Report: Energy Market Selloff Led to Blackouts in Record Heatwave

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The final report on what triggered last year’s massive power outages acknowledges that state energy “market practices” allowed thousands of megawatts of desperately needed power to be exported out of state at the peak of the mid-August heatwave.

The report examining the root causes of the outages on Aug. 14 and 15 -- when California endured record temperatures that left more than 800,000 people without power— was generated at the demand of Gov. Gavin Newsom.

The embarrassed governor called out California’s Independent System Operator and state energy and utility regulators, demanding to know what went wrong. The final 131-page joint report released Wednesday points to everything from climate change to poor planning to smoke from wildfires hindering rooftop solar production as factors.

But critics, like former CPUC President Loretta Lynch, were not satisfied by the findings.

“We’ve got a lot of unanswered questions with this report,” said Lynch, who said the report does not go far enough to explain what led to the meltdown. The report does cite “energy market practices,” as having “contributed to the inability to obtain or prioritize energy” that “could have otherwise relieved the strained conditions” on the grid.

But Lynch says the report doesn’t detail what led grid managers to disregard the weather based market forecast of high demand during an extreme heatwave, and why they allowed a large chunk of the state’s reserves to be sold off in the day-ahead energy market. She says the crisis could have been averted had grid managers intervened to stop the exports.

“They allowed 4,500 megawatts to leave the state on the hottest day of the century,” she said. In a statement accompanying the release of the report, CA ISO’s CEO, Elliot Mainzer, pledged that the, “important insights and lessons learned” from the analysis would guide any reforms designed to assure a “modernized and well-integrated” energy grid.

But Lynch maintains that until regulators actually know what made the market system so vulnerable in the first place and act to address the underlying issue, the system could still be prone to another meltdown.

“Frankly, the government of California needs to get to the bottom of this,” she said, “because Californians are not safe from blackouts until the market rules that allowed the black outs get fixed.”

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