Utilities brace for another power peak

Summer can be hard on the electric grid.

Iowa's big utilities say they are prepared this year for the annual demand peaks that always arrive in hot weather. But as history shows, much depends on the weather.

In early May 2001, a heat wave conspired with power plant outages that curbed more than 800 megawatts of generating capacity to leave Alliant short-handed in the electricity department.

The utility invoked its right to interrupt service to nearly 100 large-scale customers who had voluntarily signed up for interruptible service to get better prices. The results included lost school days for many public schools, and a rethinking of their interruptible service plans.

In June 2008, the weather brought record floods that inundated substations and two power plants in Cedar Rapids. The utility was forced to shut off power to parts of the city for weeks.

Last year, Alliant was forced to disrupt power to customers twice due to hot weather conditions. One of the breaks affected all "interruptible" customers, and three affected different groups of those customers.

Alliant has 178 customers on its voluntary "interruptible" list.

Alliant spokesman Ryan Stensland said the number of service interruptions was "consistent with the expectations of the program." State regulators like to see the program used, he added, because it shows the utility is using interruptions to keep overall power costs low.

MidAmerican Energy, which has 87 interruptible customers, had no interruptions, spokeswoman Tina Pothoff said.

The fragile grid

The big threat to summer power supply, many observers say, are the demands on the fragile electric grid.

Intense and prolonged heat waves require significant power movements across the grid to large power-demand centers such as the Chicago metro area, sometimes hitting capacity constraints at "chokepoints" on the grid.

"It's not so much of an Iowa thing as a Midwest thing," Alliant's Stensland said. "When you get these big cities like Minneapolis-St. Paul and Chicago pulling lots of power, it affects the whole region."

The company that handles in-region transmission for Alliant customers, ITC-Midwest, said it's invested millions of dollars in five major upgrades since 2009.

"As I look at the transmission system, we're in good shape," said ITC-Midwest President Doug Collins.

Collins said the growing number of transmission constraints was a primary reason regulators approved Alliant's sale of the transmission system to ITC.

"There was a real need for someone to come in and invest in the system," Collins said. "With our maintenance program -- with what we do -- it's pretty much business as usual for us."

Collins said ITC was fortunate to get through the winter without any substantial damage to its system from ice storms. The utility now is awaiting state approval for a roughly $150 million project that will build the last leg of a transmission system "reliability loop" that will improve reliability to Eastern Iowa customers, he said.

The 85-mile length of 345 kilovolt transmission line will tie in with the existing system near the Dubuque Regional Airport and at Hazleton, not far from Oelwein, Collins added.

Collins pointed out ITC also has one more hurdle to get through before summer -- high predicted flood crests along the Mississippi River that could damage the transmission system. He said ITC has stocked sandbags to fortify some of its equipment on the ground, and he's encouraged by recent downgrades in the flood crest predictions.

MidAmerican Energy and Alliant Energy are part of a regional transmission organization, the Midwest Independent System Operator or MISO, that will issue its summer reliability report in late May.

At this time last year, MISO's report was somewhat reassuring. MISO said it expected the actual 2010 load to be about the same as the 2009 load --which was down 3.8 percent from forecasts -- because of the recession.

Stensland said electric demand in Alliant's service territory is still not up to pre-recession levels.

"Demand is recovering," Stensland said. "It's a slow recovery. It's very gradual.

"We're in a good position to provide power to customers without any issues."

"We have adequate supply to meet summer demand in 2011," MidAmerican's Pothoff said.

Large clients who sign up for a one-year interruptible service period receive a discount on their electric rates. This is as an incentive to allow them to have their service disrupted at peak demand times, when the cost to Alliant of buying power off the grid is much higher.

The peaks almost always coincide with prolonged periods of intense heat, when electric demand for air-conditioning skyrockets.

Stensland said the amount of the discount varies with the profile of the customer's electric usage.

Customers are always informed in advance when Alliant wants to interrupt their service. They are also allowed to "buy through" if they don't want the interruption.

Customers who buy through the interruption are penalized by being required to pay the full rate Alliant must pay for wholesale power from outside suppliers during the peak demand period, Stensland said.