deal with catastrophic gas supply disruptions, perhaps taking a page from California’s playbook.

Christina Simeone

Kleinman Center Senior Fellow

Christina Simeone is a senior fellow at the Kleinman Center for Energy Policy and a doctoral student in advanced energy systems at the Colorado School of Mines and the National Renewable Energy Laboratory, a joint program.