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More details emerge from NV Energy’s rare electricity conservation request from August

Riley Snyder
Riley Snyder

Around mid-day on August 19, NV Energy customers began to get texts, robocalls and emails asking them to please conserve electricity use between the hours of 2 to 9 p.m. over the next two days.

The requests — in part marred by a “vendor error” that sent out robocalls in the dead of night — came amid a record-breaking Western U.S. heat wave and thick smoke from California wildfires blanketing parts of the state. But the utility said the effort worked — estimating a significant decrease in power demand over the two-day period that helped avoid power shutoffs or blackouts for customers in Nevada.

More than two months later, NV Energy is releasing more information about the decision-making process that led to the request for power conservation, as well as data that may help state utility regulators determine whether the conservation request was a one-time unusual request or a sign that the utility needs to do more to ensure resource adequacy as climate change and other factors drive more strain on the system.

The new information comes via a filing made in a state Public Utilities Commission docket, launched in late August shortly after the conservation requests were made to investigate “resource adequacy and planning.”

NV Energy made the filing last week, the first of several requested by regulators seeking more details on the circumstances leading up to the request for voluntary power cutbacks. The PUC is not responsible for overseeing day-to-day decisions made by the utility company to balance load or meet customer demand, but approves long-term energy supply plans and other planning decisions. 

The utility’s filing is a behind-the-scenes look at the circumstances NV Energy faced in mid-August to stave off a potentially catastrophic power outage in Nevada, ultimately leading up to that request for customers to conserve power.

While NV Energy is the state’s primary electric utility, that doesn’t mean all electricity used in the state comes from power plants owned by or contracting with the utility company.

The company is required under state law to file what’s called an “Energy Supply Plan” every three years that details utility plans for procuring enough electricity, as well as fuel and risk management strategies to meet a projected electricity demand, based on factors such as temperature and historical trends.

While the company regularly files amendments to that plan, it’s able to make short-term modifications as needed through what’s called “short-term procurement activities,” which includes practices such as day-ahead or real time electric-market trading to “bring the gap between long-term energy supply planning and actual energy supply needs.”

In its filing with the PUC, NV Energy said it uses those transactions to “ensure a continuous balance of energy supply and demand because of variations in system conditions” as well as to achieve “economic benefits” for customers.

Use of those types of electric market trading to meet demand aren’t unusual — the utility reported to the PUC that since the summer of 2017, there were more than 100 instances in which it opted to purchase more than 1,000 megawatts of power on the open market in order to meet demand, including 40 times during the summer of 2020.

On Aug. 17 (the Monday before the request for conservation), the utility reported engaging in its normal day-ahead trading activities for energy supply resources. But with hotter-than-normal weather (about 11 degrees warmer in Las Vegas as compared to seasonal averages) through the record-breaking heat wave across the U.S., the utility company found the market to be “severely restrictive with heavy buyers and very few sellers.”

“It was unprecedented for NV Energy to receive so few supply offers for power market purchases,” the company wrote in the filing. “Routine suppliers were unable or unwilling to transact with NV Energy.”

The utility reported that much of demand was being driven by an overall concern about “market uncertainty” from the California Independent System Operator (CAISO), the balancing authority that manages California’s energy market and that at the time warned that supply limits could lead to potential curtailments — blackouts.

Despite engaging in a “broader search of additional counterparties,” NV Energy reported exhausting all available supply options for day-ahead availability, meaning it would need to either obtain power in real-time markets or risk the potential of an Energy Emergency Alert (EEA), utility parlance for power blackouts.

EEAs come in three levels, with the third level being the most severe and meaning that load interruptions are “imminent or in progress.” 

Nevada entered the first EEA level on Aug. 18 — the first day of requested power curtailment — shortly after noon, reaching the third level around 3:30 p.m. That level was reset to the first EEA level after 9 p.m., and finally reverted to normal operations about an hour later. The utility entered the first EEA level the next day, Aug. 19, but was back to normal by the end of the day.

Again, no NV Energy customers lost power during the period of high demand — but the utility was taking rapid action behind the scenes to ensure that was the case.

According to a timeline published in the filing, the utility took several unusual or rare steps to obtain electricity throughout that two-day period, including asking large customers to voluntarily cut back on power, asking large independently owned power generators within the state to help address the demand and issuing a “no touch” order on generation equipment to avoid any inadvertent interruptions.

NV Energy also reached out to its sizable base of distribution-only customers (largely businesses that opted to leave utility service through the 704B legal process, but still rely on it for transmission service) to ensure that their electric loads were in balance and not relying on the power company for electric demand. Those customers — many of whom filed to leave NV Energy through the 704B process to purchase power from other sources — still take transmission service from the utility, and are required to contract with them as an essential provider of last resort.

The company wrote in the filing that two of the company’s distribution-only customers were “unexpectedly relying” on NV Energy for electric service as their supplier failed to deliver their energy. Those customers were not identified in the filing.

The utility also disclosed that one of the units at the natural-gas firing Higgins Generating Station near the California border had experienced equipment failure in late July, meaning it was offline for the power shortages in August. The out-of-commission plant has a production capacity of 225 megawatts, which could have helped address the high-demand period.

Additional filings in the docket are due throughout the rest of the year, with a workshop hearing set for Dec. 16.


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