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Cowlitz PUD

General Manager Steve Kern said what power managers call a “heat storm” is the worst in nine years. It’s driving up demand for electricity because of the need for air conditioning.

“You don’t see this type of extreme often,” Kern said. “Very hot weather, very high loads across the West. Even the Northwest is having a higher demand.”

Those conditions, which Kern predicted will last about seven more days, have reduced wind energy output and natural gas deliverability in California, he said. Demand for power has caused electrical costs on the spot market to spike sharply in California.

He compared the increases to “gasoline going from $3 to $10 or $12 per gallon over the course of a day or two.”

The California Independent System Operator (CAISO), which oversees most of California’s power grid, uses natural gas, nuclear power and imported energy from the Northwest to cover roughly 90 percent of its energy load. The rest comes from renewable energy sources, such as solar and wind, which California has added significantly to in recent years.

CAISO buys mostly hydroelectric power from the Northwest through two power transmission lines called interties. The Bonneville Power Adminsitration, the region’s power wholesaler, has adjusted production to meet the increased demand, according to data from the PUD, and the supply of power into California has hovered around its intertie maximum of 7,800 megawatts this week.

The current price surge will help the PUD’s finances, Kern said, but he stopped short of calling it a windfall for the utility. And he cautioned that such market surges are fleeting.

“This is an anomaly,” Kern said. “The annualized price of energy is very cheap. … Things are already cooling off.”

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