LADWP Receives Approval From South Coast Air Quality Regulators to Run Power Plants with Diesel Fuel to Help Reduce Risk of Outages Caused by Gas Shortages from Aliso Canyon

The variance approved by the SCAQMD Hearing Board granted LADWP’s request for a variance from air quality permit conditions to use diesel as an alternative fuel for 12 generating units at three gas-fired power plants—Harbor Generating Station in San Pedro, Haynes Generating Station in Long Beach and Valley Generating Station in the Northeast San Fernando Valley. The exemption allows LADWP to run the units with diesel fuel, rather than natural gas, on short notice for a limited period to help avoid power outages on up to 14 days this summer, where there is a significant risk that gas curtailments from SoCalGas would result in power outages.

“The use of diesel fuel at these power plants would be a last resort to avoid outages after exhausting all other options, ranging from Flex Alerts to deploying increased renewable energy,” said LADWP General Manager Marcie Edwards. “Running these plants for a short time on diesel is not something we want to do, but we may face no other choice to reduce the widespread community health and safety impacts from rolling blackouts. At any time this summer, SoCal Gas could notify us that they cannot meet the fuel requirements of our in-basin power plants, which are critical to meeting customer electricity demand on hot summer days. Running the plants on diesel fuel as a last resort can help minimize the risk to all of our customers from traffic accidents resulting from signals affected by outages, and protect the sick and elderly who are at risk without air conditioning. It will also result in lower emissions than those that would result from the over 3,000 known, permitted diesel backup generators located in LADWP’s service area that would be used by critical facilities such as hospitals and businesses should rolling blackouts occur.”

In addition to operating the plants with diesel fuel during a gas curtailment by SoCal Gas, the variance would also allow LADWP to a limited number of hours to test and recommission the units to ensure they will operate with diesel fuel reliably and with the least environmental impact.  The units are equipped with advanced emission control technology to reduce emissions as much as possible during normal operation. Recommissioning involves the startup and testing of units to verify proper operation within design specifications, and will be conducted within the next 45 to 60 days.  LADWP will be conducting public meetings to provide information and answer any questions in the communities near the Harbor, Haynes and Valley stations by July 15th.

Combined, the 12 generating units capable of running on either natural gas or diesel fuel have the ability to generate 1,500 megawatts (MW) of power, enough to serve nearly 2.2 million homes. As part of the approved variance, LADWP has also committed to provide $1.5 million and up to $2.9 million to fund measures including the purchase of electric school buses to improve air quality in communities surrounding the local power plants.

Background on Summer Electric Reliability and
the Impact of the SoCal Gas Aliso Canyon Leak & Moratorium

The likelihood of a power outage during a heat wave this summer is heightened because of the Aliso Canyon gas leak and resulting moratorium on new gas injections at the Aliso Canyon facility. LADWP and other utilities serving the greater Los Angeles area depend upon this facility to maintain power reliability when energy use spikes during hot weather. Gas is used not only in homes and businesses, but is also primary fuel for gas-fired electric power plants. Aliso Canyon is the only gas storage facility that can immediately respond to rapid changes in gas supply for 17 gas-fired generating plants, including four generating stations operated by LADWP in the Los Angeles basin.

LADWP and three State energy agencies (the California Energy Commission, California Public Utilities Commission, and the California Independent System Operator) jointly developed the Aliso Canyon Action Plan to Preserve Electric Reliability for Los Angeles and a technical assessment on the risk of power outages this summer due to unexpected gas curtailments. The joint agencies concluded that curtailment of natural gas supply would be so severe as to result in power outages on up to 14 days this summer. Gas curtailments occur exclusively by order of the SoCalGas, and are completely outside of LADWP’s control.

The use of diesel as an alternative fuel is one of several steps that LADWP is taking to reduce the risk of outages this summer. These efforts include:

• Changing operating procedures to maximize flexibility, such as curtailing gas hedging and sales of gas-fired energy to preserve LADWP’s natural gas supply for critical needs within its service area.
• Maximizing the use of renewable energy resources and accelerating solar projects currently being constructed, including about 550 megawatts (MW) of large solar projects expected to come online in 2016 and early 2017. LADWP is also working to add battery or other energy storage technology.
• Working closely with State energy agencies, other electric utilities, and SoCalGas to mitigate the risk of electrical interruptions this summer through the Aliso Canyon Action Plan to Preserve Electric Reliability for Los Angeles.
• Implementing a new Energy Saving Program for large commercial customers to receive a monthly incentive of $10 per kilowatt (kW) for reducing their energy during, or shifting it away from the hours of 3 p.m. to 5 p.m. on weekdays in July, August, and September. LADWP anticipates the program could save up to 1,000 MW during the critical peak period.
• Ramping up demand-response (DR) programs through price incentives and discounted rates, focusing efforts on the top 1,000 industrial, commercial and institutional customers to reduce an additional 50 MW of electricity when needed.
• Calling on all customers to voluntarily reduce their energy use through a widespread communications strategy across multiple media channels, including a joint effort with other Southern California energy providers robust “Flex Alert” outreach campaign coordinated jointly with energy agencies in the region.

For more information on LADWP’s outlook for electric reliability this summer, energy saving tips and rebate programs, please visit www.ladwp.com/summerreliability.

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