Report blames blackouts on poor maintenance, not market manipulation – July 9 outages coincided with heat wave in Alberta

By Matt McClure, Calgary Herald November 6, 2012

CALGARY — The province’s electricity watchdog says tens of thousands of Albertans endured rolling outages this summer because power stations shut down unnecessarily during hot weather.

The Market Surveillance Administrator report released Monday suggests utilities be penalized by the province’s system operator if their generating units fail again due to poor maintenance.

While the investigation found there was no attempt to manipulate prices and gouge consumers during the July 9 blackouts, a senior adviser said four of the 10 generating stations that shut down that day had heat sensors that were poorly calibrated.

“They were set to trip too low,” Richard Penn said.

“There is a requirement that you carry out these routine checks, and we’re thinking that if you haven’t done that then you should be penalized.”

As temperatures soared to 30 Celsius in some parts of the province, and business began another work week, demand peaked that day at 9,885 MW — a record for Alberta.

The average pool price for power was $411.43 per MW, more than 10 times what it had been any time in the previous month.

The Wildrose opposition raised suspicions about market manipulation when so many generators went off-line in quick succession, but the report found that some utilities actually missed out that day on the chance to sell electricity at top price.

“There were a few media stories suggesting there were shenanigans going on,” Penn said.

“This wasn’t a strategic shutdown but a series of technical shutdowns.”

The rolling blackouts darkened homes and businesses in Calgary, Edmonton and Lethbridge for several hours that afternoon and evening as the Alberta Electric System Operator directed local utilities to shed 200 MW. It was a desperate effort to keep the entire electrical grid from overloading and collapsing.

The report found AESO correctly predicted high demand that day, but its long-term forecast failed to adjust for the fact that many of the province’s coal and gas plants would not be able to operate at peak capacity in the hot weather.

Harry Chandler, the Market Surveillance agency’s top administrator, said better modelling wouldn’t have allowed TransAlta to shutter its 330 MW Sundance 3 plant near Wabamun that week for scheduled maintenance.

“If you had sharp long-term tools, you might have been able to anticipate this, and the AESO would have said don’t take that outage right now, postpone it a week,” Chandler said.

Over the course of the day, 10 generating units accounting for more than 1,400 MW of energy were forced from service for various periods.

The report said AESO’s own investigation of the incident has already led to the submission and approval of a “number of corrective action plans by generators” to prevent a similar shutdown in future.

An AESO spokesman refused to provide details on those plans, but she said the grid operator accepted the watchdog’s findings.

“We have no concerns with the operating issues MSA has covered,” Ally Taylor said.

“We will release our own report into the incident sometime late in the year.”

Energy Minister Ken Hughes said the province is still studying the watchdog’s report.

“Every time there’s a circumstance like that, we’re looking for ways to learn,” Hughes said.

With files from Darcy Henton, Calgary Herald

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Original source article: Report blames blackouts on poor maintenance, not market manipulation