APS and SRP to prepare for summer's electricity demand

Ryan Randazzo
The Arizona Republic
August 15, 2007

Blazing summer heat has major utilities in the area humming as they import electricity to the Valley to keep air- conditioners cranked.

Arizona Public Service Co. and Salt River Project both came close to hitting peak summer electricity demand this week and weren't far off records set in July 2006.

Summer demand exceeds what the utilities produce with Palo Verde Nuclear Generating Station and the myriad dams, natural-gas and coal plants they operate. So they buy power from out-of-state providers throughout the summer. They have contracts from those suppliers, such Pacificorp in the Northwest, but still have monitors watching the grid to determine when they need to enact them and where they can get the power for the lowest price to keep customers' rates down.

We have to operate our system around that one moment in time every year when we will experience the peak amount of demand for our customers," SRP spokesman Scott Harelson said. "Usually as the week goes on, even as the temperature remains the same, the loads get higher and higher as people get tired of keeping the thermostat low."

The utilities employ teams of forecasters and energy traders who line up enough juice for the city to get through the hot spots.

"We do have power traders that absolutely monitor the consumption and look at the next day's weather forecast and a little to the future," said Steve Bischoff, general manager of construction, operations and maintenance for APS.

"They make sure we have contracts (to buy electricity) to roll out as needed. It picks up the activity levels on peak days, but it has to be managed every hour of every day of the year anyway. "Utilities must balance calling on those power options or buying energy on the pricier spot market to get through the peaks.

Electricity isn't easily stored, so spot market prices can swing wildly according to demand even when the price of the fuel for power plants is stable.

All the APS and SRP generating facilities are now fully operational, but the utilities still might find less-expensive energy through contracts than by running their own plants at 100 percent of capacity.

"The perfect situation is you have just enough energy contracted for to minimize costs," Bischoff said. "You don't want to over purchase and buy contracts you never have to use, because that will drive costs up needlessly."

In some ways, that makes peak demand days easier to manage, because the utilities need to enact nearly 90 percent of their total generating and purchasing capacity.

Summer electricity sales generate the bulk of revenue for the utilities. But in the winter they can produce much more energy than needed locally, and sales to colder climates to keep heaters fired up can be lucrative.

APS and SRP combined can generate 11,832 megawatts when all the facilities are running. Their record day July 21 last year pushed demand to 14,242 megawatts. The difference between demand and their generation represents more electricity than is produced by a single coal-fired plant like Navajo Generating Station near Page, and more than twice that of the natural-gas-fired West Phoenix Power Plant. SRP operates Navajo, and APS runs West Phoenix.

"The real activity takes place in the planning and preparing," said Jeff Laib, manager of term trading in SRP's supply group. "As long as you are prepared, everything should work well. But we do have situations where something flips off. You may lose a generating unit, and those situations create a lot more work."

And the utilities must anticipate forest fires taking out transmission lines and other emergencies.

"There are days that are pretty stressful," Laib said. "As long as we have some contingencies. Hopefully because of our experience, we know where to go and who to talk to, to get power."

Reach the reporter at ryan.randazzo@arizonarepublic.com or (602) 444-4331.

Andre Norwood is production supervisor at the APS West Phoenix Power Plant. High temperatures have electricity providers in high gear supplying power for the city's air conditioners.

By the numbers

Arizona Public Service Co. and Salt River Project both import electricity in the summer when demand exceeds their generating ability among their various power plants.

In the winter, they both sell electricity to colder climates, such as the Pacific Northwest. This week, demand nearly hit the summer peak for both utilities

APS/SRP maximum generation: 11,832 megawatts

Total APS/SRP peak demand Monday: 13,995 megawatts

Required purchases to meet demand: 2,163 megawatts, if all facilities were operating at full capacity.

APS/SRP peak-demand record: 14,242 megawatts on July 21, 2006.